Rajes Kumar, J. - (1.) The Income Tax Appellate Tribunal, Allahabad has refened the following question under Section 27 (1) of the Wealth-tax Act (hereinafter referred to as "Act") relating to the assessment years 1970-71 to 1976-77 for opinion to this Court: "Whether on the facts and in the circumstance!) of the case, the Tribunal was in error in concluding that there was no failure on the part of the assessee to disclose material facts and in holding that proceedings taken under Section 17 (1) (a) of the Wealth-tax Act were not valid?"
(2.) The brief facts of the case are as follows: The assessee/opposite party (hereinafter referred to as "assessee") is a trust and was created by late Shri Chintamni Ghosh under a registered deed dated 24th July. 1924. In the said deed the provision for descendants and other relatives of the settler for charity and for due performance of the worship of the family deity was made. The deed of trust sets out the names of different beneficiaries and the extent of the benefits conferred on them. Briefly stated the allocation of the income was made as under: 15% Reserves 15% Sewa Puja 10% Relative allowance. 15% To be granted to the sebaiyets as remuneration for their services and the same is called 'A' allowance. 45% To be divided into 5 equal shares and each such share to be paid to each sebait for the maintenance of his family and the same is called 'B' Allowance.
(3.) The dispute arose between the assessee trust and the revenue with regard to the taxability of the wealth relating to the aforesaid items. Reference arising out of the proceedings relating to the assessment years 195.7-58 to 1959-60 was made to this Court which was disposed of by this court vide order dated 10th September. 1970 which is report in 80 ITR 331. In the said reference, this court held that 15% reserve and 15% Sewa Puja were to be assessed under Section 21 (4) of the Wealth-tax Act and the allowance called 'A' and 'B' were to be assessed under Section 21 (4) of the Act and the remaining part under Section 21 (4) of the Act for the assessment year under consideration. The assessee filed return giving complete details of the allocation of the income of the trust deed. However, the Assessing Authority has not assessed the aforesaid items. The Assessing Authority initiated proceeding under Section 17 (1) (a) of the Act on the ground that the aforesaid items have not been disclosed by the assessee in the original return as wealth inasmuch as at the time of original assessment, the assessee did not bring the decision of this court to the notice of the Assessing Officer. The Assessing Authority was of the view that the wealth liable to tax was escaped assessment due to failure and omission on the part of the assessee to disclose fully and truly its wealth. Against the assessment orders, the assessee filed appeal before the Appellate Assistant Commissioner. It was contended before him that the trust deed was on record and the returns were filed on that basis, that the allowances 'A' and 'B' which the Wealth Tax Officer thought was taxable had already been disclosed in the trust deed. Agreeing with the assessee's contention, the Appellate Assistant Commissioner held that all the relevant facts were available before the Wealth Tax Officer at the time of passing of the original orders and the order of Hon'ble High Court had also come by then. He, therefore, was of the opinion that the provision of Section 17 (1) (a) of the Act would not apply and accordingly, quashed the order passed by the Wealth Tax Officer. Revenue filed appeal before the Tribunal against the order of the Appellate Assistant Commissioner. The Tribunal has held that the Revenue was the party to the case decided by Hon'ble High Court and it cannot be held that it was ignorant of the same and it was the duty of the assessee to bring the order of the High Court to the notice of the Revenue. The Tribunal, accordingly, concluded that it cannot be held that the assessee had suppressed material information and there was failure on his part to disclose material facts. Tribunal accordingly held that the provision of Section 17 (1) (a) of the Act was not valid. The Tribunal, however, restored the matter to the file of the Appellate Assistant Commissioner to examine whether the requisite conditions for the purpose of reopening the proceedings under Section 17 (1) (a) of the Act were satisfied or not.;