R.R. Rastogi, J. - (1.) THE Income-tax Appellate Tribunal, Delhi Bench-C, has, in this reference under Section 26(1) of the. G.T. Act, 1958, referred the following questions of law for the opinion of this court : " (i) Whether, on the facts and in the circumstances of the case, the fact that the wealth-tax assessment was made at a higher figure, constituted ' information ' for the purposes of reopening the assessment under Section 16(1)(b) of the Gift-tax Act, 1958 ? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in quashing the reassessment completed under Section 16(1)(b) of the Gift-tax Act, 1958 ? "
(2.) THE facts which have given rise to these questions briefly stated are that the assessee, late Sri Guran Ditta Mal, an individual, had constructed a house property bearing No. F-40, Green Park, New Delhi. He made a gift of a portion of that property on March 2, 1970, in favour of his son, Chiranjiv Lal Sarpal. THE value of the gifted property was shown at Rs. 47,000 and the assessee filed a return of gift on November 27, 1970, declaring the taxable gift at the aforesaid amount. THE GTO made an assessment under Section 15(1) on August 31, 1971, accepting the return. At the same time, a few days before the filing of the gift-tax return the assessee had filed his wealth-tax return for the assessment years 1968-69 and 1969-70. In these returns for 1969-70, the value of the entire property was shown at Rs. 72,000 as on March 31, 1969. THE WTO, however, determined the vaule of that property at Rs. 1,56,000. On the basis of that assessment as modified by the AAC, the GTO issued notice under Section 16(1) of the Act in respect of the assessment under consideration, viz., 1970-71, on January 19, 1973. Pursuant to that notice the assessee filed the return showing the value of the gifted property at the figure which he had shown in the original return. THE GTO, on the other hand, took the value of the property gifted at Rs. 90,500. The assessee appealed to the AAC and contended that the belief of the GTO that the taxable gift had escaped assessment or had been under-assessed was merely based on a change of opinion and hence action taken under Section 16(1)(b) was invalid. The AAC did not accept that contention and confirmed the reassessment made by the GTO. There was a further appeal taken by the assessee to the Appellate Tribunal and there he succeeded. The Appellate Tribunal, accepting the assessee's contention, held that all the relevant facts were available before the GTO at the time of the original assessment and since no fresh facts had come to his knowledge subsequently, the GTO could not reopen the assessment on the basis of the wealth-tax assessment where the value of the same property had been determined only on estimate. The reassessment was accordingly set aside. Hence, his reference. It was submitted before us on behalf of the revenue that the information in this case had come to the knowledge of the GTO from an external source and subsequent to the original assessment and the requirements of Section 16(1)(b) were fully complied with. The order of the AAC passed in the appeal against the wealth-tax assessment for the assessment year 1969-70 constituted a valid information and on the basis of the same the GTO could take action under Section 16(1)(b), when he was satisfied that the gift-tax had been under assessed. On the other hand, according to the assessee, there was no change at all in the facts and circumstances of the case and the action of the GTO in reopening the assessment was only as a result of change of opinion.
(3.) RELIANCE has been placed by both the sides on certain decisions to which we would advert a little later. In order to appreciate the submissions made before us, it would be necessary to refer to the relevant provisions contained in Section 16(1)(b) of the Act. Section 16(1)(b) reads as under ; "16. (1) If the Gift-tax Officer--...... (b) has, in consequence of any information in his possession, reason to believe, notwithstanding that there has been no such omission or failure as is referred to in Clause (a), that any taxable gift has escaped assessment for any year, whether by reason of under-assessment or assessment at too low a rate or otherwise ; he may, in cases falling under Clause (a) at any time within eight years and in cases falling under Clause (b) at any time within four years of the end of that assessment year, serve on the assessee a notice containing all or any of the requirements which may be included in a notice under Sub-section (2) of Section 13, and may proceed to assess or reassess any taxable gift which has escaped assessment, and the provisions of this Act shall, so far as may be, apply as if the notice had issued under that sub-section. " This provision is in pari materia with similar provision contained in Section 147(b) of the I.T. Act, 1961, or Section 34(1)(b) of the Indian I.T. Act, 1922. There are two conditions precedent which must be satisfied before this provision can be invoked and they are that the GTO should have reason to believe that any taxable gift has escaped assessment and it should be in consequence of information received after the original assessment that he should have such reason to believe. Both these conditions must be satisfied before an action taken under this provision can be justified.;