G.M. Lodha, J. - (1.) EVASION, avoidance or tax dodging has always posed a perennial problem for the revenue. The Direct Taxation Enquiry Committee, headed by Chief Justice K. N. Wanchoo, suggested latest ways and methods, to plug loopholes of law for removing the above. Section 16A of the W.T. Act was precisely introduced in the Amendments of 1972 for counteracting the evasion of tax by undervaluation of wealth. An alleged evaluation of the working of this section by the alleged absence of its proper use during assessment and reassessment has itself been alleged to have resulted in undervaluation of the provision itself. Its use as a weapon for reopening under Section 17 has resulted in this litigation; the assessee's contention being that this is a misuse of Section 16A by the revenue and beyond jurisdiction. This bunch of 11 writ petitions are aimed at closing the deep openings in Section 16A by reopening notices of Section 17 and further penetrating the very existence of jurisdictional facts of "reason to believe" under Clause (a) and "information" under Clause (b) of Sub-section (1) of Section 17 of the W.T. Act (for short, "the Act" hereafter).
(2.) THE two sisters, Anandkumari and Nawal Kanwar, have filed them. THE first five, D. B. Civil Writ Petitions Nos. 265, 321, 322, 323 and 324, were filed in 1978 by Kanwarani Anandkumari, wife of Brig. B. Lall against the notices dated March 4, 1978, issued to her by the WTO, A-Ward, Jodhpur, under Section 17 of the Act for reopening the assessments for the years 1969-70, 1972-73, 1970-71, 1971-72 and 1973-74, respectively. THE other six writ petitions being D. B. Civil Writ Petitions Nos. 315 to 320 of 1978 relate to the notices dated March 7, 1978, for reopening under Section 17 issued to Smt. Kanwarani Nawal Kanwar by the WTO, A-Ward, Jodhpur. Anandkumari became the victim of a murder during the pendency of the writ petitions and, therefore, her husband, Brig. B. Lall. is now the petitioner in the first bunch of five cases. Out of the 11 writ petitions, the following eight writ petitions relate to the validity of notices for the reopening of the assessments of wealth-tax on the basis of the alleged report of the Valuation Officer : JUDGEMENT_308_ITR127_1981Html1.htm The brief facts of D. B. Civil Writ Petition No. 269 of 1978 may now be mentioned. Late Anandkumari, wife of Brig. B. Lall, residing at Sunset View, Opposite Central School, Ratanada, Jodhpur, furnished her wealth-tax return for the assessment year 1969-70, under Section 14 of the Act to the WTO, A-Ward, Jodhpur, on June 29, 1970, in the status of "individual" in the prescribed manner, setting forth her net wealth as on the valuation date, i.e., April 1, 1969. This return was accompanied by a statement of wealth declaring a total wealth of Rs. 1,64,631 as on April 1, 1969. The valuation of three show-rooms situated at M. I. Road, Jaipur, which are jointly owned by the petitioner and her sister, Nawal Kanwar, and in which the petitioner has got half share, was got done by a registered valuer. As per his valuation certificate and a detailed valuation report dated August 4, 1969, the said show-rooms was valued at Rs. 1,84,000 and, therefore, the petitioner's share was of the value of Rs. 92,000. In this return, the petitioner valued her plot of land and two flats, Golf Links, Jodhpur, at Rs. 17,000 and Rs. 40,000, respectively.
(3.) DURING the course of the assessment proceedings, the valuation report and the valuation certificate of the approved valuer were submitted. The WTO assessed the net wealth of the assessee for the assessment year 1969-70, after notice was given to the petitioner under Section 16(2) of the Act and after the case was discussed with her authorised representative. The assessment order dated December 21, 1971, contained the computation of the total wealth of the petitioner at Rs. 1,74,131 in which, the valuation of the property at Jaipur of the petitioner, as per the valuation certificates and report, was accepted at Rs. 92,000. In respect of the valuation of the immovable property at Jodhpur, non-petitioner No. 1 increased the price of the land by Rs. 3,000 on the ground that the valuation of open land was going up every day. The value of the gallery was also increased. Thus, after an intelligent and conscious application of the mind, the WTO assessed the petitioner and while doing so, accepted the valuation of the Jaipur property and the Jodhpur flats as per the valuer's report and certificate. On March 4, 1978, the WTO issued notice to the petitioner-assessee under Section 17 of the Act wherein it has been stated, inter alia, that he had reason to believe that the petitioner's net wealth chargeable to tax for the assessment year 1969-70 had escaped assessment within the meaning of Section 17 of the Act, and, therefore, he proposed to reopen the said net wealth which had so escaped assessment. On March 31, 1978, the petitioner filed a reply to the impugned notice and, inter alia, challenged the jurisdiction of the non-petitioner No. 1 to issue the impugned notices on the ground that the condition precedent for taking such action under Section 17 of the Act were not present and were nonexistent. It was pointed out that the petitioner had fully and truly disclosed all material facts necessary for assessment and the approved valuer's reports were accepted after due consideration and discussion and the application of mind and, therefore, the assessment could not be reopened. The non-petitioner No. 1 gave a reply by letter dated April 6, 1978, mentioning that the Jaipur property of the petitioner had been referred to the valuation cell for determination of the fair market value. ;