BALIA, J. - (1.) HEARD learned counsel for the Revenue.
(2.) THE learned counsel for the respondent has not appeared on previous two occasions and the matter was adjourned on last two hearing. THE matter was heard during the course of the day, but has been kept pending as an opportunity to the respondents to avail for putting its case before the Court, assistance. Today at commencement of the day, Mr. Mahendra Trivedi for the respondent has appeared only to seek adjournment which was declined. THEreafter Mr. Trivedi withdrew himself from the Court and did not appear. The two Wealth Tax Reference No. 103/95 and 106/95 arise out of same set of facts and, therefore, are being heard and decided together. The reference in each case, made by the Income Tax Tribunal, relates to the assessment years 1980-81 to 1986-87 in connection with the proceedings under the Wealth Tax Act, 1957. The respondent-Assessee in each case during the relevant assessment period was one of the five partners of firm M/s Ashoka Palace Hotel, Banswara. Returns for all the assessment years were filed by the assessee in both the cases on 10. 3. 89 and assessment was completed under Section 16 (1) of the Act without requiring the presence of assessee by accepting the returns submitted by the assessee and computation of wealth tax payable under the Act was made on that basis. In the returns, net wealth of the assessee included share of the assessee in value of building known as Ashoka Palace Hotel which was the property of partnership firm as per his share in the partnership firm for each assessment year. It appears that before returns were filed, Wealth Tax Officer has made a reference to the Departmental Valuation Officer under Section 16a for determining the value of Ashoka Palace Hotel as property of firm for assessment years 1980-81 to 1984-85 on 2. 12. 83 and for assessment year 1985-86 and 1986-87 on 23. 7. 86. While report in pursuance of the reference made on 7. 12. 83 by the Department Valuation Officer was submitted on 20. 3. 84, on the later reference, report was submitted on 27. 3. 89. Thus, on the date of filing of returns, by the assessee for seven assessment years and its assessment under Section 16 (1) on 16. 3. 89, valuation report dated 20. 3. 84 submitted by the Departmental Valuation Officer was already on record, but valuation report in respect of assessment year 1985-86 though the matter was already referred to the Departmental Valuation Officer, was not received. The same was received after assessments were made. Thereafter on going through the record of assessment in the case of assessment for the aforesaid years under consideration, the learned Commissioner of Wealth Tax was of the opinion that because one valuation report was already on record and for subsequent period, reference was also made under Section 16a, he ought to have waited for receipt of the report from the Departmental Valuation Officer and should not have taken recourse to framing assessment under 16 (1) by accepting the returns. The difference in value of share of the assessee in the Ashoka Palace Hotel Building as computed by the respondent assessee and on the basis of valuation report submitted by the Departmental Valuation Officer in tabular form stands as under: ASSESSMENT YEAR VALUATION DECLARED BY ASSESSEE VALUATION DETERMINED BY DVO 80-81 1,01,610/- 3,15,200/- 81-82 1,21,150/- 3,62,400/- 82-83 1,31,454/- 3,88,400/- 83-84 1,72,457/- 4,69,000/- 84-85 1,91,509/- 5,19,000/- 85-86 2,33,720/- 6,71,600/- 86-87 2,59,595/- 7,66,200/- With these considerations, the Commissioner of Wealth Tax set aside the assessment under Section 16 (1) of the Act and directed the Assessing Officer to proceed to make assessments afresh in accordance with and after taking into consideration that material. In the meantime, the Assessing Officer has himself reopened the assessment under Section 17 (1) of the Act on 28. 9. 89 by issuing notice to the assessee under that provision.
(3.) THE three fold contentions were raised before the Commissioner against the proposed action under Section 25. Firstly, the Assessing Officer has reopened the assessment under Section 17 (1) on 28. 9. 89 and, therefore, the assessment orders lost their existence for all practical purpose and no order could have been made under Section 25 (2); secondly report of Valuation Officer cannot be considered as part of record of assessment, because no assessment was pending when the two references was made to Departmental Valuation Officer inasmuch as neither any returns were filed nor any statutory notices were served on the assessee; to institute any proceedings which could be said to be pending during which reference to D. V. O. could have been made under Section 16-A, lastly references made by the Wealth Tax Officer were not valid as the same were made in the case of Firm Ashoka Palace Hotel and notices were issued to the firm but no notices were issued to the partners of the firm. Such valuation made by giving notice to the firm only, which is not at all an assessable entity, could not be considered as material on record of assessee's Wealth Tax file. All the objections were overruled by the Commissioner, and Wealth Tax Officer was directed to pass fresh assessment orders after setting aside the orders made under Section 16 (1 ). On appeal before the Tribunal, the Tribunal held that the orders of Wealth Tax Officer passed under Section 16 (1) were not orders but only intimations under Section 16 (1) (a) of the Act and, therefore, provisions of Section 25 would not apply thereto. Secondly, reference having been made only in the name of M/s Ashoka Palace Hotel which was a firm, and the firm being not an assessable entity under the Act no reference could have been made under Section 16a and question of considering such valuation reports by the Wealth Tax Officer in the case did not arise. Therefore, the orders under Section 16 (1) (a) were not erroneous. ;