S.K. Mal Lodha, J. - (1.) THESE eight applications under Section 27(3) of the Wealth-tax Act, 1957 (for short "the Act"), relate to the assessment years 1970-71, 1971-72, 1972-73, 1973-74, 1974-75, 1975-76, 1976-77 and 1977-78.
(2.) JAGDISH Puri and Shankar Puri are two cousin brothers. Their fathers hailed from a common ancestor who expired leaving behind 13 immovable properties of the Hindu undivided family. There was a dispute between JAGDISH Puri and Shankar Puri regarding distribution of Hindu undivided family properties. A suit for partition of the immovable properties was filed in the court of the Additional District Judge No. 2, Jodhpur, who by his judgment dated October 4,1973, held that half of the entire properties belonged to JAGDISH Puri and the other half to Shanker Puri. It may be stated that JAGDISH Puri was appointed as receiver of all the 13 properties of the bigger Hindu undivided family vis-a-vis the properties coming to his share as per the judgment of the Additional District Judge. The judgment passed by the Additional District Judge on October 4, 1973, was assailed in the High Court, The Wealth-tax Officer issued notices under Section 17 of the Act for the assessment years 1970-71 to 1974-75 to bring the properties to tax under the Act. The assessments were completed for the aforesaid years on the bigger Hindu undivided family and wealth-tax was levied on the value of all the 13 properties of the Hindu undivided family. An appeal was filed by the assessee before the Appellate Assistant Commissioner. The assessments were quashed by the Appellate Assistant Commissioner for the reason that the notices under Section 17 of the Act which were issued to JAGDISH Puri Hindu undivided family were for the smaller Hindu undivided family and that those notices did not pertain to the bigger Hindu undivided family and since the Wealth-tax Officer had completed the reassessment on the bigger Hindu undivided family relying on the reasons given in CWT v. Ridhkaran [1972] 84 ITR 705 (Raj.) he agreed with the contentions raised on behalf of the assessee. A further appeal was filed before the Income-tax Appellate Tribunal ("the Tribunal" herein). The appeal was dismissed by the Tribunal by its order dated November 14, 1983. An application under Section 27(1) of the Act was filed for referring the following question of law to this court for its opinion : "Whether, on the facts and in the circumstances of the case, the Tribunal was legally justified in holding that notice under Section 17 of the Wealth-tax Act issued in the name of Jagdish Puri (HUF) was for the smaller HUF whereas Shri Jagdish Puri was the karta of the bigger HUF vis-a-vis the receiver for the properties of the bigger HUF appointed by the Additional District Judge in a partition suit which matter is sub-judice before the Rajasthan High Court ?" The Tribunal declined to refer the aforesaid question and dismissed the reference applications. Being dissatisfied, the Commissioner of Wealth-tax Jodhpur, has filed these applications under Section 27(3) of the Act on the ground that the decision of the Tribunal dated November 14, 1983, does give rise to a question of law and that the order rejecting the reference applications is erroneous. We have heard Mr. B. R. Arora for the Revenue and Mr. Dinesh Maheshwari for the assessee, who has appeared in pursuance of the notice that was issued by this court. It may be stated that the Appellate Assistant Commissioner in his order annulling the assessments, observed as under : "It is obvious that the assessment proceedings in this case under Section 17 were initiated against the smaller HUF of Lal Puri Jagdish Puri of which Jagdish Puri is the karta. From the reasons recorded by the learned Wealth-tax Officer for all these years, it is obvious that while issuing the notices under Section 17, he believed that wealth taxable in the hands of Shri Jagdish Puri HUF has escaped assessment and, therefore, if at a later stage, he came to the conclusion that in fact wealth assessable in the hands of Shri Shiv Puri HUF, i.e., bigger HUF, has escaped assessment, ho should have issued fresh notices in the name of Shri Shiv Puri HUF rather than completing the assessment on the basis of notices issued to Shri Jagdish Puri HUF."
(3.) THE Tribunal agreed with the conclusion arrived at by the Appellate Assistant Commissioner and in that connection referred to the report of the Inspector, submitted to the Wealth-tax Officer on the basis of which, the Wealth-tax Officer ordered that the notices be issued only to Jagdish Puri who had a half share. Under Section 17 of the Act, before issuing notice, the Wealth-tax Officer has to record reasons. It is not in dispute that the proceedings for reopening of the assessment were initiated on the basis of the report dated July 7, 1976, of the Inspector. We may usefully excerpt the following portion from the report which finds mention in the order of the Appellate Assistant Commissioner as well as in the order of the Tribunal : "In my view notices be issued to Shri Jagdish Puri, who is having a lion's share, i.e., half in the whole property ; others share is nominal and they are not liable to wealth-tax." The Wealth-tax Officer concurred with the view of the Inspector by putting the word "yes" on the margin of the report. On the basis of this "reason", the notices were issued in the name of Shri Jagdish Puri HUF under Section 17 of the Act. The irresistible conclusion from these facts, to our mind, is that in the absence of any variation or modification of the aforesaid report of the Inspector by the Wealth-tax Officer, he accepted and agreed with the proposal of the Inspector that the notices may be issued to Shri Jagdish Puri with respect to the major share, i.e., half share in the whole property. It is correct that the notices that were issued under Section 17 of the Act merely makes mention of Jagdish Puri HUF but this has to be viewed in the light of the circumstances that led to the issuance of notices under Section 17 of the Act. Mad there been any modification or variation by the Wealth-tax Officer with the report of the Inspector, then, on an appropriate case being made out, there would have been some justification for learned counsel for the Revenue to contend that the notice should be considered as a notice to the bigger HUF. The Appellate Assistant Commissioner in his order has stated that if at a later stage the Wealth-tax Officer was of the opinion that in fact wealth assessable in the hands of Shiv Puri HUF, i.e., the bigger HUF, has escaped assessment, he should have issued fresh notices in the name of Shiv Puri HUF rather than completing the assessment on the basis of notices issued to Jagdish Puri HUF. ;