JOGINDER SINGH SODHI VS HUTESH DOGRA
1999 P T D 3308
[236 I T R 817]
[Punjab and Haryana High Court (India)]
Before G. C. Garg and N. K. Agrawal, JJ
JOGINDER SINGH SODHI
Versus
HUTESH DOGRA and others
C. W. P. No.7371 of 1998, decided on 20/01/1999.
Wealth tax---
----Reassessment---Notice---Jurisdiction to issue notice after four years from end of the assessment year in question---Wealth Tax Officer has jurisdiction to issue notice provided he seeks satisfaction of Deputy Commissioner of income-tax on reasons recorded therefor---Indian Wealth Tax Act, 1957, S.17.
A plain reading of clause (b) of subsection (1-B) of section 17 of the Wealth Tax Act, 1957, shows that notice can only be issued by an Assessing Officer who is below the rank of the Deputy Commissioner, after four years from the end of the assessment year in question, after seeking satisfaction of the Deputy Commissioner on the reasons recorded for the issue of such notice. It would mean that if the Assessing Officer is of the rank of the Deputy Commissioner or above, notice may be issued on his own satisfaction:
Held, dismissing the writ petition, that it was admitted that the petitioner-assessee was not earlier assessed for the assessment year 1987-88, under the Act and, therefore, clause (b) of subsection (1-B) of section 17 was attracted. The question whether the Assessing Officer had, before issuing notice to the assessee, placed the matter before the Deputy Commissioner for the latter's satisfaction on the reasons for issuance of notice was a question of fact which needed to be verified. If such satisfaction was recorded by the Deputy Commissioner and thereafter the Assessing Officer issued notice, the notice would be valid.
S. S. Mahajan for Petitioner.
R. P. Sawhney, Senior Advocate and Rajesh Bindal for Respondent.
JUDGMENT
N. K. AGRAWAL, J.---This is a petition under Article 226/227 of the Constitution of India for quashing the notice, dated March 24, 1998, issued by the Wealth Tax Officer Ward-1, Moga, to the petitioner-assessee for the assessment year 1987-88 under section 17 of the Wealth Tax Act, 1957 (for short "the Act").
The assessee was being assessed under the Act but he did not file the return of wealth for the assessment year 1987-88 nor was he assessed for that year. Notice, dated March 24, 1998 (Annexure-P-5), was issued to him asking him to file the return of wealth for the assessment year 1987-88 inasmuch as wealth chargeable to wealth tax for that assessment year had escaped assessment. .
Shri S. S. Mahajan, learned counsel for the petitioner, has argued that the impugned notice having been issued by the Wealth Tax Officer was unauthorised and without jurisdiction as no officer other than a Deputy Commissioner was competent to issue a notice as is laid down in clause (b) of section 17(1-B) of the Act.
Subsection (1-B) of section 17 of the Act reads as under:
"17. Wealth escaping assessment.
(1-B) (a) In a case where an assessment under subsection (3) of section 16 or subsection (1) of this section has been made for the relevant assessment year, no notice shall be issued under sub-section (1) by an Assessing Officer, Who is below the rank of Assistant Commissioner, unless the Deputy Commissioner is satisfied on the reasons recorded by such Assessing Officer, that it is a fit case for the issue of such notice:
Provided that, after the expiry of four years from the end of the relevant assessment year, no such notice shall be issued unless the Chief Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer aforesaid, that it is a fit case for the issue of such notice.
(b) In a case other than a case falling under clause (a), no notice shall be issued under subsection (1) by the Assessing Officer, who is below the rank of Deputy Commissioner, after the expiry of four years from the end of the relevant assessment year, unless the Deputy Commissioner is satisfied, on the reasons recorded by such Assessing Officer, that it is a fit case for the issue of such notice . . . . "
A plain reading of clause (b) of subsection (1-B) of section 17 shows that notice can only be issued by an Assessing Officer who is below the rank of the Deputy Commissioner, after four years from the end of the assessment year in question, after seeking satisfaction of the Deputy Commissioner on the reasons recorded for the issue of such notice. It would mean that if the Assessing Officer was of the rank of the Deputy Commissioner or above, notice may be issued on his own satisfaction.
There is no dispute to the fact that the petitioner-assessee was not earlier assessed for the assessment year 1987-88 under the Act and, therefore, clause (b) of subsection (1-B) of section 17 was attracted. The question whether the Assessing Officer had, before issuing notice to the assessee, placed the matter before the Deputy Commissioner for the latter's satisfaction on the reasons is a question of fact which needs to be verified. If such satisfaction was recorded by the Deputy Commissioner and thereafter, the Assessing Officer issued the impugned notice (Annexure P-5), the objection regarding jurisdiction would not help the petition6r assessee.
Shri R. P, Sawhney, learned senior counsel for the respondent Department, has argued that there is no bar to the issuance of notice by an Assessing Officer below the rank of the Deputy Commissioner. The only requirement in that situation is that the Assessing Officer should, before issuing the notice, seek satisfaction from the Deputy Commissioner on the reasons for the issuance of notice.
On a consideration of the matter we are of the view that the plea raised by Shri Mahajan, learned counsel for the petitioner, that the Wealth Tax Officer was not competent to issue a notice is found to have no merit. If the Wealth Tax Officer had placed the matter before the Deputy Commissioner for satisfaction on the reasons for issuance of notice, the objection raised by Shri Mahajan would nave no force. It is, therefore, necessary to verify if such a procedure was or was not followed.
In the result, the writ petition is found to be devoid of merit and is dismissed. The petitioner may, however, file his reply to the notice (Annexure P-5) before the Wealth Tax Officer within four weeks from today and raise all objections as are available to him in law.
M.B.A./3320/FCPetition dismissed.