COMMISSIONER OF INCOME-TAX/WEALTH TAX COMPANIES ZONE-I, LAHORE VS MEHFIL, CINEMA (PVT.) LTD., 2005 PTD-LAHORE-HIGH-COURT-LAHORE 2419 (2005)

Wealth Tax Act (XV of 1963)---

----Ss.16(3), 17 & 27---Wealth escaping assessment---Reopening of assessment---Appeal to High Court---Wealth tax assessment for the year 1996-97 was finalized in the year 3-4-1999 but was cancelled on an appeal 1 y the Income, Tax Appellate Tribunal---Subsequently, a notice under S. 17, Wealth Tax Act, 1963 was issued whereafter, the assessment was finalized purportedly under S. 16(3) of the Act---Validity---Income Tax Appellate Tribunal in the facts and circumstances, was justified to cancel the order when the assessment was completed under S.16(3) of the Act after re-opening the case under S.17 subsequent to cancellation of original assessment on technical defects.

Sardar Ahmad Jamal Sukhera for Appellant.

ORDER

Through this appeal under section 27 of the Wealth Tax Act, 1963, the following question of law had been referred for opinion for this Court:--

"Whether in the fact and circumstances of the case, the ITAT was justified to cancel the order when the assessment was completed under section 16(3) after re-opening case under section 17 subsequent to cancellation of original assessment on technical defects."

2. It is contended that the respondent-assessee is a limited company. The wealth tax assessment for the year, 1996-97 was finalized in the year 3-4-1999 but was cancelled on an appeal by the ITAT. Subsequently, a notice under section 17 was issued whereafter, the assessment was finalized purportedly under section 16(3). Being aggrieved, the assessee filed an appeal before the CIT(Appeals), which was dismissed vide order, dated 19-8-2003 holding as follows:-

"The matter to be pondered over by us is the fact that the assessment framed were firstly cancelled by this forum for the reason that mandatory requirement of issuance of Notice under section 16(2) was not complied with. Second again vide order ibid the assessment framed under section 16(3)/23 were also cancelled due to the persistent fault. It is pertinent to point out here that defect has been caused when the Assessing Officer crossed the fence by issuing fresh notice under section 17 of the Act resultantly extended the time and authority over the case which is patently illegal.

Notice under section 17 has been issued for filing of the wealth tax return, since there was no default in assuming of jurisdiction prior to the re-issuance of the notice under section 17 after twice cancellation of the assessment. The fresh issuance of statutory notices under section 17 on 4-8-2001 has made the assuming of the fresh jurisdiction over particular case when wealth tax returns were there on record. This defect has now gone to the roots of the case resultantly the assessment orders framed under sections 16(3)/23 have become void ab initio and of no legal effect, thus the order of both the authorities below are hereby annulled. "

3. In view of the aforesaid observations it is clear and obvious that orders passed by the ITAT are in accordance with law and the jurisdiction was properly exercised by the Tribunal. The question as framed is answered in the positive. Hence this appeal is without any merit is hereby dismissed.

M.B.A./C-122/LAppeal dismissed.