FIRST WEALTH-TAX OFFICER v. LATE SHRI C.B. TARAPOREWALA BY HIS LEGAL HEIRS
[Citation -1987-LL-0224-4]

Citation 1987-LL-0224-4
Appellant Name FIRST WEALTH-TAX OFFICER
Respondent Name LATE SHRI C.B. TARAPOREWALA BY HIS LEGAL HEIRS
Court ITAT
Relevant Act Wealth-tax
Date of Order 24/02/1987
Assessment Year 1971-72
Judgment View Judgment
Keyword Tags reason to believe • service of notice • valuation date • valid notice • time barred • son-in-law • legal heir • net wealth
Bot Summary: Thereafter, the WTO observed in his assessment order as under: As the Legal heirs of the assessee did not file the return voluntarily under s. 14(1) of the WT Act and as there was reason to believe that assessee had taxable net wealth, a notice in terms of s. 17(1)(a) was issued and served on the legal heirs. As no return had been filed in response to notice under s. 17(1)(a), I proceed to complete the assessment ex-parte under s. 16(5) A of the WT Act to the best of judgment on the basis of materials available on the file. The AAC cancelled the assessment under s. 16(5) stating The order does not indicate as to when the said notice was issued and as to when it was served and on whom the same was served. After careful consideration of the said order of the WTO, I am of the opinion that the assessment order of the WTO, deserves to be cancelled. The Revenue seeks for the restoration of the order of assessment. We have set out the title as described in the assessment order. The assessment as made therefore, cannot be sustained in law and on this score also, apart from the invalidity of service of notice under s. 17 which makes the initiation of proceedings ab initio void, the assessment would fall to be cancelled.


GEORGE CHERIYAN, V.P. This appeal by Revenue relates to asst. yr. 1971-72. assessment was made under following titles: "Late Shri C.B. Taraporewala by his Legal heirs (1) Mrs. Nargis Minoo Mehta (2) Dr. J.C. Taraporewala (3) Miss Homa C. Taraporewala Now Mrs. Homa D. Watcha (4) Mr. N.C. Taraporewala C/o. F.D. Mehta & Co., Standard Bldg. D.N. Road, Bombay 1". Thereafter, WTO observed in his assessment order as under: "As Legal heirs of assessee did not file return voluntarily under s. 14(1) of WT Act and as there was reason to believe that assessee had taxable net wealth, notice in terms of s. 17(1)(a) was issued and served on legal heirs. As no return had been filed in response to notice under s. 17(1)(a), I proceed to complete assessment ex-parte under s. 16(5) of WT Act to best of judgment on basis of materials available on file". assessment was made under provisions of s. 16(5) of WT Act for asst. yr. 1971-72 for which valuation date was 31st March, 1971. assessee appealed and it was submitted before AAC that notice under s. 17 was served on one Minoo F. Mehta on 28th July, 1980 who was not legal heir of deceased. It was also submitted on merits that only property which was left behind by deceased was taken over by Government to recover huge tax arrears immediately after death of deceased. AAC cancelled assessment under s. 16(5) stating "The order does not indicate as to when said notice was issued and as to when it was served and on whom same was served. It is also not known from assessment order as to what follow up action was taken out by WTO after he had issued said notice. He appears to have been waiting for period of 4 years and when assessment was getting time barred, he finalised assessment under s. 16(5) Exparte saying that no return had been made in response to notice issued under s. 17. After careful consideration of said order of WTO, I am of opinion that assessment order of WTO, deserves to be cancelled. same is accordingly cancelled." Revenue is in appeal before us. Revenue seeks for restoration of order of assessment. We have heard ld. Counsel for assessee. We have set out title as described in assessment order. It is clear that Minoo F. Mehta, on whom notice under s. 17 is stated to have been served is not one of legal heirs mentioned in assessment order. There is no material to show that though he was son-in-law, he was one of legal heirs either by virtue of testamentary or non-testamentary succession. Therefore, it has to be held that no valid notice under s. 17 was served on entity on which assessment has been made. Apart from this, AAC has given clear finding that Shri C.B. Taraporewala passed away on 11th Feb., 1969. This was much prior to valuation dt. 31st March, 1971. There is no question therefore, of making wealth tax assessment on wealth of Late Shri C.B. Taraporewala as on 31st March, 1971 since he had passed away much prior to aforesaid valuation date. assessment as made therefore, cannot be sustained in law and on this score also, apart from invalidity of service of notice under s. 17 which makes initiation of proceedings ab initio void, assessment would fall to be cancelled. ld. Departmental Representative had submitted that fact of death prior to valuation date was not one of grounds on which AAC cancelled assessment and therefore, that factor should not be gone into by us. However, this is fact mention in order of AAC and as such legal consequences which flow therefrom necessarily have to be taken note of and cannot be ignored. We have therefore, only proceeded to draw legal inference from material already on record. Yet another ground urged by assessee was that there was no warrant for taking value of property at Rs. 10 lakhs and odd when it was under possession of Government. We would only say that in view that we h v e taken viz., that assessment itself cannot be sustained it is not necessary for us to pronounce on this aspect. result is that appeal of Revenue is cancelled. *** FIRST WEALTH-TAX OFFICER v. LATE SHRI C.B. TARAPOREWALA BY HIS LEGAL HEIRS
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