High Court Of Punjab & Haryana
Joginder Singh Sodhi vs. Hutesh Dogra, Wealth Tax Officer, Etc.
Section WT 17(1B)(b)
Asst. Year 1987-88
N.K. Agrawal & G.C. Garg, JJ.
Civil Writ Petn. No. 7371 of 1998
20th January, 1999Â
S.S. Mahajan, for the Petitioner : R.P. Sawhney with Rajesh Bindal, for the Respondents
N.K. AGRAWAL, J. :
This is a petition under Arts. 226 and 227 of the Constitution of India for quashing the notice dt. 24th March, 1998, issued by the WTO, Ward-I, Moga, to the petitioner-assessee for asst. yr. 1987-88 under s. 17 of the WT Act, 1957 (for short, the âActâ). Assessee was being assessed under the Act but he did not file the return of wealth for the asst. yr. 1987-88 nor was he assessed for that year. Notice dt. 24th March, 1998 (Annexure P-5) was issued to him asking him to file the return of wealth for the asst. yr. 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 WTO was unauthorised and without jurisdiction as no officer other than a Dy. CIT was competent to issue a notice as is laid down in cl. (b) of s. 17(1B) of the Act. Sub-s. (1B) of s. 17 of the Act reads as under: “17. Wealth escaping assessment.â (1) xxxxxxxxxxxxxxx (1A) xxxxxxxxxxxxxxx (1B) (a) In a case where an assessment under sub-s. (3) of s. 16 or sub-s. (1) of this section has been made for the relevant assessment year, no notice shall be issued under sub-s. (1) by an AO, who is below the rank of Asstt. CIT, unless the Dy. CIT is satisfied, on the reasons recorded by such AO, 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 CIT or CIT is satisfied, on the reasons recorded by the AO aforesaid, that it is a fit case for the issue of such notice.
(b) In a case other than a case falling under cl. (a), no notice shall be issued under sub-s. (1) by an AO, who is below the rank of Dy. CIT, after the expiry of four years from the end of the relevant assessment year, unless the Dy. CIT is satisfied, on the reasons recorded by such AO, that it is a fit case for the issue of such notice. (2) xxxxxxxxxxxxxxx A plain reading of cl. (b) of sub-s. (1B) of s. 17 shows that notice can only be issued by an AO who is below the rank of Dy. CIT, after four years from the end of the assessment year in question, after seeking satisfaction of the Dy. CIT on the reasons recorded for the issue of such notice. It would mean that if the AO was of the rank of Dy. CIT 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 asst. yr. 1987-88 under the Act and, therefore, cl. (b) of sub-s. (1B) of s. 17 was attracted. The question whether the AO had, before issuing notice to the assessee, placed the matter before the Dy. CIT for latterâs satisfaction on the reasons is a question of fact which needs to be verified. If such satisfaction was recorded by the Dy. CIT and thereafter the AO issued the impugned notice (Annexure P-5), the objection regarding jurisdiction would not help the petitioner- 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 AO below the rank of Dy. CIT. The only requirement in that situation is that the AO should, before issuing the notice, seek satisfaction from the Dy. CIT 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 WTO was not competent to issue a notice is found to have no merit. If the WTO had placed the matter before the Dy. CIT for satisfaction on the reasons for issuance of notice, the objection raised by Shri Mahajan would have 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 WTO within four weeks from today and raise all objections as are available to him in law.
[Citation: 236 ITR 817]