Pratap, J.:— This extremely well argued petition under art. 226 of the Constitution questions and challenges the jurisdictional validity of the notice dated January 7, 1981 issued by the Wealth Tax Officer under s. 17 of the Wealth Tax Act, 1957 (hereafter, the Act), seeking to reopen the petitioner's tax assessment for the assessment year 1976-1977.
2. Hearing the rival submissions of the respective Counsels, I do not find this to be a fit case for interference under art. 226 of the Constitution. All that has happened at this juncture is the issuance of a show cause notice. Jurisdiction under art. 226 may, in a given case, warrant interference even at such stage. There is no single litmus test in that behalf. But in the facts here and considering the materials presently existing it is difficult to hold that the Wealth Tax Officer here had no reason to believe, within the meaning of s. 17 of the Act, that the net wealth chargeable to tax for the assessment year 1976-1977 had escaped assessment and had, therefore, no jurisdiction to issue the impugned notice.
3. Indeed, to the contrary, the valuation report dated January 23, 1978 obtained by the assessee himself for the very next succeeding assessment year 1977-1978 showed valuation of the property in question as on March 31, 1977 at Rs. 5,05,000 (which valuation for just the previous year was shown at Rs. 1,17,793). More still, the assessee sold the property soon, thereafter for this almost equivalent value and consideration of Rs. 5,00,000. If, on these undisputed materials, the Wealth Tax Officer states that he had reason to believe, within the meaning of s. 17 of the Act, that the net wealth chargeable to tax for the assessment year 1976-1977 had escaped assessment, it is well-nigh impossible to find fault therewith and equally difficult, therefore, to interfere in one's jurisdiction under art. 226 of the Constitution.
4. However, Mr. Mukerji, learned Counsel for the assessee, placed strong reliance on paragraph III. 2 of Circular No. 3(WT) dated September 28, 1957 issued by the Central Board of Revenue, under which intention is expressed that valuation once fixed need not be disturbed for the two succeeding assessments unless there are special over-riding reasons justifying substantial revision of the valuation made. Contention consequently is that the valuation report submitted by the petitioner for the assessment year 1974-1975 should prevail also for the two succeeding assessments and therefore also, the Wealth Tax Officer was not entitled to reopen the assessment in question. This initially impressive argument was, however, rendered bereft of all force and could not be pursued any further after Mr. Chatterjee, learned Counsel for the respondents, produced before this Court, Board's Circular letter No. 319/12/74-D.T. dated April 5, 1974, under which the aforesaid paragraph III(b) of the Board's earlier Circular No. 3(WT) dated September 28, 1957 supra stood withdrawn. Reliance placed on the earlier circular could thus be of no avail.
5. The assessee's learned Counsel next relied upon two decisions: (a) Tulsidas Kilachand v. D.R Chawla . [1980] 122 I.T.R 458 Bom.., and (b) Brig. B. Lall v. Wealth Tax Officer . [1980] 127 I.T.R 308 Raj. Qua Tulsidas Kilachand's case, the valuation report relied upon for reopening the assessment therein was one prepared by the Income-Tax Department's own Executive Engineer (Valuation). Not so here where the valuation, report is the one obtained by the assessee himself and the sale transaction is the one effected on that basis also by the assessee himself. As observed in the cited judgment itself (at p. 460):
“It is now well settled that the jurisdiction to reopen the assessment orders which have become final can be exercised provided the officer has reason to believe from information in his possession that the earlier orders escaped the net wealth chargeable to tax. Mere change of opinion of the succeeding officer is not enough….”
6. In the instant case, it is not mere change of opinion but, as already noted, cogent materials viz., the valution report obtained by the assessee and the sale also effected by the assessee coming to the notice of the concerned officer, on the basis whereof he had, within the meaning of s. 17(7) of the Act, information and reason to believe, in pursuance of which belief the impugned notice was issued. Tulsidas Kilachand's case (supra) thus fails to aid the assessee.
7. In Brig. B. Lull's case (supra), the assessee had in the original proceedings been assessed on the basis of approved valuer's report and assessment completed. Reassessment proceedings were, however, commenced on the basis of (i) report of valuation officer called for under s. 16A of the Act and (ii) certain audit objection. It is on these basic facts that the Rajasthan High Court held that the no provision or even remote legislative intent to refer the question of the of property, in a completed assessment, after acceptance of valuation of a ed valuer and simply for the purpose of finding out whether his own in that the completed assessment was based on undervaluation was or was not correct. And this to enable him to create a ground or foundation for a reasonable belief or information under s. 17(7) of the Act. Altogether different, indeed, is the position here. There is no resort here to any valuation report called for under s. 16A of the Act nor any recourse to any audit opinion or objection. Here on the other hand, as already seen, is a case where it is the assessee's own valuation report and the assessee's own sale transaction that constitute the crux. The Rajasthan ruling has thus no application to the facts here. It is clearly distinguishable. In this light, therefore, it is difficult, to devalue and reject the contention of the respondents that one and the same property valued for the assessment year 1976-1977 at Rs. 1,15,000 or Rs. 1,17,793 could not have been suddenly valued by the assessee himself more than four times over at Rs. 5,05,000 for the very next assessment year without there having been gross undervaluation in the previous year.
8. It is needless to proceed further with the matter and deliver an in-depth judgment on the merits of the proceedings consequent upon the impugned notice under s. 17 of the Act. Suffice it to note that this surely is not a case where the Court can with justification hold the said notice itself one without jurisdiction. As the materials stand at present the action in issuing it is faultless. It will, however, be open to the assessee, who will now appear in the proceedings pursuant to the said notice, to contest the same on all such grounds as he may be advised. And which grounds when urged will be decided by the concerned authority on their own merits and in accordance with law uninfluenced by the observations herein which, in their very nature, are made in the context of the claim to have the impugned notice struck down as without jurisdiction ab initio.
9. So far as this petition is concerned, the same fails and is rejected.
10. Petition dismissed.