JUDGMENT
K.S. Puttaswamy, J.
1. As the questions that arise for determination in these cases are common, I propose to dispose of them by a common order.
2. A Hindu undivided family consisting of Sri K. M. Ramdas Prabhu and Sri K. M. Shankar Prabhu as its coparceners, inter alia, owns and immovable property in the city of Mangalore and the same had been taken on lease by a partnership firm called K. M. Ananda Prabhu and sons of Mangalore (firm) consisting of three partners which had also constructed a building thereon.
3. For the assessment years 1977-78 to 1979-80 relevant to the valuation dates of December 31, 1976, December 31, 1977, and December 31, 1978, respectively, the Hindu undivided family and the three partners of the firm filed their returns under the Wealth-tax Act, 1957 (Act No. 27 of 1957) (“the Act”), before the First Wealth-tax Officer, Mangalore, disclosing their net wealth in the aforesaid property. On February 10, 1979, the Wealth-tax Officer completed the assessments on the Hindu undivided family and the partners of the firm enhancing the value of the said property and those assessments have been affirmed by the appellate authority under the Act. But, not with standing these concluded assessments, at the instance of the Wealth-tax Officer, the Valuation Officer, Unit-III, Bangalore (Valuation Officer), on September 30, 1976 and December 31, 1977. In these petitions, under article 226 of the Constitution, the petitioners have challenged them (annexure-D in each writ petition).
4. The petitioners have urged that the impugned notices has been issued by the Valuation Officer for the assessment years for which assessments have been completed and concluded under the Act, that the Wealth-tax Officer can neither make a reference nor the Evaluation Officer can make a determination of the valuation of the property and that they are, therefore, wholly without jurisdiction and illegal.
5. The respondents have resisted the writ petitions.
6. Learned counsel for the petitioners contends that the notices issued by the valuation Officer at the instance of the Wealth-tax Officer proposing to refix the valuation of the property as on December 31, 1976, and December 31, 1977, in relation to which dates there was a determination of valuation in the assessments made which had become final are wholly without jurisdiction and illegal. In support of his contention, Sri Bhat strongly relies on the rulings of the High Courts of Calcutta, Madhya Pradesh and Rajasthan in Satyendra Chunder Ghose v. WTO , Smt. Uma Debi Jhawar v. WTO and Brig. B. Lall v. WTO and the commentary of Sri A. C. Sampath Iyengar Three New Taxes, VI edition, at page 683.
7. Learned standing counsel for the Revenue, refuting the contention urged for the pituitaries, counted that the notices issued by the Valuation Officer cannot be construed as notices exclusively for determination of valuation as on December 31, 1976, and December 31, 1977, but must be construed as general references for assessing the valuation of the property to be used by the authorities in accordance with law.
8. Learned standing counsel for the Revenue had produced that records at the hearing.
9. In this notices, the Valuation Officer had expressly indicated that he proposes to determine the valuation of the property as on December 31, 1976, and December 31, 1977, which are the valuation dates that are relevant for the assessment years 1977-78 and 1978-79. On the very dates stated by the Valuation Office, one can easily conclude that the valuation of the property relates to the very assessment years that have been concluded and had become final. Learned counsel for the Revenue does not dispute this position. Even otherwise, an examination of the records clearly indicates that the determination of the value is proposed to be made for the very assessment years completed and concluded earlier and not for other years or generally as contended before me for the Revenue, for the first time. I see no merit in this contention urged for the Revenue and reject the same.
10. Section 16A of the Act which empowers the Wealth-tax Officer to make a reference and the Valuation Officer to determine the value, is material and reads thus :
“16A. (1) For the purpose of making an assessment (including an assessment in respect of any assessment year commencing before the date of coming into force of this section) under this Act, the Wealth-tax Officer may refer the valuation of any asset to a Valuation Officer –
(a) in a case where the value of the asset as returned is in accordance with the estimate made by a registered valuer, if the Wealth-tax officer is of opinion that the value so returned is less than its fair market value;
(b) in any other case, if the Wealth-tax Office is of opinion –
(i) that the fair market value of the asset exceeds the value of the asset as returned by more than such percentages of the value of the asset as returned or by more than such amount as may be prescribed in this behalf; or
(ii) that having regard to the nature of the asset and other relevant circumstance, it is necessary so to do.
(2) For the purposes of estimating the value of any asset in pursuance of a reference under sub-section (1), the Valuation Officer may serve on the assessee a notice requiring him to produce or cause to be produced on a date specified in the notice such accounts, records or other documents as the Valuation Officer may require.
(3) Where the Valuation Officer is of opinion that the value of the asset has been correctly declared in the return made by the assessee under section 14 or section 15, he shall pass an order in writing to that effect and send a copy of his order to the Wealth-tax Officer and to the assessee.
(4) Where the Valuation Officer is of opinion that the value of the asset is higher than the value declared in the return made by the assessee under section 14 or section 15, or where the asset is not disclosed or the value of the asset is not declared in such return or where no such return has been made, the Valuation Officer shall serve a notice on the assessee intimating the value which he proposes to estimate and giving the assessee and opportunity to state, on a date to be specified in the notice, his objections either in person or in writing before the Valuation Officer and to produce or cause to be produced on that date such evidence as the assessee may rely in support of his objections.
(5) On the date specified in the notice under sub-section (4), or as soon thereafter as may be, after hearing such evidence as the assessee we may produce and after considering such evidence as the Valuation Office may require on any specified points and after taking into account all relevant material which he has gathered, the Valuation Officer shall, by order in writing, estimate the value of the asset and send a copy of his order to the Wealth-tax Officer and to the assessee.
(6) On receipt of the order under sub-section (3) or sub-section (5) from the Valuation Officer, the Wealth-tax Officer shall, so fast as the valuation of the asset in question is concerned, proceed to complete the assessment in conformity with the estimate of the Valuation Officer.”
11. When an assessment is pending before him, the section empowers the Wealth-tax Officer to make a reference on the valuation of the property involved in such an assessment. On such a reference, the Valuation Officer is competent to determine the valuation of such property and furnish the same to the Wealth-tax Officer which is made biding on him. Before making his assessment, the Wealth-tax Officer is not bound to accept the valuation furnished by the assessee in his return and is free to refer that question to the Valuation Officer, obtain his valuation and act on the same.
12. Section 2(ca) of the Act which defines “assessment” includes reassessment also But, the term “assessment” occurring in section 16A of the Act, in the context, can be given the retracted meaning of assessment only and cannot be given the extended meaning as defined in section 2(ca) of the Act. The extended meaning in the definition section must be applied only when the context demand and not otherwise. j In may view, the context of section 16A of the Act demands that the extended meaning in section 2(ca) cannot be given to the term “assessment” occurring in section 16A of the Act.
13. In the cases relied on for the petitioners, the High Courts of Calcutta, Madhya Pradesh and Rajasthan, on similar facts, have also expressed this very view. I am in respectful agreement with the view expressed by their Lordships in all those cases.
14. On this aspect, Sampath Iyengar’s treatise Three New Tads sums up the position at page 683 neatly in these words :
“It is, however, noteworthy that no valid reference can be made by the Wealth-tax Officer, if the assessee’s assessment for the year in question is not pending at the relevant time. Evidently, the report submitted by the Valuation Officer in an invalid reference must be a nullity in the eye of law, ab initio, void, non est, it cannot lead to the reopening of a closed assessment under section 17(1)”.
15. What is expressed here correctly sums the legal position.
16. On the foregoing discussion, it follows that notices issued by the Valuation Office for the assessment years 1977-78 to 1979-80 relevant to the valuation dates as son December 31, 1976, December 31, 1977, and December 31, 1978, completed and concluded, are wholly without jurisdiction and illegal and are liable to be quashed. I, therefore, quash the impugned notices.
17. Rule is made absolute. But, in the circumstances of the case, I direct the parties to bear their own costs.