The main legal point established in the judgment is the admissibility of a subsequent valuation report as 'information' for reassessment under section 17(1)(b) of the Wealth-tax Act, despite not being received before the original assessment order.

M. Rama Jois, J.—These are two references under section 27(1) of the Wealth-tax Act, 1957 ("the Act" for short).

2. The question referred for our opinion in both the references, which is common, is as under :

"Whether, on the facts and in the circumstances of the case, the reassessment could be held to be valid under section 17(1)(b) of the Act, though it was reopened under section 17(1)(a) of the Wealth-tax Act ?"

3. The brief facts of the case, necessary for answering the reference, are these :

The assessee is the same in both the references. The assessment years concerned are 1974-75 and 1975-76. During the pendency of these assessment proceedings on February 17, 1976, the Assessing Officer called for a valuation report in respect of a building called "Harsha Mahal" from the Official Valuer under section 16 of the Wealth-tax Act. However without waiting for the valuation report, the Wealth-tax officer completed the assessment for both the assessment years on April 2, 1976. The wealth of the assessee was determined at Rs. 2,53,100. This included the value of the building "Harsha Mahal" at Rs. 5,65,000. This valuation had been arrived at by the Wealth-tax Officer by applying the multiplier of 15 to the annual rental value. Subsequently, on June 8, 1977, the valuation report as on the date relevant for both the assessment years was sent by the official valuer. He valued the building at Rs. 8,21,500 as on March 31, 1974 and at Rs. 10,05,000 as on March 31, 1975. The successor Wealth-tax Officer considered this report as fresh information available in respect of the building property and commenced reassessment proceedings under section 17(1)(a) of the Act. Accordingly, a notice was issued to the assessee. The assessee filed fresh returns on November 2, 1977, declaring his net wealth at Rs. 2,55,600 as on the date of valuation for the assessment year 1974-75 and at Rs. 2,60,100 as on the date of valuation relevant to the assessment year 1975-76. The Wealth-tax Officer completed the reassessment adopting the valuation report furnished by the official valuer for the two assessment years. Aggrieved by the reassessment orders, the assessee preferred appeals before the Appellate Assistant Commissioner of Income Tax, Range II, Bangalore. The Appellate Assistant Commissioner was of the view that, as the valuation reports under section 16 of the Act had not been received before the assessment order was passed, it was not binding on the Assessing Officer. The appellate authority was also further of the view that, as the Wealth-tax Officer, in the absence of a report of the official valuer under section 16 of the Act, had valued the house property on the basis of rental income by applying the well-known method of multiplier of 15, the matter could not have been reopened under section 17 of the Act. He also held that the opinion in the valuation report which was not binding, at the best, could be treated as a mere change of opinion and, therefore, could not constitute a basis for reopening the assessment under section 17 of the Act. The Revenue took the matter in appeal before the Tribunal. The Tribunal gave a categorical findings that the provisions of section 17(1)(a) of the Act would not APPLICANT as the assessee had disclosed the facts fully and truly. The Tribunal, however, held the assessee's case would fall under section 17(1)(b) of the Act as there was information which constituted a basis to say that a portion of the wealth of the assessee had escaped assessment. The Tribunal found that as the reference had been made by the Wealth-tax Officer to the Valuation Officer when the assessment proceeding was pending, though the report was received subsequently, it could be used for making a reassessment under section 17(1)(b) of the Act. Accordingly, the Tribunal set aside the order of the Appellate Assistant Commissioner and remitted the case for consideration on other points raised in the appeals. Thereafter, at the instance of