1. These five appeals by the assessee, a HUF, relate to its assessments for the assessment years 1965-66 to 1969-70.
2. Briefly stated, the relevant facts are that the assessee-HUF owned certain immovable properties in Bombay. The value of these properties was shown at Rs. 3,50,000 for the assessment years 1965-66, 1966-67 and 1967-68. The same was shown at Rs. 8,03,000 for the assessment years 1968-69 and 1969-70 on the basis of a valuation report given by K.G.Kapadia & Co., Government approved valuer. In the light of the report, the value shown for the earlier years in the original returns filed by the assessee, was suitably enhanced for the assessment years 1965-66, 1966-67 and 1967-08 to Rs. 4,78,000, Rs. 6,00,000 and Rs. 7,34,000, respectively, by filing the revised returns. The WTO after going through the valuation report submitted by the assessee, accepted the valuation of the immovable properties as shown by the assessee for all the five years under consideration.
3. Subsequently, the WTO got these properties valued by a departmental valuer. The departmental Valuation Officer has, by his report dated 1-12-1979, valued these properties for each of the years under consideration at a substantially higher figure than the value shown by the assessee and adopted by the WTO in the assessment orders. The valuation by the departmental Valuation Officer of these properties in the respective years was Rs. 15,00,000, Rs. 20,21,000, Rs. 20,21,000, Rs. 12,91,000 and Rs. 12,19,000.
4. On the basis of the figures as per the department valuer's report, the Commissioner felt that the valuation adopted by the WTO was prima facie very low and there were reasons to believe that the orders of the WTO were erroneous insofar as they were prejudicial to the interests of the revenue. A show-cause notice was issued to the assessee in response to which the assessee filed written reply and the counsel for the assessee was heard by the Commissioner on 16-1-1981. However, for reasons given in paragraphs 5 and 6 of his order, the Commissioner has rejected the assessee's objection, set aside the orders of assessment and directed the WTO to make assessments afresh after determining the correct market value of these properties in each of these years, taking into account all the relevant facts and materials into consideration.
5. Aggrieved by the aforesaid consolidated order of the Commissioner, the assessee has come up in appeal. It is contended that the valuation report obtained by the WTO subsequent to the completion of the wealth-tax assessments herein was not an admissible piece of evidence and, in any event, the Commissioner could not have relied on the said valuation report for holding the orders of the assessment by the WTO to be erroneous and prejudicial to the interests of the revenue. For this purpose, Sri S.E. Dastur, the learned counsel for the assessee, has strongly relied on the decision of the Calcutta High Court in the case of Ganga Properties v. ITO  118 ITR 447. In particular, he urged that the WTO did not have the jurisdiction to call for the valuation report and that the Commissioner could not, in law, take into account the said report for the purpose of assuming jurisdiction under Section 25(2) of the Wealth-tax Act, 1957 ("the Act"). Inviting our attention to the decision of the Punjab and Haryana High Court in the case of CIT v. R.K. Mittal Works , it is submitted that it is necessary for assuming jurisdiction under Section 25(2) that the Commissioner should at least primafacie come to the conclusion that the order passed by the WTO is erroneous and prejudicial to the interests of the revenue.
Taking us through the order of the Commissioner, Sri Dastur submits that there is no indication in the order that the Commissioner has applied his mind independently and considered the orders of assessment to be erroneous. According to him, the Commissioner has mechanically based his decision on the valuation report obtained by the WTO subsequent to the completion of the wealth tax assessments.
6. The departmental representative has, on the other hand, strongly relied on the order of the Commissioner. In particular, he has invited our attention to the decision of the Delhi High Court in the case of Gee Vcc Enterprises v. Addl. CIT  99 ITR 375 for the proposition that if the ITO/WTO has accepted the assessee's statement without making a proper inquiry, that fact will itself reasonably lead to the conclusion that the order of the assessment is erroneous and prejudicial to the interests of the revenue. Our attention in this behalf is also invited to the Board's Instruction No. 365 [F. No.319/5/70 WT dated 28-12-197.1 from the CBDT] in terms of which the WTO is duty bound to refer the question of valuation if the value of immovable property is Rs. 5,00,000 or more. It is stated that this instruction of the department was not observed by the WTO. Therefore, the Commissioner was justified in coming to the conclusion that the orders of assessment passed by the WTO without following the aforesaid instructions were erroneous and prejudicial to the interests of the revenue.
7. In reply, Sri S.E. Dastur has referred to the provisions of Section 16A of the Act to show that the circular referred to by the departmental representative goes beyond the provisions of the section and is, therefore, invalid. Reliance in this behalf has been placed on the decision of the Madras High Court in the case of A.L.A. Firm v. CIT  102 ITR 622 for the proposition that any instruction issued by the department cannot legally extend to the judicial aspects of the administration of the Act.
8. We have heard the parties and have gone through the facts on record and the cases relied upon carefully. We are of the view that the valuation report subsequently obtained by the WTO after the completion of the wealth-tax assessment is certainly uncalled for under the provisions of the Act. In the premises, we are inclined to accept Sri Dastur's submission that the said valuation report could not be relied upon by the Commissioner for assuming jurisdiction under Section 25(2).
We also arrive at the same conclusion for another reason, namely, that such a valuation report is subsequent to the completion of the assessment which the Commissioner could not have considered as laid down by the Calcutta High Court in the case of Ganga Properties (supra). As regards the Board's circular referred to by the departmental representative, we find that apart from other reasons which we will give in the course of our order, the Commissioner had not referred to the said circular in his impugned order revising the assessments under Section 25. The provisions of Section 16A contemplate reference by the WTO to a Valuation Officer under certain circumstances. The direction of the Board in terms of the circular to call for a report from a Valuation Officer if the value of an individual property exceeds Rs. 5,00,000 is certainly not contemplated in the section. In the circumstances, it can be reasonably assumed that the Board's direction has gone beyond the provisions of the Act.
Moreover, it cannot be disputed that the said direction in the circular affects the judicial aspects of the administration of the Act as distinct from the administrative aspects. Therefore, following the decision of the Madras High Court in the case of A.L.A. Firm (supra), we would hold that the said circular was not binding on the WTO in this regard and the Commissioner would not be justified in holding the orders of assessment to be erroneous and prejudicial to the interest of the revenue on the ground that the WTO completed the assessments without following the direction contained in the said circular.
9. Having regard to the above discussion, we hold that the order of the Commissioner cannot be sustained. The same is set aside. In the result, the appeals are allowed.