Per Shri T. V. K. Nataraja Chandran, Accountant Member -These appeals by the two separate remaindermen of the property at Jail Road, Coimbatore are consolidated and disposed of by a common order for the sake of convenience as the issue involved is similar and arises from similar orders passed by the Commissioner under section 25(2) of the Wealth-tax Act, 1957 (the Act).
2. Late Shri G. D. Naidu gifted certain properties at Jail Road, by way of settlement on 12-12-1940 to his daughter Smt. V. Krishnammal for her life and thereafter to her sons and daughters equally and the sons daughters of her predeceased sons and daughters to get the properties per stripes holding the same absolutely. For the assessment year 1976-77 for which the valuation date is 31-3-1976, the share of the remaindermen shown at Rs. 2,57.500 in the case of Shri V. Jayaraman and Rs. 5,15,000 in the case of Shri V. Rajendran were accepted by the WTO in his orders dated 26-3-1981. Subsequently, the DVO valued such interest at Rs. 4,75,028 in respect of Shri V. Jayaraman and at Rs. 9,50,000 in the case of Shri V. Rajendran. In the light of the departmental valuation of the interest of the remaindermen, the Commissioner considered that the orders passed by the WTO were erroneous and prejudicial to the interest of the revenue in terms of section 25(2). After giving show-cause notice and considering the objections raised by the remaindermen the Commissioner held that the value adopted by the WTO was not correct market value of the property on the valuation date which is evidenced by the departmental valuation report. Although, this information was obtained subsequent to the completion of assessments by the WTO he could rely on such information for the purpose of revision under section 25(2). Accordingly, he set aside the assessments made by the WTO and directed him to make fresh assessments after giving the assessees reasonable and sufficient opportunity of being heard and in accordance with the law.
3. The remaindermen have raised several grounds to the effect that the orders passed by the WTO were not erroneous and prejudicial to the interests of the revenue to warrant revision under section 25(2) and the value of the remaindermen could be equated to the total value of the property excluding the life interest of the life tenants and the revision order indirectly extended the time limit for completion of the assessments.
4. The learned counsel for the assessee filed a paper book at the time of hearing and submitted that original value of the property as determined in the case of life tenant Krishnammal was adopted by the WTO, but that valuation was set aside by the appellate authority on the ground that no opportunity was given to the remaindermen who are the grandsons of late Shri G. D. Naidu. That is how the valuation was made by the DVO on 14-10-1982 determining the value of Shri V. Jayaraman at Rs. 4,75,028 and Shri V. Rajendran at Rs. 9,50,000. His main contention was that revised valuation as per the DVOs report was not before the WTO and did not form part of his records on the basis of which the Commissioner could revise his orders. Relying on the decision of the Calcutta High Court in the case of Ganga Properties v. ITO : 118ITR447(Cal) , he vehemently contended that the materials which came into existence after the assessment for the purpose of revision under section 25(2) and several decisions of the Tribunal holding likewise have also been filed in the paper book.
5. The learned counsel departmental representative on the other hand relied on the decision of the Delhi High Court in the case Gee Vee Enterprises v. Addl. CIT : 99ITR375(Delhi) in support of his contention that the WTO having not made proper enquiry required by the mandatory section 16A of the Act constituted error and, therefore, the Commissioner could invoke his jurisdiction under section 25(2). In reply the learned counsel for the assessee submitted that section 16A is not mandatory and the assessees case was not a case of the failure of the WTO in making the enquiry and, therefore, the decision of the Delhi High Court cited (supra) was not applicable.
6. We have duly considered the rival contentions and the facts of this case. At the outset, we have to observe that the Commissioner should prima facie make out a case that the orders passed by the WTO were erronous insofar as they were prejudicial to the interests of the revenue. In this case, the Commissioner has relied on the subsequent valuation of the DVO and which was not part of the assessment record before the WTO to come to the conclusion that the value shown by the remaindermen and adopted by the WTO was not the correct market value of the property on the valuation date. The Calcutta High Court was held that the material which came into existence after the assessment was completed did not form part of the record of the assessment for the purpose of invoking revision under section 25(2). The Tribunal, Bombay Bench B, in the case of PQR, HUF v. First WTO [WT Appeal Nos. 215 to 219 (Bom) of 1981, dated 12-5-1981] has held that the valuation report obtained after the assessment could not be relied upon by the Commissioner for exercising revisionary jurisdiction under section 25(2) and the Boards circular on obtaining report from the Valuation Officer for properties of over Rs. 5 lakhs value affects judicial aspects of the Act and is beyond the Act and, therefore, not binding on the WTO. The omission to follow the Boards circular in such circumstances, could not be the basis for treating the order of the WTO as prejudicial or erroneous in terms of section 25(2). In the case of ABC v. Second WTO [WT Appeal Nos. 1043 to 1046 (Bom) of 1980 dated 13-10-1981], the Tribunal held in its order in relying on the Calcutta High Court in the case of Ganga Properties (supra) and the Gujarat High Court in the case of State of Gujarat v. Chelabhai Bhanabhai Prajapati  33 STC 147, that the valuation report of the DVO obtained after the assessments were completed by the WTO did not form part of the records on which the WTOs order was passed and, consequently, the Commissioner had no jurisdiction to revise the assessments under section 25(2).
7. The case before us involves valuation of interest of remaindermen in certain properties situated at Jail Road, Coimbatore. Originally the WTO adopted the valuation for the assessees based on the valuation report of the properties by an approved valuer given in the case of life tenant Smt. Krishnammal, but the valuation of the properties was set aside by the appellate authority on the ground that no opportunity was given to the assessee remainderman that is how the DVO came into the picture and valued the properties on the basis of which the Commissioner of Income-tax exercised his revisional powers. This event of valuation of property by the DVO took place after the original assessments were made under section 16(3) of the Act after discussion with the assessees representative Shri K. Murali Mohan. The WTO has left a note in the body of the assessment order in the case of Shri V. Jayaraman which reads as under : 'The assessee has a house property in which the mother has life interest. The value of the property is equal to life interest and being less than Rs. 1 lakh ignored.' This shows that the WTO had applied his mind regarding the value of the property and also the value of the life interest of the life tenant. In this connection, it is relevant to point out that the DVOs report obtained subsequent to the regular assessment made by the WTO could not be treated as information within the meaning of section 17(1) (b) of the Act as per the judgment of the Supreme Court in D. R. Chawla, WTO v. Ramdas Kilachand [SLP (Civil) No. 5663 of 1980, dated 30-3-1983] filed by the department against the judgment of the Bombay High Court dated 10-1-1980 whereby the High Court dismissed the departmental appeal against the judgment of a Single Judge allowing the writ petition on the point whether the WTO having completed the assessment accepting the assessees valuation can reopen the assessment on the basis of DVOs report and whether the DVOs valuation report constitutes information within the meaning of section 17(1) (b). In the light of the judgment of the Supreme Court it is clear that the subsequent valuation report obtained from the DVO is not information for reopening the assessment under section 17(1) (b). When this is the legal position it is not open to the reason as to how this information which was not on the reason as to how this information which was not record at the time of making original subsequent thereto could form part of the record so as to constitute the original order passed by the WTO as erroneous insofar as it was prejudicial to the interests of the revenue. The reopening of the assessment is only to restore the revenue what was lost to the department while the revision of the Commissioner of Income-tax is also aimed at the same objective. The law laid down by the Supreme Court in respect of information for the purpose of reassessment cannot be different for the purpose of information for the purpose of revision valuation is purely subject to guesswork and even the same property for the same year. There is no question of the WTO omitting to take into account any evidence which was relevant or taking into account any evidence which was irrelevant and ignoring any evidence on the record. It was also not a case of the WTO making order in haste or male fide so as to constitute the orders by him as erroneous in law and in fact.
8. In view of the aforesaid decisions, we hold that the Commissioner was not justified in exercising his jurisdiction under section 25(2) and, consequently, setting aside the assessments holding that they were erroneous insofar as they were prejudicial to the interests of the revenue. In this view of the matter, therefore, we set aside the orders passed by the Commissioner and consequently, restore the orders passed by the WTO.
9. In the result, the appeals are allowed.