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1. The WTO issued a notice under Section 17(1)(a) of the W.T. Act to the assessee on the ground that the assessee failed to disclose fully and truly all material facts necessary for assessment of his net wealth chargeable to tax for the assessment years 1963-64 to 1967-68. That notice was issued in December, 1971. The notice has specified that the assessee failed to include 81/2 acres of land in Maredpalli in his wealth-tax returns for all the relevant assessment years. It so happened that when the WTO reopened the assessments he found that the Begumpet house property of the assessee was under-valued in all the assessment years and a bad debt of Rs. 2,36,985 for the assessment years 1966-67 and 1967-68 was wrongly allowed. An objection was taken by the assessee before the AAC and before the Appellate Tribunal that, in so far as the two items, viz., the house property in Begumpet and the bad debt are concerned, the WTO was not competent to reopen the assessment proceedings for the first four years, as the time prescribed for taking action in respect of cases falling under Clause (b) of Section 17(1) is at any time within four years of the end of that assessment year. This contention of his was negatived throughout.

(2) If the answer to the above question is in the affirmative, whether the Wealth-tax Officer was competent to revise the value of the Begumpet property in the reassessments for 1964-65 to 1966-67 and to disallow the assessee's claim for bad debt of Rs. 2,36,985 in the reassessment for 1966-67 when the limitation under Section 17(1)(b) had expired in respect of these two items ?

(3) Whether, on the facts and in the circumstances of the case, the land at Maredpalli can be treated as non-agricultural in nature and its value included in the net wealth of the assessee for the assessment years 1963-64 to 1967-68?"

6. This referred case came up before a Division Bench consisting of Obul Reddi C.J. and M. Ramachandra Raju J., who by their order dated September 27, 1977, answered question No. 1 in the affirmative and in favour of the revenue and referred question No. 2 to a Full Bench as in their opinion it is an important one and is likely to arise quite often and there should be an authoritative pronouncement. That is how this has come up before us.

in order to appreciate the scope of the question it is necessary to refer briefly to the facts and circumstances indicated in the statement of case. For the assessment years 1963-64 to 1967-68, the wealth-tax assessments of the assessee were originally completed under Section 16(3) of the Act on February 6, 1965, March 5, 1965, and January 27, 1968, respectively. Subsequently, the WTO, having come to know that an item of immovable property consisting of 81/2 acres of open land at Maredpalli, Secunderabad, was not disclosed by the assessee in the original returns, reopened in the first instance the assessments for the years 1957-58 and 1958-59 and estimated the value of the property at Rs. 85,000. The plea of the assessee that Maredpalli land was agricultural land and was, therefore, exempt from the purview of the Act was abandoned at the time of hearing of the appeal and the plea was confined to the value of the lands. The AAC determined the value of the land at Rs. 25,000 in his order dated April 5, 1969. Thereafter, the WTO reopened the assessments for the years 1963-64 to 1967-68 by the issuance of notices under Section 17(1)(a) of the Act on the ground that the assessee failed to disclose fully and truly all the relevant and material facts relating to the assessments in question. In the returns filed by the assessee in response to the notice issued under Section 17 of the Act, Rs. 25,000 towards the value of the Maredpalli land was included by the assessee, although the assessee objected to the jurisdiction of the WTO to reopen the assessment. Overruling the objections relating to the jurisdiction to reopen the assessment, the WTO held that the Maredpalli land was non-agricultural in nature and its value was liable to wealth-tax. In the returns filed for the assessment years 1968-69 and 1969-70 the assessee himself admitted the value of the Maredpalli land to be Rs. 85,000 on the basis of the approved valuer's report. . In the circumstances, for the assessment years 1963-64 and 1964-65, the value of the land was determined at Rs. 75,000, for the assessment years 1965-66 and 1966-67 at Rs. 80,000 and for the assessment year 1967-68 at Rs. 85,000. The WTO also noticed another property known as Begumpet property, the value of which was declared by the assessee for the assessment year 1968-69 at Rs. 3,83,801 on the basis of the report of an approved valuer and, therefore, came to the conclusion that there was under assessment in respect of the value of the property which was declared by the assessee at Rs. 1,60,000 in the original returns and accordingly fixed the value of the property at Rs. 2,75,000, Rs. 3,00,000, Rs. 3,25,000, Rs. 3,50,000 and Rs. 3,83,000 for the assessment years 1963-64, 1964-65, 1965-66, 1966-67 and 1967-68, respectively.

7. On appeal, the AAC held that the WTO was well within his jurisdiction to reopen the assessments and fixed the value of the Maredpalli land at Rs. 60,000 for the assessment year 1963-64, Rs. 70,000 for 1964-65 and 1965-66 and Rs. 80,000 for 1966-67 and 1967-68 and upheld the assessment in respect of Begumpet property. In the further appeal to the Tribunal, it was contended on behalf of the assessee that there was no escapement of the value of Maredpalli land within the meaning of Section 17(1)(a), that, in any event, the WTO had no jurisdiction to reassess the items of escapement or under-assessment which would fall within the category of Section 17(1)(b) as the period of four years' limitation had expired, that the Maredpalli land was agricultural in nature and as such it was exempt from tax and that the reassessment and assessment are, consequently, invalid and without jurisdiction. This claim was countered by the departmental representative by stating that the assessee had admitted the fact of non-inclusion of Maredpalli property and when notice was issued seeking reopening of assessment, the assessee included that property in the revised return and hence the WTO had jurisdiction to reopen the assessment under Section 17(1)(a) of the Act. The assessee's representative replied that the admission of the assessee, that the Maredpalli land was non-agricultural in nature, was made under an erroneous impression of law and that admission was withdrawn before the AAC in view of the Full Bench decision of the Andhra Pradesh High Court in Officer-in-Charge (Court of Wards] v. CWT [1969] 72 ITR 552. The Tribunal agreed with the WTO and the AAC that the omission of Maredpalli property in the original return had undoubtedly invested the WTO with the jurisdiction to reopen the assessment under Section 17(1)(a) of the Act and the attitude of the assessee before the appellate authorities would not deprive the WTO of his powers and jurisdiction to reopen the original assessment. However, on the application of the several tests laid down by the Andhra Pradesh High Court in Officer-in-Charge (Court of Wards) v. CWT [1969] 72 ITR 552 [FB] it was found that the land was agricultural in nature and was, therefore, exempt from the purview of the Act. The Tribunal negatived the contention of the assessee's representative that the WTO was precluded in the proceedings initiated under Section 17(1)(a) of the Act to charge the items of wealth falling under Section 17(1)(b) of the Act, and, consequently, the underassessment pertaining to Begumpet property was held to be rightly revised in the reassessment and the disallowance of bad debt of Rs. 2,36,985 was quite in order in the assessments for the years 1966-67 and 1967-68. The Tribunal determined the value of Begumpet property at Rs. 3,50,000, Rs. 3,00,000, Rs. 2,50,000, Rs. 2,00,000 and Rs. 1,60,000 for the assessment years 1967-68, 1966-67, 1965-66, 1964-65 and for 1963-64, respectively.