Wealth tax
This query is : Resolved
17 April 2013
Status - Pvt Ltd Co
For AY 2005-06
Wealth Tax Return Filed within Due date
Query:
Assesing officer first service notice u/s 17(1)on 30-3-2012. Company replies to notice of AO. Thereafter on AO issues assessment order dated 21-12-2012 & make addition to net wealth 2 crores.
I think AO has issued time barred asseement order under section 17.
Request you to provide your opinion.
Regards.
For AY 2005-06
Wealth Tax Return Filed within Due date
Query:
Assesing officer first service notice u/s 17(1)on 30-3-2012. Company replies to notice of AO. Thereafter on AO issues assessment order dated 21-12-2012 & make addition to net wealth 2 crores.
I think AO has issued time barred asseement order under section 17.
Request you to provide your opinion.
Regards.
17 April 2013
Section 17A talks about the time limit to complete the assessment. As per that section,post amended by Finance Act,2012, time limit is 12 months from the end of the financial year in which notice is served u/s 17(1).
Therefore, the order of the AO is not barred by time.
Therefore, the order of the AO is not barred by time.
17 April 2013
Can AO can pass assement order as income escaping assement even after 6 years from end after AY? As amendment in Finance act is for asset l;ocated outside india
03 August 2025
You're right to raise this question. Let's break it down carefully with reference to Wealth Tax Act provisions (as they existed for AY 2005–06) and the Finance Act, 2012 amendment.
🔍 Facts Recap:
Assessee: Pvt Ltd Co
AY: 2005–06
Return filed: Within due date
Notice u/s 17(1): Issued on 30-03-2012
Assessment Order: Passed on 21-12-2012
Addition: ₹2 crore to net wealth
Your Concern: Is it time-barred?
📘 Relevant Legal Provisions
📌 1. Section 17 of Wealth Tax Act, 1957 (Reassessment)
Allows AO to reopen assessment if net wealth has escaped assessment.
📌 2. Section 17A — Time Limit for Completion
After Finance Act 2012, inserted Section 17A(2):
Assessment shall be completed within 12 months from the end of the FY in which notice under section 17(1) is served.
✅ So, notice served on 30-03-2012, i.e., FY 2011–12
🗓️ Therefore, assessment must be completed by 31-03-2013
➡️ AO passed order on 21-12-2012 — within time limit
📌 3. Time limit for issuing notice u/s 17(1):
Earlier, time limit was 6 years from the end of the relevant AY.
For AY 2005–06 → Time limit expired on 31-03-2012
AO issued notice on 30-03-2012 → ✅ Within time
📌 4. Clarification on Foreign Asset Extension
You're right — Finance Act, 2012 extended the reopening limit to 16 years, but only for assets located outside India.
➡ Since your case does not involve foreign assets, the 6-year limit applies.
✅ Conclusion:
Notice issued within 6-year window ✅
Assessment order passed within 12 months ✅
➤ Not time-barred, valid order under amended Section 17A
🔍 Facts Recap:
Assessee: Pvt Ltd Co
AY: 2005–06
Return filed: Within due date
Notice u/s 17(1): Issued on 30-03-2012
Assessment Order: Passed on 21-12-2012
Addition: ₹2 crore to net wealth
Your Concern: Is it time-barred?
📘 Relevant Legal Provisions
📌 1. Section 17 of Wealth Tax Act, 1957 (Reassessment)
Allows AO to reopen assessment if net wealth has escaped assessment.
📌 2. Section 17A — Time Limit for Completion
After Finance Act 2012, inserted Section 17A(2):
Assessment shall be completed within 12 months from the end of the FY in which notice under section 17(1) is served.
✅ So, notice served on 30-03-2012, i.e., FY 2011–12
🗓️ Therefore, assessment must be completed by 31-03-2013
➡️ AO passed order on 21-12-2012 — within time limit
📌 3. Time limit for issuing notice u/s 17(1):
Earlier, time limit was 6 years from the end of the relevant AY.
For AY 2005–06 → Time limit expired on 31-03-2012
AO issued notice on 30-03-2012 → ✅ Within time
📌 4. Clarification on Foreign Asset Extension
You're right — Finance Act, 2012 extended the reopening limit to 16 years, but only for assets located outside India.
➡ Since your case does not involve foreign assets, the 6-year limit applies.
✅ Conclusion:
Notice issued within 6-year window ✅
Assessment order passed within 12 months ✅
➤ Not time-barred, valid order under amended Section 17A
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