Commissioner Of Income Taxbathinda v. None For The

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ----- -Income tax Appeal No. 71 of 2003Date of decision: July 14, 2010 -Commissioner of Income taxBathinda --- Appellant Versus Devki Devi widow of lateKasturi LalRespondent --- --- CORAM: HON’BLE MR. JUSTICE ADARSH KUMAR GOELHON’BLE MR. JUSTICE AJAY KUMAR MITTAL --- PRESENT:Ms. Savita Saxena, Advocatefor the appellant.for the appellant. None for the respondent . --- AJAY KUMAR MITTAL , .J 1.TheRevenuehasapproachedthisCourtunder-Section 260- A of the Income tax Act, 1961 ( in short “the Act’) and has prayed that the following substantial questionsof law arise in this appeal for the consideration of this Court,-from the order of the Income tax Appellate Tribunal, AmritsarBench, Amritsar (inshort “theTribunal”) passedon-30.9.2002, in Income tax Appeal No. 555 (ASR) 2001, forthe assessment year 1992-93: 1-Whether on the facts and in the circumstancesof thecase, the Hon’ble ITAT wasjustified inof thecase, the Hon’ble ITAT wasjustified in law in holding that the reopening of assessmentu s/ 147 oftheactbasedonvaluation reportwas not valid, whereas as per valuation reportincometothetuneofRs. 16,91,200/- hasescaped assessment ”.u s/ 147 oftheactbasedonvaluation reportwas not valid, whereas as per valuation reportincometothetuneofRs. 16,91,200/- hasescaped assessment ”. 2-Whether on the facts and in the circumstancesofthecasetheHon’bleITATwasjustified inholdingthatthereportoftheDepartmentalValuationOfficeris “Informationornot”forinitiatingproceedingsu s/ 147 evenafterofthecasetheHon’bleITATwasjustified inholdingthatthereportoftheDepartmentalValuationOfficeris “Informationornot”forinitiatingproceedingsu s/ 147 evenafter amendmentinsection 147 witheffectfrom1.4.1989.” The assessee had filed return of income for 2. the assessmentyear 1992-93, declaring an income of Rs.18,650/-. Thereturnwasprocessed under Section 143(1)( ) aof the Act and subsequently proceedings under Sections147/148 oftheActwereinitiated. Theassessing officerobserved that an income of Rs. 16,91,200/- chargeable totax had escaped assessment as the assessee had incurredRs. 1,51,000/- ascostofconstruction renovation/ofresidentialhouseNo. 3056, PowerHouseRoad, BathindaagainstcostofconstructionofRs. 18,42,200/- asdetermined by the Departmental Valuation Officer (DVO). TheAssessingOfficerultimately, videassessmentorderdated18.2.2000 framedassessmentonanincomeofRs.14,09,928/-. Theassesseefiledappealbeforethe-CommissionerofIncome tax (Appeal) [(forshort “CIT A ”( )] .The appeal was remanded back to the assessing officer for-decisionafresh. Theassessingofficerre framedthe assessment, videorderdated 27.6.2001 andmadeanaddition of Rs. 5,06,600/-. This gave rise to the assesseetoonceagainpreferappealbeforetheCIT A( ). In theappeal, theCIT ( ) Aheldthattheassessingofficer wasjustified in invoking the provisions of Sections 147 read withSection 148 oftheAct. Theconsequential assessmentframed under Section 143(3) was, thus, held to be legal andvalid. 3.The assessee preferred appeal before the Tribunal.-The assessee only pressed the question of re opening of theassessment under Section 147 of the Act. The Tribunal afterexamining the matter, accepted the plea of the assessee andaccordingly, allowed the appeal vide order dated 30.9.2002. 4.The issue that arises in this appeal is whether theassessing officer could have reopened an assessment on thebasis of report of the DVO. Learned counsel for the Revenue,however, couldnotrefertoanyprovisionexceptSection55 A of the Act on the basis of which, it could be pleadedthatthereportoftheDVOwasvalidforestimating the correct cost of the construction and investment in the housein question. He also made efforts to draw support from theprovisions of Section 142 A of the Act introduced by FinanceAct (No.2) of 2004 . . . 15.11.1972.w e f 5.Wedonotfindanysubstanceineither of thesubmissions made by the learned counsel for the Revenue. 4.The issue that arises in this appeal is whether theassessing officer could have reopened an assessment on thebasis of report of the DVO. Learned counsel for the Revenue,however, couldnotrefertoanyprovisionexceptSection55 A of the Act on the basis of which, it could be pleadedthatthereportoftheDVOwasvalidforestimating the correct cost of the construction and investment in the housein question. He also made efforts to draw support from theprovisions of Section 142 A of the Act introduced by FinanceAct (No.2) of 2004 . . . 15.11.1972.w e f 5.Wedonotfindanysubstanceineither of thesubmissions made by the learned counsel for the Revenue. 6.TheapexCourtinSmt. AmiyaBalaPaul .v-CommissionerofIncome Tax, (2003) 262 ITR 407 (SC)had held that in an assessment of the assessee to incometax, thereferencebytheassessingofficerto the DVOregarding question of cost of construction of a property builtbytheassesseecannotbemade. Oncethat is so, thereliance on the report of the DVO by the assessing officer forreopening the assessment was not justified. 7.Even after insertion of Section 142 A of the Act byFinance (No. 2) Act, 2004, . . . 15.11.1972, w e fthis Court whileconsidering the scope of its applicability to proceedings under-theAct, inIncome taxReferenceNo. 48 of 1994, CommissionerofIncomeTax (Central), Ludhiana v . NabhaSolvex ( ) PLtd. decided on 7.7.2010, has held as under: “11. ThequestionregardingtheapplicabilityofSection 142AoftheActwassubject matter ofconsideration before this Court in Krishan Lal Dua s'case (supra) wherein the assessment had becomefinal on 31.3.1995 and the same was not liable toreassessmentunderSection 153Aofthe Act, itwas held that Section 142 A of the Act would notbeapplicableastheprovisowasattracted. The'AllahabadHighCourtinSmt. ShashiAgarwal scase (supra) had held that where the Tribunal hadpassed the order before the cutoff date prescribedunder the proviso to Section 142 A of the Act andthe appeal under Section 260 A of the Act beingmaintainablebeforetheHighCourtonlyonsubstantial question of law, therefore, it could notbesaidtobecontinuationoftheassessmentproceedingswithinthemeaningofprovisoto Section 142 AoftheAct. TheAssessing Officer,thus, hadnopowertoreferthematter to theDVO. Similarview hasbeen takenbyDelhi andCalcutta High Courts. 8.In view of the above, we hold that Section142 A of the Act is not attracted to the facts of the presentcaseand, thus, noreliancecanbeplaceduponthat.Consequently, theinitiationofreassessmentproceedings onthe basis of report of the DVO cannot legally be sustained. 9.Accordingly, thesubstantialquestionsoflawclaimed by the Revenue for determination by this Court areanswered against the Revenue. The appeal is dismissed. (AJAY KUMAR MITTAL)JUDGE GOEL)July 14, 2010*rkmalik* (ADARSH KUMAR JUDGE