Ita/20/2003 Of The Commissioner Of Income Tax,Cochin v. Mrs.achamma Chacko

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE T.R.RAMACHANDRAN NAIR THURSDAY, THE 3RD APRIL 2008 / 14TH CHAITHRA 1930 ITA.No. 20 of 2003() -------------------- ITA.277/COCH/1994 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/PPELLANT ------------------------------------- THE COMMISSIONER OF INCOME TAX, COCHIN BY ADV. SRI.P.K.R.MENON(SR.),SR.COUNSEL FOR IT SRI.GEORGE K. GEORGE, SC FOR IT RESPONDENTS: RESPONDENT ----------------------- MRS.ACHAMMA CHACKO, PALACKAL COURT, M.G.ROAD, ERNAKULAM. BY ADV. SRI.S.VIJAYAN NAYAR THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 03/04/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR &T.R.RAMACHANDRAN NAIR, JJ. .................................................................... ....................................................................Dated this the 3rd day of April, 2008. JUDGMENT C.N.Ramachandran Nair, J. This is an appeal filed by the Revenue under Section 260A of the Income Tax Act challenging the order of the Tribunal upholding C.I.T's.(Appeal) order cancelling re-assessment made against the respondent-assessee for the assessment year 1986-87. The assessee who had not filedreturn was called upon to file return on account of investment in theconstruction of a building. The assessee filed return and along with it avaluation report of construction. The Assessing Officer made assessmentmaking certain additions. In the appeal filed against the same, the C.I.T.(Appeal) remanded the matter for the limited purpose of examininggenuineness of certain cash credits added in the original assessment. Whenthe matter went back to the Assessing Officer for passing revised orders interms of the directions contained in the C.I.T's. order, the Assessing Officerreferred valuation of the building constructed by the assessee by thedepartment's valuer. Even after reference for valuation, the AssessingOfficer gave effect to the C.I.T.'s order against which also assessee filed another appeal which was allowed by the appellate authority cancelling theaddition pertaining to unexplained cash credits. The Assessing Officerafter receipt of valuation report from the department's valuer who valuedthe investment at about Rs.26 lakhs, reopened the assessment and made anassessment of around Rs.9 lakhs. On appeal filed against the revised order,the appellate authority found that reference for valuation was made by theAssessing Officer when no proceeding was pending before him andtherefore, he cancelled the re-assessment made under Section 147 of theAct. The appeal filed by the Revenue was dismissed by the Tribunalagainst which this appeal is filed. We have heard Senior counselSri.P.K.R.Menon for the Revenue and Sri.Vijayan Nair for the respondent-assessee. 2. Even though counsel for the Revenue contended that reference forvaluation was made by the Assessing Officer when the assessment stoodremanded under the orders of the C.I.T.(Appeal), counsel for the assesseecontended that C.I.T.(Appeal) remanded the matter only for the limitedpurpose of considering certain cash credits and assessment as such was notpending before the Assessing Officer for reconsideration. We do not think 2. Even though counsel for the Revenue contended that reference forvaluation was made by the Assessing Officer when the assessment stoodremanded under the orders of the C.I.T.(Appeal), counsel for the assesseecontended that C.I.T.(Appeal) remanded the matter only for the limitedpurpose of considering certain cash credits and assessment as such was notpending before the Assessing Officer for reconsideration. We do not think we should enter any finding on this matter because we are of the view thatintroduction of Section 142A with retrospective effect may validate thereference by the Assessing Officer for valuation, no matter whether theassessment was pending after remand by the C.I.T.(Appeal) or not. TheTribunal had no occasion to consider the amendment because theamendment, though introduced with retrospective effect from 15.11.1972,was made only by Finance (No.2) Act, 2004. Since the new provisionSection 142A entitles an Assessing Officer for referring the question ofvaluation even after completion of an assessment for the purpose ofconsidering reassessment after receipt of valuation report, the reference bythe officer in this case may get validated on account of the retrospectivitygiven to the amendment. If that is so, then the correctness of thereassessment has to be gone into by the C.I.T.(Appeal) on merits. In otherwords, the assessee should have an opportunity to contest the case onmerits. However, since both the appellate authorities have not consideredthe impact of amendment with retrospective effect, we leave open both theissues to the Commissioner of Income Tax (Appeal) for consideration i.e.whether reopening is justified on account of retrospective amendment through introduction of Section 142A and if so, to consider assessee's challenge against the quantum of assessment. We, therefore, set aside theimpugned orders of the Tribunal and remand the matter to the C.I.T.(Appeal) for rehearing the assessee and for disposal of the case afresh. Theappeal is disposed of as above. C.N.RAMACHANDRAN NAIRJudge pms T.R.RAMACHANDRAN NAIRJudge