The Commissioner Of Income Tax, Ludhiana-Ii v. Shri N.s. Bakshi, 1826, Sector 17-A, Gurgaon, Haryana

I.T.A. No. 492 of 2007 IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH I.T.A. No. 492 of 2007 Date of decision: 01.04.2008 The Commissioner of Income Tax, Ludhiana-II. ..... Appellant-revenue Versus Shri N.S. Bakshi, 1826, Sector 17-A, Gurgaon, Haryana ..... Respondent-assessee CORAM: HON'BLE MR. JUSTICE SATISH KUMAR MITTALHON'BLE MR. JUSTICE RAKESH KUMAR GARGHON'BLE MR. JUSTICE RAKESH KUMAR GARG Present:-Mr. Sanjiv Bansal, Advocate for the appellant-revenue. Mr. Puneet Gupta, Advocate for the respondent-assessee. RAKESH KUMAR GARG, J. For the assessment year 1997-98 return declaringan income of Rs.2,17,650/- was processed on 24.05.1999.During the course of assessment proceedings under Section143(3) of the Act, the Assessing Officer while computing the valuation of house property referred the case to the Distt.Valuation Officer for its valuation. On examination of thevaluation filed by the assessee, it was found that there was ahuge difference of Rs.17,89,000/- on the value of propertyassessed by the assessee and by the District Valuation. Hence,an addition of Rs.17,89,000/- was made in the income of theassessee for the assessment year 1997-98. Aggrieved against the order of the AssessingOfficer, the respondent filed an appeal before the Commissionerof Income Tax (A)-II, Ludhiana ( hereinafter referred to as the“CIT(A)-II, Ludhiana” ), who vide his order dated 28.11.2002,has deleted the addition. Not satisfied with the order of CIT(A)-II,Ludhiana, the revenue filed an appeal before the Tribunal,which was dismissed vide order dated 7[th] October, 2005. Theoperative part of the order is reproduced:- “It is evident from Section 142 A quoted above thatwhereas the section has been incorporatedretrospectively, w.e.f. 15.11.1972, by the finance( No.2 ) Act, 2004, it has been specifically providedthat nothing contained in this section shall apply inrespect of an assessment of made on or before the 30[th]day of September, 2004, and where such assessmenthas become final and conclusive on or before that date. In this case, the assessment was made earlierthan 30[th] Sept., 2004 and reopening of the assessmentprior to 30[th] Sept., 2004 on the basis of DVO's reportwould also not justified. We are, therefore, of the viewthat the controversy on merits of the addition isnecessary. We accordingly find no justification tointerfere with the order of CIT (A). The appeal of therevenue is accordingly dismissed.” However, after preliminary hearing, this Courtissued notice to assessee on the following substantial questionof law:- “Whether in the law and on the facts of the case, theIncome Tax Appellate Tribunal was correct in holdingthat Assessing Officer was not empowered to refer thecase to the District Valuation Officer and theinterpretation of Section 142-A of the Income Tax Actwas justified?” Shri Sanjiv Bansal, Advocate for the appellant-revenue has vehemently argued that the Tribunal has erred inlaw in disallowing the departmental appeal by relying upon thedecision in the case ofSmt. Amiya Bala Paul v. CIT, 262 ITR407 ( SC )and has not properly interpreted the provisions ofSection 142A of the Act. According to the learned counsel forthe revenue, Section 142A of the Act has been inserted withretrospective effect i.e. w.e.f. 15.11.1972 and the Assessing Officer has always power to make a reference to the ValuationOfficer, so the decision of Tribunal does not appear to be passedon the correct appreciation of facts of the case and, therefore, thequestion of law as raised by him, does arise from the order ofthe Tribunal. Shri Sanjiv Bansal, Advocate for the appellant-revenue has vehemently argued that the Tribunal has erred inlaw in disallowing the departmental appeal by relying upon thedecision in the case ofSmt. Amiya Bala Paul v. CIT, 262 ITR407 ( SC )and has not properly interpreted the provisions ofSection 142A of the Act. According to the learned counsel forthe revenue, Section 142A of the Act has been inserted withretrospective effect i.e. w.e.f. 15.11.1972 and the Assessing Officer has always power to make a reference to the ValuationOfficer, so the decision of Tribunal does not appear to be passedon the correct appreciation of facts of the case and, therefore, thequestion of law as raised by him, does arise from the order ofthe Tribunal. On the other hand, Mr. Puneet Gupta, Advocatecounsel for the respondent-assessee has argued that the questionof law raised by the revenue has actually no effect on thedecision of the case and is purely academic in nature becauseeven if the question of law as raised by the revenue is answeredin favour of the department even then in view of the pure findingof fact recorded by the Tribunal in the impugned order, thisappeal is liable to be dismissed. We have heard learned counsel for the parties andperused the record. From the perusal of the record, the CIT(A)-II,Ludhiana found that the report of the Valuation Officer is notreliable and the addition made on the basis of Valuation weredeleted. The revenue has not challenged the said finding of factbefore the Tribunal when the attention of Mr. Sanjiv Bansal,Advocate for the revenue was drawn towards this point he couldnot controvert. In view of this undisputed fact, we do not deemit necessary to answer the question of law as raised by therevenue in the present appeal, being of no consequence. In view of the finding of fact, we are not inclined tointerfere in the impugned order passed by the Tribunal. Theappeal being without any merit, is dismissed. ( RAKESH KUMAR GARG )JUDGE 01.04.2008dinesh ( SATISH KUMAR MITTAL )JUDGE