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Issues Involved:
1. Validity of the notice u/s 148 of the Income Tax Act. 2. Reference to the Valuation Officer u/s 142-A of the Act. 3. Formation of belief of escaped assessment u/s 147 of the Act. Summary: 1. Validity of the Notice u/s 148: The petitioner challenged the notice dated 24.6.2006 u/s 148 of the Income Tax Act for the assessment year 2003-04. The notice was issued to reopen the assessment on the ground of escaped assessment due to lesser investment shown in house construction compared to the valuation report. 2. Reference to the Valuation Officer u/s 142-A: The assessing authority referred the matter to the Valuation Officer during the course of the assessment proceeding to ascertain the quantum of investment in the building construction. The Valuation Officer's report, received after the assessment order, estimated the investment higher than disclosed by the petitioner. The petitioner did not challenge the reference to the Valuation Officer at any stage, thus it was not open to challenge it at this stage. 3. Formation of Belief of Escaped Assessment u/s 147: The court examined whether the valuation report constituted material to form a belief of escaped assessment. The valuation report showed a significant difference between the disclosed investment (Rs. 3,00,000/-) and the estimated investment (Rs. 5,05,300/-). The court referred to the Supreme Court's interpretation of "reason to believe" in Section 147, emphasizing that it requires cause or justification but not conclusive proof of escapement of income. The court concluded that the valuation report provided tangible material to form the belief of escaped assessment, thus justifying the reopening of the assessment. Conclusion: The court dismissed the writ petition, holding that the valuation report constituted material to form a belief of escaped assessment. The petitioner was allowed to contest the estimate of the investment in the reassessment proceeding by adducing necessary evidence. There was no order as to cost.
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