2007 (1) TMI 66 - HC - Income Tax

Assessment Dy. Commissioner issue commission u/s 131(1)(d) to the DVO officer to ascertain the cost of construction when no proceeding or appeal was pending Held that consequent notice issued by the DVO, were without jurisdiction and as such could not be sustained

Summary

Issues:
1. Justification of issuing a commission under Section 131(1)(d) of the Income Tax Act, 1961.

Analysis:
The petition before the High Court raised the issue of whether the respondents were justified in issuing a commission under Section 131(1)(d) of the Income Tax Act, 1961. The petitioner, a builder and developer, had constructed a building known as 'Chetak Chambers' in Indore. The Assessing Officer had previously issued a commission to ascertain the cost of construction, which resulted in a valuation report. However, subsequent appeals led to the rejection of this valuation report. Despite no pending assessment proceedings or appeals, the Deputy Commissioner of Income Tax issued a new commission in 2001. The respondents argued that an appeal had been filed before the High Court, justifying the commission.

Upon considering the arguments, the High Court found that no assessment proceedings were pending when the new commission was issued, as required by law. Citing a previous Division Bench decision, the Court emphasized that the Assessing Officer can only issue a commission when a proceeding is pending before them. The Court noted that the previous valuation report had been challenged and rejected, and there was no ongoing assessment proceeding. The Court dismissed the justification provided by the respondents regarding the appeal filed, as no concrete evidence was presented regarding the timing or status of the appeal. Consequently, the High Court held that the commission and the subsequent notice were without jurisdiction and could not be sustained. The petition was allowed, with each party bearing their own costs.