2006 (7) TMI 200 - HC - Income Tax

Reference to Valuation office u/s 142A issue of notice for reassessment u/s 148 Held that - opening part of section 142A the words used are for the purposes of making an assessment or reassessment under the Act . The intent of the legislation is that the matter can be referred to the Valuation Officer only when the proceedings of assessment or reassessment are pending before the Assessing Officer. When no such proceedings are pending, the Assessing Officer has no jurisdiction to refer any property for assessment - When the notice under section 148 has been issued and addition has been made by adopting the value estimated by the Valuation Officer and when we found that the Assessing Officer is not empowered to refer any property for valuation in a case where no assessment proceedings or reassessment proceedings of the assessee is pending before him, we see no justification to make any addition in such cases

Issues:
1. Jurisdiction of Assessing Officer to refer property for valuation when assessment or reassessment proceedings are not pending.
2. Validity of notice under section 148 issued after the due date of filing return and without pending assessment or reassessment proceedings.

Analysis:
1. The main issue in this case is whether the Assessing Officer has the authority to refer any matter for valuation of the property of an assessee when assessment or reassessment proceedings are not pending. The Tribunal held that the Assessing Officer lacks jurisdiction to refer property for valuation when assessment proceedings are not pending. The Tribunal cited precedents and highlighted that the Assessing Officer must have reason to believe that income has escaped assessment to issue a notice for reassessment under section 148.

2. The Tribunal further discussed the validity of the notice under section 148 issued after the due date of filing the return and without pending assessment or reassessment proceedings. It was noted that the Assessing Officer cannot refer property for valuation in such cases. The Tribunal emphasized that the provisions of section 142A allow for valuation only when assessment or reassessment proceedings are pending, and without such proceedings, the Assessing Officer lacks jurisdiction to refer any property for assessment.

3. The appellant's argument focused on section 142A of the Act, contending that the Assessing Officer can refer property for valuation at any time. However, the Tribunal emphasized that the legislation intends for valuation to occur only when assessment or reassessment proceedings are ongoing. The Tribunal highlighted that the Assessing Officer's authority to refer property for valuation is limited to cases where assessment or reassessment proceedings are pending.

4. In conclusion, the Tribunal dismissed the appeals, stating that no substantial questions of law arise. The Tribunal upheld that the Assessing Officer cannot refer property for valuation when no assessment or reassessment proceedings are pending. The Tribunal quashed the notices issued under section 148 and the assessments completed in response to those notices. The decision was based on the lack of jurisdiction of the Assessing Officer in referring property for valuation without pending assessment or reassessment proceedings.

5. The judgment serves as a significant interpretation of the provisions related to the jurisdiction of the Assessing Officer in referring property for valuation and the validity of notices under section 148 in the absence of pending assessment or reassessment proceedings. It establishes a clear precedent regarding the limitations on the Assessing Officer's authority in such circumstances, ensuring adherence to the legal requirements for assessment and reassessment processes.

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