Report of Public Accounts Committee. - Income Tax - 978/CBDT

INSTRUCTION NO. 978/CBDT Dated : July 14, 1976 In their 211th Report, the Public Accounts Committee have expressed deep concern on under-assessment in a case arising out of failure to co-relate the assessments under the different direct taxes laws. The Committee have expressed their surprise that two valuation reports had been issued in respect of the same house property, both purporting to have been prepared and signed by the same valuer on the same day, one showing the fair rent at Rs. 1850/- p.m and the other at Rs. 1550/- p.m. While the lower rent of Rs. 1550/- had been adopted in the Estate Duty assessments the higher rent of Rs. 1850/- p.m. had been adopted for purposes of wealth-tax. The adoption of the lower rent in the Estate Duty assessment had resulted in under-valuation of the estate by Rs. 48,900. The Committee were not fully satisfied with the Department's contention that the higher rent was as on 31-3-68 and the lower as on 10-10-68 and that as rents in Calcutta might have fallen considerably during the intervening period of time on account of disturbed conditions then prevailing in the city, the Estate Duty officer had perhaps considered that the unrented units would be of lesser value and had taken the lesser rental for those un-rented units. 2. In the absence of any recorded reasons, it was not clear from the assessment order whether the officer had applied his mind at all and satisfied himself that there was justification for reducing the rent in this case. There are several instances where the assessing officers do not record their reasons for taking a particular point of view, as a result of which it becomes difficult subsequently to determine the rationale for the adoption of such a view, especially if it happens to differ from the ordinarily accepted view on the issue. You are, therefore, requested to ensure that in future, the assessing officers invariably record adequate reasons for arriving at a particular conclusion in their assessment orders.