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TMI Blog2013 (10) TMI 710X X X X Extracts X X X X X X X X Extracts X X X X ..... Relying upon Smt. Amiya Bala Paul vs. Commissioner of Income Tax [2003 (7) TMI 4 - SUPREME Court] - the power of enquiry under Section 133 (6) and 142 (2) does not include the power to refer the matter to the Valuation Officer for an enquiry by the latter - If the power to refer any dispute to a Valuation Officer is available under Section 131 (1), 133 (6) and 142 (2), there was no need to specifically empower the Assessing Officer to do so under Section 55-A - It is not open to the Valuation Officer to act in his capacity as Valuation Officer otherwise than in discharge of his statutory functions - He cannot be called upon, nor would he have the jurisdiction, to give a report to the Assessing Officer under the Act except when a reference is made under and in terms of Section 55A or to a competent authority under Section 269-L – Decided against Revenue. - Income Tax Appeal No. 80 of 2005, Income Tax Appeal No. 574 of 2012, Income Tax Appeal No. 575 of 2012, Income Tax Appeal No. 578 of 2012, Income Tax Appeal No. 580 of 2012, Income Tax Appeal No. 581 of 2012, Income Tax Appeal No. 582 of 2012, Incom - - - Dated:- 10-10-2013 - Hon'ble Sunil Ambwani And Hon'ble Surya Prakash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer in view of the judgment of Hon'ble Supreme Court in the case of Amiya Bala Paul reported in 262 ITR 407? 3. Whether on the facts and in the circumstances of the case, the Tribunal's order is not bad in law in view of the new provisions of Section 142-A introduced retrospectively w.e.f. 15.11.1972 in the Income Tax Act by the Finance Act, 2004 which empowers the A.O to require the Valuation Officer to make an estimate of value of movable/immovable property? 4. Brief facts giving rise to these Income Tax Appeals are that the assessee AOP had been constructing a multi storeyed commercial complex known as "Baldeva Plaza" in which substantial investment was made. The assessee did not file returns for the assessment years 1990-91 to 1996-97. 5. The Assistant Commissioner of Income Tax, Range-II, Gorakhpur (AO), in order to ascertain the cost of constructions, referred the case to District Valuation Officer (DVO), Kanpur under Section 131 (1) (d) of the Income Tax Act, 1961 (in short the Act). A notice under Section 142 (1) of the Act was issued by the AO on 20.7.1998 for the assessment year 1997-98. 6. The DVO, Kanpur inspected the building in question for the purpose of est ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined u/s69 and added to his income." 10. The appeals filed by the assessee against the order of AO for the assessment years 1990-91 to 1996-97 were allowed by the CIT (A) and the assessee was given relief of the income tax demanded in respect of all the seven years. 11. The Income Tax Appellate Tribunal (ITAT) dismissed all the departmental appeals and the cross objections on the ground that as per decision of Hon'ble Supreme Court in the case of Smt. Amiya Bala Paul vs. CIT (2003) 262 ITR 467, no reference can be made to the DVO for estimating the cost of construction. The assessee was not having any other taxable income. It was not required to file return of income. The reasons for initiating proceedings under Section 148 are based on report of DVO, which does not legally exist and therefore, the AO was not justified in relying upon the report of DVO for the purposes of initiating proceedings under Section 148 of the Act. There was no other material to initiate the proceedings under Section 148, and thus the CIT (A) was justified in cancelling the assessment order. 12. On merits the Tribunal observed in paragraph-29 of its judgment as follows:- "29. Therefore, one fact is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g a plea of escaped assessment in the order under consideration. 15. Shri S.K. Garg, appearing for the assessee, on the other hand, submits that the power of enquiry given to AO under Section 133 (6) and 142 (2) does not include the power to refer the matter to the DVO for an enquiry. The assessment proceeding must be pending, if such a reference is made. He has relied on judgment in Smt. Amiya Bala Paul v. Commissioner of Income Tax (supra) and submits that the amendment made under Section 142A is not of any help to the appellant. He submits that in Asstt. CIT v. Rajesh Jhaveri Stock Brokers P. Ltd (2007) 291 ITR 500 (SC) (page 511) it was held that the word "reason" in the phrase 'reason to believe' under Section 147 would mean cause or justification. If the Assessing Officer has cause or justification to know or suppose that income had escaped assessment, it can be said that he has reason to believe that an income had escaped assessment. It does not mean that the Assessing Officer should have finally ascertained the fact by legal evidence or conclusion. The function of the Assessing Officer is to administer the statute with solicitude for the public exchequer with an inbuilt i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the DVO to the assessee. There was no other material for recording reasons for the AO for re-opening the proceedings under Section 148 of the Act. 20. In Smt. Amiya Bala Paul vs. Commissioner of Income Tax (supra) while considering the powers of the AO to make a reference under Section 131 (1) of the IT Act, it was held that the power of enquiry under Section 133 (6) and 142 (2) does not include the power to refer the matter to the Valuation Officer for an enquiry by the latter. If the power to refer any dispute to a Valuation Officer is available under Section 131 (1), 133 (6) and 142 (2), there was no need to specifically empower the Assessing Officer to do so under Section 55-A. It is not open to the Valuation Officer to act in his capacity as Valuation Officer otherwise than in discharge of his statutory functions. He cannot be called upon, nor would he have the jurisdiction, to give a report to the Assessing Officer under the Act except when a reference is made under and in terms of Section 55A or to a competent authority under Section 269-L. The Assessing Officer could not have referred the matter to the Valuation Officer for estimating the cost of constructions of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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