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TMI Blog2013 (10) TMI 1026X X X X Extracts X X X X X X X X Extracts X X X X ..... ermissible and valid under law. Reliance has been placed upon the judgment in the case of CIT v. Bhawani Shankar Vyas [ 2008 (11) TMI 154 - UTTARKHAND HIGH COURT], wherein it was held that rejection of books of account is not a precondition for enquiring into the valuation of an investment for the purpose of reassessment under section 142A(1) - The Division Bench of the Uttarakhand High Court ultimately concluded that full powers have been given by section 142A of the Act to the Assessing Officer and it was not necessary for him to first reject the books of account of the assessee – Decided against the assessee. - - - - - Dated:- 20-6-2012 - GODA RAGHURAM, RAVI SHANKAR N., JJ. JUDGEMENT N. Ravi Shankar J.- This matter arises under the Income-tax Act, 1961 (for short Act). The petitioner is a private limited company called Bharathi Cements Corporation (P.) Ltd. represented by its director, G. Balaji, and it is in the business of manufacture of cement. When this writ petition came up for admission, the learned standing counsel for the Income-tax Department took notice and subsequently the third respondent filed his counter and material papers. Thereafter, both s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent who is also the Assessing Officer by his assessment order dated December 30, 2011, after taking up scrutiny of the return and for reasons recorded added an income of Rs. 69,84,11,520 which was the amount shown as received through share premia from other investors in the petitioner company and a sum of Rs. 94,28,904 towards unexplained cash credits under the relevant provisions of the Act and assessed the income of the petitioner at Rs. 73,69,41,671 after the said additions and fixed the total tax inclusive of interest and after deducting the tax already paid, determined the tax payable at Rs. 32,09,48,108. The petitioner preferred a statutory appeal before the concerned Commissioner of Income-tax (Appeals) against the above assessment order. We are not, of course, concerned with the correctness or otherwise of the said assessment order as its merits have to be decided in the statutory appeal. We mention the above facts as the petitioner has made the above assessment order also a basis, as will presently be seen, for questioning the impugned letters and notices. The first plea of the petitioner is that section 50C of the Act deals with consideration received by an asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for suppressing the taxable income and the third and fourth respondents are, therefore, justified in issuing the impugned notices. Sri Prasad also pointed out that the third respondent has not yet taken any final decision in the matter regarding valuation and unexplained investment or income and that process has only been initiated. Ultimately, if the third respondent takes any decision which goes against the petitioner, the petitioner can always work out his remedies and the present writ petition is premature. We will now take up the pleas of the petitioner and the stand of the Revenue for analysis. Regarding the first plea of the petitioner, it is true that section 50C of the Act deals with assessment of capital gain when it is noticed or suspected that there is suppression of actual consideration received by the assessee on transfer of an asset. It may, however, be noted that section 292B of the Act enacts no assessment, notice, summons or other proceedings taken by the authorities under the Act shall be invalid by reason of any mistake, defect or omission if such notice or proceedings or assessment is otherwise valid under the Act. This provision enacts the principle that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with an appeal from the order of an Tribunal. It has also considered the scope and power of the authorities under section 144 which deals with best judgment assessment, section 144A which deals with the power of the Joint Commissioner of Income-tax in certain cases to issue directions and section 131 which deals with the power regarding discovery and production of evidence and laid down the above proposition. As already mentioned, the above decision was rendered in an appeal under section 260A of the Act from an order of the Tribunal. There the Tribunal independently considered the matter and reached its conclusions on facts. On the premise that findings of facts cannot be interfered with, the Division Bench in the aforesaid case, however, held that the Tribunal's view that the Assessing Officer should first reject the books of account of the assessee before calling for a valuation report was not correct. The Division Bench of the Uttarakhand High Court ultimately concluded that full powers have been given by section 142A of the Act to the Assessing Officer and it was not necessary for him to first reject the books of account of the assessee. We respectfully agree with the above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted by the petitioner in his reply affidavit. The version of the third respondent is that despite reminders the petitioner did not produce the bills and vouchers necessary for correctly estimating the value of the investments in the plant and went on postponing the matter and as the time limit for completion of assessment was about to expire, he passed the assessment order dated December 30, 2011, without touching the valuation of the civil works including the plant. We mention the above facts only to indicate the situation or circumstances under which the third respondent says the impugned letter and connected notices were issued to the petitioner calling for all particulars of the valuation relating to the plant and its civil works. As noticed earlier, the conduct of the third respondent in calling for particulars relating to valuation of the plant would show that he did not accept the books of account of the petitioner filed in the initial assessment proceedings and this by implication amounts to rejection. It cannot, therefore, be said that the third respondent or the Revenue was acting according to their whims and fancies. What should be noted is that the above circumst ..... X X X X Extracts X X X X X X X X Extracts X X X X
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