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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 ..... tion Officer of the Valuation Cell of the Income-tax Department, Hyderabad) and the earlier connected notices should be read as those issued under section 142A are ultra vires the provisions of the Act and should be set aside ? The fourth respondent had earlier issued a notice dated November 25, 2011, calling upon the petitioner to produce copies of certain documents to arrive at the fair market value of the petitioner's plant at Nallalingayapalli Village, Kamalapuram Mandal in Kadapa District. That notice was issued by the fourth respondent pursuant to the third respondent's requisition dated November 21, 2011. In the notice dated November 25, 2011, it was mentioned that it was issued under section 50C of the Act. Pursuant to the reply dated December 5, 2011, by the petitioner to the third respondent explaining that section 50C was inapplicable, the latter issued the impugned notice informing the petitioner that it should be read as one issued under section 142A of the Act and that section 50C was mentioned by mistake. It is clear from the contentions that the petitioner is also questioning the validity of the fourth respondent's notice dated November 25, 2011, and also the afor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d respondent sent the impugned letter dated December 7, 2011, to wriggle out of that situation and, therefore, the impugned notices are invalid. The petitioner's second plea is that the Assessing Officer should first reject the books of account of the petitioner or for that matter any assessee to again go into the investment and valuation of an asset and as the third respondent did not reject the books of account regarding the valuation of the petitioner's plant in the assessment proceedings, it was not open to him to go into this aspect. In support of this plea Sri C. P. Ramaswamy, the learned counsel for petitioner, also relied upon two decisions which we will refer to later. The third plea of the petitioner is that while conducting the assessment and passing the assessment order, the third respondent neither referred to nor expressed any doubt about the valuation of its plant ; there was no reference to valuation and in fact he also accepted certain vouchers and other documents filed by it showing investments in the plant. Therefore, the present notices amount to witch-hunting and harassment. Section 142A is also not applicable to the petitioner's case, to once again probe int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estment referred to in the various sections mentioned therein, the Assessing Officer may require the Valuation Officer concerned to make an estimate of such value and furnish his report to him. Section 142A(1) of the Act which is relied upon by the respondents clearly authorizes issuance of the impugned letter and the concerned notices ; and they are permissible under the aforesaid provision even after an assessment is made. This aspect can as well fall under section 69 of the Act which may deal with unexplained investment. Thus, the first plea of the petitioner is rejected. Coming to the second plea of the petitioner, which is based upon the requirement of rejection of books of account of the petitioner regarding the valuation as a precondition for calling a report from the Valuation Officer, the position is this. Section 142A(1) of the Act which provides for probing into the valuation of investments and the source of money for such investments, has been introduced by the Finance (No. 2) Act, 2004 (Central Act 23 of 2004), with effect from November 15, 1972. This provision specifically empowers the concerned assessing authority to undertake reassessment even after making an assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to infer that the matter pertains to a year after the amendment of section 142A by the Finance (No.2) Act, 2004. The relevant facts are not discernible from the judgment and, in our opinion, this decision cannot, therefore, come to the rescue of the petitioner. Even otherwise, it may be noted here that in the course of previous assessment proceedings, as will be presently seen under the third plea, the third respondent did not accept the valuation shown by the petitioner in its balance-sheet and accounts and he was asking for more information to arrive at the fair market value of the petitioner's plant and civil works connected with it. In fact, that can be treated as amounting to rejecting the books of account of the petitioner by implication and no formal order rejecting the books of account is necessary. This is also a negative point for the petitioner and the petitioner's contention under this point is liable to be rejected on the above ground. That takes us to the third plea of the petitioner. The third respondent has dealt with the same in his counter-affidavit, in detail. The relevant plea in the counter is that earlier in the course of assessment proceedings for the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... frained from going into the same. In such a situation, the third respondent claims that he took up the issue of valuation of the plant and called for particulars from the Valuation Officer also apart from issuing other communications to the petitioner for full information relating to valuation to take up reassessment if necessary and the third respondent was within his power to do so under section 142A of the Act. It is also settled now that an assessing authority under the Act is also given inquisitorial powers while making assessment or reassessment. Thus, it cannot be said that the third respondent had accepted the valuation given by the petitioner in his books of account and the other bills and vouchers filed by him with regard to its plant and its other civil works in the previous assessment proceedings. It, therefore, follows that the third respondent was well within his power under section 142A to take up that issue of valuation of or investment in the petitioner's plant for a reassessment if necessary. Hence, we are not inclined to accept this third plea of the petitioner also. Further, this is a case where the assessing authority has merely issued a notice earlier to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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