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TMI Blog2013 (12) TMI 1252X X X X Extracts X X X X X X X X Extracts X X X X ..... out of a common judgment and order of Income Tax Appellate Tribunal, Agra Bench, Agra dated 30.5.2008 in ITA Nos. 307, 308, 309 & 310/Agr/2007 relating to assessment years 1997-98, 1998-99, 1999-2000 and 2001-02. 3. The department has raised following two questions of law for consideration of this Court:- "(1) Whether on the facts and in the circumstances of the case, the Tribunal is justified in law in holding that the action u/s 147 of IT Act, 1961 by issuance of notices u/s 148 of the Act on the basis of DVO's report is invalid, illegal and void ab-initio and that the jurisdiction assumed u/s 148 of IT Act, 1961 is therefore illegal and invalid? (2) Whether on the facts and in the circumstances of the case, the Tribunal is justified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in Prakash Chand v. DCIT (2004) 269 ITR 260 in which it was held that the notice of re-assessment on the basis of report of the Valuation Officer is not valid. It was held that DVO's report is only an information and not the material on the basis of which the assessment may be reopened. Such a report cannot be an arithmetic appreciation of the materials used for constructions nor the expenses incurred by the assessee in that regard. The observations made by the DVO do not amount to material warranting satisfaction on the part of the Assessing Officer for reason to believe that the income had escaped assessment. 7. In Shamsuddin Ansari v. Union of India & another Civil Misc. writ Petition No. 1603 (Tax) of 2006 decided on 27.8.2010 thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opinion" is removed, then, in the garb of re-opening the assessment, review would take place. One must treat the concept of "change of opinion" as an in-built test to check abuse of power by the Assessing Officer. The Assessing Officer has power to re-open, provided there is "tangible material" to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with the formation of the belief. 9. In the present case the Tribunal found that the DVO's report is based on his opinion, and not on any material, which could form the basis of reopening of the cases, and thus it can at best be treated as an information, which will not be sufficient material for recording 'reason to believe' to proceed in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... information for the purposes of reopening assessment under Section 147 of the Income Tax Act, 1961. The Assessing Officer has to apply his mind to the material, if any, collected and must form a belief thereon. There has to be something more than the report of DVO for the belief of the Assessing Officer. The Assessing Officer cannot, merely on the basis of DVO's report, reopen the assessment. The DVO's report may be based only on his opinion or on some tangible material. In the former case it would be only estimation or guesswork. In this case the ITAT found that AO had found in paragraph-13 of the judgment:-"...We may mention that the A.O. has relied mainly on the report of the DVO without pointing out any defect or discrepancy much less a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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