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TMI Blog2014 (9) TMI 286X X X X Extracts X X X X X X X X Extracts X X X X ..... onstruction. The petitioners accordingly filed their return of income for the assessment year 2004-2005. 4. It also appears that in the course of assessment proceedings of one of the co owners by name Shivlal, the Assessing Officer concerned required details of the cost of construction and the assessee produced a detailed valuation report from a registered valuer. The registered valuer valued the building at Rs. 72,22,621/-. Thereafter, a reference was made to the Departmental Valuation Officer. He valued the building at Rs. 1,74,20,000/-, by his report dated 29.12.2006. Consequently, the Assessing Officer of that co-owner, adopted 1/4th of the said value for that Assessee. 5. Based upon the information provided by the Assessing Officer of that co-owner by name Shivlal, a notice under Section 148 was issued to the petitioners on 11.3.2008. The Assessing Officers passed an order dated 18.12.2008 under Section 143(3) read with Section 147(a), determining a particular amount as unexplained investment under Section 69B. 6. Aggrieved by the said order, the petitioners filed first appeals before the Commissioner of Income Tax (Appeals). By an order dated 15.6.2009, the Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice under Section 148 has already expired and that the case cannot come under section 150 (1). Under Clause (a) of Sub-Section (1) of Section 149, the time limit is normally four years unless the case falls under Clause (b) or Clause (c). The time limit is six years under Clause (b), if the income chargeable to tax, which has escaped assessment amounts to or is likely to amount to Rs. 1 lakh or more for that year. We are not concerned with Clause (c), since it relates to an asset including financial interest in any entity located outside india. Under Section 150(1), a notice under Section 148 may be issued at any time, notwithstanding anything contained in Section 149, if it is for the purpose of making an assessment or re-assessment or recomputation in consequence of or to give effect to any finding or direction contained in an order passed by any authority in any proceeding under the Act. 12. Section 150 requires reproduction and hence, it is reproduced as follows: "150. Provision for cases where assessment is in pursuance of an order on appeal, etc.(1) Notwithstanding anything contained in Section 149, the notice under Section 148 may be issued at any time for the purpose of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment relating to the assessment year 2004-2005. 16. A brief history of what happened in two rounds of litigation that went up to the Income Tax Appellate Tribunal may be necessary at this juncture. As stated earlier, the petitioners along with two others including a person by name Shivlal purchased land and building during the previous year relevant to the assessment year 2000-2001. All the co-owners demolished the building and started new construction in the financial year 2001-2002. The Assessing Officer concerned called upon the other co-owner Shivlal to furnish details of the cost of construction. Not satisfied with the valuation report given by him, the Assessing Officer concerned made a reference to the Departmental Valuation Officer. On the basis of the valuation made by the Departmental Valuation Officer, the Assessing Officer concerned arrived at the investment made by Shivlal. Based upon the assessment made in respect of Shivlal, the Assessing Officers of the petitioners herein reopened their assessments, for making an addition of unexplained investment in the house property. The orders of the Assessing Officers were challenged by the petitioners before the Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... permitted, the Tribunal relied upon the decision of the Supreme Court in Rajinder Nath Vs. CIT [120 ITR 14] and held that when the assessees themselves claimed that the cost of construction was spread over to 2-3 years, the finding that the unexplained cost of construction should also be spread over cannot be found fault with. Therefore, the Tribunal rejected in paragraph 17, the objection of the Department that the Commissioner of Income Tax (Appeals) had no power to direct spreading of unexplained portion of investment. 21. In the light of paragraph 17 of the order of the Income Tax Appellate Tribunal dated 11.10.2012, it is contended by Mr.T.Pramod Kumar Chopda that there was a finding/direction by an authority under the Act and that therefore, this case is covered by the requirements of Section 150(1). 22. But, it is contended by Mr.R.Sivaraman, learned counsel for the petitioners that the appeals and the cross objections before the Income Tax Appellate Tribunal arose out of reopening of assessment for the year 2004-2005 and that eventually, the Tribunal set aside all the orders and remitted the matter back to the Assessing Officers for a fresh consideration on the cost of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officers are now bound to grant the benefit, in view of the observations made by the Tribunal in paragraph 17 of its order. In such circumstances, what is recorded in paragraph 17 of the order of the Tribunal, is actually a finding. As I have pointed out earlier, the necessity to reopen the assessment beyond the period of six years may arise, by invoking Section 150(1), either as a consequence of an order passed or in pursuance of a finding or direction by an authority. 27. In Rajinder Nath Vs CIT, the Supreme Court was concerned with the definition of the expressions 'finding' and 'direction'. The Supreme Court held that a finding given in an appeal, revision or reference arising out of an assessment must be a finding necessary for the disposal of the particular case that is to say in respect of the particular assessee and in relation to the particular assessment year. The Supreme Court pointed out that to be a necessary finding, it must be directly involved in the disposal of the case. If, in order to render a finding in respect of A, a finding in respect of B is also called for, such a finding may only be an incidental finding. 28. But, in so far as the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Commissioner of Income Tax (Appeals), a portion of which alone was set aside by the Tribunal, it could be seen that the Commissioner of Income Tax (Appeals) rendered a finding that the unexplained investment should be allowed to be spread over. That finding is upheld by the Tribunal, though the ultimate conclusion of the Commissioner of Income Tax (Appeals) was set aside on a different aspect. 32. Therefore, the contention of Mr.T.Pramod Kumar Chopda, learned Standing Counsel for the Department that there was a finding and that this has lead to the reopening of the assessment, has to be upheld. As a matter of fact, the reopening of assessment is a natural consequence of the claim for spread over. Suppose the Assessing Officers arrive at a cost of construction in pursuance of the order of remand now passed by the Income Tax Appellate Tribunal, the Assessing Officers are obliged, by virtue of the orders of the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal, to allow the assessees to spread it over. At that stage, the reopening becomes inevitable. Hence, I do not find any justification to interfere with the impugned orders. 33. Therefore, the writ petit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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