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TMI Blog2005 (1) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal"), has, in compliance with an order dated April 4, 1986, passed by this court in I.T.C. Nos. 61 and 64 of 1985, referred the following question of law for its opinion: "Whether the Tribunal was correct in law in holding that the Income-tax Officer had rightly invoked the provisions of section 147(a) of the Income-tax Act, 1961, so as to bring to tax the alleged unexplained investments of Rs. 7,500 and Rs. 26,500 in the assessment years 1969-70 and 1970-71, respectively?" The assessee along with his brother-the late Shri Siri Ram constructed commercial properties Nos. 49, 50 and 51 in Section 17, Chandigarh. They claim to have spent Rs. 3,10,398 on the construction between July 1968, and December 1970. The bifurcation of the expenditure involved in the construction of the properties is as under: Financial year 1968-69, relevant to the assessment year 1969-70 = Rs. 44,210. Financial year 1969-70, relevant to the assessment year 1970-71 = Rs. 60,687. Financial year 1970-71, relevant to the assessment year 1971-72 = Rs. 1,05,500. In the course of the assessment proceedings held for the assessment year 1971-72, the Assessing Officer, vide his let ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the assessment years 1969-70 and 1970-71, the Assessing Officer finalised the assessment under section 143(1) of the Act without making any addition. However, after the decision of the appeals filed in relation to the assessment year 1971-72, he issued notices under section 147(a) and made additions to the tune of Rs. 7,500 and Rs. 26,500 for the assessment years 1969-70 and 1970-71, respectively, by treating the same as unexplained investment in the construction of the commercial properties. The appeals filed by the assessee were dismissed by the Commissioner of Income-tax (Appeals) and further appeals were dismissed by the Tribunal vide its order dated September 24, 1984. Both the Commissioner of Income-tax (Appeals) and the Tribunal held that the valuation report submitted by the DVO could be made the basis for initiation of action under section 147(a) of the Act. We have heard Shri Akshay Bhan, learned counsel for the assessee and Shri Rajesh Bindal, learned counsel for the Revenue, and carefully perused the record. Section 147 of the Act (as it stood prior to April 1, 1989) which was invoked by the Assessing Officer for making reassessment, reads as under: "147. If- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion for assessment/reassessment if he, on the basis of the information in his possession had reason to believe that income chargeable to tax has escaped assessment. In the light of the above, we shall now consider whether the Assessing Officer was justified in reopening the assessment by invoking section 147(a) solely on the basis of the report of the DVO. It is settled law that an Income-tax Officer acquires jurisdiction to reopen an assessment under section 147(a) read with section 148 of the Act only if, on the basis of specific, reliable and relevant information coming to his possession subsequently, he has reasons, which he must record, to believe that, by reason of omission or failure on the part of the assessee to make a true and full disclosure of all material facts necessary for his assessment during the concluded assessment proceedings, any part of his income, profits or gains, chargeable to income-tax has escaped assessment. Mere change of opinion in regard to the particular state of facts cannot be made the basis for initiation of action under section 147(a) of the Act. In Smt. Tarawati Debi Agarwal v. ITO [1986] 162 ITR 606, a learned single judge of the Calcutta H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 74 were taken up, the Income-tax Officer referred the question of valuation of the building to the Valuation Officer, who computed the valuation of the cost of construction of the building at Rs. 2,33,940 and its fair market value at Rs. 3,64,560 for the years 1966-67 to 1969-70, and, in the light of this report, he formed the opinion that the assessee had not fully and truly disclosed all material facts necessary for the assessment and, therefore, issued notices for reassessment under section 147(a) of the Act. The assessee filed a writ petition for quashing the notices on the grounds that the Income-tax Officer had no jurisdiction to reopen the assessment because she had disclosed fully and truly all material facts at the time of the assessments and that it was only on the basis of the subsequent valuation report obtained by the Income-tax Officer from the valuation cell of the Department that he proceeded to initiate the reassessment proceedings. The learned single judge relied on the judgments of the Supreme Court in Calcutta Discount Co. Ltd. v. ITO [1961] 41 ITR 191 and the Assam, Calcutta and Madhya Pradesh High Courts in Bajranglal Beria v. ITO [1972] 85 ITR 335; Rasikla ..... X X X X Extracts X X X X X X X X Extracts X X X X
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