THE COMMISSIONER OF INCOME TAX vs. DEVKI DEVI

1 - IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ----- - : 14, 2010 Date of decision July

- Commissioner of Income tax Bathinda --- Appellant Versus

Devki Devi widow of late

Kasturi Lal --- Respondent --- :

CORAM HON’BLE MR JUSTICE ADARSH KUMAR GOEL

HON’BLE MR JUSTICE AJAY KUMAR MITTAL --- : PRESENT .

, Ms Savita Saxena Advocate

. for the appellant

. None for the respondent ---

, . AJAY KUMAR MITTAL J 1.

The Revenue has approached this Court under 260-

, 1961 ( “ Section A of the Income tax Act in short the

2 -

)

Act’ and has prayed that the following substantial questions

, of law arise in this appeal for the consideration of this Court

, from the order of the Income tax Appellate Tribunal Amritsar , (

Bench Amritsar in short the Tribunal” passed on 30.9.2002,

. 555 ( ) 2001, in Income tax Appeal No ASR for

1992-93: the assessment year 1-

Whether on the facts and in the circumstances

of the case the Hon’ble ITAT was justified in

law in holding that the reopening of assessment / 147

u s of the act based on valuation report

was not valid whereas as per valuation report

. 16,91,200/- income to the tune of Rs has

. escaped assessment ” 2-

Whether on the facts and in the circumstances

of the case the Hon’ble ITAT was justified in

holding that the report of the Departmental

Valuation Officer is Information or not” for

/ 147

initiating proceedings u s even after

3 - amendment in section with effect from 1.4.1989.” 2.

The assessee had filed return of income for

1992-93,

. the assessment year declaring an income of Rs 18,650/-.

143(1) The return was processed under Section ( )

a of the Act and subsequently proceedings under Sections 147/148

of the Act were initiated The assessing officer

. 16,91,200/-

observed that an income of Rs chargeable to

tax had escaped assessment as the assessee had incurred . 1,51,000/-

Rs as cost of construction renovation of

. 3056,

, residential house No Power House Road Bathinda

. 18,42,200/- against cost of construction of Rs as

( ). determined by the Departmental Valuation Officer DVO The

Assessing Officer ultimately vide assessment order dated 18.2.2000

. framed assessment on an income of Rs 14,09,928/-.

The assessee filed appeal before the

- ( ) [(

“ ( )] . Commissioner of Income tax Appeal for short CIT A ”

The appeal was remanded back to the assessing officer for

decision afresh The assessing officer re framed the

4 - 27.6.2001

assessment vide order dated and made an

. 5,06,600/-.

addition of Rs This gave rise to the assessee

( ).

to once again prefer appeal before the CIT A In the ,

( )

appeal the CIT A held that the assessing officer was

147

justified in invoking the provisions of Sections read with 148

Section of the Act The consequential assessment

143(3) , ,

framed under Section was thus held to be legal and . valid 3.

. The assessee preferred appeal before the Tribunal

The assessee only pressed the question of re opening of the

147

assessment under Section of the Act The Tribunal after

examining the matter accepted the plea of the assessee and ,

30.9.2002. accordingly allowed the appeal vide order dated 4.

The issue that arises in this appeal is whether the

assessing officer could have reopened an assessment on the

, basis of report of the DVO Learned counsel for the Revenue ,

however could not refer to any provision except Section 55

A of the Act on the basis of which it could be pleaded

that the report of the DVO was valid for estimating the

5 - correct cost of the construction and investment in the house

in question He also made efforts to draw support from the

142

provisions of Section A of the Act introduced by Finance ( .2) 2004 . . . 15.11.1972. Act No of w e f 5.

We do not find any substance in either of the

. submissions made by the learned counsel for the Revenue 6.

The apex Court in .

. Smt Amiya Bala Paul v

- , Commissioner of Income Tax (2003) 262 407 ( ) ITR SC

had held that in an assessment of the assessee to income ,

tax the reference by the assessing officer to the DVO

regarding question of cost of construction of a property built

, by the assessee cannot be made Once that is so the

reliance on the report of the DVO by the assessing officer for

. reopening the assessment was not justified 7.

142

Even after insertion of Section A of the Act by ( . 2) , 2004, . . . 15.11.1972,

Finance No Act w e f this Court while

considering the scope of its applicability to proceedings under

. 48 1994, the Act in Income tax Reference No of

6 - ( ), . Commissioner of Income Tax Central Ludhiana v Nabha ( ) . Solvex P Ltd

7.7.2010,

: decided on has held as under “11.

The question regarding the applicability of 142

Section A of the Act was subject matter of

' consideration before this Court in Krishan Lal Dua s ( )

case supra wherein the assessment had become

31.3.1995

final on and the same was not liable to

153

, reassessment under Section A of the Act it

142

was held that Section A of the Act would not

. be applicable as the proviso was attracted The

' Allahabad High Court in Smt Shashi Agarwal s ( )

case supra had held that where the Tribunal had

passed the order before the cutoff date prescribed

142

under the proviso to Section A of the Act and

260

the appeal under Section A of the Act being

maintainable before the High Court only on

, ,

substantial question of law therefore it could not

be said to be continuation of the assessment

proceedings within the meaning of proviso to

7 -

142

, Section A of the Act The Assessing Officer ,

thus had no power to refer the matter to the .

DVO Similar view has been taken by Delhi and

. Calcutta High Courts 8.

In view of the above we hold that Section 142

A of the Act is not attracted to the facts of the present

, ,

. case and thus no reliance can be placed upon that ,

Consequently the initiation of reassessment proceedings on

. the basis of report of the DVO cannot legally be sustained 9. ,

Accordingly the substantial questions of law

claimed by the Revenue for determination by this Court are

. answered against the Revenue The appeal is dismissed (

) AJAY KUMAR MITTAL JUDGE (

ADARSH KUMAR ) GOEL 14, 2010 July JUDGE * * rkmalik

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