SH. ARUN MUNDRAY SAINI,CHANDIGARH vs. DY. DIRECTOR OF INCOME TAX, CHANDIGARH

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ITA 389/CHANDI/2017Status: DisposedITAT Chandigarh28 March 2018AY 2008-094 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that reopening of assessment cannot be made merely on the basis of a DVO's valuation report, especially when the assessee has acted upon a registered valuer's report. Following previous decisions involving co-owners of the same property, the Tribunal found the reopening to be unsustainable.

What were the facts?

The assessee challenged the reopening of assessment under Section 147 and subsequent additions. The reopening was based on a District Valuation Officer's (DVO) report regarding the valuation of a property sold by the assessee. The assessee had relied on a registered valuer's report showing nil capital gains.

What were the issues?

The primary issue was the validity of reopening the assessment under Section 147 without independent satisfaction of the Assessing Officer and based solely on the DVO's report. Another issue concerned the validity of penalty proceedings under Section 271(1)(c).

Which sections of the Income-tax Act were involved?

Section 147,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, CHANDIGARH BENCHES ‘A’, CHANDIGARH

Before: SHRI SANJAY GARG & Ms. ANNAPURNA GUPTA

For Appellant: Adv. : Sh. Gulshan Raj, CIT- DR
Hearing: 28.03.2018Pronounced: 28.03.2018

Per Sanjay Garg, Judicial Member:

The present appeal has been preferred by the assessee against the order of the Commissioner of Income Tax (Appeals), [hereinafter referred to as CIT(A)]-43, New Delhi dated 09.01.2017.

2.

The assessee has taken following grounds of appeal:-

1.

The Ld. Assessing officer and worthy CIT(A)’s orders are contrary to law and facts of the case.

2.

The Ld. Assessing officer erred in reopening the case u/s 148 as there was non independent satisfaction of the Assessing officer for forming a reason to believe about the escapement of income & worthy CIT(A) has ignored the submissions of

ITA No.389/Chd/2017- Arun Mundray Saini., Chandigarh 2

the assessee and had wrongly decided the same against the assessee. There was no tangible material available on record to justify reopening of the assessment before the Ld. Assessing officer & worthy CIT(A).

3.

Without prejudice to ground No.2, the Ld. Assessing officer grossly erred in referring the case to Distt. Valuation officer (DVO) to evaluate the value of assets as the assessee had acted upon and shown NIL Capital gain in her return of income based on the valuation report of the registered valuer. Worthy CIT(A) had ignored the assessee submission and decided the matter against the assessee.

4.

The initiation of penalty u/s 271(1)(c) is invalid and bad in law without recording the satisfaction by Assessing officer regarding inaccurate particular or concealment of income.

3.

At the outset, Ld. Counsel for the assessee has submitted that

the assessee apart from challenging of the additions on merits has

also taken a legal issue regarding validity of reopening of the

assessment u/s 147 of the Act. He has further submitted that

reopening in this case was done by the Department on the basis of

valuation report of the DVO in respect of the property sold by the

assessee with other co-owners. He has further relied upon the

decision of the Chandigarh Bench of the Tribunal in the case of ‘ITO

Vs. Ms. Malika Mundrey Saini’, ITA No. 967/Chd/2017 order dated

12.11.2017 wherein in the case of co-owner of the property, who had

ITA No.389/Chd/2017- Arun Mundray Saini., Chandigarh 3

sold his share in the property in question, through the same

transactions. The Tribunal while relying upon the decision in the case

of another co-owner namely ‘Ms.Rajinder Kuar Vs. ACIT’ while

upholding the order of the CIT(A) held that the reopening of the

assessment was bad in law. He has further invited our attention to the

decision of the Tribunal in the case of ‘Ms. Rajinder Kaur Vs. ACIT’

(ITA No. 765/Chd/2015) which has been placed at pages 15 to 34 of

the paper book wherein the Tribunal in the case of Co-owner, while

relying on the decision of the Hon'ble Supreme Court in the case of

‘Dhariya Construction Co.’ 328 ITR 515 (SC) held that the reopening

cannot be made merely on the basis of the valuation report of the

DVO. Since the facts are identical and relating to the same

transaction of the sale of property, hence, respectfully following the

above referred to decisions of the Tribunal in the case of co-owners,

we hold that the reopening in this case was also not sustainable in the

eyes of law and the same is accordingly set aside. Consequently, the

additions made pursuant to the reopening have lost their basis and

accordingly the same are ordered to be deleted.

In the result, the appeal of the assessee is hereby allowed.

Order pronounced in the Open Court

Sd/- Sd/- (ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated : 28.03.2018 Rkk

ITA No.389/Chd/2017- Arun Mundray Saini., Chandigarh 4

Copy to: 1. The Appellant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR

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