TMI Blog2003 (7) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... essee disclosed that she had invested a further amount of Rs. 1,70,000 in the construction of the house. This was not accepted by the Assessing Officer, who referred the question of the construction cost of the house to the Valuation Officer under section 55A of the Income-tax Act, 1961 (hereinafter referred to as "the Act") The Valuation Officer submitted a report to the Assessing Officer. On the basis of the report, the Assessing Officer reopened the assessment in respect of the assessment year 1982-83. The Income-tax Officer then made an addition of Rs. 2,79,000 in respect of the assessment year 1982-83 and Rs. 1,77,000 in respect of the assessment year 1983-84 as undisclosed investment in the construction of the house. The assessee's appeals from the assessment orders were turned down by the Commissioner of Income-tax (Appeals), Gauhati. The Income-tax Appellate Tribunal, however, following an earlier decision, allowed the assessee's appeal and held that the Assessing Officer could not have referred the question of the cost of construction of the assessee's house to the Valuation Officer. In this background the following question was referred to the High Court under section 256 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be called upon to discharge functions not statutorily prescribed, in his capacity as a Valuation Officer. Learned counsel appearing on behalf of the Revenue authorities has submitted that under section 131(1), the Assessing Officer has all the powers of the civil court including issuing of commissions under section 131(1)(d). Further under section 142(2), an Assessing Officer, for the purpose of obtaining full information in respect of the income or loss of any person, may make "such enquiry as he considers necessary". While conceding that section 55A could not in terms apply to the assessee's case, the respondents' contention was that the Assessing Officer was otherwise empowered under the other provisions of the Act to refer the matter to the Valuation Officer. According to the respondents the powers of enquiry invested in the Assessing Officer under sections 131(1), 133(6) and 142(2) were wide and that this court should not read in any limitation to this power. It was further submitted that there was nothing in the Wealth-tax Act, 1957, which precluded the Valuation Officer from giving a valuation report in respect of any matter not covered by the provisions of that Act. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aluation Officer is required under sub-section (4) of section 16A to serve notice on the assessee intimation the value at which he proposes to estimate the asset giving the assessee an opportunity to state his objections either in person or in writing before the Valuation Officer and to produce or cause to be produced, such evidence as the assessee may rely on in support of his objections. Under sub-section (5), the Valuation Officer may pass an order in writing, estimating the value of the asset after hearing such evidence as the assessee may produce and after considering such evidence as the Valuation Officer may require and, after taking into account all relevant materials which he has gathered, the Assessing Officer is required to complete the assessment in conformity with the estimate of the Valuation Officer as far as the valuation of the particular asset in question is concerned in terms of sub-section (6) of section 16A. The decision of the Valuation Officer is amendable by him under section 35(aaa) of the Wealth-tax Act. The decision may also be the subject matter of appeal under section 23(ha) in which event the appellate authority is required, under section 23(3A) to g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l gains it incorporates several provisions relating to a Valuation Officer in the Wealth-tax Act and reads as follows: "55A. With a view to ascertaining the fair market value of a capital asset for the purposes of this Chapter, the Assessing Officer may refer the valuation of the capital asset to a Valuation Officer- (a) in a case where the value of the asset as claimed by the assessee is in accordance with the estimate made by a registered valuer, if the Assessing Officer is of opinion that the value so claimed is less than its fair market value; (b) in any other case, if the Assessing Officer is of opinion- (i) that the fair market value of the asset exceeds the value of the asset as claimed by the assessee by more than such percentage of the value of the asset as so claimed or by more than such amount as may be prescribed in this behalf; or (ii) that having regard to the nature of the asset and other relevant circumstances, it is necessary so to do, and where any such reference is made the provisions of sub-sections (2), (3), (4), (5) and (6) of section 16A, clauses (ha) and (i) of sub-section (1) and sub-sections (3A) and (4) of section 23, sub-section (5) of sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efer the matter to the Valuation Officer for an enquiry by him. Learned counsel for the respondents has however particularly drawn our attention to clause (d) of sub-section (1) of section 131 which provides, inter alia, that the Assessing Officer shall, "for the purposes of this Act, have the same powers as are vested in a court under a Code of Civil Procedure, 1908 (referred to as "the Code"), when trying a suit in respect of the following matters, namely:-- "(d) issuing commissions." The court's power to issue commissions is contained in sections 75 to 78 of the body of the Code and Order XXVI of the Schedule to the Code. Sections 76 to 78 are not relevant for our purposes. Section 75 which delineates the power of court to issue commissions says: "75. Power of court to issue commissions.--Subject to such conditions and limitations as may be prescribed, the court may issue a commission- (a) to examine any person; (b) to make a local investigation; (c) to examine or adjust accounts; or (d) to make a partition; (e) to hold a scientific, technical, or expert investigation; (f) to conduct sale of property which is subject to speedy and natural decay and which is i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act and of a commission issued under section 75 read with Order XXVI, rule 9, of the Code are different. It is not, therefore, a case of correction of an error in mentioning the section by the Assessing Officer, an error which could be ignored by referring the action to the appropriate source of power. Besides section 55A having expressly set out the circumstances under and the purposes for which a reference could be made to a Valuation Officer, there is no question of the Assessing Officer invoking the general powers of enquiry to make a reference in different circumstances and for other purposes. It is noteworthy that section 55A was introduced in the Act by the Taxation Laws (Amendment) Act, 1972, when sections 131(1), 133(6) and 142(2) were already on the statute book. Learned counsel for the appellant has correctly submitted that if the power to refer any dispute to a Valuation Officer were already available in sections 131(1), 133(6) and 142(2), there was no need to specifically empower the Assessing Officer to do so in certain circumstances under section 55A. We may also note section 269L of the Act which enables the competent authority appointed under section 269B: ..... X X X X Extracts X X X X X X X X Extracts X X X X
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