TMI Blog2001 (1) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... ti-storeyed buildings and allied construction. The petitioner has filed the return of its income for the assessment year 1999-2000 (annexure P-4). It is yet to be assessed. A survey under section 133 of the Act was conducted by the income-tax authorities in the business premises of the assessee. In these proceedings, when asked, the petitioner furnished an information that the value of one of their properties now under dispute in this petition by name-Classic Gold, 23/24, New Palasia, Indore, is valued at Rs. 62,75,000. Iii order to elucidate the correctness of the cost of construction of this property, the Deputy Director of Income-tax (Investigation)-I, Indore, by his letter dated May 31, 1999 (annexure P-1), asked the District Valuation Officer of the Income-tax Department to inspect the aforementioned property and to make such investigation, seek clarification and material from an assessee and then determine the true and correct cost of construction of the aforesaid property. It was also said that the letter may be treated as issue of commission as provided under section 131(1)(d) read with section 131(1A) of the Act. In substance, the Deputy Director of Income-tax (Investig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hekar, learned senior counsel with Shri J. W. Mahajan, learned counsel for the petitioner, and Shri A. P. Patankar, learned counsel for the respondents. Learned counsel for the petitioner mainly assailed the letter dated May 31, 1999 (annexure P-1), written by the Deputy Director of Income-tax (Inv.) to the District Valuation Officer for making the valuation of property. According to learned counsels this letter (impugned herein) issued by the Deputy Director of Income-tax ("the DDI", for short) is without authority of law, Learned counsel urged that the DDI has no power under section 131(1A) to issue commission as contemplated under section 131(1)(d) asking the District Valuation Officer to determine the cost of any property. According to learned counsels such power can be exercised by the DDI only in the case of search and seizure under section 132 and that too before taking action under clauses (i) to (v) of section 132(1). Learned counsel while referring to section 132(1A) urged that the submission made by him is lent support if one reads section 132(lA) in its proper perspective. In other words, the submission was that the words "before fie takes action under clauses (i) to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d other documents ; and (d) issuing commissions. (1A) If the Director-General or Director or joint Director or Assistant Director or Deputy Director, or the authorised officer referred to in subsection (1) of section 132 before he takes action under clauses (i) to (V) Of that sub-section, has reason to suspect that any income has been concealed, or is likely to be concealed, by any person or class of persons within his jurisdiction, then, for the purposes of making any enquiry or investigation relating thereto, it shall be competent for him to exercise the powers conferred under sub-section (1) on the income-tax authorities referred to in that sub-section, notwithstanding that no proceedings with respect to such person or class of persons are pending before him or any other income-tax authority". A perusal of section 131(1A) would indicate that it empowers six authorities of the Income-tax Department to invoke/use the powers of sub-section (1) of section 131 on fulfilment of certain conditions specified in subsection (1A). It says that if any of these six specified authorities, i.e., (1) Director-General, (2) Director, (3) Joint Director, (4) Assistant Director, (5) Deputy D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red to in sub-section (1) of section 132 before he takes action under clauses (i) to (v) of that sub-section" do not qualify the words-Director-General, Director, Joint Director, Assistant Director, Deputy Director but only qualify the words "the authorised officer" which precede them. In other words, these words are meant only for the last and sixth specified authority, namely, "authorised officer", and not other five authorities named therein. In my opinion, the first five authorities specified in sub-section (1A) are in no way concerned with section 132 while exercising the powers under sub-section (1A) or/and powers under sub-section (1) of section 131. The reference of section 132 in sub-section (1A) is only for that "authorised officer" who is specially empowered to conduct the search and seizure operation under section 132. Indeed these five specified authorities who were not initially empowered to exercise powers under section 131(1), are now empowered to exercise it by virtue of sub-section (1A) which was inserted with effect from October 1, 1975 and later amended on June 1, 1988. In case the interpretation suggested by learned counsel for the petitioner of sub-secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 132A, 133, 133A and 138, the aforementioned Departmental circular was issued which reads as under : "By the Direct Tax Laws (Amendment) Act, 1987.--The scope and effect of the amendments made in section 131 as also in sections 132, 132A, 133, 133A and 138, have been elaborated in the following portion of the Departmental Circular No. 551, dated 23rd january, 1990, as under : '9.1 Amendment of the provisions conferring powers of a civil court in certain matters on the income-tax authorities (section 131).-Under the old provisions of sub-section (1A) of section 131, the powers of a civil court in certain matters like enforcing attendance of witnesses and examining them on oath compelling the production of books of account and documents, etc., which are normally exercised by the Assessing Officers and appellate or revisionary authorities under the provisions of sub-section (1), were also conferred on an Assistant Director of Inspection, who generally deals with searches and seizures, and enabled him to exercise the powers even when no proceedings were pending. However, these powers were not available to the Directors and the Deputy Directors, who are generally associated with inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to find out whether any income has been concealed or is likely to be concealed, by the petitioner when it showed its valuation at Rs. 62,75,000 and who is carrying on his business in his jurisdiction, the reference to the District Valuation Officer for making the valuation of property was just and proper. It was an act falling strictly within the four corners of section 131(1A). The submission of learned counsel for the petitioner that the valuation report submitted by the District Valuation Officer (annexure P-2) which is apparently against the petitioner is bound to be relied on by the Assessing Officer in making the assessment for the assessment year (1999-2000) has no force. Firstly, it is simply an apprehension, secondly, even this apprehension has no basis for the simple reason that the Assistant Commissioner of Income-tax (Circle) (2)(1)(Inv.) by its letter dated November 18, 1999 (annexure P-2), has given to the petitioner an opportunity to file objections to the said report of the District Valuation Officer. A copy of the said report is also sent to the petitioners to enable them to file their objections. The petitioners have also filed their objections (annexures P-4 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
