TMI Blog2010 (6) TMI 902X X X X Extracts X X X X X X X X Extracts X X X X ..... on receipt of notice of hearing, which was not adverted to or dealt with by him; and consequently, the assessment order dt. 31st Dec., 2008 as passed by the Asstt. CIT, Central Circle-6, Kanpur was liable to be declared as null and void. 2. Because the 'appellant' had challenged the jurisdiction of learned Asstt. CIT, Central Circle, Kanpur, inter alia, on the ground that requirement of Section 127 had not been complied with and such objection had duly been raised before the AO himself and the 'CIT(A)' has erred in holding 'if there was any objection on the issue of centralization of case, it should have been taken then before the relevant authorities' and in rejecting the 'appellant's' plea to the effect that the assessment order dt. 31st Dec., 2008 was wholly without jurisdiction. Without prejudice to the aforesaid 3. Because the 'CIT(A)' has erred in law and on facts in rejecting the 'appellant's' pleas to the effect that: (a) there was no occasion or justification to invoke the provisions of Section 142A and to make a reference thereunder to the DVO, on 27th Sept., 2007; (b) the DVO's report as obtai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Because there being no assessment proceedings pending on 27th Sept., 2007, reference made to the DVO on that date for obtaining valuation report (for unspecified period) was invalid and no addition on the basis of valuation report dt. 9th Dec., 2008 (so obtained by the AO) could have been made. 10. Because otherwise also, the reference made on 27th Sept., 2007, cannot be said to have been made Under Section 142A as the period for which estimate of investment was called for, was not specified therein and consequently the valuation report dt. 9th Dec., 2008 could not have been made the basis for making the assessment. 11. Because the appellant had maintained books of accounts in regular course and there being no defect found in such books of accounts, either at the stage of initiating the reference Under Section 142A, nor after the DVO's report dt. 9th Dec., 2008 had been obtained, no addition on account of alleged undisclosed investment could have been made. 12. Because, wholly without prejudice to the contentions raised in the foregoing grounds, there was no variation between the appellant's version of investment in the year under consideration, vis-a-vis correct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gument of the assessee was that the DVO has divided the estimated cost of Rs. 27,50,55,529 in three financial years in equal proportion without deducting therefrom the cost of machinery, generator, escalators etc. which were installed in the last year only. After considering the objections of the assessee, the AO made addition of Rs. 2,50,98,612. 6. Aggrieved by the order of the AO, the assessee carried the matter in appeal before the learned CIT(A). 7. The assessee challenged the order of the AO by raising a number of grounds. Vide ground No. 4 of the appeal, the assessee challenged the action of the AO in making a reference to the DVO and the submissions made in this regard are as under : (b)The case was centralized vide order dt. 15th May, 2007 passed by the learned CIT-IX, New Delhi, with which the appellant never got apprised of such centralization order, it had filed the return in normal course at Delhi itself with the AO having territorial jurisdiction in its case on 31st March, 2008. In between no proceedings under the IT Act were in progress either for the asst. yr. 2007-08 (year under appeal) or for earlier years. In such a situation, reference made by the Asstt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diction to refer the matter to the DVO for determination of cost of investment. Para 5 of the judgment reads as under : In the opening part of Section 142A the words used are 'for the purposes of making an assessment or reassessment under the Act'. The intent of the legislation is that the matter can be referred to the Valuation Officer only when the proceedings of assessment or reassessment are pending before the AO. When no such proceedings are pending, the AO has no jurisdiction to refer any property for assessment. In the above decision, the Hon'ble High Court has clearly held that the matter can be referred to the Valuation Officer when the proceedings of assessment or reassessment are pending before the AO and not otherwise. 10.1 The decision of the Tribunal, Lucknow Bench in the case of Vijeta Educational Society (supra) can also be referred for deciding the controversy. In the said case, the Tribunal held as under : 14. In order to consider this argument let us refer to Section 142A, which is as under : 142A. (1) For the purposes of making an assessment or reassessment under this Act, where an estimate of the value of any investment referred to in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is a basis to think that the assessee may have understated the cost of construction or whatever is declared by him in this regard is not believable. Therefore, it is quite apparent that reference to valuation cell Under Section 142A can be made during the course of assessment and reassessment and not for the purpose for initiating reassessment. This view is clearly supported by the decision of Ahmedabad Bench in Umiya Co-operative Housing Society's case (supra) referred to above, wherein it is held as under : 7. From the above, it is evident that Section 142A empowers the AO to require the Valuation Officer for making the estimate of the value of any asset provided the AO required the same for the purpose of malting the assessment or reassessment. The above provision does not empower the AO to refer the matter to the DVO for gathering information for reopening of assessment. Making the reassessment and reopening of assessment are two different things. 8. When the process of reopening of assessment ends and the assessment is validly reopened thereafter, the process of making reassessment starts. Therefore, even after the insertion of Section 142A the AO should have rea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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