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2009 (3) TMI 652 - AT - Income TaxApplication for condonation of delay - inordinate delay of one year and 92 days - sufficient cause - HELD THAT:- The Hon’ble Supreme Court in the case of Collector, Land Acquisition v. Mst. Katiji [1987 (2) TMI 61 - SUPREME COURT] held that ordinarily, a litigant does not stand to benefit by lodging an appeal late. The Hon’ble Supreme Court further held that "every day’s delay must be explained" does not mean that a pedantic approach should be made. Why not every hour’s delay, every second’s delay ? The doctrine must be applied in a rational, common sense and pragmatic manner. It is also well-settled law that length of delay is not to matter in the context of condonation of delay. At this stage, we may point out that the revenue has not brought any material on record to controvert the facts stated in the application of condonation of delay. Considering the facts and the fact that the FIR has been lodged by the assessee and also considering the assessee’s explanation for delay and the settled legal position, we are of the view that there was sufficient cause, which prevented the assessee from filing the appeal before the Tribunal within time. Therefore, we condone the delay in filing the appeal. Jurisdiction to any authorities mentioned in the definition by the CBDT under the provisions of section 120 of the Income-tax Act, 1961, to act as an AO - DDIT made reference to the DVO before completing the construction of the house property - no proceeding was pending in the case of the assessee before making reference to the DVO by the DDIT - Validity of assessment order passed on the basis of such valuation report - HELD THAT:- The authorities mentioned in the definition of AO in section 2(7A), must be assigned the jurisdiction to any authorities mentioned in the definition by the CBDT under the provisions of section 120, to act as an AO. Only in that circumstances that Assistant Commissioner or Dy. Director of Income-tax, other authorities mentioned in the definition u/s 2(7A), can act as AO. In this case, the DDIT (Investigation II), Indore, who issued the commission u/s 131(1)(d) has not been assigned jurisdiction to act as an AO of the assessee Shri Rajeev Mewara. Therefore, the finding of CIT(A) that the DDIT (Investigation II), Indore, is an AO by virtue of the provisions of section 2(7A), is not valid. Further, the DDIT (Investigation) has made reference to the DVO by virtue of powers conferred on him under sub-section (1A) of section 131. However, such reference by the DDIT(Investigation), Indore, is illegal and he has exaggerated his jurisdiction as the power under sub-section (1A) of section 131 has been conferred on the DDIT(Investigation) for entirely different purposes and not for the purpose of valuation of the house property. it is noted that none of the condition mentioned in sub-clauses (i) to ( v) of sub-section (1) of section 132 has been mentioned for reference to the DVO to value a house property as has been done in the instant case by the ld. DDIT (Investigation - II), Indore. We hold that reference made by the DDIT(Investigaiton-II), Indore, for valuation of the house property to the DVO u/s 131(1)(d) is itself illegal and beyond the power of the Dy. Director of Income-tax (Investigation), Indore. Therefore, subsequent action, i.e., valuation of the property and assessment order passed on the basis of such valuation report also had become illegal and void ab initio. This view is also supported by the decision of ITAT, Allahabad Bench in the case of Baldev Plaza [2004 (6) TMI 239 - ITAT ALLAHABAD] . Hence, this ground of appeal of the assessee is allowed. Cost of construction of house property estimated by the DVO - assessee also got valued the property by the approved valuer, who estimated the cost - AO allowed reduction @ 20 per cent on the cost determined by the DVO - balance excess added as unexplained investment in the construction of the said building - CPWD rates were adopted - claimed for deduction @ 25 per cent - HELD THAT:- The ld AR contended that after adopting the cost of the house on the basis of the CPWD rates, no further addition has to be made by the DVO as added above which are not called for. That after adding the addition, DVO arrived at the cost of construction and thereafter, he added 1.5 per cent for builders’ effort, the amount on account of builders’ effort should have been reduced from the total cost of construction arrived by the DVO and cannot be added. Therefore, the report of the DVO is not reliable at all. It is further argued that the DVO has worked out the cost of construction at the rate of Rs. 582 per sq.ft. After allowing deduction at the rate of 20 per cent by AO, the cost of construction comes at Rs. 466 per sq.ft. We agree with the submission of the ld AR in view of the infrastructure used by the assessee of his own business in the construction of the house property under consideration. Therefore, further deduction of Rs. 25 per cent is allowable. Thus, the difference arrived only at 6.9 per cent, which is negligible. Hence, the additions sustained by the ld. CIT(A) are deleted. Thus, all the three grounds of appeal are allowed. In the result, the appeal of the assessee is allowed both on account legality and on merits.
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