TMI Blog2009 (9) TMI 652X X X X Extracts X X X X X X X X Extracts X X X X ..... on the part of the assessee to file return of income. Hence, the assessee never filed its return of income in respect of the year under appeal, assessee has contended that since no proceedings under the Act, were pending at that point of time, the reference itself made to valuation cell by invoking the provisions of section 131(1)(d) by issuing commission were invalid – Held that:- Assessing Officer could only have referred the matter to the District Valuation Officer if independent proceedings were pending with him for the year under appeal in accordance with the decision of the Gujarat High Court in CIT v. Umiya Co-operative [2006 -TMI - 34339 - GUJARAT HIGH COURT], there were no proceedings pending, we confirm the order of the learned Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 131 of the Act to valuation cell and consequently quashing the action under section 147 vis-a-vis assessment of unexplained investment under section 69 of the Act, without considering the merits of the case. Secondly, the action under section 131 is not appealable before the income-tax authorities and. only writ, before the court, is permissible. 4. It is therefore, prayed that the order of the Commissioner of Income-tax (Appeals) be set aside and that the order of the Assessing Officer be restored." 3. The assessee is a co-operative housing society registered under section 10 of the Gujarat Co-operative Societies Act, 1962. The assessee was registered on August 30, 1993, with an object to provide housing to its members. During ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to District Valuation Officer (DVO), Ahmedabad. 7. It is pertinent fact to note here that at that relevant point of time, when the then learned Deputy Commissioner of Income-tax (Appeals) Circle-1, Navsari made a reference to valuation cell, no proceedings under the Income-tax Act, 1961 were pending against the assessee. 8. The assessee has contended that since no proceedings under the Act, were pending at that point of time, the reference itself made to valuation cell by invoking the provisions of section 131(1)(d) by issuing commission were invalid. 9. The District Valuation Officer, Ahmedabad, vide his letter No-2(27)/DVO/1999-2000/597, dated December 19, 2000, forwarded his valuation report to the then Deputy Commissioner of In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstruction at Rs. 1,05,21,176 as against Rs. 40,00,000 estimated by the then learned Deputy Commissioner of Income-tax (Appeals) Circle-1, Navsari, and therefore, he had reason to believe that income of Rs. 65,21,176 relevant to the assessment year 1997-98 chargeable to tax has escaped assessment. 11. Thus, the reassessment proceeding for year under appeals was commenced and the assessment was finalised solely relying on the valuation report received from the District Valuation Officer. The Assessing Officer did not even care to independently inquire about the fact that when the construction activity had actually commenced and when it was completed. 12. The assessee has contended that District Valuation Officer's report is an "opinion" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing against the appellant on the date of reference to the District Valuation Officer under section 131(1)(d). The reason for issuing summons as stated by the Assessing Officer is to investigate whether the assessment should be reopened or not. It was for the Assessing Officer to first decide whether he had any reason to believe that income had escaped assessment. Only if he decided that question in the affirmative, could be initiate proceedings under section 147 and only thereupon could he become entitled to invoke the provisions of section 131(1). In the instant case the facts as brought out by the Assessing Officer did not reveal that the Assessing Officer had any material on record to initiate even an inquiry in the year under reference. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reassessment is quashed." 14. Against this, the Revenue is in appeal before us. Shri A. K. Nayak, Departmental representative, appeared for the Revenue. He relied on the order of the Assessing Officer. Shri M. S. Modi, authorised representative appeared for the assessee. He repeated the arguments made before the Commissioner of Income-tax (Appeals). He also relied on the order of the Commissioner of Income-tax (Appeals). 15. We have considered the rival submissions. The Commissioner of Income-tax (Appeals), has written a well reasoned order. The Assessing Officer could only have referred the matter to the District Valuation Officer if independent proceedings were pending with him for the year under appeal in accordance with the decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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