9911796707
TMI Blog2010 (8) TMI 941X X X X Extracts X X X X X X X X Extracts X X X X ..... plained the investment out of savings. However, such explanation has not been accepted by the assessing authority and the sum of ₹ 3,00,000/- has been added as unexplained investment in the construction/renovation of the building. The assessing authority has passed the order on 21.2.2006 It appears that to ascertain the quantum of investment made in the building construction the assessing authority had referred the matter to the valuation officer under Section 142-A of the Act. The Valuation Officer has given its report on 9.5.2006 and has valued the investment as under : F.Y. A.Y. Investment declared By assessee Investment valued by V.O Difference 2002-03 2003-04 300000 505300 205300 2003-04 2004-05 576000 970300 394300 2004-05 2005-06 531900 896000 364100 2005-06 2006-07 70000 117900 47900 As the investment shown by the petitioner was less than the investment estimated by the valuer report, notice under Section 148 of the Act has been issued for the assessment year 2003-04 to reopen the assessment on the ground that there was an escaped assessment. It appears that the petitioner has filed a reply to the notice under Section 148 of the Act, vide reply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We have considered the rival submissions of learned counsel for the parties and perused the record. The notice under Section 148 read with Section 147 of the Act has been issued on the basis of valuer report in which it is reported that as against the disclosed investment in the construction of house in the year under consideration at ₹ 3,00,000/- a sum of ₹ 5,05,300/- has been estimated resulting less disclosure of investment by ₹ 2,05,300/-. A perusal of the assessment order under Section 143(3) reveals that the assessing authority has not adjudicated the issue relating to investment in the construction. The assessing authority has made the query from the petitioner asking him to explain the source of investment towards construction, which was shown at ₹ 3,00,000/- and made an addition of ₹ 3,00,000/- towards unexplained investment in the building and being not satisfied with the explanation to the source of investment but no query doubting the investment had been made. A perusal of the letter dated 1.8.2006 reveals that the reference to the Valuation Officer under Section 142-A of the Act was made during the course of assessment proceeding. However, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are the subject matters of any appeal, reference or revision, which is chargeable to tax and has escaped assessment. Explanation I.- Production before the Assessing Officer of account of books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the foregoing proviso. Explanation 2.- For the purposes of the this section, the following shall also be deemed to be cases where income chargeable to tax has escaped assessment, namely:- (a) where no return of income has been furnished by the assessee although his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax; (b) where a return of income has been furnished by the assessee but no assessment has been made and it is noticed by the Assessing Officer that the assessee has understated the income or has claimed excessive loss, deduction, allowance or relief in the return; (c) where an assessment has been made, but- (i) income chargeable to tax has been underassesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke a back assessment, but in section 147 of the Act [with effect from 1st April, 1989], they are given a go-by and only one condition has remained, viz., that where the Assessing Officer has reason to believe that income has escaped assessment, confers jurisdiction to re-open the assessment. Therefore, post-1st April, 1989, power to re-open is much wider. However, one needs to give a schematic interpretation to the words "reason to believe" failing which, we are afraid, Section 147 would give arbitrary powers to the Assessing Officer to re-open assessments on the basis of "mere change of opinion", which cannot be per se reason to re-open. We must also keep in mind the conceptual difference between power to review and power to re-assess. The Assessing Officer has no power to review; he has the power to re-assess. But reassessment has to be based on fulfillment of certain pre-condition and if the concept of "change of opinion" is removed, as contended on behalf of the Department, then, in the garb of re-opening the assessment, review would take place. One must treat the concept of "change of opinion" as an in-built test to check abuse of power by the Assessing Officer. Hence, after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the position would be different if there will be a case of investment in the construction or any fact is suppressed and the income escaped from the assessment. Therefore, this decision of of no help to the petitioner, rather it goes against the petitioner. In the case of Smt. Tarawati Debi Agarwal v. Income-Tax Officer (supra) the assessment years involved were 1966-67 and 1967-68 prior to the amendment in Section 147 of the Act and, therefore, this decision has no relevance. In the case of S. Sreeramachandra Murthy and another v. Deputy Commissioner of Income-Tax and another (supra) the notice under Section 148 of the Act was issued beyond four years. In view of the proviso to Section 147 of the Act, notice beyond four years could be issued only in case if there was a failure to disclose primary fact by the assessee. The assessee has disclosed the primary fact relating to the construction of the commercial complex and the cost of the construction which has been considered by the assessing officer. Proceeding under Section 147 of the Act was issued on the basis of estimate of the cost of construction by the Departmental Valuer after four years. The Division Bench of the An ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
