TMI Blog2016 (9) TMI 1454X X X X Extracts X X X X X X X X Extracts X X X X ..... reflected in the books of accounts which is a condition precedent before referring to Section 142A of the Act. The words of both the provisions 'pre' as well as 'post' are not of much difference and therefore the contention raised by the revenue is meritless and therefore the same is not accepted. The particulars which have been asked for have been sufficiently explained during the assessment proceedings and the assessment proceedings have become final and therefore relying upon solitary report, the only reason which is based upon to exercise powers for reopening of the assessment would be nothing but change of opinion which is not permissible. Therefore the over all circumstances reflected on the record indicates that the action on the part of the respondent authority under reopening of the assessment is impermissible and therefore the petition deserves to be allowed and the impugned notice issued in Section 148 dated 28.4.2010 as well as the order of rejection of objection dated 12.12.2011 are quashed and set aside hereby. Rule is made absolute. - Special Civil Application No. 18015 of 2011 - - - Dated:- 19-9-2016 - AKIL KURESHI And A.J. SHASTRI, JJ. JUDGMENT A. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y and the valuation officer-II,ITD, Ahmedabad vide his report No.2(1)/VO-II/2009-10/838 dated 10/02/2010 reported the value of cost of construction in building. The same is reproduced as under: Sr. No . Details of property Value (F.Y.2005-06) Declared by the assessee Estimated by the V.O. 1 Building 84,57,956 2,64,91,000 2 Plant Machinery 2,26,08,801 2,02,77,773 On going through the report it appears that the assessee company has understated the value of building to the extent of ₹ 1,80,33,044/-. Thus the assessee had not fully disclosed investment made in building and had furnished the inaccurate particulars of incomes to the extent of ₹ 1,80,33,044/-. Therefore, I have reason to believe that the income chargeable to tax have been escaped assessment for A.Y.2006-07 within the meaning of section 147 of the I.T. Act. 2.2 It is against this notice issued under Section 148 read with Section 147 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment proceedings, all the relevant bills pertaining to construction of factory building have been scrutinized as having been produced by the petitioner and after considering that only, the assessment proceedings have been finalized and therefore to allow the authority to reopen the assessment at this juncture would be based upon a mere change of opinion which is not permissible in view of settled position of law. Learned counsel for the petitioner has further contended that assessment proceedings have been finalized on 26.6.2008 whereas the District Valuation Officer's report dated 18.8.2008 is made the subject matter of reopening of assessment after almost a period of 1 months after finalization of assessment proceedings. Learned counsel submitted that this power of reopening is not permissible in view of Section 148 of the Act. Learned counsel for substantiating this contention has relied upon a decision of this Court passed in Tax Appeal No.148 of 2000 in case of GoodLuck Automobiles (P.)Ltd. v. Asstt. CIT. [2013] 359 ITR 306/[2012] 210 Taxman 183 (Mag.)/26 taxmann.com 254 (Guj.) and another decision in Tax Appeal No.293 of 2014 and allied matters decided on 15.4.2014 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scrutinized and examined, to rely upon the report of the DVO for reopening of assessment which has already been finalized would be nothing but a mere change of opinion and therefore in view of settled position of law, the same is impermissible and therefore the learned counsel requested the Court to allow the petition. 4. To oppose this petition, learned counsel Mr.Nitin Mehta has submitted that impugned action is within a period of four years and therefore any information which is made available to the Assessing Officer can be gone into for the purpose of reopening of assessment. Learned counsel has submitted that the petitioner has mainly relied upon the decision of GoodLuck Automobiles (P.) Ltd. (supra) delivered by this Court wherein the learned counsel for revenue has submitted that the amended provisions of Section 142A was never before the Court for examination as the issue related to the said case was pertaining to assessment year 1989-90 and therefore the learned counsel submitted that new provision incorporated in the form of Section 142A is entitling the authority to reopen the assessment. It is submitted that under the new provision, there is no reference to rejecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reference made in accounts along with the invoices, bills etc. pertaining to this very construction and it appears that under a communication dated 16.5.2008, the assessee company has sufficiently explained the same by producing all relevant xerox bills pertaining to the construction and it also appears from the record that entire construction account has been submitted before the Assessing officer who undertook the exercise of framing the assessment. (3) It is also emerging from the record that the assessment order has been finalized under Section 143(3) on 26.6.2008 wherein also this issue related to construction has been dealt with and it is appearing from the record that this valuation report which is relied upon is after the assessment proceedings has been finalized. (4) In view of the aforesaid position, it appears that the issue related to this construction has been gone into at sufficient length by the Assessing Officer before framing the assessment. However, even in addition to that, the proposition of law which has been propounded by this Court in case of Goodluck, it appears that without rejecting the books of accounts the reference could not have been made and Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, when the Assessing Officer records that he is not satisfied about the correctness or completeness of the accounts of the assessee etc., the Assessing Officer can make a best judgment assessment. In other words, before proceeding to estimate the value of any investment the Assessing Officer has to record that he is not satisfied about the correctness or completeness of the accounts of the assessee. 11. At this juncture, reference may be made to the decision of the Uttarkhand High Court in Commissioner of Income-tax v. Bhawani Shankar Vyas, [2009] 311 ITR 8, wherein the court was dealing with the question as to whether the Income Tax Appellate Tribunal was justified in holding that without rejecting the books of account, the Assessing Officer was not justified in making reference to the Departmental Valuation Officer, ignoring the retrospective effect of the provisions of section 142A of the Income Tax Act? The court held that where the Income Tax officer while making his assessment had doubts on the correctness of the accounts submitted by the assessee, the Income Tax Officer was perfectly justified in making a reference to a departmental valuer without formally or cate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s allowed, the same would tantamount to be based upon a mere change of opinion which in settled legal position is impermissible. 6. It is found from the record that the assessee-company has produced the entire construction along with the bills in detail and only after examining the same, the assessment order has been finalized and therefore a mere report of valuation cannot be construed as sufficient and tangible material which may permit the authority to reopen the assessment. In addition thereto, it appears that the Assessing Officer is satisfied with the correctness and complete notes of accounts of the assessee and nowhere even the method of accounting has been questioned and therefore when the entire construction account is made available to the Assessing Officer and only thereafter when the final assessment has taken place, DVO's report cannot be construed as tangible material which would warrant the authority to exercise the powers of reopening of assessment. The Apex Court time and again has propounded that the powers of reassessment cannot be exercised just to reensure the correctness of material which has already been examined. Further, not to review the opinion wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of formation of belief about incorrect information which are not reflected in the books of accounts which is a condition precedent before referring to Section 142A of the Act. The words of both the provisions 'pre' as well as 'post' are not of much difference and therefore the contention raised by the revenue is meritless and therefore the same is not accepted. A further reference is made by the learned counsel for the revenue to the case of decision Bharathi Cement Corpn. (P.)Ltd. (supra), delivered by the A.P.High Court in the case of Bharathi Cement Corpn. (P.)Ltd. (supra), wherein the learned counsel has relied upon the observations contained in paragraph 14 in it. The said decision is based upon a different set of circumstances which is not appearing on the case on hand and the Court has found that ratio laid down by this Court in case of Goodluck Automobiles (P.) Ltd. (supra) has got the applicability to the facts of the present case, the contention raised by the revenue is not accepted. 8. In over all view of the aforesaid facts and circumstances, it appears to the Court that the particulars which have been asked for have been sufficiently explained duri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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