TMI Blog2001 (4) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... on'ble High Court had set a time-limit of three months, for completion of hearing by the Tribunal, from the date of receiving order dt. 11th Dec, 2000. Accordingly, the appeals were fixed, on out of turn basis, for 31st Jan., 2001. However, Shri S.P. Choudhury, counsel for the assessee, moved an adjournment petition dt. 22nd Jan., 2001, which inter alia, stated as follows: "That the above appeals have been fixed for hearing-on 31st Jan. 2001, but as I am leaving Calcutta today to have a holy bath at Kumbh Mela and will be returning on 31st Jan., 2001, it will not be possible for me to appeal and argue the appeals on 31st Jan., 2001. Under the above mentioned facts and circumstances, your good selves are requested to adjourn the hearing of appeals on 31st Jan., 2001, and refix the same after 31st Jan., 2001, at your convenience." Accordingly, the appeals were posted for hearing on 8th March, 2001, but, even on this date, the appeals could not be heard. Record of proceedings for that day are as follows: " 8th March, 2001 The case is adjourned to 28th March, 2001, at the request of the assessee's counsel. Sd/xx Both the parties are informed. S.P. Choudhary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted accounts were duly furnished for all these years and that the assessee attended satisfactorily to all the queries made by the AO during the course of scrutiny proceedings under s. 143(3) of the Act. The assessments for all these years were reopened on 2nd May, 1995, on the basis of Departmental Valuer's report obtained after completion of original assessments. The reasons recorded for reopening the assessment for the asst. yr. 1991-92, which are materially identical to the reasons for reopening of assessments for other years also, are reproduced below: "During the F.Y. 1990-91 (asst. yr. 1991-92), the 'a' Co. has sold flats at 201 Jodhpur Park, Calcutta, claiming to have sold the flats at an average rate of Rs. 348 per sq. feet which was assessed @ Rs. 359 per sq. feet. Subsequently, on a reference made to the valuation cell, the Valuation Officer has valued the FMV per sq. ft. @ Rs. 509.66 which amounts to suppression of actual sales price by the 'a' Co. to the extent of difference amount. During the assessment year, the 'a' Co. has sold 7,760 sq. ft. of flats and I, therefore, have reasons to believe that income by way of sales price suppression to the extent of (509.66-359 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on with or bearing on formation of belief'. Rational connection was said to postulate that there must be direct nexus and live link between material coming to the notice of the AO and formation of belief that there is some escapement of income. We may also refer to the observations of Hon'ble Gauhati High Court, in the case of Bhola Nath Majumdar vs. ITO (1996) 137 CTR (Gau) 198 to the effect that a valuation report is only an opinion of valuer. It is further stated that the same can neither amount to 'information nor to 'reason to believe' that any income has escaped assessment. The condition precedent for assumption of jurisdiction under s. 147 is AO's reason to believe1 that any income has escaped assessment. Hon'ble High Court has also observed that if that be so, opinion of a third party cannot be the reason of AO's such a belief. Hon'ble Gauhati High Court has, while dealing with valuation report by the Departmental Valuation Officers and in the context of s. 147 as it exists today, also categorically held that s. 55A has no relevance and cannot be applied after the assessment is completed and before the reassessment has commenced that is, to consider whether the completed as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... between material coming to the notice of the AO and formation of belief that there is some escapement of income. To our mind, there is no such direct nexus between DVO report and ascertaining suppressed sale amount of the related flats. The reasons of reopening, therefore, cannot be said to be relevant for that purpose. 10. In the case of N.R.K. Ramkumar Raja vs. CIT (1999) 106 Taxman 81 (Mad) Hon'ble Madras High Court has, while dealing with s. 147 as it exists today, observed as follows: "The words 'AO has reason to believe' should be read with reference to the other provisions of the Act, under which, income is chargeable to tax it is in this regard that authorities should satisfy themselves whether such income is chargeable to tax, before holding that the AO has reasons to believe that any income of the assessee petitioner chargeable to tax has escaped assessment for any assessment year." It appears from the above observations that unless the AO is satisfied that the reasons on account of which the assessment is being reopened may lead to detection of some income which is chargeable to tax but has escaped assessment to tax, reopening of assessment cannot be said to be go ..... X X X X Extracts X X X X X X X X Extracts X X X X
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