Shri P.V.Shanmugam, Ariyalur V. ITO, Trichy

ITA 106/CHNY/2010

• Counselvise Citation: 10621714 RSA 2010
• Duration Of Justice: 2 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 25-07-2012
• Assessment Year: 2000-2001
• Appeal Filed On: 29-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K E B RENGARAJAN JUNIOR
• Assessee Lawyers: V D GOPAL
• Keywords: Reopening of assessment; Value adopted by valuation officer; Valuation report
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI S.S. GODARA, JUDICIAL MEMBER .. M.P. NOS. 134 & 135/MDS/2012 (IN I.T.A. NOS.106 & 107/MDS/2010) ASSESSMENT YEARS : 2000-01 & 2001-02 & I.T.A. NOS. 106 & 107/MDS/2010 ASSESSMENT YEARS : 2000-01 & 2001-02 SHRI P.V. SHANMUGAM, 5-A, MARKET STREET, ARIYALUR. PAN : ARBPS5070J (PETITIONER & APPELLANT ) V. THE INCOME TAX OFFICER, WARD IV(2), NO.44, WLLIAMS ROAD, CANTONMENT, TRICHY. (RESPONDENT) PETITIONER BY : SHRI V.D. GOPAL, ADVOCATE RESPONDENT BY : SHRI K.E.B. RENGARAJAN, JUNIOR STANDING COUNSEL DATE OF HEARING : 05.10.2012 DATE OF PRONOUNCEMENT: 05.10.2012 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : THROUGH THESE MISCELLANEOUS PETITIONS, ASSESSEE S UBMITS THAT HIS APPEALS WERE DISPOSED OF WITHOUT ADJUDICATING T HE GROUNDS RAISED BY HIM. ACCORDING TO HIM, ONLY THE GROUND RELATING TO THE ISSUE OF NOTICE UNDER SECTION 143(2) OF INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') BEING BARRED BY TIME, WAS NOT PRESSED. M.P. NOS. 134 & 135/MDS/12 2 2. LEARNED D.R. STRONGLY OPPOSING THE M.P. SUBMITTE D THAT REOPENING WAS OF A 143(1) ASSESSMENT, AND THERE BEI NG NO OPINION INITIALLY FORMED BY THE A.O., DECISION OF HONBLE A PEX COURT IN THE CASE OF ACIT V. RAJESH JHAVERI STOCK BROKERS P. LTD . (291 ITR 500) APPLIED. 3. WE HAVE HEARD RIVAL SUBMISSIONS FROM BOTH SIDES. THE COMMON ORDER DATED 8 TH AUGUST, 2012 OF THIS TRIBUNAL WAS ON TWO APPEALS OF THE ASSESSEE AND TWO APPEALS OF THE REVE NUE. THESE WERE CROSS APPEALS. THIS TRIBUNAL HAD TAKEN UP REV ENUES APPEALS FIRST FOR DISPOSAL. AT PARA 2, IT NARRATED THE GRI EVANCE OF THE REVENUE THAT THE CIT(APPEALS) SCALED DOWN THE ADDITION FOR THE RESPECTIVE YEARS, RELYING ON VALUATION SUBMITTED BY THE ASSESS EE FROM A REGISTERED VALUER WHICH, AS PER THE REVENUE, WAS IN EXCESS OF 15% OF DIFFERENCE BETWEEN VALUATION BASED ON CPWD AND S TATE PWD RATES. AFTER CULLING OUT THE FACTS AT PARAS 4 TO 6 AND ALSO NOTING DOWN THE SUBMISSIONS OF BOTH COUNSEL AT PARAS 7 AND 8 OF ITS ORDER, THE FOLLOWING FINDINGS WERE GIVEN BY THE TRIBUNAL AT PA RA 9:- 9. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL SUBMISSIONS. THERE IS NO DISPUTE THAT THE PROCEEDI NGS UNDER SECTION 147 WERE INITIATED BASED ON DVOS REPORT. SUCH A M.P. NOS. 134 & 135/MDS/12 3 VALUATION REPORT, OF COURSE, WAS OBTAINED BY THE AS SESSING OFFICER IN THE COURSE OF ASSESSMENT PROCEEDINGS FOR ASSESSMENT YEAR 2002-03. AS HELD BY HONBLE APEX COURT IN THE CASE OF DHARIYA CONSTRUCTION CO. (SUPRA), OPINION OF DVO CO ULD NOT BE A BASIS FOR REOPENING OF ASSESSMENT. IN ANY CASE, WE FIND FROM THE ORDER OF CIT(APPEALS) THAT HE HAD DIRECTED THE ASSE SSING OFFICER TO CONSIDER THE VALUATION REPORT GIVEN BY T HE REGISTERED VALUER BASED ON STATE PWD RATES AND HELD THAT THIS HAD TO BE TAKEN INSTEAD OF THE VALUATION REPORT GIVEN BY THE DVO BASED ON CPWD RATES. AS OFTEN HELD BY VARIOUS COURTS, VALUA TION OF A HOUSE PROPERTY IS A QUESTION OF FACT DEPENDING ON M ATERIAL USED, LOCATION OF PROPERTY, QUALITY OF CONSTRUCTION AND J UST BECAUSE THE VALUATION GIVEN BY DEPARTMENTAL VALUATION OFFICER B ASED ON CPWD RATES WAS HIGHER THAN WHAT WAS SHOWN BY THE AS SESSEE, COULD NOT BE A REASON FOR REOPENING PER SE. IN THE RESULT, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDERS OF CIT(APPEALS). 4. AS EVIDENT FROM ABOVE PARA, TRIBUNAL HAD HELD TH AT REOPENING BASED ON A REPORT OF DEPARTMENTAL VALUATION OFFICER COULD NOT BE A REASON FOR REOPENING PER SE. FOR BOTH THE ASSESSME NT YEARS, THE ORIGINAL PROCEEDINGS COMPLETED UNDER SECTION 143(1) OF THE ACT, WERE REOPENED BY ISSUE OF NOTICE UNDER SECTION 148 OF TH E ACT. ASSESSEE IN HIS APPEALS HAD ASSAILED THE REOPENING IN ONE OF HIS GROUNDS. THIS TRIBUNAL OBVIOUSLY COMMITTED A MISTAKE IN NOT ADJUD ICATING THIS GROUND TAKEN BY THE ASSESSEE THOUGH A FINDING WHICH COULD RESOLVE THE ISSUE WAS GIVEN. AS MENTIONED BY THE ASSESSEE S COUNSEL, HE HAD WITHDRAWN ONLY HIS GROUND REGARDING NOTICE UNDE R SECTION 143(2) BEING BARRED BY TIME AND NOT THE OTHER GROUND RAISE D IN ITS APPEALS. M.P. NOS. 134 & 135/MDS/12 4 5. NO DOUBT, IT IS TRUE THAT AS STATED BY LEARNED D .R., WHEN A RETURN IS PROCESSED UNDER SECTION 143(1), THERE IS NO OPINION WHATSOEVER FORMED BY THE A.O., AS HELD BY HONBLE A PEX COURT IN THE CASE OF RAJESH JHAVERI STOCK BROKERS P. LTD. (SUPRA ). BUT, HONBLE APEX COURT DID NOT GIVE A GO BYE TO THE REQUIREMENT THAT THERE SHOULD BE A REASON WHICH IS HAVING A LIVE NEXUS. HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF M/S SADDIQUE LEATHERS V. CIT , MADURAI (TCA NO.38 OF 2006 DATED 10.7.2012), ON A REOPENING DONE WHERE ORIGINAL PROCEEDINGS WERE COMPLETED UNDER SECTION 143(1), HE LD THAT EVEN IN SUCH CASES, REASON FOR REOPENING SHOULD HAVE LIVE N EXUS WITH THE FORMATION OF BELIEF. IN THE CASE BEFORE US, WE HAV E AT PARA NINE OF THE ORDER REPRODUCED ABOVE, HELD THAT DVO REPORT CANNO T BE A REASON FOR REOPENING AS HELD BY HONBLE APEX COURT IN THE CASE OF ACIT V. DHARIYA CONSTRUCTION CO. (328 ITR 515). IT IS TO B E NOTED THAT THIS WAS THE ONLY REASON SHOWN FOR REOPENING. HENCE THE FINDING THAT REOPENING WAS NOT VALIDLY DONE, IF CHANGED NOW, WIL L RESULT IN A REVIEW OF THE EARLIER ORDER, WHICH WE ARE NOT COMPETENT TO DO. M.P. NOS. 134 & 135/MDS/12 5 6. THOUGH SIMILAR GROUND WAS TAKEN BY THE ASSESSEE IN HIS APPEAL BEFORE CIT(APPEALS), HE NEVERTHELESS DID NOT ADJUDI CATE THE ISSUE. THEREBY A PRESUMPTION CAN BE DRAWN THAT THE CIT(APP EALS) HAD REJECTED THAT GROUND OF THE ASSESSEE. 7. IN THESE CIRCUMSTANCES, THERE IS A MISTAKE COMMI TTED BY THE TRIBUNAL IN DISPOSING THE APPEALS AND HOLDING THAT ASSESSEES APPEALS WERE DISMISSED AS NOT PRESSED. WE, THEREFO RE, RECALL THE ORDER OF THIS TRIBUNAL DATED 8 TH AUGUST, 2012 AND DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. WE ARE OF THE OPINION THA T SUCH REOPENING, BASED ON DEPARTMENTAL VALUATION OFFICERS REPORT, C OULD NOT BE UPHELD. FOR THIS WE RELY ON SAME REASON TAKEN BY T HE TRIBUNAL AT PARA 9 OF ITS ORDER DATED 8 TH AUGUST, 2012 REPRODUCED AT PARA THREE ABOVE. 8. IN THE RESULT, WE ALLOW GROUND NO.2 OF THE ASSES SEE AND HOLD THAT THE RE-ASSESSMENT WAS NOT VALIDLY DONE. 9. IN THE RESULT, THE MPS ARE ALLOWED. ORDERS IN T HE APPEALS ARE RECALLED AND APPEALS OF THE ASSESSEE ARE NOW ALLOWE D. APPEALS OF THE REVENUE HAVING BECOME INFRUCTUOUS, ARE DISMISSE D. M.P. NOS. 134 & 135/MDS/12 6 THE ORDER WAS PRONOUNCED IN THE COURT ON FRIDAY, TH E 5 TH OF OCTOBER, 2012. SD/- SD/- (S.S. GODARA) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 5 TH OCTOBER, 2012. KRI. COPY TO: (1) PETITIONER (2) RESPONDENT (3) CIT(A) (4) CIT (5) D.R. (6) GUARD FILE