Flytech Aviation Limited, Secunderabad V. Asst. Commissioner of Income Tax, Circle-1(3), Hyderabad

ITA 1712/Hyd/2019

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 8814 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-09-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: DB-B
• Assessment Year: 2007-2008
• Appeal Filed On: 21-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Recovery proceedings; Depreciation; Charitable institution; Valuation report; Set aside
• Section: 6; 28; 2; 43B; 142(1); 115JB; 133(6); 69B; 143(2); 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ B ‘ Bench, Hyderabad Before Shri R.K. Panda, Accountant Member AND Shri Laliet Kumar, Judicial Member ITA No.1712/Hyd/2019 Assessment Year: 2007-08 Flytech Aviation Limited, Secunderabad. PAN : AAACF3053D. Vs. Asst.Commissioner of Income Tax, Circle 1(3), Hyderabad. (Appellant) (Respondent) Assessee by: Shri Kumar Pal Tated, CA Revenue by: Shri Solge Jost Kottaram Date of hearing: 11.08.2022 Date of pronouncement: 09.09.2022 O R D E R Per Laliet Kumar, J.M. The appeal of the assessee for A.Y. 2007-08 arises from the order of Commissioner of Income Tax (Appeals) – 7, Hyderabad dated 27.09.2019 involving proceedings under section 143(3) of the Income Tax Act, 1961 (in short, “the Act”). 2 ITA No.1712/Hyd/2019 2. At the outset, ld.AR had submitted that the assessee is not pressing ground Nos.1, 2, 15 and 16 of the grounds of appeal. Hence, the grounds 1, 2, 15 and 16 are dismissed as not pressed. However, as the grounds 3 to 13 raised by the assessee are identical grounds arising out of single addition made by lower authorities and ground No.14 is with respect to addition of Rs.18,32,869/- u/s 43B of the Act, we are reproducing the grounds as under : “1. Whether the addition of Rs.2,38,71,822/- made by the Assessing Officer and confirmed by the ld.CIT(A) was in accordance with section 69B of the Act or not ? 2. Whether the ld.CIT(A) erred in sustaining the disallowance made u/s 43B of the Act of Rs.18,32,869/- without appreciating the fact that the same is not covered under the provisions of section 43B of the Act.” 3. The brief facts of the case are that assessee, who is engaged in the business of Commercial Pilot-Training and Aircraft Maintenance Engineering, filed its return of income on 30.10.2007 admitting a loss of Rs.16,38,902/- and income admitted as deemed total income under section 115JB of the Act at Rs.55,33,668/-. The case was taken up for scrutiny and notice u/s 143(2) of the Act was issued and served on the assessee. While, the assessment proceedings were pending, the AO had received certain information from Directorate of Revenue Intelligence (in short “DRI”) Chennai, consequent on search conducted by the DRI, assessee filed Writ Petition before the hon’ble High Court of A.P. requesting for stay of I.T proceedings till 3 ITA No.1712/Hyd/2019 finalization of proceedings by the Customs Authorities. Hon’ble High Court granted the stay and subsequently vacated the stay and permitted the I.T authorities to continue the proceedings. The AO issued further notices u/s 143(2) and 142(1) of the Act on 23.04.2012 and 24.04.2012, giving fresh opportunity to the assessee. During the course of assessment proceedings, certain issues came for AO’s consideration and based on those issues, AO made certain additions and finally, he completed the assessment on 11.12.2012 by determining the total income at Rs.18,71,38,250/-. 4. Feeling aggrieved by the order of AO, assessee carried the matter before ld.CIT(A) who has confirmed the order of AO. 5. Feeling aggrieved with the order of ld.CIT(A), assessee is now in appeal before us. GROUND NO.1 6. With respect to ground No.1, ld.AR for the assessee had submitted that in the present case, assessee had imported helium balloon from M/s. Stanway Associates, London by one person namely Mr. Peter Stanway for a sum of USD 10,000 and had also paid freight at the Port of Loading i.e., Felixstowe, United Kingdom for a total value of Rs.10,92,390/-. When the said helium balloon came to India, it was valued by the Customs Authorities to the tune of US$ 19,500 dt.15.02.2007. Thereafter, the Directorate of 4 ITA No.1712/Hyd/2019 Revenue Intelligence (in short “DRI”) conducted a search at the premises of the assessee on 28.12.2007 and during the course of search, incriminating evidence was collected by the DRI. Based on that evidence, a show cause notice dt.11.02.2009 was issued to the assessee. In the said show cause notice, it was mentioned that the assessee had undervalued the helium balloon for an amount of Rs.7,95,72,739/-. The Assessing Officer issued a show cause notice on 18.11.2009 whereby the AO confronted the copy of the agreement signed by Mr. J. Venugopal and the representative of M/s. Aerophie for purchase of helium balloon. However, J. Venugopal denied having entered into an agreement with M/s.Aerophie and also denied Annexure C-91 and document No.C-91. The Assessing Officer after non-cooperation of the assessee had made an addition of Rs.7,95,72,739/- to the income of the assessee. In para 2.4 of the assessment order, AO had concluded as under : “2.4 Examination of the evidence on record and also the submissions of the assessee reveal the following facts : (a) Neither the assessee nor Mr. J. Venugopal are interested in producing technical specifications of the helium balloon, winch, gondola and other accessories though they are in full knowledge of the same. Proof for the date of manufacture and name of the manufacturer is not shown. (b) Though, Mr. Venugopal had transactions with M/s. Aerophile or some other concern for installation and operation of helium balloons at USA, he is not revealing details of comparable specifications and prices, which are very much in his knowledge. As substantial shareholder of the ass, he cannot shirk away by stating that he is not party to the transaction; (c) The statement of Mr. Peter Stanway on the valuation is unreliable as he himself is an interested party to the transaction. The valuation by 5 ITA No.1712/Hyd/2019 Jeffers Accounting is also a self serving statement as Mr Craig Jeffers is also an interested party. (d) There is clear cut evidence of suppression of payment of duty at London. (e) There were proposals for establishing a joint venture at Hyderabad and for this purpose, Mr. Peter Stanway visited India, which fact is not denied by the assessee. Otherwise, there is no reason for Mr. Peter Stanway to visit India on various occasions for a small deal of $10,000/-. (f) In the light of the above, there is strong likelihood that the value of helium balloon is undervalued by both the assessee and Mr. Peter Stanway, more so when proposals for establishing Joint Venture of helium balloon tourism was under active consideration. Therefore, the value of the helium balloon as adopted by DRI is taken as the correct value. The difference between value declared by the assessee and the value adopted by DRI is taken as unexplained investment u/s 69B of the IT Act, 1961. The total addition on this account is of Rs.7,95,72,739/-.” 7. Ld.AR has drawn our attention to Para 5.4 of the order of ld.CIT(A) which reads as under : 6 ITA No.1712/Hyd/2019 7 ITA No.1712/Hyd/2019 8. The ld.AR for the assessee had further submitted that both the lower authorities have failed to appreciate the following : 1) That no independent evidence was brought on record by the Assessing Officer or by the ld.CIT(A) 8 ITA No.1712/Hyd/2019 establishing the value of the helium balloon to an extent of Rs.8,01,41,439/-. 2) The Assessing Officer has not made any attempt to bring on record any documentary evidence contradicting the valuation made by the Customs Authorities vide their report dt.15.12.2007. 3) It was submitted that the entire action of the Assessing Officer / ld.CIT(A) was based on the show cause notice issued by the DRI. It was submitted that the DRI does not have the power to issue the show cause notice and revaluate helium balloon, as the officer of the DRI is not the ‘proper person’ under the Customs Act. He relied upon the decision of the Hon’ble Supreme Court in the case of M/s. Cannon Industries Limited Vs. Commissioner of Customs vide Civil Appeal No.1827 of 2018 decided on 09.03.2021 reported in 2021(AIR) SC 1699. 9 ITA No.1712/Hyd/2019 9. It was submitted that in the show cause notice of the DRI, various invoices were analyzed, however, the ld.CIT(A) on examination of facts and after seeking report from the Assessing Officer had dropped most of the allegations against the assessee. It was further submitted that the assessee had produced the affidavit of the buyer supporting the valuation of the helium balloon to the extent of USD 10,000 and thereafter, had also relied upon the report of the Customs Authorities dt.15.02.2007 whereby the Customs Authorities have analyzed the valuation of helium balloon to USD 19,500. It was the contention of the ld.AR that the valuation done by the Customs Authorities have not been challenged by the department even after the alleged search conducted on 28.10.2007. It was the contention of the ld.AR that once the assessee has discharged his onus by filing the affidavit from seller dt.27.07.2007, the transaction details and also valuation report from the Customs Authorities dt.15.02.2007 the Assessing Officer either should have accepted the above said valuation or should have brought on record to the contrary to prove the valuation of helium balloon to an extent of Rs.8,01,41,439/-. Since nothing has been brought on record, the order of the Assessing Officer and ld.CIT(A) are erroneous. 10. The ld.AR had also submitted that an affidavit was filed by the officials of DRI before the Hon’ble High Court of A.P. in a Writ Petition wherein it was submitted that they wrote letters 10 ITA No.1712/Hyd/2019 to London Office to conduct necessary enquiries with Shri Peter Stanway with regard to the verification of the value of helium balloon. To the knowledge of the assessee, the verification of the valuation had been carried out by the authorities. However, till date, the report was not provided to the assessee. The assessee has sought copy of the report by moving an application under RTI before DRI and also before Customs Authorities for providing the copy of such verification from the Embassy of London. The ld.AR also submitted that in the Customs Valuation Report dt.15.02.2007, it was categorically mentioned that the helium balloon imported by the assessee was using second hand balloon and the valuation of the fresh helium balloon in the market was USD 65,000. The Customs Authorities after considering that the helium balloon being used second hand, had only arrived at a valuation at 19,500 USD. It was also the contention of the ld.AR that the income tax authorities have failed to exercise their power under the Act by either summoning the person u/s 133(6) of the Act or by examining the expert evidence or by referring the matter to the approved valuer for verification of the value of the helium balloon. 11. Per contra, the ld.DR had relied upon the orders passed by the lower authorities. 12. Ld.DR submitted that it is not possible for any person to spend Rs.10,93,790/- on freight for the import of helium balloon for USD 10000. The huge freight charges paid by the 11 ITA No.1712/Hyd/2019 assessee only lead to an inference that balloon was priced at a high value of Rs.8,01,41,439/- as no prudent person can spend a huge rate to the import of helium balloon for USD 10000. Further, it was submitted that sufficient opportunities were granted to the assessee, including the opportunity on 01.05.2012 after the vacation of stay by the High Court to furnish technical information of helium balloon. However, the assessee had failed to avail the opportunity and failed to produce the technical information of the helium balloon and had denied the material evidence collected by the DRI. It was further submitted by the ld.DR that the additions were made by the Assessing Officer on the show cause notice of DRI and therefore, the action on the part of the learned Assessing Officer is in accordance with the law. 13. In rebuttal, the ld.AR had also relied upon the following decisions to state that the valuation done by the Customs Authorities cannot be doubted by the Assessing Officer. 1. K.P. Verghese Vs. ITO - 131 ITR 597 (SC), 2. CIT Vs. P.V. Kalyanasundaram – 294 ITR 49 (SC). 3. CIT Vs. Smt. K.C. Agnes – 262 ITR 354 (Kerala High Court) 4. Asma Estates and Investments Pvt Ltd. Vs. DCIT – ITA 782/Hyd/2020. 5. The Lok Prakashan Ltd. Vs. JCIT – ITA 1394/Ahd/2009. 6. DCIT Vs. Value Labs LLP – ITA 305/Hyd/2015. 12 ITA No.1712/Hyd/2019 7. ITO Vs. Happy Homes and Hotels Private Limited – ITA 1545/Kol/2011. 14. We have heard the rival submissions and perused the material available on record. In this case, the sole basis of making the addition by the Assessing Officer was the report of Customs Authorities. The case of the DRI was that the assessee had imported helium balloon from UK and for that purpose, he relied upon the financial layout plan with loan document recovered from the laptop of one Mr. J. Venugopal indicating the basic price of helium balloon at Rs.7,90,50,000/- (at page 128 of the paper book). If we look into page 128 of the paper book, it shows that it is merely a projection allegedly recovered from the laptop of the assessee. However, the said J. Venugopal in the sworn statement before the Assessing Officer had denied having entered into any such projection report before the DRI. The statement recorded before the DRI is forming part of the assessment order on page 9, showing the financial layout plan with Annexure C-91 was confronted to J. Venugopal, however, the said J. Venugopal had denied the very existence of the said financial layout plan. Mr. J. Venugopal had categorically mentioned that the said document was never submitted by him to the DRI and he totally denied the existence of Annexure C-91. Infact, the Assessing Officer had not brought on record any material or corroborative evidence, thereby independently confirming the value of the helium balloon for Rs.8,01,41,439/- . He had further not made any efforts to collect the evidence either from the supplier / from the Customs 13 ITA No.1712/Hyd/2019 Authorities. Further, the Assessing Officer / ld.CIT(A) had not referred the valuation of the helium balloon to the expert by using the vested powers u/s 142A of the Act. At this stage, it would be relevant to mention here that the helium balloon was very much available at the relevant time in the premises of the assessee and the efforts should have been made by the Assessing Officer to bring the positive evidence on record. We are also of the opinion that it is the duty of the Assessing Officer to bring that the assessee has shown helium balloon undervalued and thereafter had imported it to India. Quite contrary to the above, the Assessing Officer had merely relied upon the show cause notice issued by the DRI and had made the addition on the basis of show cause notice. The Assessing Officer has not considered either the replies given by the assessee whereby the assessee has totally denied the existence of a financial layout plan and have also not considered the valuation report prepared by the Customs Authorities dt.15.02.2007. 15. In our view, the Assessing Officer made the addition merely based on show cause notice rather the Assessing Officer should have considered the reply of the assessee given to the DRI and should have also considered the other facts namely, the valuation report prepared by the Customs Authorities dt.15.02.2007. We, during the course of arguments, have enquired from both the parties whether any action was initiated by the Customs Authorities after the search conducted by DRI and show cause notice dt.11.02.2009 issued by the DRI or not. 14 ITA No.1712/Hyd/2019 To which the ld.AR of the assessee has submitted that no action has been initiated by the Customs Authorities either by enclosing the valuation report in respect of helium balloon or by confiscating the same. 16. The office of Commissioner of Customs and Central Excise, Hyderabad had passed an order on 15.02.2007 under the Customs Act thereby assessing the value of helium balloon envelope, gondola and other steel parts. In the said order, at paras 7 and 8 it was held as under : “7. Examination by Customs and load prt Chartered Engineers Certificate reveals the goods are used and old. There is no mention in the invoice that the goods are used / second hand nor the importer declared the nature of goods that those are second hand. The Importer has not offered any explanation for these deviations and further not produced the manufacturer’s invoice as per Rule 10 of the Customs Valuation Rules, 1988. Declared priced, in the absence of full details is not acceptable as transaction value. Invoice value ordinarily is acceptable only if otherwise reliable and there is no material or basis to cast any doubt about the correctness of the invoice value. In the circumstances, the declared value cannot be acceptable as true transaction value under Rule 4 of the Customs Valuation Rules, 1988 and merits rejection under Rule 10A of the Rules, ibid. In view of this, I proceed sequentially to assess the value in terms of Rules 5, 6, 7 and 8 of said Rules. Since the goods are second hand in nature, no second hand goods can strictly be identical or similar, because of extent of usage and the manner of upkeep. The value of identical or similar goods cannot be the basis for determination of value and hence valuation under Rule 5 to 7A is ruled out. Therefore, I proceed to determine the value of the goods in terms of the provisions of Rule 8 consistent with the principle and general provisions of Customs Valuation Rules, 1988. 8. In the above situation, besides the declared value, there is a value appraised by the load port chartered engineer who certified the value of new equipment as 65000 USD at the time of acquisition 15 ITA No.1712/Hyd/2019 and also mentioned the years of manuracture of equipment. In the circumstances, the value of 19,500 USD (C&F) recommended by the Customs, arrived on depreciation method, is acceptable under Rule 8 of the Customs Valuation Rules, 1988 which value was also accepted by importer. Accordingly, the assessable value works out to Rs.8,90,271/- for the goods covered by both the Bills of Entry, which is to be apportioned in the same ratio, as was done for splitting the invoice value while filling the bills of entry basing on the letter dated 15.01.2007 of supplier. 17. The order passed by the Commissioner of Customs and Central Excise has not been modified / rectified / recalled / reassessed by the Customs Authorities under the Customs Act. The Customs Act had provided the elaborate mechanism to assess / reassess the valuation of the imported goods and as per the same, only the ‘Proper Person’ appointed under the Customs Act is having the authority to do the valuation / revaluation. We find that in the recent judgment of the Hon’ble Supreme Court in the case of M/s. Cannon Industries Limited Vs. Commissioner of Customs (supra) wherein it was held as under : “14. It is well known that when a statute directs that the things be done in a certain way, it must be done in that way alone. As in this case, when the statute directs that “the proper officer” can determine duty not levied/not paid, it does not mean any proper officer but that proper officer alone. We find it completely impermissible to allow an officer, who has not passed the original order of assessment, to re- open the assessment on the grounds that the duty was not paid/not levied, by the original officer who had decided to clear the goods and who was competent and authorised to make the assessment. The nature of the power conferred by Section 28 (4) to recover duties which have escaped assessment is in the nature of an administrative review of an act. The section must therefore be construed as conferring the power of such review on the same officer or his successor or any other officer who has been assigned the function of assessment. In other words, an officer who did the 16 ITA No.1712/Hyd/2019 assessment, could only undertake re-assessment [which is involved in Section 28 (4)]. 15. It is obvious that the re-assessment and recovery of duties i.e. contemplated by Section 28(4) is by the same authority and not by any superior authority such as Appellate or Revisional Authority. It is, therefore, clear to us that the Additional Director General of DRI was not “the” proper officer to exercise the power under Section 28(4) and the initiation of the recovery proceedings in the present case is without any jurisdiction and liable to be set aside. 16. At this stage, we must also examine whether the Additional Director General of the DRI who issued the recovery notice under Section 28(4) was even a proper officer. The Additional Director General can be considered to be a proper officer only if it is shown that he was a Customs officer under the Customs Act. In addition, that he was entrusted with the functions of the proper officer under Section 6 of the Customs Act. The Additional Director General of the DRI can be considered to be a Customs officer only if he is shown to have been appointed as Customs officer under the Customs Act. 17. Shri Sanjay Jain, learned Additional Solicitor General, relied on a Notification No.17/2002 - Customs (NT) dated 7.3.2002 to show all Additional Directors General of the DRI have been appointed as Commissioners of Customs. At the relevant time, the Central Government was the appropriate authority to issue such a notification. This notification shows that all Additional Directors General, mentioned in Column (2), are appointed as Commissioners of Customs. 18. The next step is to see whether an Additional Director General of the DRI who has been appointed as an officer of Customs, under the notification dated 7.3.2002, has been entrusted with the functions under Section 28 as a proper officer under the Customs Act. In support of the contention that he has been so entrusted with the functions of a proper officer under Section 28 of the Customs Act, Shri Sanjay Jain, learned Additional Solicitor General relied on a Notification No.40/2012 dated 2.5.2012 issued by the Central Board of Excise and Customs. The notification confers various functions referred to in Column (3) of the notification under the Customs Act on officers referred to in Column (2). The relevant part of the notification reads as follows:- “[To be published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii)] Government of India Ministry of Finance (Department of Revenue) Notification No.40/2012-Customs (N.T.) New Delhi, dated the 2nd May, 2012 S.O. (E). – In exercise of the powers conferred by sub-section (34) of section 2 of the Customs Act, 1962 (52 of 1962), the Central Board of Excise and Customs, hereby assigns the officers and above the rank of officers mentioned in 17 ITA No.1712/Hyd/2019 Column (2) of the Table below, the functions as the proper officers in relation to the various sections of the Customs Act, 1962, given in the corresponding entry in Column (3) of the said Table: - ............. ........ 19. It appears that a Deputy Commissioner or Assistant Commissioner of Customs has been entrusted with the functions under Section 28, vide Sl. No.3 above. By reason of the fact that the functions are assigned to officers referred to in Column (3) and those officers above the rank of officers mentioned in Column (2), the Commissioner of Customs would be included as an officer entitled to perform the function under Section 28 of the Act conferred on a Deputy Commissioner or Assistant Commissioner but the notification appears to be ill-founded. The notification is purported to have been issued in exercise of powers under sub-Section (34) of Section 2 of the Customs Act. This section does not confer any powers on any authority to entrust any functions to officers. The sub-Section is part of the definitions clause of the Act, it merely defines a proper officer, it reads as follows:- “2. Definitions – In this Act, unless the context otherwise requires, - ... (34) ‘proper officer’, in relation to any functions to be performed under this Act, means the officer of customs who is assigned those functions by the Board or the [Principal Commissioner of Customs or Commissioner of Customs]. “ 20. Section 6 is the only Section which provides for entrustment of functions of Customs officer on other officers of the Central or the State Government or local authority, it reads as follows:- “6. Entrustment of functions of Board and customs officers on certain other officers – The Central Government may, by notification in the Official Gazette, entrust either conditionally or unconditionally to any officer of the Central or the State Government or a local authority any functions of the Board or any officer of customs under this Act.” 21. If it was intended that officers of the Directorate of Revenue Intelligence who are officers of Central Government should be entrusted with functions of the Customs officers, it was imperative that the Central Government should have done so in exercise of its power under Section 6 of the Act. The reason why such a power is conferred on the Central Government is obvious and that is because the Central Government is the authority which appoints both the officers of the Directorate of Revenue Intelligence which is set up under the Notification dated 04.12.1957 issued by the Ministry of Finance and Customs officers who, till 11.5.2002, were appointed by the Central Government. The notification which purports to entrust functions as proper officer under the Customs Act has been 18 ITA No.1712/Hyd/2019 issued by the Central Board of Excise and Customs in exercise of non-existing power under Section 2 (34) of the Customs Act. The notification is obviously invalid having been issued by an authority which had no power to do so in purported exercise of powers under a section which does not confer any such power. 22. In the above context, it would be useful to refer to the decision of this Court in the case of Commissioner of Customs vs. Sayed Ali and Another5 wherein the proper officer in respect of the jurisdictional area was considered. The consideration made is as hereunder:- “16. It was submitted that in the instant case, the import manifest and the bill of entry were filed before the Additional Collector of Customs (Imports), Mumbai; the bill of entry was duly assessed, and the benefit of the exemption was extended, subject to execution of a bond by the importer which was duly executed undertaking the obligation of export. The learned counsel argued that the function of the preventive staff is confined to goods which are not manifested as in respect of manifested goods, where the bills of entry are to be filed, the entire function of assessment, clearance, etc. is carried out by the appraising officers functioning under the Commissioner of Customs (Imports). 17. Before adverting to the rival submissions, it would be expedient to survey the relevant provisions of the Act. Section 28 of the Act, which is relevant for our purpose, provides for issue of notice for payment of duty that has not been paid, or has been short-levied or erroneously refunded, and provides that: “28. Notice for payment of duties, interest, etc. – (1) When any duty has not been levied or has been short-levied or erroneously refunded, or when any interest payable has not been paid, part paid or erroneously refunded, the proper officer may,- (a) in the case of any import made by any individual for his personal use or by Government or by any educational, research 5 (2011) 3 SCC 537 or charitable institution or hospital, within one year; (b) in any other case, within six months, from the relevant date, serve notice on the person chargeable with the duty or interest which has not been levied or charged or which has been so short- levied or part paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice: Provided that where any duty has not been levied or has been short- levied or the interest has not been charged or has been part paid or the duty or interest has been erroneously refunded by reason of collusion or any wilful mis-statement or suppression of facts by the importer or the exporter or the agent or employee of the importer or exporter, the provisions of this sub-section shall have effect as if for 19 ITA No.1712/Hyd/2019 the words ‘one year’ and ‘six months’, the words ‘five years’ were substituted.” 18. It is plain from the provision that the ‘proper officer’ being subjectively satisfied on the basis of the material that may be with him that customs duty has not been levied or short levied or erroneously refunded on an import made by any individual for his personal use or by the Government or by any educational, research or charitable institution or hospital, within one year and in all other cases within six months from the relevant date, may cause service of notice on the person chargeable, requiring him to show cause why he should not pay the amount specified in the notice. It is evident that the notice under the said provision has to be issued by the ‘proper officer’. 19. Section 2(34) of the Act defines a ‘proper officer’, thus: ‘2. Definitions.- (34) ‘proper officer’, in relation to any functions to be performed under this Act, means the officer of customs who is assigned those functions by the Board or the Commissioner of Customs;’ It is clear from a mere look at the provision that only such officers of customs who have been assigned specific functions would be ‘proper officers’ in terms of Section 2(34) the Act. Specific entrustment of function by either the Board or the Commissioner of Customs is therefore, the governing test to determine whether an ‘officer of customs’ is the ‘proper officer’. 20. From a conjoint reading of Sections 2(34) and 28 of the Act, it is manifest that only such a Customs Officer who has been assigned the specific functions of assessment and re- assessment of duty in the jurisdictional area where the import concerned has been affected, by either the Board or the Commissioner of Customs, in terms of Section 2(34) of the Act is competent to issue notice undersection 28 of the Act. Any other reading of Section 28 would render the provisions of Section 2(34) of the Act otiose inasmuch as the test contemplated under Section 2(34) of the Act is that of specific conferment of such functions.” 23. We, therefore, hold that the entire proceeding in the present case initiated by the Additional Director General of the DRI by issuing show cause notices in all the matters before us are invalid without any authority of law and liable to be set-aside and the ensuing demands are also set- aside.” 20 ITA No.1712/Hyd/2019 18. In the present case, if we look into the show cause notice dt.11.02.2009 issued by the Addl.Director General (DRI), namely, Mr. Arun Tandon, it is abundantly clear that the show cause notice has not been issued by the officials of the Customs Authorities. However, after noticing it, we leave the legality of issuance of the show cause notice by the DRI to the appropriate Court / Forum as this Tribunal is not competent to comment on the validity of the issuance of show cause notice. As the case may be, there is no revaluation / reassessment of the imported goods either by the Customs Authorities or by the Income Tax Authority or by any other person. 19. The law is fairly settled that if the Custom Authorities have permitted the import of the goods and thereafter has passed the order estimating the value of the imported goods by passing judicial order, then the order passed by the said quasi-judicial authority is binding unless the contrary evidence is produced before such authorities. In the present case, no evidence has been brought on record by the Assessing Officer and therefore, the expert evidence / order of the expert body is required to be followed instead of the vague, unsubstantiated observation of the Assessing Officer. In the light of the above, we are of the opinion that the value of the helium balloon is required to be adopted at Rs.5,99,762/- and Rs.2,90,563/- as adopted by the Customs Authorities as against value taken by the Assessing Officer for Rs.7,90,50,500/- of the helium balloon. Thus, we uphold the addition of Rs.4,40,324/- against the undervaluation of helium 21 ITA No.1712/Hyd/2019 balloon shown by the assessee and adjudicated by the Customs Authorities. Besides that, we also uphold the addition of Rs.10,92,390/- being the ocean freight not disclosed by the assessee. Thus, a total addition of Rs.10,92,390/- and Rs.4,40,324/-, totaling to Rs.15,32,715/- is sustained. Thus, the ground of the assessee is partly allowed. GROUND NO.2 20. Next ground is with respect to the disallowance of Licence Fee to GHMC at Rs.18,32,869/- u/s 43B of the Act. 20.1. Before us, ld.AR submitted that the licence fee paid to GHMC for advertising boards was in the nature of rent and was not covered under the provisions of section 43B of the Act and he relied on the decision of ITAT, Kolkata in the case of ITO Vs. Happy Homes and Hotels Pvt. Limited in ITA Nos.1545 and 1546/Kol/2011. 21. Per contra, the ld.DR relied upon the order passed by lower authorities. 22. We have heard the rival contentions of the parties and perused the material available on record. Admittedly, the amount was paid by the assessee towards the hoarding charges to GHMC. The assessee has not furnished any evidence that the amount paid by the assessee was not by way of tax duty or cess or fee. It is the 22 ITA No.1712/Hyd/2019 duty of the assessee to bring on record the contract, if any, entered into between the assessee and the GHMC permitting it to install the hoardings and the charges paid to GHMC. Merely, the statement of the assessee that it was advertisement hoarding charges cannot be accepted by the Bench unless cogent, corroborative evidence is produced before us. Nothing has been brought on record in the voluminous paper book showing any contract with GHMC or any order passed by the High Court in this regard permitting the assessee to pay the contract fee. In the light of the above, we do not find any merit in the claim of the assessee. The case law relied upon by the ld.AR is not applicable. In the said case, the assessee was collecting the licence fee from the tenants but has not deposited it with the Kolkata Municipal Corporation after taking the land for construction of Air Condition Market on lease from the KMC. In the present case, no such evidence was produced by the assessee showing that the assessee has landlord and tenant relationship with GHMC. The case law relied upon by the ld.AR is not applicable to the facts of the present case, as the facts of the said case are different to the facts of the present case. Thus, the ground No.2 is dismissed. 23 ITA No.1712/Hyd/2019 23. In the result, the appeal of the assessee is partly allowed. Order pronounced in the Open Court on 9 th September, 2022. Sd/- Sd/- (RAMA KANTA PANDA) ACCOUNTANT MEMBER (LALIET KUMAR) JUDICIAL MEMBER Hyderabad, dated 09 th September, 2022. TYNM/sps Copy to: S.No Addresses 1 Flytech Aviation Limited, 1-8-303/33, 3 rd Floor, Nagam Towers, NTR Circle, SP Road, Secunderabad – 500 003. 2 ACIT, Circle 1(3), Hyderabad. 3 CIT(Appeals)-7, Hyderabad. 4 PCIT-7, Hyderabad. 5 DR, ITAT Hyderabad Benches 6 Guard File By Order