Smt. M.Jamilabanu, CHENNAI V. ITO, Ramanathapuram

ITA 877/CHNY/2010

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 6499 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 30-06-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 04-06-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANIRUDH RAI
• Assessee Lawyers: M P SENTHIL KUMAR
• Keywords: Reopening of assessment; Principle of natural justice; Valuation report
• Section: 147; 69; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH D CHENNAI BEFORE SHRI N.S. SAINI, AM AND SHRI GEORGE MATHAN, J.M. .. I.T.A. NO. 877/MDS/2010 [ASSESSMENT YEAR 2002-03] SMT. M. JAMILABANU NO. 49, SANNATHI STREET RAMANATHAPURAM PAN : ACLPJ 9341 E/J-729 VS. THE INCOME-TAX OFFICER RAMANATHAPURAM (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI M.P. SENTHIL KUMAR DEPARTMENT BY : SHRI ANIRUDH RAI, CIT O R D E R PER N.S. SAINI, A.M :- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER PASSED BY THE CIT(A)-II, MADURAI DATED 13.04.2010. 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED 12 EFFEC TIVE GROUNDS OF APPEAL WHICH ARE AS FOLLOWS: PAGE 2 OF 6 I.T.A. NO. 877/MDS/2010 1. THE LEARNED CIT APPEAL FAILED TO SEE THAT THE REOPE NING OF ASSESSMENT MADE SECTION 148 ON BASIS OF VALUATION RE PORT WAS WITHOUT JURISDICTION, TIME BARRED AND BAD IN LAW AND THAT THEREFORE THE ADDITION WAS NOT JUSTIFIED. 2. THE LEARNED CIT APPEAL FAILED TO SEE THAT THE UNDER PROVISO TO SEC 142A THE REFERENCE TO THE VALUATION CELL WAS WIT HOUT JURISDICTION AND INCOMPETENT, AND THAT WHOLE REVISIO N OF ASSESSMENT U/S SEC 147 WHOLLY WITHOUT AUTHORITY OF LAW. 3. THE LEARNED CIT APPEAL FAILED TO SEE THAT THE OF 14 7 FOR REVISION WAS WHOLLY WITHOUT JURISDICTION WHEN NO INCOME REMAIN ED UNDISCLOSED AND WHEN THERE WAS NO REASON TO BE LIVE WITH MATERIAL KNOWN TO LAW FOR ASSUMPTION OF REVISIONAL J URISDICTION 4. THE LEARNED CIT APPEAL ALSO FAILED TO SEE THAT THE IMPUGNED ASSESSMENT IS TIME BARRED. 5. EVEN ON MERITS, THE ASSESSMENT ORDER MADE UNDER SECT ION 147 BY MERELY ADOPTING VALUATION REPORT IS NOT VALID IN LAW, IN THE ABSENCE OF ANY FLAW FOUND IN THE ACCOUNTS MAINTAINED DISCLOSING THE TRUE AND CORRECT COST OF CONSTRUCTION. 6. THE LEARNED CIT APPEAL ALSO FAILED TO SEE THAT THE ESTIMATE OF COST OF CONSTRUCTION MADE BY THE VALUATION CELL WAS ARBITRARY PAGE 3 OF 6 I.T.A. NO. 877/MDS/2010 AND VIOLATIVE OF PRINCIPLES OF NATURAL JUSTICE. 7. THE LEARNED CIT APPEAL FAILED TO SEE THAT THE ESTIM ATE BASED ON CPWD VALUATION IS NOT VALID AND THAT THE VALUATION RE PORT FAILED TO CONSIDER DETAILED OBJECTION FILED BEFORE THE CEL L. 8. THE LEARNED CIT APPEAL FAILED TO SEE THE REOPENING OF ASSESSMENT AND ADDITION MADE BY EXERCISING THE PURPO RTED POWER OF SEC 69 THE YEAR UNDER CONSIDERATION IS WHOL LY NOT VALID IN LAW 9. THE PROVISIONS OF SECTION 69 ARE NOT INVOKABLE BY M AKING REFERENCE T THE VALUATION CELL, ESPECIALLY WHEN THE ACTUAL AND TRUE FIGURE OF COST OF CONSTRUCTION REFLECTED IN THE B OOKS WERE FLAWLESS BUT SUMMARILY IGNORED AND ESPECIALLY WHEN TH E ASSESSMENT ORDER WAS NOT PASSED BY EXERCISING DISCR ETION IN A JUDICIAL MANNER WHILE CONSIDERING THE EXPLANATION OR FINING THEM NOT SATISFACTORY. 10. AS THE EXPLANATIONS AND OBJECTIONS FILED BY THE AP PELLANT AT ALL STAGES WERE NOT CONSIDERED IN PROEPR PERSPECTIVE, A L THE OBJECTIONS MADE BEFORE THE ITO, VALUATION CELL GROUND S OF APEP AND WRITTEN STATEMENT FILED BEFORE THE LD. CIT(A) , MAY KINDLY BE TREATED AS PART AND PARCEL OF THIS APPEAL. PAGE 4 OF 6 I.T.A. NO. 877/MDS/2010 11.THE ORDER OF REOPENING OF THE ASSESSMENT IS CONT RARY TO THE LAW AS HELD IN THE FOLLOWINGS AMONG OTHER CASES:- 1. SMT.AMIYA BALA PAUL -VS- CIT (262 ITR 470 (SC)), 2. CIT -VS- IQBAL HUSSAIN (320 ITR 142) (ALL), 3. CIT -VS- T.RAJENDRAN(288 ITR 382 (MAD)), 4. VIDY A S~GAR -VS- CIT (277 ITR 120) P&H)), 5. CIT- VS- LEATHER TRENDS (P) LTD (320 ITR 114 (ALL)), 6. CIT -VS- D. SUBRAMANIAN ( 296 ITR 348) (MAD) 7. CIT -VS- S. KALAIVANI (296 ITR 505 (MAD)). 12. THE LEAVE OF INTEREST U/S SEC 243A AND 2438 ARE WHOLLY WITHOUT JURISDICTION AS THE~ ENTIRE REOPENING OF ASSE SSMENT U/S 147 IS WITHOUT JURISDICTION. HENCE THE LEARNED CIT A PPEAL OUGHT TO HAVE SET ASIDE THE INTEREST DEMANDED U/S 243A AND 2 438. FOR THE ABOVE GROUNDS AND THOSE THAT MAY BE URGED A T THE TIME OF HEARING, IT IS PRAYED THE HON'BLE TRIBUNAL MAY BE PL EASED TO SET ASIDE THE ORDER OF REOPENING OF ASSESSMENT AND THUS RENDER PAGE 5 OF 6 I.T.A. NO. 877/MDS/2010 JUSTICE. 3. AT THE TIME OF HEARING, THE LD. A.R. ARGUED ONLY GROUND NO. 7 OF THE APPEAL AND HIS SUBMISSION WAS THAT THE LD. C IT(A) ERRED IN UPHOLDING THE DVOS REPORT WHICH VALUED THE PROPER TY AT CPWD RATES. HE SUBMITTED THAT THE RATE ADOPTED SHOULD B E PWD RATE AND NOT CPWD RATE FOR THE PURPOSE OF VALUATION OF THE P ROPERTY. THE LD. D.R. ALSO AGREED WITH THE SUBMISSION OF THE LD. A.R . 4. WE, THEREFORE, SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND REMAND THE MATTER BACK TO THE FILE OF THE ASSES SING OFFICER TO CONSIDER THE VALUATION OF THE PROPERTY AS PWD RATES AND ACCORDINGLY REWORK THE ADDITION AFTER ALLOWING REASONABLE AND P ROPER OPPORTUNITY OF HEARING TO THE ASSESSEE. THUS, THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 5. NO OTHER GROUNDS WERE ARGUED OR PRESSED BY THE A SSESSEE. PAGE 6 OF 6 I.T.A. NO. 877/MDS/2010 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED AS ABOVE. ORDER PRONOUNCED IN THE OPEN COURT IMMEDIATELY AFT ER THE CONCLUSION OF HEARING ON 30 TH JUNE 2011. SD/- SD/- ((GEORGE MATHAN ) (N.S. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 30 TH JUNE, 2011. VL COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE