V.S.A.Arulmuthukumarasamy, Vaitheeswaran Koil V. DCIT, Kumbakonam

MA 87/CHNY/2015

• Counselvise Citation: [2015] 124 COUNSELVISE.COM (IT) 3589 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 1 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 15-10-2015
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 11-09-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 14-07-2015
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: P RAJASEKHARAN
• Keywords: Valuation report
• Section: 143(3); 147; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI . . . , . !' , # $ % [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ] M.P.NOS.85,86,87 & 88/MDS/2015 [IN I.T.A.NOS.918, 919, 920 & 921/MDS/2011] ASSESSMENT YEARS : 2002-03 2003-04, 2004-05 & 2005-06 SHRI V.S.A ARULMUTHUKUMARASAMY NO.18, MILLADI STREET VAITHEESWSARAN KOIL 609117 VS. THE DY. COMMISSIONER OF INCOME-TAX CIRCLE I KUMBAKONAM [PAN AETPA 5472 R] ( PETITIONER ) ( -./0 /RESPONDENT) PETITIONER BY : SHRI P. RAJASEKHARAN, CA RESPONDENT BY : SHRI P. RADHAKRISHNAN, JCIT / DATE OF HEARING : 11 - 09 - 2015 / DATE OF PRONOUNCEMENT : 15 - 10 - 2015 / O R D E R PER N.R.S.GANESAN, JUDICIAL MEMBER THE ASSESSEE FILED THE PRESENT MISCELLANEOUS PE TITIONS ON THE GROUND THAT THERE IS AN ERROR IN THE ORDER OF T HIS TRIBUNAL DATED 19.7.2011. 2. SHRI P. RAJASEKHARAN, LD. REPRESENTATIVE FOR THE A SSESSEE SUBMITTED THAT THE TRIBUNAL FAILED TO CONSIDER THE PROVISIONS OF SEC. MP NOS. 85 TO 88/15 :- 2 -: 142A OF THE ACT AND THE BINDING JUDGMENT OF THE APE X COURT IN ACIT VS DHARIYA CONSTRUCTIONS COMPANY, [2010]328 ITR 515. ACCORDING TO THE LD. REPRESENTATIVE, THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2002-03 ON 31.3.2003. THE RETURN W AS PROCESSED U/S 143(1) OF THE ACT ON 28.4.2003. NO ORDER WAS PASSED U/S 143(3) OF THE ACT. THE LD. REPRESENTATIVE CLARIFIED THAT NO NOTICE WAS ISSUED U/S 143(2) OF THE ACT ALSO. WHEN THE ASSESSMENT PR OCEEDINGS OR RE- ASSESSMENT PROCEEDINGS WERE NOT PENDING, THE ASSESS ING OFFICER CALLED FOR VALUATION REPORT FROM THE DISTRICT VALUATION OF FICER. THE DVO FILED HIS REPORT DATED 16.8.2004 BEFORE THE ASSESSING OFF ICER. JUST TO CONSIDER THE REPORT OF THE DVO, THE ASSESSING OFFIC ER REOPENED THE ASSESSMENT BY ISSUING NOTICE U/S 148 ON 12.3.2009. REFERRING TO THE JUDGMENT OF THE APEX COURT IN ACIT VS DHARIYA CONST RUCTIONS COMPANY (SUPRA), THE LD. REPRESENTATIVE SUBMITTED T HAT REPORT OF THE DVO PER SE IS NOT AN INFORMATION FOR THE PURPOSE OF REOPENING OF THE ASSESSMENT U/S 147 OF THE ACT. THE ASSESSING OFFI CER HAS NO OTHER MATERIAL TO REOPEN THE ASSESSMENT U/S 147 OF THE A CT FOR ANY OF THE ASSESSMENT YEARS. REFERRING TO THE ASSESSMENT ORDE R, THE LD. REPRESENTATIVE SUBMITTED THAT CONSIDERING THE REPOR T OF THE VO, THE ASSESSING OFFICER FOUND THAT THERE WAS AN ESCAPEMEN T OF INCOME. THERE WAS NO OTHER MATERIAL AVAILABLE ON RECORD TO SUGGEST THAT ANY PART OF THE INCOME WHICH IS OTHERWISE LIABLE FOR TA XATION ESCAPED THE MP NOS. 85 TO 88/15 :- 3 -: ASSESSMENT. ACCORDING TO THE LD. REPRESENTATIVE, I N VIEW OF THE APEX COURT JUDGMENT IN DHARIYA CONSTRUCTIONS COMPANY (SU PRA), THE REOPENING OF THE ASSESSMENT IS BAD IN LAW. 3. REFERRING TO SECTION 142A OF THE ACT, THE LD. REPRE SENTATIVE SUBMITTED THAT THE ASSESSING OFFICER MAY MAKE A REF ERENCE TO THE VALUATION OFFICER TO ESTIMATE THE COST OF CONSTRUCT ION ONLY FOR THE PURPOSE OF ASSESSMENT OR RE-ASSESSMENT. IN THIS CA SE, THE ASSESSMENT OR RE-ASSESSMENT IS NOT PENDING ON THE DATE OF MAKI NG A REFERENCE, THEREFORE, THE REFERENCE MADE BY THE ASSESSING OFF ICER IS CONTRARY TO THE PROVISIONS OF SEC.142A OF THE ACT. NON-CONSIDE RATION OF THE PROVISIONS OF SEC. 142A AND THE JUDGMENT OF THE APE X COURT IN DHARIYA CONSTRUCTION COMPANY (SUPRA) AMOUNTS TO A MISTAKE W HICH IS APPARENT ON THE FACE OF THE RECORD WITHIN THE MEANING OF SEC . 254(2) OF THE ACT. THEREFORE, THE LD. REPRESENTATIVE SUBMITTED THAT TH E ORDER OF THE TRIBUNAL NEEDS TO BE RECTIFIED. 4. ON THE CONTRARY, SHRI P. RADHAKRISHNAN, LD. DR SUBM ITTED THAT NO DOUBT NOTICE U/S 143(2) OF THE ACT WAS NOT ISSUED. HOWEVER, THE ASSESSING OFFICER FOUND ON EXAMINATION OF THE B ALANCE SHEET FILED BY THE ASSESSEE THAT THE ASSESSEE HAS CONSTRUCTED A THREE-STOREYED BUILDING. THE GROUND FLOOR WAS USED AS A KALYANAMA NDAPAM AND SECOND FLOOR WAS A LODGE AND LET OUT FOR RENT. THE ASSESSEE HAS MP NOS. 85 TO 88/15 :- 4 -: REPORTED THE COST OF CONSTRUCTION AT ` 44,10,000/- ONLY. HOWEVER, THE TOTAL COST OF CONSTRUCTION WAS ESTIMATED BY THE DVO AT ` 89,77,000/-. CONSIDERING THE TOTAL VALUE OF THE COST OF CONSTRUC TION REPORTED BY THE DVO AND THE COST OF CONSTRUCTION ADMITTED BY THE A SSESSEE, THE ASSESSING OFFICER FOUND THAT THERE WAS ESCAPEMENT OF INCOME WHICH WAS NOT SUBJECTED TO TAXATION. THE LD. DR SUBMITT ED THAT THE ASSESSEE HAS NOT ACCOUNTED FOR THE REAL INVESTMENT IN THE CONSTRUCTION OF BUILDING, THEREFORE, THE ASSESSING OFFICER HAS R IGHTLY REOPENED THE ASSESSMENT BY ISSUING NOTICE U/S 148 OF THE ACT ON 12.3.2009. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE MAIN CONTENTION OF THE ASSESSEE APPEARS TO BE THAT REFERENCE TO VALUA TION CELL COULD BE MADE U/S 142A OF THE ACT WHEN THE ASSESSMENT OR RE -ASSESSMENT PROCEEDINGS WERE PENDING BEFORE THE ASSESSING OFFIC ER. IN THIS CASE, FOR THE ASSESSMENT YEAR 2002-03, THE RETURN WAS FIL ED ON 31.3.2003. THE RETURN FILED BY THE ASSESSEE WAS PROCESSED U/ S 143(1) ON 28.4.2003. THE TIME LIMIT FOR ISSUE OF NOTICE U/S 143(2) EXPIRED ON 31.3.2004. THEREFORE, BY OPERATION OF LAW, THE ASS ESSMENT PROCEEDINGS FOR THE ASSESSMENT YEAR 2003-04 CAME TO AN END ON 31.3.2004. THE ASSESSING OFFICER APPEARS TO HAVE R EFERRED THE MATTER TO THE DVO TO ESTIMATE THE COST OF CONSTRUCTION OF THE BUILDING. FROM THE ORDERS OF THE LOWER AUTHORITIES IT IS NOT KNOWN WHEN ACTUALLY THE MP NOS. 85 TO 88/15 :- 5 -: REFERENCE WAS MADE. HOWEVER, THE ASSESSEE CLAIMS THAT THE VALUATION OFFICERS REPORT IS DATED 16.8.2004. THE REFORE, PRIMA FACIE WHEN THE VALUATION OFFICER FILED HIS REPORT, NO ASS ESSMENT PROCEEDINGS OR RE-ASSESSMENT PROCEEDINGS WERE PENDING FOR THE A SSESSMENT YEAR 2003-04. ACTION WAS INITIATED FOR RE-OPENING OF TH E ASSESSMENT BY ISSUE OF NOTICE U/S 148 ON 12.3.2009. IN RESPECT OF OTHER ASSESSMENT YEARS, NAMELY 2003-04, 2004-05 AND 2005-06, THE TIM E LIMIT FOR ISSUING NOTICE U/S 143(2) WAS VERY MUCH AVAILABLE ON 16.8.2004 ON WHICH DATE THE DVO SAID TO HAVE FILED HIS REPORT. THE QUESTION ARISES FOR CONSIDERATION IS WHETHER THE ASSESSING OFFICER COULD REOPEN THE ASSESSMENT U/S 147 BY ISSUING NOTICE U/S 148 JUST TO CONSIDER THE REPORT OF THE DVO OR NOT? THE APEX COURT IN THE CA SE OF DHARIYA CONSTRUCTION COMPANY (SUPRA) FOUND THAT THE REOPENI NG CANNOT BE MADE TO CONSIDER THE REPORT OF THE VALUATION OFFIC ER. THIS JUDGMENT OF THE APEX COURT WAS NOT BROUGHT TO THE NOTICE OF THE EARLIER BENCH OF TRIBUNAL WHICH DECIDED THE APPEAL OF THE ASSES SEE. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT NON-CONSIDERATION OF THE JUDGMENT OF THE APEX COURT WHICH IS AVAILABLE ON THE DATE OF HE ARING OF THE APPEAL IS AN ERROR WITHIN THE MEANING OF SECTION 254(2) OF THE ACT. THEREFORE, WITHOUT EXPRESSING ANY OPINION ON THE MERIT OF THE APPEAL, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATT ER NEEDS TO BE RECONSIDERED IN THE LIGHT OF THE APEX COURT JUDGME NT IN DHARIYA MP NOS. 85 TO 88/15 :- 6 -: CONSTRUCTION COMPANY (SUPRA). THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE JUDGMENT OF THE APEX COURT IN DHAR IYA CONSTRUCTION COMPANY (SUPRA) MAY GO TO THE ROOT OF THE MATTER, T HEREFORE, FOR CONSIDERING THE JUDGMENT OF THE APEX COURT, THE ORD ER OF THIS TRIBUNAL DATED 19.7.2011 HAS TO BE RECALLED AND THE APPEALS HAVE TO BE HEARD AFRESH. ACCORDINGLY, THE ORDER OF THIS TRIBUNAL DA TED 19.7.2011 IS HEREBY RECALLED AND ALL THE APPEALS OF THE ASSESSE E I.T.A.NOS.918, 919, 920 & 921/MDS/2011 ARE HEREBY RESTORED ON THE FILE. THE REGISTRY IS DIRECTED TO FIX ALL THE APPEALS FOR FIN AL DISPOSAL BEFORE THE REGULAR BENCH ON 1.12.2015. 6. IN THE RESULT, ALL THE MISCELLANEOUS PETITIONS FILE D BY THE ASSESSEE STAND ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH OCTOBER, 2015, AT CHENNAI. SD/- SD/- ( . !' ) (A. MOHAN ALANKAMONY) # / ACCOUNTANT MEMBER ( . . . ) ) (N.R.S. GANESAN) / JUDICIAL MEMBER / CHENNAI / DATED: 15 TH OCTOBER, 2015 RD !' / COPY TO: 1 . PETITIONER 4. # # $ / CIT 2. %#&' / RESPONDENT 5. ()*# +, / DR 3. # # $ (! *) / CIT(A) 6. )./ 0 / GF