Invalid Commission Issued under Income Tax Act; Jurisdiction Questioned

The High Court held that the commission issued under Section 131(1)(d) of the Income Tax Act, 1961 was unjustified as there were no pending assessment proceedings, as required by law. The Court emphasized that such commissions can only be issued when a proceeding is ongoing. Despite the respondents' arguments regarding an appeal, the Court found no concrete evidence to support this claim. Consequently, the commission and subsequent notice were deemed without jurisdiction and unsustainable. The petition was allowed, with each party bearing their own costs.

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Issues:
1. Justification of issuing a commission under Section 131(1)(d) of the Income Tax Act, 1961.

Analysis:
The petition before the High Court raised the issue of whether the respondents were justified in issuing a commission under Section 131(1)(d) of the Income Tax Act, 1961. The petitioner, a builder and developer, had constructed a building known as 'Chetak Chambers' in Indore. The Assessing Officer had previously issued a commission to ascertain the cost of construction, which resulted in a valuation report. However, subsequent appeals led to the rejection of this valuation report. Despite no pending assessment proceedings or appeals, the Deputy Commissioner of Income Tax issued a new commission in 2001. The respondents argued that an appeal had been filed before the High Court, justifying the commission.

Upon considering the arguments, the High Court found that no assessment proceedings were pending when the new commission was issued, as required by law. Citing a previous Division Bench decision, the Court emphasized that the Assessing Officer can only issue a commission when a proceeding is pending before them. The Court noted that the previous valuation report had been challenged and rejected, and there was no ongoing assessment proceeding. The Court dismissed the justification provided by the respondents regarding the appeal filed, as no concrete evidence was presented regarding the timing or status of the appeal. Consequently, the High Court held that the commission and the subsequent notice were without jurisdiction and could not be sustained. The petition was allowed, with each party bearing their own costs.

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