Tribunal upholds assessment reopening, directs valuation officer referral for property fair market value.

The Tribunal upheld the reopening of the assessment and the computation of capital gains by the Assessing Officer. However, it directed the AO to refer the matter to the Valuation Officer for determining the fair market value of the property. The appeal filed by the assessee was partly allowed for statistical purposes.

---

---

Issues Involved:
1. Validity of reopening of assessment under section 147.
2. Validity of service of notice under section 148.
3. Whether the reassessment was barred by limitation.
4. Whether the reassessment was made without complying with statutory requirements.
5. Whether the reopening was based on a mere change of opinion.
6. Computation of capital gains under section 50C.
7. Non-referral to the Valuation Officer under section 50C(2).
8. Levy of interest under sections 234B and 234C.

Detailed Analysis:

1. Validity of Reopening of Assessment under Section 147:
The assessee argued that the reopening of the assessment was invalid as it was based on a mere change of opinion and lacked fresh tangible material. The Tribunal rejected this argument, stating that the Assessing Officer (AO) had new material to form a reasonable belief of escapement of income, thus justifying the reopening of the assessment.

2. Validity of Service of Notice under Section 148:
The assessee contended that the notice under section 148 was not served within the stipulated time. The Tribunal found that the notice dated 31.03.2013 was dispatched on the same day and served within a reasonable time, as evidenced by the Postal Department acknowledgment. Therefore, the Tribunal upheld the validity of the service of notice.

3. Whether the Reassessment was Barred by Limitation:
The assessee argued that the reassessment was barred by limitation. The Tribunal referred to the High Court of Punjab and Haryana's judgment in V.R.A. Cotton Mills (P) Ltd. vs. Union of India, which clarified that the date of issue of notice is relevant for determining the limitation period, not the date of receipt. Since the notice was issued within the limitation period, the reassessment was not barred by limitation.

4. Whether the Reassessment was Made Without Complying with Statutory Requirements:
The Tribunal noted that the AO had complied with the statutory requirements by issuing and serving the notice under section 148 within the stipulated time. The Tribunal also found that the satisfaction recorded by the CIT for granting approval for the issue of notice was valid.

5. Whether the Reopening was Based on a Mere Change of Opinion:
The Tribunal rejected the assessee's argument that the reopening was based on a mere change of opinion. The Tribunal noted that the AO had not examined the applicability of section 50C during the original assessment proceedings, and therefore, the question of change of opinion did not arise.

6. Computation of Capital Gains under Section 50C:
The AO computed the capital gains by adopting the full value of consideration as per the provisions of section 50C, which was higher than the actual consideration received by the assessee. The Tribunal upheld the AO's computation, noting that the value assessed by the Stamp Valuation Authority is deemed to be the full value of consideration received or accruing as a result of the transfer of the capital asset.

7. Non-referral to the Valuation Officer under Section 50C(2):
The assessee argued that the AO should have referred the matter to the Valuation Officer under section 50C(2) to determine the fair market value of the property. The Tribunal found merit in this argument, noting that once the assessee objects to the adoption of the full value of consideration and requests a reference to the Valuation Officer, it is the duty of the AO to comply. The Tribunal set aside the issue to the AO for fresh verification and directed the AO to refer the matter to the Valuation Officer.

8. Levy of Interest under Sections 234B and 234C:
The Tribunal did not specifically address the issue of the levy of interest under sections 234B and 234C in detail, as the primary focus was on the validity of the reopening and the computation of capital gains.

Conclusion:
The Tribunal upheld the reopening of the assessment and the computation of capital gains by the AO. However, it directed the AO to refer the matter to the Valuation Officer for determining the fair market value of the property as on the date of sale. The appeal filed by the assessee was partly allowed for statistical purposes.

---