DVO report u/s 131(i)(d)

[svss prasad]

can the A.O REOPEN THE ASSESSEMENT BASED ON DVO REPORT

[Rama Krishana]

To open an assessment u/s 147/148 AO has to satisfy the conditions of section 147 read with the first proviso and explanations appended thereto. So long as the ingredients of section 147 are fulfilled, the Assessing Officer is free to initiate proceeding under section 147. Indeed the report of the DVO may be one ground to reopen the assessment u/s 147. Supreme court has analysed the provisions of section 147 after amendment with effect from 1-4-1989 and delivered landmark decision in the matter of Assistant Commissioner of Income-Tax Versus Rajesh Jhaveri Stock Brokers P. Limited 2008 -TMI - 6563 - SUPREME Court - https://www.taxtmi.com/caselaws?id=6563

[CAGOPALJI AGRAWAL]

No, you may refer the following case law: Tej Pratap Singh Vs. ACIT [2008]307 ITR (AT) 244

[CAGOPALJI AGRAWAL]

You may also refer the verdict in the judgement of Manjusha Estate (P) Ltd V. ITO [2009] 314 ITR 0263. All the decisions carry its own facts and circumstances,

[DEV KUMAR KOTHARI]

Dear Dr.SVSS Prasad, the answer to your query will depend on full facts and circumstances prevailing at the time of original assessment and also facts leading to reference and obtaining report of DVO. When the report of DVO was asked by the AO- reference was made. In case the original assessment was based on full facts duly explained and the AO did not refer the matter to the DVO before completion of assessment, then report of DVO obtained subsequently may not be a ground to re assess. In case original assessment was made subject to revision on receiving report of DVO, on a reference already made before original assessment, then perhaps a recomputation can be made based on and in consequence of the report of DVO. In case of construction of buildings, estimated cost or market valuation by DVO may not be ground of reassessment. In context of WT also all facts will require to be considered. In case report of DVO constitute mere change of opinion, then it will not be legal basis for reassessment because a review cannot be made in name of reassessment of income which is alleged to have escaped assessment. Please see page 5200 of the book of Chaturvedi and Pithisaria (Vol.3)

AI Summary

Reassessment power: DVO reports can support reopening if statutory conditions are met, but not when they amount to a mere change of opinion. A DVO report may justify reopening an assessment if the statutory conditions for reassessment are satisfied; it can be a ground for reopening when referenced before completion of original assessment and may permit recomputation in consequence of such reference. If the original assessment was made on full facts and the DVO report is obtained only thereafter, reliance on it may constitute a mere change of opinion and thus not be a lawful basis for reassessment. Valuation differences and wealth tax issues require fact-specific analysis.