AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
1991 (5) TMI 123
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....i Shankar Picture Palace". The construction of the cinema house was stated to have commenced in September 1982 and completed in October 1984. In the assessment year 1985-86, the value of the cinema theatre was shown at Rs. 7,01,438. The assessment for 1985-86 was completed under section 143(1) by the ITO Srikakulam, by his assessment order dated 28th July, 1986. After the said assessment order was passed, without taking any action under section 143(2) or without obtaining any previous approval of the Dy. Commissioner for issuing notice, the ITO left the following note in his assessment record for 1985-86 : " During the year of account, the assessee-firm has constructed a theatre known as Sri Hari Shankar Picture Palace, Kasibugga, Srikak....
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....ticed that the construction was commenced in September 1982 and completed in October 1984. The cost of construction was admitted by the assessee at Rs. 7,01,438. The ITO made a reference to the Valuation Cell, in response to which, the Valuation Officer estimated the cost of construction at Rs. 11,51,000 as against Rs. 7,01,438 admitted by the assessee. The ITO has now proposed to consider the difference of Rs. 4,49,562 under section 69 towards under-valuation of cost of construction. For orders to issue a notice under section 263. " 3. Subsequently, action under section 263 was initiated and a notice was sent to the assessee. The Authorised Representative on behalf of the assessee filed a statement before the learned CIT contending that....
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....of this Act, have the same powers as are vested in a court under the Code of Civil Procedure, 1908 (5 of 1908), when trying a suit in respect of the following matters, namely : (a) discovery and inspection ; (b) enforcing the attendance of any person, including any officer of a banking company and examining him on oath; (c) compelling the production of books of account and other documents ; and (d) issuing commissions. " Even a court, while exercising the powers under the Code of Civil Procedure is entitled to issue a commission, etc., only during the course of a proceeding or trying a suit. When no suit is pending, the court is not entitled to issue any commission on its own. The same powers as are exercised by a court are v....
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....tion by the Commissioner. Before calling any document as record or as forming part of a record which the learned Commissioner is entitled to examine for invocation of his powers under section 263, that record should necessarily relate to any proceeding taken under the IT Act. A document or a record not relating to any proceeding cannot form part of "record" which the Commissioner is entitled to examine while invoking his revisionary powers. In this case, the valuation report dated 21st Nov., 1988 is a document which cannot form part of any proceeding under the IT Act. As already pointed out, the assessment under section 143(1) was over by 28th July, 1986. It was not revived by issuing any notice under section 143(2). In such a circumstance,....
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.... 1989 Tax LR 871, were sought to be relied upon. For the proposition that unless a proceeding is pending, the valuation report obtained would not be of any value under section 55A of the IT Act, the decision of the Calcutta High Court reported as Reliance Jute & Industries Ltd. v. ITO [1984] 150 ITR 643 was sought to be relied upon. 6. The learned departmental representative vehemently argued in support of the order of the CIT. 7. We have considered the respective arguments advanced on both sides. We are inclined to agree with the arguments advanced by Sri Manmohan, learned Advocate for the assessee, especially when he argued that the valuation report dated 21st Nov., 1988 does not form part of any proceeding before the ITO and, there....
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....o investigate whether the assessment for the assessment years 1972-73 to 1974-75 should be reopened under section 147. It was for the ITO to first decide whether he had reason to believe that income had escaped assessment. Only if he decided that question in the affirmative, could he initiate proceedings under section 147 and only thereupon could he become entitled to invoke section 131(1). Therefore, the impugned summons was liable to be quashed. " Speaking about the ambit and scope of section 131(1) of the IT Act, 1961, the Calcutta High Court in ITO v. James Joseph O'Gorman 1989 Tax LR 371, held the following as per head note: " Persons as mentioned in section 131(1) are vested with powers of a court as provided under the Code of C....