TaxTMI 
TaxTMI 
2006 (11) TMI 279
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....ted reference to Valuation Officer under s. 55A of the IT Act. 3. The CIT(A) also failed to take note of the fact that in the letter dt. 22nd Sept., 1999 addressed to Valuation Officer, the AO had requested DVO to estimate the cost of construction without actually mentioning s. 55A anywhere in the paras 1 to 4 of this letter and incorrect mention of s. 56A in the top margin was due to use of wrong proforma and such defect was curable under s. 292B of the Act. 4. The CIT(A) erred in not appreciating the fact that it is open to the AO to seek expert opinion and even in the case of Smt. Amiya Baja Paul vs. CIT (2003) 182 CTR (SC) 489 : (2003) 262 ITR 407 (SC), Hon'ble Supreme Court has observed that AO was not bound by strict rules of evidence and report of DVO could be considered as a piece of evidence. 5. The CIT(A) ought to have appreciated that any irregularity in collecting material/information cannot vitiate the material so collected and same could form basis for issuing notice for reassessment [Thakursidas Banwarilal vs. CIT (1999) 152 CTR (Gau) 302 : (1998) 232 ITR 846 (Gau)]. Accordingly, even if there was irregularity in making reference to valuation office since no....
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....sp; 11,49,078 --------- 4. The CIT(A) annulled the order under s. 147, dt. 8th March, 2002 on the ground that the assumption of jurisdiction under s. 147 was bad in law and his order has been challenged by the Department in the present appeal. The assessee has also filed cross-objection. 5. Shri P.W. Athalye, the learned Departmental Representative, placed reliance on the order of the AO. He vehemently argued saying that the order of the AO be upheld and that of the CIT(A) be reversed. He placed reliance on the decision of the Gauhati High Court in the case of Thakursidas Banwarilal vs. CIT (1999) 152 CTR (Gau) 302 : (1998) 232 ITR 846 (Gau). 6. Shri S.N. Puranik, the learned Authorised Representative, r....
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.... it is relevant." 9. In our considered opinion, the CIT(A) did not examine the issue involved in the present case on correct lines, inasmuch as he failed to take into consideration the provisions of the post-1989 s. 147. The provisions of s. 147 to 151 were substituted/amended by the Direct Tax Laws (Amendment) Act, 1987 and 1989 w.e.f 1st April, 1989. The newly substituted (w.e.f 1st April, 1989) s. 147 not only merged the cls. (a) and (b) of s. 147 (operative upto 31st March, 1989) but also brought about a significant change in the preliminary requirement of certain mandatory conditions before the reassessment proceeding could be initiated under the pre-1989 s. 147. The power to reopen assessment under the post-1989 section is much wider and can be exercised even if an assessee had disclosed fully and truly all material facts, unless the case was covered by the proviso to the post-1989 s. 147. 9.1 We are of considered opinion that the CIT(A) erred in holding that the initiation of proceeding under s. 147 was bad and that the reasons given by him for arriving at this conclusion are, on the facts of the case, misconceived. He erred in applying the judgment of the Supreme Cour....
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....on 'material' which may not strictly be evidence admissible under the Indian Evidence Act, for the purpose of making an order of assessment. In making an assessment the AO does not act merely on what is technically described as 'evidence' in the Indian Evidence Act. It may be seen from ss. 142 and 143 that the AO may also act on the 'material' gathered by him. The word 'material' clearly shows that the AO is not fettered by the technical rules of evidence and that he may act on 'material', which may not, strictly speaking, be accepted as evidence in a Court of law. 9.6 However, the evidence brought on record without the knowledge of the assessee and used against him without giving him an opportunity to rebut it, offends the principles of natural justice. The assessee has got the right to urge that he be apprised of any material collected behind his back and then to offer counter-evidence. 9.7 The Courts have held that even though a search and seizure operation may be in contravention of s. 132, still the material obtained thereby is liable to be used. The documents recovered at a search which was not absolutely according to law can be utilized for assessment. There is no dire....
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....der s. 147/148 of the Act itself are bad in law as basis of reasoning of reassessment is the DVO's report. Cross-objector prays to dismiss Department's appeal. 2. Finding of the CIT(A) that assessment is bad in law as proceedings under s. 147/148 are bad in law, may please be confirmed. 3. Action of the CIT(A) as to deciding that reference to DVO itself is bad in law and without jurisdiction, may please be upheld. 4. CIT's order of relying on the Supreme Court decision of Smt. Amiya Bala Paul vs. CIT (2003) 182 CTR (SC) 489 : (2003) 262 ITR 407 (SC) may please be upheld. 5. Without prejudice to ground Nos. 1 to 4, fact that original return was taken for scrutiny on the basis of unanimous complaint against the assessee, AO has verified books, AO has not shown any defect in the books of account relating to construction or otherwise. The valuation report by approved valuer was submitted by the assessee before AO during the course of original assessment proceedings under s. 143(3) and same was accepted by AO. As such, there was no reason for reference. This finding of the CIT(A) may please be confirmed. 6. Without prejudice to ground Nos. 1 to 5, considering the submissi....