TaxTMI 
TaxTMI 
2009 (3) TMI 652
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....00 with the instruction that he should deposit Rs. 7,450 in the State Bank of India, GPO Branch and annex one copy of the challan with the appeal paper and instructed to file three copies of appeal and challan in the ITAT and obtained acknowledgement on the fourth copy of the appeal papers. The office of the ITAT was shown to Shri Rajesh Bheel by the assessee. After the assessee returned about a week from Khargone and on being asked Shri Rajesh confirmed that the appeal has been filed in the ITAT. The assessee asked the fourth copy along with acknowledgement issued by the Tribunal, then Shri Rajesh told that the same was at home, which he would bring. The assessee again went to next morning to Khargone to see the work of M/s. Mewara Construction Company and thereafter the assessee forgot to ask Shri Rajesh Bheel about the paper. However, in the month of November, 2006, the assessee went to the Income-tax Office and clerk asked the assessee to file a copy of acknowledgement of filing appeal before the Tribunal, so that the penalty proceedings initiated under section 271(1)(c) of the Income-tax Act, might be kept in abeyance. The assessee assured him to file the said copy next. By th....
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.... there was a sufficient cause, which prevented the assessee from filing the appeal before the Tribunal in time. On the other hand, ld. DR, stated that there was an inordinate delay in filing the appeal. According to him, the assessee was required to explain every day's delay in filing the appeal. It is well-settled law that jurisdiction to condone delay should be exercised liberally. The matter relating to condonation of delay should be judged broadly and not in a pedantic manner. The Hon'ble Supreme Court in the case of N. Balakrishnan v. M. Krishnamurthy 1998 (7) SCC 123 condoned the delay of 883 days observing that condonation of delay is a matter of discretion of the court. Section 5 of the Limitation Act does not provide discretion only in the cases of delay within a certain limit. The only criteria is the acceptability of explanation irrespective of the length of delay. The primary function of the court being adjudication of the disputes between the parties and to advance substantial justice, it is not enough to turn down the plea of the litigant for the delay. Similarly, the Hon'ble Supreme Court in the case of Collector, Land Acquisition v. Mst. Katiji [1987] 167 ITR 471, h....
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....proceedings were pending before any Income-tax authorities when the reference was made to the Valuation Officer on 24-3-1999 by the DDIT (Investigation-II), Indore. It is well-settled that a reference can only be made when some assessment proceedings are pending and the reference was made only by the Assessing Officer. In the present case, on 24-3-1999, i.e., the date of issue of commission under section 131(1)(d), no proceedings were pending against the assessee. Thus, the assessment so framed on the report of DVO is illegal and without jurisdiction. In this respect, reliance was placed on the decision of ITAT, Indore Bench, in the case of Sarin Bai v. ITO 29 ITC 488. However, the CIT(A) did not convince with the submission of the learned Authorized Representative for the reasons that the reference to the Valuation Cell was made by the Dy. Director of Income-tax, who as per the provisions of section 2(7A) is treated as an Assessing Officer being empowered to exercise or perform all or any of the power and functions conferred on or assigned to an Assessing Officer. He further held that by virtue of provisions of section 131(1A) of the Act, such an authority can refer case for valua....
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....as may be specified therein,- (a)authorise any Director General or Director to perform such functions of any other income-tax authority as may be assigned to him by the Board; (b)empower the Director General or Chief Commissioner or Commissioner to issue orders in writing that the powers and functions conferred on, or as the case may be, assigned to, the Assessing Officer by or under this Act in respect of any specified area or persons or classes of persons or incomes or classes of income or cases or classes of cases, shall be exercised or performed by a [Joint] Commissioner [or a [Joint] Director], and, where any order is made under this clause, references in any other provision of this Act, or in any rule made thereunder to the Assessing Officer shall be deemed to be references to such [Joint] Commissioner [or [Joint] Director] by whom the powers and functions are to be exercised or performed under such order, and any provision of this Act requiring approval or sanction of the [Joint] Commissioner shall not apply. (5) The directions and orders referred to in sub-sections (1) and (2) may, wherever considered necessary or appropriate for the proper management of the work, ....
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....the Valuation Officer by virtue of powers conferred on him under sub-section (1A) of section 131. However, such reference by the Dy. Director of Income-tax (Investigation), Indore, is illegal and he has exaggerated his jurisdiction as the power under sub-section (1A) of section 131 has been conferred on the Dy. Director of Income-tax (Investigation) for entirely different purposes and not for the purpose of valuation of the house property. For the sake of convenience, the relevant provisions of sub-section (1A) of section 131 is reproduced as under :- "131. (1) The [Assessing] Officer [Deputy Commissioner (Appeals)], [Joint Commissioner], Commissioner (Appeals)] and [Chief Commissioner or Commissioner] shall, for the purposes 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. [(1A) [If the Director Gener....
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....dian Income-tax Act, 1922 (11 of 1922), or this Act (hereinafter in this section referred to as the undisclosed income or property), [then,- (A) the [Director General or Director] or the [Chief Commissioner or Commissioner], as the case may be, may authorise any [Joint Director], [Joint Commissioner], [Assistant Director [or Deputy Director]], [Assistant Commissioner [or Deputy Commissioner] or Income-tax Officer], or (B) such [Joint Director], or [Joint Commissioner], as the case may be, may authorise any [Assistant Director [or Deputy Director]], [Assistant Commissioner [or Deputy Commissioner] or Income-tax Officer], (the officer so authorised in all cases being hereinafter referred to as the authorised officer) to-] (i)enter and search any [building, place, vessel, vehicle or aircraft] where he has reason to suspect that such books of account, other documents, money, bullion, jewellery or other valuable article or thing are kept; (ii)break open the lock of any door, box, locker, safe, almirah or other receptacle for exercising the powers conferred by clause (i) where the keys thereof are not available; [(iia)search any person who has got out of, or is about....
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....ITAT, Allahabad Bench in the case of Asstt. CIT v. Baldev Plaza [2005] 93 ITD 579 . It would not be out of context to mention that new provisions under section 142A inserted by the Finance Act, 2004, with retrospective effect from 15-11-1972 also states - (i) for the purpose of making an assessment or reassessment under the Act...." Also authorized the Assessing Officer to make reference to the DVO, when any assessment proceeding or reassessment proceedings are pending before him and not otherwise. Similar position came for consideration before the High Court of Jammu & Kashmir in the case of Prem Hotel v. ITO [1997] 93 Taxman 237 . In that case, in the return of income, the assessee had declared cost of construction of the building and cost of plant and machinery as per report of the approved valuer. While the assessments were pending (which was later on completed), the Assistant Director of Income-tax (Investigation)/Assessing Officer referred the matter to the DVO under section 131(1)(d), read with section 55A, for determining the cost of construction of building and the cost of installation of machinery. While deciding the writ petition, the Hon'ble High Court has observed as u....
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....levant year's and make the additions of Rs. 5,31,228 in the respective assessment year being the undisclosed investment in construction of house after taking action under section 148. 5.That on the facts and in the circumstances of the case, the ld. CIT(A) erred in maintaining the valuation report based on Delhi rate, i.e., DSR-97 of 1999 while the construction is completed in Indore and the period of construction of 1993-94 to 1998-99. 6.That on the facts and in the circumstances of the case, the ld. Assessing Officer erred in not relying on the order of the Hon'ble ITAT, Indore Bench without discussing anything in the body of assessment order. 15. Facts of the case as per the assessment order are that the assessee had declared the cost of construction of house property at Rs. 5,91,568 (correct figure is Rs. 6,91,568), which was estimated by the Departmental Valuation Officer at Rs. 15,28,496. The assessee also got valued the property by the approved valuer, who estimated the cost at Rs. 6.92 lakhs. In the report of the approved valuer, it is mentioned that the construction was carried out for a long period of 6 years. Further various objections were raised against the es....
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....red." 16. It is admitted by the Assessing Officer that actual amount of investment made by the assessee amounted to Rs. 6,91,568 and not Rs. 5,91,568. The Assessing Officer after taking into account the objections raised by the assessee allowed deduction to the extent of Rs. 1,67,386 at the rate of 20 per cent on the difference of Rs. 8,36,928 and after taking into account the declared cost at Rs. 6,91,568 and the estimated of Rs. 15,28,496 as made by the DVO. The balance excess amount of Rs. 6,69,542 was added as unexplained investment in the construction of the said building. The Assessing Officer has mentioned in the assessment order that - "Considering all the facts and circumstances of the case and the claim of the assessee, as elaborated above and comments of the approved valuer as reproduced (supra) a reduction at the rate of 20 per cent is allowed on the cost determined by the DVO". 17. In the instant case, the DVO determined cost of construction at Rs. 15,28,496. At the rate of 20 per cent reduction was to be given as held in the body of assessment order, however, the Assessing Officer has reduced the cost of the house by Rs. 1,67,386 against the correct reduction of....
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....te of Rs. 582 per sq.ft. After allowing deduction at the rate of 20 per cent by the Assessing Officer, the cost of construction comes at Rs. 466 per sq.ft. However, the ITAT, Indore Bench, Indore, in the case of Jagmohan Jaiswal v. ITO 10 ITJ 187, has held that CPWD rates cannot be applied and the ld. CIT(A) has granted reduction of 30 per cent on account of difference in CPWD rates and local rates, self-supervision and for material directly purchased by the assessee. This deduction has been enhanced by 40 per cent by this Bench. Hence, it is claimed that the assessee himself is a contractor for constructing the building, therefore, he had wide experience in construction. He has directly purchased the material from the market. The property has been constructed over a period of 7 years. Therefore, further deduction of 10 per cent should have been allowed on this account. The assessee has used its own trucks, crushers and other machineries for constructing his own house. Therefore, deduction allowed at the rate of 7.5 per cent only on account of self-supervision is too low and as the assessee is renowned contractor having every infrastructure for carrying out major supply for constru....