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2006 (4) TMI 95
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....uction of Bagria Towers, which he had not shown in the original return. In the original return, the respondent had claimed house tax, but in the revised return he withdrew the said claim towards payment of house tax as the same had not been paid. In the revised return, the value of Bagria Towers (land and structure) as on March 31, 1994, was shown at Rs. 14,14,828. The case was selected for scrutiny and notice dated April 19, 1996, was issued under section 143(2) of the Act and in the course of assessment proceedings, the Assessing Officer issued a commission under section 131(1)(d) of the Act to the District Valuation Officer, Bhopal, for determination of cost of construction of Bagria Towers. On the basis of the report of the District Valuation Officer, Bhopal, the Assessing Officer determined the investment on the Bagria Towers during the previous year relevant to the year 1994-95 as Rs. 21,25,042 against the investment of Rs. 8,26,715 shown by the respondent. After giving an opportunity to the respondent, the Assessing Officer made an addition of Rs. 12,98,328 on account of unexplained investment under section 69 of the Act to the income of Rs. 33,646 shown in the revised retur....
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...., (i.e., the Assessing Officer) on the strength of a revised return submitted by the assessee is non est? (2) Whether the Income-tax Appellate Tribunal was justified in holding that the Assessing Officer had no jurisdiction to take into account and rely upon the valuation submitted by the District Valuation Officer in respect of the house property belonging to the assessee?" When the matter was taken up again on January 10, 2005, the court lost sight of the fact that the appeal had already been admitted and substantial questions of law had already been formulated on July 14, 2004, and again passed order admitting the appeal and formulated the following two substantial questions of law: "(1) Whether the Income-tax Appellate Tribunal was justified in coming to a conclusion that the assessment made on March 27, 1997, for the assessment year 1994-95 is not a valid assessment and hence deserves to be annulled? (2) Whether the finding recorded by the Tribunal annulling the assessment in question is legally sustainable and can be said to be in conformity with the requirement of law and on the facts emerging on record?" Thereafter on January 31, 2006, the court heard learned....
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....e filed even after the draft assessment order referred with the assessee's objection to the IAC under the law. In these circumstances, the revised return is non est in law and no cognizance can be taken thereof. If any assessment is framed on the basis of such a revised return, it would be invalid and void ab initio. Since in the instant case, the assessment was framed on the basis of the revised return which is non est in law, we have no option but to hold that the aforesaid assessment is invalid and void ab initio. We, therefore, annul the same." Mr. R. L. Jain, learned senior advocate appearing for the appellant, submitted that the Tribunal has taken an erroneous view that an intimation issued under section 143(1)(a) of the Act partakes of the character of an assessment if no action is taken within the prescribed period for framing regular assessment. He cited the decision of the Madhya Pradesh High Court in Kamal Textiles v. ITO [1991] 189 ITR 339, the decision of the Delhi High Court in Apogee International Ltd. v. UOI [1996] 220 ITR 248 and the decision of the Allahabad High Court in Pradeep Kumar Har Saran Lal v. Assessing Officer [1998] 229 ITR 46 in support of his conte....
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....order under section 143(3) of the Act. He also relied, on the decision of the Punjab and Haryana High Court in Vipan Khanna v. CIT [2002] 255 ITR 220 in support of his submissions that a notice under section 143(2) of the Act cannot be served on the assessee after the expiry of twelve months from the end of the month in which the return is furnished and that in such a case the assessment proceedings under section 143 of the Act come to an end and the matter becomes final. He also cited the decision of the Gujarat High Court in Panchmahal Steel Ltd. v. U. A. Joshi, ITO [1994] 210 ITR 723 wherein the Gujarat High Court has held that no revised return can be filed by the assessee after the Income-tax Officer makes a draft order of assessment under section 144B of the Act because under section 139(5) of the Act a revised return cannot be filed after completion of the assessment. He submitted that since no notice was issued in the present case to the respondent under section 143(2) of the Act within the period of one year from the end of July, 1994, the month in which the original return was filed, the intimation dated October 17, 1994, operated as an assessment and had become final and....
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....; (ii) any loss carried forward, deduction, allowance or relief, which, on the basis of the information available in such return, accounts or documents, is prima facie admissible but which is not claimed in the return, shall be allowed; (iii) any loss carried forward, deduction, allowance or relief claimed in the return, which, on the basis of the information available in such return, accounts or documents, is prima facie inadmissible, shall be disallowed:.... (2) Where a return has been made under section 139, or in response to a notice under sub-section (1) of section 142, the Assessing Officer shall, if he considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not underpaid the tax in any manner, serve on the assessee a notice requiring him, on a date to be specified therein, either to attend his office or to produce, or cause to be produced there, any evidence on which the assessee may rely in support of the return: Provided that no notice under this sub-section shall be served on the assessee after the expiry of twelve months from the end of the month in which the return is furnished.....
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....section (l)(a) of section 143 by adjustments arithmetical errors in the return may be corrected, losses, deduction, allowance or relief on the basis of the information available in the return, accounts or documents may be allowed and similarly loss, deduction, allowance or relief claimed in the return on the basis of the information available in such return, accounts or documents may be disallowed. In other words, the truth of the statement of income or loss made by the assessee in the return is not verified by the Assessing Officer nor is the assessee required to adduce evidence in support of income or loss before the intimation is sent to the assessee under sub-section (l)(a) of section 143 of the Act. Sub-section(1)(a)(i) of section 143 of the Act, however, makes it clear that such an intimation shall be deemed to be a notice of demand issued under section 156 and all the provisions of this Act shall apply accordingly. Thus, by a statutory fiction the intimation is treated as a notice of demand under section 156 of the Act, so that the provisions of the Act for recovery of demand applicable to the notice of demand under section 156 can be taken recourse to for recovering the amo....
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..... [1996] 220 ITR 248 and this court in Kamal Textiles [1991] 189 ITR 339 cited by Mr. Jain. In the aforesaid three decisions, the difference between an intimation sent to the assessee under section 143(1)(a) and an assessment made under section 143(3) pursuant to a notice under section 142 of the Act has been clearly brought out. In Pradeep Kumar Har Saran Lal [1998] 229 ITR 46 as well as in Apogee International Ltd. [1996] 220 ITR 248, the Allahabad High Court and the Delhi High Court, respectively, further held that the intimation under section 143(1)(a) of the Act is treated as notice of demand under section 156 of the Act only for the purpose of making the machinery provisions applicable for recovery of tax found to be due in the intimation under section 143(1)(a)(i) of the Act. Mr. Choudhary, however, submitted that a reading of sections 246 and 246A of the Act would show that against the intimation under section 143(1)(a), an appeal can be filed before the Deputy Commissioner of Income-tax (Appeals) if the intimation has been issued by the Assessing Officer and, before the Commissioner of Income-tax (Appeals) in case the intimation has been sent by the Deputy Commissioner ....
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....eeds to give notice under sub-section (2) of section 143 and passes an order under sub-section (3) of section 143 of the Act and that the absence of an order under sub-section (3) of section 143 is not a bar to proceed under section 148 of the Act. The aforesaid judgment of the Punjab and Haryana High Court does not really equate an intimation under section 143(1)(a) with an assessment under section 143(3) pursuant to a notice under section 143(2) of the Act, but has only held that even where only an intimation is sent under sub-section (1) of section 143 and no regular assessment has been made under sub-section (3) of section 143, proceedings for reassessment can be initiated under section 148 of the Act. In Vipan Khanna [2002] 255 ITR 220 (P & H) cited by Mr. Choudhary, the Punjab and Haryana High Court has clearly held that the new procedure for processing the return under sub-section (l)(a)(i) of section 143 of the Act cannot be equated with framing of the assessment, but has observed that a notice under sub-section (2) of section 143 of the Act cannot be served on the assessee after the expiry of twelve months from the end of month in which the return is furnished and the a....
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.... respondent on August 31, 1995, it was a valid revised return under sub-section (5) of section 139 of the Act and the assessment made pursuant to the said revised return by the Assessing Officer was a valid assessment. The conclusions of the Tribunal that the revised return was invalid in law and the assessment made on the basis of such a revised return was also invalid in law, are thus incorrect in law. For the aforesaid reasons, we hold that the Tribunal was not justified in coming to the conclusion that the assessment made on March 27, 1997, for the assessment year 1994-95 was not a valid assessment. The first substantial question of law as formulated by order dated July 14, 2004, of the court and the first and second substantial questions of law as formulated by order dated January 10, 2005, of the court are accordingly answered in favour of the appellant and against the respondent. The second substantial question of law as formulated by order dated July 14, 2004, of the court is whether the Tribunal was justified in holding that the Assessing Officer had no jurisdiction to take into account and rely upon the valuation submitted by the Valuation Officer in respect of the ....
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....n Officer by the Assessing Officer for determining the fair market value of the asset for the purpose of capital gain only. But after the said judgment of the Supreme Court, section 34 of the Finance (No.2) Act, 2004 inserted a new section 142A in the Act. The said section 34 of the Finance (No.2) Act, 2004 is quoted herein below: "34. Insertion of new section 142A.-After section 142 of the Income-tax Act, the following section shall be inserted and shall be deemed to have been inserted with effect from the 15th day of November, 1972, namely: '142A. Estimate by Valuation Officer in certain cases.-(l) For the purposes of making an assessment or reassessment under this Act, where an estimate of the value of any investment referred to in section 69 or section 69B or the value of any bullion, jewellery or other valuable article referred to in section 69A or section 69B is required to be made, the Assessing Officer may require the Valuation Officer to make an estimate of such value and report the same to him. (2) The Valuation Officer to whom a reference is made under sub-section (1) shall, for the purposes of dealing with such reference, have all the powers that he has under s....
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....he Act arising out of the said assessment on the issue with regard to valuation of the construction of Bagria Towers made by the Valuation Officer is still pending before this court. Mr. Jain submitted that the assessment in the present case has not become final and conclusive as yet because the appeal on the very issue regarding valuation by the District Valuation Officer under section 260A of the Act is pending before this court. Mr. Choudhary, on the other hand, submitted that since the assessment order, the first appellate order and the second appellate order have been passed by the Assessing Officer, Commissioner of Income-tax,(Appeals) and the Tribunal before September 30, 2004, section 142A will not apply in the present case. He cited the decisions of the Delhi High Court in CIT v. Sudhish Kumar [2005] 276 ITR 563 and of the Punjab and Haryana High Court in CIT v. Krishan Lal Dua [2005] 277 ITR 477 in support of his aforesaid contention. He also cited the decision of the Supreme Court in R. Rajagopal Reddy v. Padmini Chandrasekharan [1995] 213 ITR 340 in which the Supreme Court has held that section 4(2) of the Benami Transactions (Prohibition) Act, 1988, will not apply r....