TaxTMI 
TaxTMI 
2004 (12) TMI 52
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....idual and derives income from house property, etc. For the assessment year 1971-72, the assessee filed a return on October 30, 1971, declaring an income of Rs. 10,470. He filed a revised return on March 29, 1974, at an income of Rs. 10,410. By an order dated March 18, 1975, passed under section 143(3) of the Income-tax Act, 1961 (for short, "the Act"), the Income-tax Officer, A-Ward, Ambala (hereinafter described as "the Assessing Officer"), made assessment on a total income of Rs. 10,745. he gave the following footnote in the assessment order: "Valuer's certificate show cost of construction at Rs. 3,18,300. This case was referred to the Government Valuer. Report has not been received. The case being barred by limitation, I am, therefore, ....
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....nvoking section 147 of the Act. However, he sustained an addition of Rs. 1,06,097 by observing that the cost of construction of the building was Rs. 4,16,494 as against Rs. 3,10,397 declared by the assessee. The Appellate Assistant Commissioner then held that the building was constructed in the assessment years 1969-70, 1970-71 and 1971-72 and, therefore, the addition should be spread over in all the three years. Accordingly, he declared that the assessee's share in the cost of construction would come to Rs. 19,000 only for the assessment year 1971-72 and, as such, the addition made by the Assessing Officer was liable to be reduced by Rs. 90,751. The Revenue as well as the assessee filed appeals against the order of the Appellate Assistant....
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....given serious thought to the respective arguments and carefully persued the record. It is settled law that an Income-tax Officer acquires jurisdiction to reopen an assessment under section 147(a) read with section 148 of the Act only if, on the basis of specific, reliance and relevant information coming to his possession subsequently, he has reasons, which he must record, to believe that, by reason of omission or failure on the part of the assessee to make a true and full disclosure of all material facts necessary for his assessment during the concluded assessment proceedings, any part of his income, profits or gains, chargeable to income-tax has escaped assessment. The mere change of opinion in regard to the particular state of facts canno....
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....r Singh v. CIT [1992] 195 ITR 769. In CIT v. Smt. Usha Mathur [2001] 252 ITR 179, a Division Bench of this court, while dismissing the appeal filed by the Revenue under section 260A of the Act, approved the view taken by the Tribunal that the valuation report could not be made the basis for reopening the assessment which had already been finalised. We may now revert to the case in hand. A reading of the reassessment order passed by the Assessing Officer shows that he had issued show-cause notice to the assessee under section 147 of the Act solely on the basis of the Departmental Valuer's report. He opined that the cost of construction projected by the assessee and his brother was not correct and in the absence of any plusible explanation f....
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....'A' to his letter dated March 21, 1974. It did not have any higher evidentiary value to constitute fresh and new information within the meaning of section 147(b) of the Act. The decision of the Calcutta High Court in the case of Smt. Rajeshwari Birla v. WTO [1979] 119 ITR 629 supports the contention of the assessees. 12. The Full Bench decision of the Punjab and Haryana High Court in Jindal Strips Ltd. v. ITO [1979] 116 ITR 825 shows that it is open to the Income-tax Officer under section 133(6) of the Income-tax Act to take the assistance of the Valuation Officer, who was an officer of the Income-tax Department having technical knowledge, but that the report of the Valuation Officer would not be binding on the Income-tax Officer and that ....
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....ect against arbitrary reopening of assessments by the Revenue." In our opinion, the view taken by the Tribunal that the Assessing Officer did not have the jurisdiction to initiate proceedings under section 147 of the Act is correct and the question referred by it in pursuance of the direction given by this court deserves to be answered against the Revenue. Before concluding, we may refer to the judgment of this court in Grover Nursing Home v. ITO [2001] 248 ITR 493. That was a case in which the assessee had challenged the legality of the show-cause notice. After examining the facts of the case, this court held as under (headnote): "That even though the report of the Departmental Valuation Officer cannot be made the sole basis for initiat....