Justice Sanjay K Agrawal of Chhattisgarh High Court held that, proceeding for reassessment under Section 147-148 of the Income Tax Act, 1961 cannot be initiated on the basis of report of the Assistant Valuation Officer.
The High Court has also quashed proceedings against the assesse.
The petitioner is an assessee for the purpose of the Income Tax Act, 1961. She filed return for the assessment period 2011-12, financial year 2010-11, on 31-3-2013 along with necessary documents in which she was served with notice under Section 148 of the Act, 1961 on 12-9-2013 stating that the Assessment Officer has reasons to believe that income has escaped assessment and she was directed to file return within 30 days of the notice period. Thereafter, fresh notices were issued under Sections 142 (1) and 143 (2) of the Act, 1961 calling for revised return and documents in support thereof respectively, as scrutiny assessment was to be conducted and assessment order was passed.
Accepting the earlier return filed on 31-3-2013, but in the meanwhile, a reference was made to the Departmental Valuation Officer (Assistant Valuation Officer-II), Mumbai in terms of Section 55-A of the Act, 1961 in which a preliminary valuation report was furnished on 2-3-2015, but the final report was furnished only after the completion of assessment proceedings.
The Court held that, the reassessment cannot be initiated only on the basis of the valuation report received from Assistant Valuation Officer.
The assessing authority sought to reopen the proceeding under Section 147 of the Act, 1961 which is clearly not an information for reopening the assessment proceeding as held by the Supreme Court in Dhariya Construction Company’s case wherein it has been observed that opinion of the District Valuation Officer is not an information for the purposes of reopening assessment under Section 147 of the Act, the Court said.
The Court also observed that, The Assessing Officer has not applied its mind and solely relied upon that opinion of the Assistant Valuation Officer to reopen the assessment under Section 147 read with Section 148 of the Income Tax Act, 1961.
The Court also imposed the Cost of Rs. 15,000 from Income Tax Officers and Deputy Commissioner of Income Tax.
Read the full text of the Judgment below.
