Re-Assessment based on DVO Report is valid since Original Assessment was completed without waiting for Report due to Statutory Time Limit: ITAT [Read Order]

In the case of ACIT 3(1) versus M/s Mashal Hotels Pvt. Ltd, Indore bench of ITAT ruled that re-Assessment on the basis of DVO Report is valid since the original assessment was completed without waiting for the report due to the statutory time limit.

A division bench comprising Kul Bharat, Judicial Member and Manish Borad, Accountant Member was held so while considering the appeal of revenue challenging the issue relates to quashing the reassessment proceedings by the CIT (A) relying on the decision of  Apex Court in the case of Dharia Construction Company, wherein it has been held that reopening of assessment merely on the basis of valuation report of Departmental Valuation Officer is not sustainable in law because the opinion given by the Departmental Valuation Officer is not per the information for the purpose of reopening of assessment u/s 147 of the Act.

The Counsel for Assessee found satisfied with the findings of Appellate Authority, on counterpart Revenue argued that reopening was correctly made after due application of mind by the Assessing Officer.

In the instant case, the Assessing Officer, while completing the assessment, took up the issue about the investment in hotel building and in order to quantify the issue with supporting evidence, he referred the matter to the Departmental Valuation Officer for valuation of the correct investment made in all these years in the hotel building.

The Tribunal bench opinioned that if the reopening made based on independent information received from the DVO after the completion of assessment u/s 143(3), the case would have been different.

But in instant case, AO made proper application of mind and if the resistance of completing the assessment as per the statutory time limit provided in the Act would not have been there, then the Assessing Officer would have waited for the Departmental Valuation Officer report and accordingly made the additions in the regular assessment proceedings.

Accordingly, the bench held that issuance of notice u/s 148 of the Act as well as reassessment proceedings are valid.

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