Ruma Pal, J. - (1.) The assessee built a house in a suburb of Kolkata between the years 1981 to 1983. She filed a return in respect of the assessment year 1982-1983 in which she disclosed that she had invested an amount of Rs. 1,75,000 in the construction of the house. The return was accepted by the Income-tax Officer (now known as the Assessing Officer). In respect of the subsequent assessment year, namely 1983-84, the assessee disclosed that she had invested a further amount of Rs. 1,70,000 in the construction of the house. This was not accepted by the Assessing Officer, who referred the question of the construction cost of the house to the Valuation Officer under Section 55(A) of the Income-tax Act, 1961 (hereinafter referred to as the Act). The Valuation Officer submitted a report to the Assessing Officer. On the basis of the report, the Assessing Officer re-opened the assessment in respect of the assessment year 1982-83. The Income-tax Officer then made an addition of Rs. 2,79,000 in respect of the assessment year 1982-83 and Rs. 1,77,000 in respect of the assessment year 1983-84 as undisclosed investment in the construction of the house. The assessees appeals from the assessment orders were turned down by the Commissioner of Income-tax (Appeals), Gauhati. The Income-tax Appellate Tribunal, however, following an earlier decision, allowed the assessees appeal and held that the Assessing Officer could not have referred the question of the cost of construction of the assessees house to the Valuation Officer. In this background the following question was referred to the High Court under Section 256(2) of the Act."Whether on the facts and in the circumstances of the case, the Tribunal erred in law by holding that the Assessing Officer cannot refer the matter to the Valuation Cell (sic) for estimating the cost of construction of the house property."
(2.) The Division Bench of the High Court held that although the Assessing Officer could not have referred the question of the cost of construction of the assessees house to the Valuation Officer under Section 55-A of the Act, he had ample power under Sections 131(1), 133(6) and 142(2) of the Act to ask for a Valuation Report from the Valuation Officer. It was held that each of these sections were "enabling machinery provisions which invested ample powers in the Assessing Authority", and that any wrong mention of the provision on the requisition memo would not be material. Accordingly the question referred was answered in the affirmative and against the assessee.
(3.) In the appeal before us, it was contended on behalf of the assessee that a reference to a Valuation Officer could only be made strictly in terms of Section 55-A of the Act and that if the circumstances justifying the reference under that Section were not prevailing, the Assessing Officer did not have the jurisdiction to otherwise refer the matter to the Valuation Officer. It was further pointed out that Section 55-A of the Act only allows for reference to the Valuation Officer for the purposes of computing the market value of property in connection with the computation of capital gains. It was also submitted that reference to the Valuation Officer had been specifically provided for under Section 55-A and that this implied that a reference to the Valuation Officer could not be made under any of the other provisions which generally empowered the Assessing Officer to ascertain the income of the assessee. The submission of the appellant was that if the power to refer the determination of the cost of construction to the Valuation Officer was otherwise available to the Assessing Officer under the other provisions of the Act, it was not necessary to specifically empower the Assessing Officer under Section 55-A. Finally, it is submitted that the Valuation Officer is appointed under the Wealth-tax Act and that he could exercise the power only in the manner prescribed by that Act or by any other statutory provision like Section 55-A of the Act, and that he could not be called upon to discharge functions not statutorily prescribed, in his capacity as a Valuation Officer.;