D.K.Seth, J. - (1.) In this appeal two questions have since been framed for being answered by this Court, viz: (i) Whether the reopening of the assessment under section 148 read with section 147 of the Act after the expiry of four years can be made on the basis of the report of the valuation officer who has been appointed under section 131(1)(a) of the Act for proper valuation of the cost of construction of the building? (ii) Whether the report of the valuation officer in any event is merely an opinion and can be relied upon as a material or evidence on the basis of which the sum of Rs. 12,32,954/- can be treated as the undisclosed income of the assessee when the said amount of Rs. 12,32,954/- as undisclosed income of the assessee is without any material or evidence? Submission on behalf of the Appellant/Assessee :
(2.) Dr. D. Pal, learned Sr. counsel, appearing on behalf of the appellant, submits that in this case the assessment for the relevant assessment year 1993-94 was complete under section 143 of the Income Tax Act, 1961. There was nothing on record to show that there was any defect in the books of accounts produced in connection with the said assessment proceedings under section 143. The assessee had constructed a hotel building during 1991-92, 1992-92 and 1993-94. The cost of construction whereof incurred in the relevant assessment years were reflected in the return submitted for the concerned assessment years respectively. After lapse of four years, section 147 was resorted to by the Assessing Officer on the allegation that income for the assessment year 1993-94 had escaped assessment. Admittedly, this was done after expiry of four years from the end of the relevant assessment year. Therefore, section 147 could be resorted to only if there was a finding that the assessee had failed to disclose truly and correctly the income. (1) Relying on the finding of facts arrived at by the learned CIT (Appeals) and the learned Tribunal, Dr. Pal points out that there was no such finding and as such the embargo provided therein could not be overcome. The Assessing Officer, however, in course of the proceedings under section 147 had recorded that only the cash book was produced and other relevant books of accounts were not produced, but he did not refer to the books of accounts produced during the relevant assessment under section 143. Whereas the CIT (Appeals) had referred to the fact that there was defect in the books of accounts in course of assessment under section 143. Therefore, according to him, the finding of facts seems to be concluded by the finding of the CIT (Appeals). This finding of the CIT (Appeals) has not at all been looked into by the learned Tribunal while recording an observation that it was an admitted fact that the books of accounts were not produced excepting the cash book. At the same time, the learned Tribunal had referred to different versions with regard to the valuation of the property by different authorities. According to Dr. Pal, these different versions were very much before the authority concerned at the time of assessment under section 143 and even then the different versions were not such as to bring the question within the purview of section 147(1)(b) of the Income Tax Act, 1961. He further contends that reliance was placed on a valuation of a valuer appointed under section 131(1)(d) of the Act, which was a subsequent event and the said valuation cannot be treated to be a material on the basis of which the Income Tax authority came to the conclusion that the assessee had failed to disclose truly and correctly the income Therefore, according to Dr. Pal, this assessment, purported to have been made under section 147, cannot be sustained. (2) Dr. Pal relies upon the decision in Smt. Tarawati Debi Agarwal v. Income Tax Officer, 1986(162) ITR 606 (Cal) to contend that the valuation report obtained at a later point of time cannot be a foundation for holiding that the assessee did not disclose the cost of construction truly and currectly at the relevant point of time and a valuation report obtained afterwards might be affected by the subsequent enhancement of valuation. He then relies upon the decision in Durga Sharan Udho Prasad v. Commissioner of Income Tax, Bihar, 1976 (103) ITR 270 to contend that when the assessee had disclosed by means of a valuation report and to support the accounts reflected in the books of accounts to substantiate the valuation given, it was under no obligation to furnish anything else. Without any other materials on record there was no occasion for the Income Tax authority to conclude that the assessee failed to disclose truly and correctly its income. Dr. Pal then relies upon the decision in Indian Oil Corporation v. Income Tax Officer, Central Circle V. Calcutta & Ors., 1986 (159) ITR 956 SC. to contend that it was not possible to apprehend that in future there would be another valuation report at the time when the return was submitted in order to entangle the assessee within the sweep of the proviso to section 147. (3) Dr. Pal on the second question, submits that, assuming but not admitting that the valuation report is an admissible evidence under section 45 of the Evidence Act, as suggested by Mr. Shome and that such an evidence could be brought on the record and looked into under section 75 of the Code of Civil Procedure, read with Order 26 Rule 9 thereof, even then it would remain only a piece of evidence which without being corroborated or supported by other evidence could not supersede the evidence already on record on the basis of which the proceeding under section 143 was concluded, so as to hold that the assessee had failed to disclose his income truly and correctly. Dr. Pal relies upon the decision in Smt. Amiya Bala Paul v. Commissioner of Income Tax, 2003 (262) ITR SC 407 to contend that the power available under the Code of Civil Procedure conferred on the Assessing Officer under section 131(1) is confined only to the extent relevant for section 133(1) without attracting the power conferred under section 55A. Relying on the said decision in Amiya Bala (supra), he submits that section 131(1) cannot be resorted to for the purpose mentioned in section 55A which again, according to him, is confined to the case of computation of capital gain and cannot be applied in respect of computation of income from business though it uses an expression for the purposes of this chapter. Submission on behalf of the Respondent/Department :
(3.) Mr. Shome, learned Sr. counsel appearing for the Department, on the other hand, points out that the Assessing Officer had found that except the cashbook no other books of account were produced during the course of the proceedings under section 147 but that was overlooked by the CIT (Appeals), which was corrected by the learned Tribunal. As such the finding of facts were concluded with the observation of the learned Tribunal that the assessee had failed to disclose truly and correctly his income attracting the provisions of section 147. He also drew our attention to the three versions disclosed by the assessee before three authorities. This itself was sufficient to hold that there was a case of escapement of income on account of non-disclosure of true and correct income by the assessee. He points out that a valuation report is admissible in evidence in view of section 45 of the Evidence Act, read with section 75 of the Code of Civil Procedure (CPC) and Order 26 Rule 9 and 11 respectively thereof. According to him, there being nothing to point out the defects in the valuation report, it was open to the Income Tax authority to depend on the same and the evidenciary value of such a report cannot be brushed aside simply because there was another valuation report submitted by the assessee earlier and that the valuation report was made correctly on the basis of the acceptable (CPWD) standard. He also points out that the 1992 valuation and as such cannot be overlooked. He then contends that this finding accepting the valuation report is a finding of fact. In the absence of any perversity this Court cannot interfere with the same. According to him, section 131(1)(d) empowers the Assessing Officer to make a reference to obtain the valuation report in terms of Order 26 Rule 9 CPC. Therefore, this Court should not interfere with the order appealed against. The scope : Section 147 : If can be resorted to :;