Income Tax Appellate Tribunal - Kolkata
Wealth-Tax Officer vs Bobita Choraria on 31 August, 1995
Equivalent citations: [1996]56ITD182(KOL)
ORDER
D. Manmohan, Judicial Member
1. These are five appeals filed by the department. The assessment years involved are 1979-80 to 1983-84.
2. As common issue is involved in these appeals, we dispose of all these appeals by a common order for the sake of convenience.
3. These appeals are marked late by 12 days. The last date for filing these appeals ended on 2-10-1992 whereas the appeals were actually filed on 14-10-1992 resulting in a delay of 12 days. We have perused the condonation petition filed by the revenue along with the appeals. We are satisfied that the delay is due to reasonable cause as explained in the petition. The delay is condoned and we admit the appeals.
4. The assessee Sri Mahendra Kr. Choraria is an individual (since deceased and now represented by the legal heir Smt. Bobita Choraria). The assessee along with three others jointly purchased a plot of land measuring 1697.29 sq. mtrs. at 5B, Abdul Gaffar Khan Road, Bombay on 29-10-1971. The co-owners jointly started construction of residential house on the said plot around 1974 and the construction is said to have been completed in 1983. A separate construction account was maintained in the name of "Smt. Ichud Devi Choraria & Ors." wherein the total cost was shown to be Rs. 7,08,659. The share of each co-owner is reflected in the respective balance-sheets and accordingly it was shown in the wealth-tax returns. The Assessing Officer has completed the assessments under Scrutiny Scheme wherein the share of each co-owner in the land and partly constructed building was specifically valued.
5. As the matter has stood thus, vide letter dated 24-4-1987 the assessing officer referred the matter of valuation of the house property as on 29-3-1985 and subsequently another reference was made on 21-5-1987 requesting the valuation officer to value the property for the earlier valuation dates also. The valuation officer has forwarded a preliminary valuation report to the appellant on 27-11-1987 and after taking into consideration the objections, a valuation report dated 9-3-1988 was forwarded to the assessing officer under Section 16A(5) of the W.T. Act. Based on the said valuation report, the assessing officer initiated reassessment proceedings under Section 17 of the W.T. Act and completed the reassessments accordingly, by merely substituting the value of the assets shown in the valuation report.
6. Aggrieved against the aforesaid orders, the assessee preferred appeals to the first appellate authority contending that since the original assessment proceedings have been completed and the valuation of the immovable property has been accepted, the assessing officer does not have any scope to invoke the provisions of Section 16A particularly in absence of any proceedings before him at the time of making the reference. It was also contended that reference to the valuation officer can be made only during the regular assessment proceedings since Sections 16 and 17 empowers the assessing officer to refer the matter to the valuation officer during the assessment proceedings. The Dy. CWT (A) has considered the issue in detail and held that the assessing officer has acted without jurisdiction to ask the Valuation Officer to make the valuation under Section 16A of the Act, for the assessment years for which proceedings were no longer pending with him. It was also held that the report of the valuation officer cannot constitute information for reopening the assessments and since all the material facts are before the assessing officer at the time of making the original assessments, the later action of the assessing officer would only constitute a change of opinion and that too at the behest of valuation officer.
7. Aggrieved against the aforesaid order of the Dy. CWT(A), the revenue has come up in appeal before the Tribunal. The Id. departmental representative vehemently contended before us that there is huge variation between the value as shown by the assessee and the value as arrived at by the valuation officer and hence the valuation report validly constitutes information to the assessing officer to reopen the assessments under Section 17 of the Act and hence the reassessments are valid. On the other hand, the Id. counsel for the assessee submitted that the reference to the valuation officer is illegal and consequently, the reassessment proceedings based on the said valuation is also invalid in the eye of law inasmuch as, reference to the valuation officer cannot be legally made by the assessing officer after the completion of the original assessments. It was also contended that since the valuation report is void ab initio, the reassessment proceedings merely based on the valuation report also falls to the ground.
8. We have heard the rival submissions. The facts as stated in the order of the Dy. CWT(A) are not in dispute. It is an admitted fact that the original assessments were completed under Scrutiny Scheme and at the time of making the reference to the valuation officer, the assessment proceedings for the years under consideration were not pending. It is well settled law that once an assessment is complete, the assessing officer becomes' functus officio vis-a-vis the assessment years under consideration as there is no proceeding pending before him. It is only when the assessment is property reopened under law, the assessing officer would have all the powers under the Act so as to complete the assessment. In the present case the reference to the valuation officer was made on 24-4-1987 and 21-5-1987 which happens to be subsequent to the completion of the assessments for the assessment years under consideration. Thus, the assessing officer has no power to refer the matter to the valuation officer after the completion of the assessment. Consequently, the report of the valuation officer based on the said invalid reference is illegal, invalid and non est in the eyes of law. As the valuation report is non est in law, the reassessment proceedings and the reassessments thereon merely based on the said valuation report do not stand. Even otherwise, a plain reading of Sections 16, 16A and 17 of the Act would clearly suggest that the exercise of referring the matter to the valuation officer only furnishes a good guide and offers assistance in determining proper assessment required to be made in terms of Section 16(3) of the Act. Section 16A(6) states that the assessing officer shall proceed to complete the assessment in conformity with the estimate of the valuation officer. Section 16(3) contains the words "and such other evidence as the assessing officer may require on specified points" whereas such a provision does not appear in Section 17 of the Act. Section 17 comes into play only after completion of assessment in terms of Section 16(3) of the Act. Thus, a reference cannot be made after completion of the original assessment, even in a case where the assessment is validly reopened under Section 17 of the Act after completion of the original assessment. The case law relied upon by the assessee i.e., Smt. Uma Debi Jhawar v. WTO [1982] 136 ITR 662 (Cal.) is a direct authority on the subject under consideration wherein their Lordships have held that the reference to the valuation officer can be made only in respect of pending assessments and once the assessment is complete, any subsequent reference is invalid in law. In fact, there is a latest decision i.e., Kum. Vijaya Raja v. Union of India [1995] 214 ITR 65 (MP) wherein their Lordships have held that reference cannot be made during the pendency of the reassessment proceedings. Even otherwise, the assessee in this case has placed all the basic material before the assessing officer and the assessments were completed under Scrutiny Scheme. It is well settled that once all the material facts are placed before the assessing officer, the assessing officer requires no further assistance by way of disclosure. It is for him to decide that inferences of facts are reasonably to be drawn and what legal inferences have ultimately to be drawn. It is not for somebody, far less the assessee, to tell the assessing officer what inferences whether of facts or law, should be drawn. In fact it is the duty of the assessing officer to make necessary enquiries and draw proper inferences on the facts already on record. If through oversight or by any other reason, the assessing officer does not choose to refer the matter to the valuation officer, in reassessment proceedings, the department cannot take advantage of referring the matter to the valuation officer and to complete the assessment on the basis of the said valuation report as the department cannot be rewarded with a premium at the cost of the assessee. Thus, the action of the assessing officer in making the reassessment, can at best constitute a mere change of opinion since all the material particulars were disclosed before the assessing officer at the stage of original assessment. We, therefore, hold that the report of the valuation officer is non est in law and the reassessments are without any jurisdiction and uphold the original assessments for the years under consideration.
9. In the result, all the appeals are dismissed.