HOTEL REGAL INTERNATIONAL Vs. INCOME-TAX OFFICER

JUDGEMENT

(1.) IN the writ petition the petitioners have challenged the notice dated July 16, 2009 issued under Section 148 of the Income -tax Act, 1961 (for short 'the Act') and the notices issued under Sections 142(1) and 143(2) of the Act dated October 21, 2009 and the order dated December 8, 2009 passed by the Income -tax Officer, Ward -2(1), Asansoi, respondent No. 1. The assessment year involved is 2006 -07. In brief the facts are that after the petitioner filed the return, the case was selected for scrutiny under Section 143(3) of the said Act. Accordingly, notices were issued by respondent No. 1. The petitioners were represented at the time of proceedings. The case was discussed and heard. The submission is the assessee had disclosed fully and truly the material facts. In the assessment order dated December 29, 2008 under Section 143(3) it was recorded that 'On examination of the relevant documents no specific and mention -worthy discrepancies were found. Therefore, the return figure is accepted'. Thereafter, respondent No. 1 issued the notice dated July 16, 2009 under Section 148 of the Act. The petitioners sought for the recorded reasons. On September 13, 2009 the recorded reasons were provided to the petitioner wherefrom I find that such notice was issued as a sum of Rs. 73,219 had 'escaped income' for the said assessment year. Thereafter, on October 21, 2009 notices under Sections 142(1) and 143(2) were issued. On November 11, 2009, the petitioners filed the written objection to the recorded reasons. After objection was filed the matter was considered and order dated December 8, 2009 was passed by respondent No. 1 holding that there was 'concealment of investment of Rs. 73,219' and the case fell 'under the ambit of Section 148' of the Act and the request to cancel the notices issued under Sections 148, 142(1) and 143(2) of the Act was turned down. It has been recorded in the said order that the petitioner did not produce the valuation report before the valuation cell. Aggrieved, the writ petition.

(2.) THE questions which fall for consideration are : (i) whether the respondents can shift their stand as notice proposing to reopen the proceeding under Section 148 was on the ground of 'escapement of income' however, the order of rejection was on 'concealment of investment', (ii) whether the petitioners are required to file valuation report before the valuation cell, (iii) whether notice under Section 148 can be issued as valuation report was received subsequent to the passing of the assessment order; and (iv) whether the objections which were raised by the petitioners on November 11, 2009 were considered in the order dated December 8, 2009.

(3.) SO far as the second issue is concerned, the question is whether the petitioner is required to produce valuation report before the valuation cell. I find from paragraph 1 of the order dated December 8, 2009 that respondent No. 1 had held that the petitioner did not produce report before the valuation cell. In my view, the said respondent had ignored the provisions contained in Section 142A of the Act which postulates that the Assessing Officer may require the Valuation Officer to make an estimate of such value and report the same to him. Therefore, the assessee is under no obligation to file a report before the Valuation Officer. It is to be noted that during the assessment the petitioner had filed a valuation report, as evident from page 41 of the writ petition. During the assessment relevant documents were examined and while passing the order under Section 143(3) the returned figure was accepted.