IN INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN Before Shri Chandra Poojari, AM & Shri George George K, JM ITA No.323/Coch/2019 : Asst.Year 2010-2011 Sri.K.P.Vijayan Income Tax Officer Krishna Care Centre Vs. Ward 1 South Bazar Kannur. Kannur. PAN : ABKPV0985A. (Appellant) (Respondent) Appellant by : --- None --- Respondent by : Smt.A.S.Bindhu, Sr.DR Date of Date of Hearing : 20.08.2018 Pronouncement : 20.08.2019 ORDER Per George George K, JM This appeal at instance of assessee is directed against Commissioner of Income-tax s order dated 27.03.2019 passed u/s 263 of I.T.Act. relevant assessment year is 2010-2011 2. Brief facts of case are as follows: For assessment year 2010-2011, assessment was completed in hands of assessee u/s 143(3) of I.T.Act vide order dated 29.12.2016. In assessment completed u/s 143(3) of I.T.Act, Assessing Officer made addition of Rs.50,22,770 in respect of unexplained investment in land and building. 2.1 Subsequently CIT issued notice u/s 263 of I.T.Act by holding that assessment order passed u/s 2 ITA No.323/Coch/2019 Sri.K.P.Vijayan. 143(3) of I.T.Act dated 27.12.2016 was prima facie erroneous and prejudicial to interest of Revenue, for following reasons:- (i) wealth statement re-worked by assessing officer during assessment proceedings show variations from that worked out by valuation officer. (ii) It is seen that assessing officer has arrived at value of Rs.1,56,47,696/- on unexplained investment in land and properties for AYs 2009-10 and 2010-11 combined. However, valuation officer has arrived at value of Rs.1,60,75,117/- on unexplained investment in land and properties for AYs 2009-10 and 2010-11 combined. Therefore, there is shortfall of Rs.4,27,421/- and short assessment has occurred for AY 2010-11. 2.2 To notice issued u/s 263 of I.T.Act, assessee raised objections. However, objections of assessee were rejected by CIT and he set aside assessment for A.Y. 2010-2011. relevant finding of CIT in setting aside assessment order for assessment year 2010-2011 reads as follow:- 4. submissions of assessee have been considered. issue is that report of valuation officer was obtained only after completion of assessment proceedings. Therefore assessment was completed provisionally. assessing officer is directed to reconcile differences between unexplained investment arrived at by taking into consideration wealth tax statement reworked during assessment proceedings and unexplained investment arrived at based on report of valuation report. Therefore, assessment for AY 2010-11 (sic) is hereby set aside for limited purpose of reconciling aforesaid differences as necessary examination / verification has not been made during assessment. 3 ITA No.323/Coch/2019 Sri.K.P.Vijayan. 3. assessee being aggrieved by CIT s order passed u/s 263 of I.T.Act, has filed present appeal before Tribunal raising following grounds:- 1. order under section 263 passed by principal commissioner of Income tax, Calicut is against facts and circumstance of appellant's case and hence opposed to provisions of Income tax Act. 2. Learned principal commissioner of Income tax has grossly erred in holding that there is unexplained investment in land and properties, that too for two assessment years being 2009- 10 and 2010-11, being Rs. 427421/- ,which is directed to be assessment for assessment year 2010-11, by exercising powers under section 263 of Income tax Act. There is nothing on record to hold that order passed by assessing officer under section 143(3) by conducting extensive and detailed enquiry and verification, is erroneous and prejudicial to interest of revenue, especially because valuation report from valuation cell is not fresh information to conclude that there is un explained investment as presumed by Principal Commissioner of Income tax. 3. appellant submit that assessment order passed for assessment year is not "provisional order" as stated by principal commissioner of Income tax. It is order passed under section 143(3) of Income tax Act. There is no provision under Income tax Act which specify that assessment shall be subject to revision, if assessment of income is completed before report of valuation from valuation cell is not received, in which case there is no finality to any assessment. Non availability of valuation report of valuation cell could by no stretch of imagination, be viewed as erroneous so as to make assessment liable for revision under section 263 of Income tax Act, especially because order by assessing officer is passed by making arbitrary estimation, by scaling up cast of construction to untold level. 4. appellant humbly submit that revision powers cannot be exercised for directing alternative ways of completing assessment and estimation of cost of construction when view was already taken by assessing officer after enquiry. This would inevitably mean that every order of lower authority would be susceptible to section 4 ITA No.323/Coch/2019 Sri.K.P.Vijayan. 263, which will cause unintended hardship to taxpayer concerned for no fault on his part. appellant submit that this is not intended by section 263 and explanation appended to it. 5. For above and for other reasons to be adduced at time of hearing, it is prayed that justice be done to appellant by setting aside order appealed against. 4. None was present on behalf of assessee nor was there any letter received by Registry of ITAT seeking adjournment of case. Hence, we proceed to dispose off appeal on merits after hearing learned Departmental Representative. 5. We have heard learned DR and perused material on record. At very outset, we noticed that there is defect in filing this appeal. assessee has not enclosed in appeal folder, assessment order passed u/s 143(3) of I.T.Act, which was subject matter of revision u/s 263 of I.T.Act. assessee was intimated of defect in filing appeal vide notice dated 26.06.2019. In response to defect notice issued by Registry of ITAT, assessee replied as under:- Please refer to above. In this regard please be informed that above appeal is against order under section 263 of Principle Commissioner of Income tax, Calicut. We have hence enclosed order passed under section 263 together with appeal papers. Please note that there is no order under section 143(3) in this regard to be enclosed together with appeal as required in notice. 5.1 Enclosing of assessment order which was set aside in revision u/s 263 of I.T.Act in appeal folder before 5 ITA No.323/Coch/2019 Sri.K.P.Vijayan. ITAT is mandatory. assessee has not cured defect inspite of notice being sent to him. Therefore, appeal filed by assessee being defective is dismissed. 5.2 Even otherwise, we see no infirmity in order of CIT passed u/s 263 of I.T.Act. additions were made by Assessing Officer as unexplained investment in land and building. At time of assessment, matter was referred by Assessing Officer for valuation to DVO. DVO s report was obtained only after completion of assessment. Therefore, necessarily, Assessing Officer has to reconcile difference between unexplained investments arrived at by him and value mentioned by DVO in valuation report. CIT has only set aside assessment for limited purpose of reconciliation of aforesaid difference. Hence, we see no infirmity in order of CIT and uphold same as correct and in accordance with law. It is ordered accordingly. 6. In result, appeal filed by assessee is dismissed. Order pronounced on this 20th day of August, 2019. Sd/- Sd/- (Chandra Poojari) (George George K) ACCOUNTANT MEMBER JUDICIAL MEMBER Cochin ; Dated : 20th August, 2019. Devdas* 6 ITA No.323/Coch/2019 Sri.K.P.Vijayan. Copy of Order forwarded to : 1. Appellant 2. Respondent. 3. Pr.CIT, Kozhikode. 4. CIT(Appeals)-Kozhikode. 5. DR, ITAT, Cochin 6. Guard file. BY ORDER, (Asstt. Registrar) ITAT, Cochin K.P. Vijayan v. Income-tax Officer, Ward 1, Kannur