Mukul Kumar Singh v. The Commissioner Income-tax, Muzaffarpur / The Deputy Commissioner Income-tax Circle 2, Muzaffarpur / The Assistant Valuation Officer, Patna
[Citation -2020-LL-0907-47]

Citation 2020-LL-0907-47
Appellant Name Mukul Kumar Singh
Respondent Name The Commissioner Income-tax, Muzaffarpur / The Deputy Commissioner Income-tax Circle 2, Muzaffarpur / The Assistant Valuation Officer, Patna
Court HIGH COURT OF PATNA
Relevant Act Income-tax
Date of Order 07/09/2020
Assessment Year 2004-05
Judgment View Judgment
Keyword Tags district valuation officer • reopening of assessment • application of mind • residential house • valuation report • goodwill
Bot Summary: In terms of these orders, action of the Revenue in reassessing the income of the Assessee solely based on the report submitted by the Valuation Officer stands justified. Undisputedly, on 05.01.2006 the Assessing Officer, in exercise of its power under Section 142 of the Income Tax Act called for the report of the Valuation Officer, Department of Income Tax. Prior thereto, the income assessed by the Assessee, on the subject matter, was accepted to be true and correct for when the petitioner s case was selected for scrutiny on the basis of CASS, the Assessing Officer never raised any objection to the Valuation Report submitted by the Assessee, as is evident from order dated 20th of December, 2006 passed under Section 143(3) of the Act. We are in agreement with the view taken by the Coordinate Bench, for in the attending facts and circumstances there is nothing on record to establish that save and except for the Valuation Report, alone, there is any other material even prima facie, indicating application of mind by the Assessing Officer in arriving at its conclusion, necessitating reopening of assessment carried out under CASS. The difference in valuation of the property in the two reports is also not substantial. During the course of proceedings, in fact much prior to the passing of the order accepting his return, he had submitted the Valuation Report from an approved Valuer. Right from day one, he had disclosed full particulars, what took the official valuer more than ten months to value the property and why despite the Assessee having submitted his Valuation Report dated 10th of January, 2005 request for calling Valuation Report was made only on 19th of October, 2006 and why the report reached the officer on 5 th of November, 2007 are all questions which are not answerable from the record. In the given facts and circumstances, we quash and set aside the impugned order dated 8th of December, 2008 passed by the DCIT, Circle-2, Muzaffarpur in the proceedings initiated under Section 143(3)/147 of the Income Tax Act, 1961, as affirmed in an appeal by the Commissioner of Income Tax vide its order dated 12th of June, Patna High Court CWJC No.12528 of 2009 dt.


IN HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.12528 of 2009 Mukul Kumar Singh, s/o late Chandeshwar Pd. Singh, resident of Mohalla Dahiawan P.O. P.S. Chapra Distt. Saran presently posted Development Officer, L I C, Chapra. Petitioner/s Versus 1. Commissioner, Income Tax, at Bela Kothi, Bela Industrial Estate, P.O. Distt. Muzaffarpur. 2. Deputy Commissioner, Income Tax Circle 2 Muzaffarpur at Bela Kothi at Bela Industrial estate P.O. Distt. Muzaffarpur. 3. Assistant Valuation Officer, Income Tax Department, Alankar Place, 4th Floor Boring Road, Patna. Respondent/s Appearance : For Petitioner/s : Mr.Nand Kishore Singh, Advocate For Respondent/s : Mrs. Archana Sinha, Advocate CORAM: HONOURABLE CHIEF JUSTICE and HONOURABLE MR. JUSTICE S. KUMAR CAV JUDGMENT (Per: HONOURABLE CHIEF JUSTICE) Date : 07-09-2020 Petitioner has prayed for following relief(s): (i) To issue writ of mandamus or any other appropriate writ/order direction for (a) Patna High Court CWJC No.12528 of 2009 dt. 07-09-2020 2/8 quashing order passed by respondent no.1 u/s 264 of I.T. Act dated 12-06-2009, (Annexure 6) (b) for quashing assessment order passed by respondent no.2 u/s 143(3) 147 dt. 8-12-2008 (Annexure 4) as without jurisdiction, void and double assessment and (c) for quashing valuation report prepared by respondent no.3 as being without any basis and arbitrary and violative of natural justice. (Annexure 2) (ii) To declare assessment order made under section 143 on 20-12-2006 to be effective and valid operative assessment order in case of petitioner (Annexure 3) (iii) To grant any other relief for which this Court deem fit and proper under facts of case. trust deficit between Department and Assessee, perhaps has led to litigation being prolonged for more than decade and half. Every public body and Institution has duty not only to build goodwill and defend its reputation but also to instill faith in mind of public with regard to its functionality. There are times when Institution has to show magnanimity, even in existence of bonafide error, and not unnecessarily embroil party to litigation and prolong his agony. We are concerned with correctness of order dated 8th of December, 2008 passed by DCIT, Circle-2, Patna High Court CWJC No.12528 of 2009 dt. 07-09-2020 3/8 Muzaffarpur in proceedings initiated under Section 143(3)/147 of Income Tax Act, 1961 (Annexure-4), as affirmed in appeal by Commissioner of Income Tax vide its order dated 12th of June, 2009 (Annexure- 6). In terms of these orders, action of Revenue in reassessing income of Assessee solely based on report submitted by Valuation Officer stands justified. prelude to passing of aforesaid order, briefly stated, is as under: With respect to Financial Year 2003-04 (Assessment Year 2004-05), Assessee filed his return declaring his income from salary as Development Officer in LIC India. In said Assessment Year, Assessee got constructed residential building on plot/land owned by his wife. Along with his return he placed on record Valuation Report dated 10th of January, 2005 indicating value of residential house (double storey) to be Rs. 24,41,515/-. Undisputedly, on 05.01.2006 Assessing Officer, in exercise of its power under Section 142 (A) of Income Tax Act called for report of Valuation Officer (Valuation Unit), Department of Income Tax. said report though dated 19th of October, 2006, reached officer dealing with file Patna High Court CWJC No.12528 of 2009 dt. 07-09-2020 4/8 only on 5th of November, 2007. As per this report, valuation of built up structure is Rs. 30,31,549/-. Hence, prior thereto, income assessed by Assessee, on subject matter, was accepted to be true and correct for when petitioner s case was selected for scrutiny on basis of CASS (Computer Assisted Scrutiny), Assessing Officer never raised any objection to Valuation Report submitted by Assessee, as is evident from order dated 20th of December, 2006 passed under Section 143(3) of Act (Annexure-3). Subsequently, and only on basis of Valuation Report submitted by official valuer received on 5th of November, 2007, notice dated 15.01.2008 under Section 147 was issued to Assessee, calling upon him to show cause as to why valuation of property be not accepted in terms thereof. Not finding favour with explanation furnished by Assessee, authorities passed impugned orders. Instant petition was filed on 15th of September, 2009 and is pending consideration before this Court. Opposing petition Mrs. Archana Sinha, invites our attention to decision rendered by Apex Court in case of ESS ESS KAY Engineering Co. P. Ltd. Vs. Patna High Court CWJC No.12528 of 2009 dt. 07-09-2020 5/8 Commissioner of Income Tax, reported in ITR 2001 Vol. 247, page- 818 and Bawa Abhai Singh Vs. Deputy Commissioner of Income Tax, reported in ITR 2002 Vol. 253 page- 83. She has also tried to distinguish following decisions referred to by Shri Nand Kishore Singh, learned counsel for petitioner in support of case of Assessee: (1). Assistant Commissioner of Income-Tax Vs. Dhariya Construction Co., ITR 2010 Vol. 328 page 515; and (2) Commissioner of Income Tax (in both) Vs. M/s Mithila Prop. Pub. & Contract (in both), 2008 (4) PLJR 785. We find petitioner s case to be squarely covered by decisions referred to and relied upon by his counsel. We need not dilate on ambit and scope of Section 147(b) of Act. But briefly stated, what is required to be examined is as to whether (a) Assessee was truthful in disclosing particulars of income to be assessed; (b) There was material before Assessing Officer to reopen proceedings, on which, there is application of mind or not. order passed in Dhariya Construction Co. (supra), in toto, is reproduced as under: Having examined record, we find that in this case, Department sought reopening of Patna High Court CWJC No.12528 of 2009 dt. 07-09-2020 6/8 assessment based on opinion given by District Valuation Officer (DVO). opinion of DVO per se is not information for purposes of reopening assessment under section 147 of Income-tax Act, 1961. Assessing Officer has to apply his mind to information, if any, collected and must form belief thereon. In circumstances, there is no merit in civil appeal. Department was not entitled to reopen assessment. Civil appeal is, accordingly, dismissed. No order as to costs. coordinate Bench of this Court in case of M/s Mithila Prop. Pub. & Contract (supra) has also held to aforesaid effect. We are in agreement with view taken by Coordinate Bench, for in attending facts and circumstances there is nothing on record to establish that save and except for Valuation Report, alone, there is any other material even prima facie, indicating application of mind by Assessing Officer in arriving at its conclusion, necessitating reopening of assessment carried out under CASS. difference in valuation of property in two reports is also not substantial. However, we may not be misunderstood of our judgment to be clouded by such fact. Patna High Court CWJC No.12528 of 2009 dt. 07-09-2020 7/8 Assessee is salaried person. He had constructed residential house on plot owner by his wife. During course of proceedings, in fact much prior to passing of order accepting his return, he had submitted Valuation Report from approved Valuer. same was never objected to or rejected. Right from day one, he had disclosed full particulars, what took official valuer more than ten months to value property and why despite Assessee having submitted his Valuation Report dated 10th of January, 2005 request for calling Valuation Report was made only on 19th of October, 2006 and why report reached officer on 5 th of November, 2007 are all questions which are not answerable from record. As such, to our mind, without meeting essential ingredient of officer having applied his mind to various material, necessitating reopening of assessment, is missing in instant case. Hence, in given facts and circumstances, we quash and set aside impugned order dated 8th of December, 2008 passed by DCIT, Circle-2, Muzaffarpur in proceedings initiated under Section 143(3)/147 of Income Tax Act, 1961 (Annexure-4), as affirmed in appeal by Commissioner of Income Tax vide its order dated 12th of June, Patna High Court CWJC No.12528 of 2009 dt. 07-09-2020 8/8 2009 (Annexure- 6). writ petition stands disposed of in aforesaid terms. (Sanjay Karol, CJ) ( S. Kumar, J) pallavi/- AFR/NAFR AFR CAV DATE 31.08.2020 Uploading Date 08.09.2020 Transmission Date Mukul Kumar Singh v. Commissioner Income-tax, Muzaffarpur / Deputy Commissioner Income-tax Circle 2, Muzaffarpur / Assistant Valuation Officer, Patna
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