Commissioner of Income Tax, Bareilly vs Dr. (Smt.) Renu Mahesh

Affidavit of service filed today be taken on record. The assessment order u/s 143(3) of the income tax Act, 1961, hereinafter referred to as ''the Act'', in respect of the Assessment year 1997-98, was originally framed on 9-9-1998. On the basis of the report of the Departmental Valuation Officer in respect of investment made in the construction of building by the respondent assessee at 225, Civil Lines, Sitapur proceedings u/s 147/148 of the Act were imitated and vide order dated 24-3-2003, the Assessing Officer added the difference in the valuation made by the Departmental Valuation Officer and the investment shown by the assessee as income from other sources which order was modified in appeal by the Commissioner of Income Tax (Appeals) by partly allowing the appeal, which order was upheld by the Tribunal.

Heard Sri R. K. Upadhaya, learned Standing Counsel for the Revenue and Sri R.R. Agrawal, learned counsel appearing for respondent-assessee.

Relying on the provisions of section 142A of the Act, which was inserted by Finance (No. 2) Act, 2004, with effect from 14-11-1972, the learned Standing Counsel submits that the Tribunal committed an error of law in setting aside the reassessment proceedings. According to him, the Assessing Officer was fully justified in taking recourse to the provisions of section 147/148 of the Act on the basis of the report of the Departmental Valuation Officer.

We have perused the three orders passed by the authorities filed along with the memo of appeal as also the proviso of section 142A of the Act which is as under.

"Provided that nothing contained in this section shall apply in respect of an assessment made on or before the 30-9-2004, and where such assessment has become final and conclusive on or before that date, except in cases where a reassessment is required to be made in accordance with the provisions of section 153A".

We find that in the present case, the reassessment proceedings would be hit by the proviso as it also forms part of Section 142A of the Act, inserted by Finance (No. 2) Act, 2004 with effect from 14-11-1972. The proviso has been reproduced above. From the reassessment order, we find that the original assessment order was passed on 9-4-1998 that is much before 30-9-2004. It had become final between the parties on the date when section 142A was inserted by Finance (No. 2) Act, 2004 as there is nothing on record to show to the contrary.

We are therefore of the considered opinion that the Tribunal had not committed any error of law in upholding the order passed by the Commissioner of Income Tax (Appeals). The appeal fails and is dismissed on merits.