The Commissioner of Income Tax vs S. Kalaivani

P.D. Dinakaran, J.—The above tax case appeal is directed against the order of the Income Tax Appellate Tribunal in ITA

No.989/Mds/2006 dated 24.11.2006, raising the following substantial questions of law.

(a) Whether on the facts and in the circumstances of the case, the Income Tax Tribunal is right in holding that the reassessment made u/s 147 is

bad and deleting the addition of Rs.1,46,790/- towards unexplained investment in the construction of a commercial complex at Simco Meters

Road Trichy is proper?

(b) Whether on the facts and in the circumstances of the case, the Income Tax Tribunal is right in law in holding that Section 142A is not applicable

to the facts of the present case for the assessment year 1996-97 especially when Section 142A was inserted by the Finance Act 2004 with

retrospective effect from 15.11.1972?

2.1. The revenue is the appellant. The assessee filed her returns on 26.2.1999, which was processed u/s 143(3) of the Act along with the returns

for the assessment year 1997-98, considering the investment in building. As the Commissioner of Income Tax (Appeals) directed that unexplained

investment in the construction of commercial complex at Simco Meter Road, Trichy had to be assessed in the ratio of 1:3 for the assessment year

1996-97 and 1997-98, fixing the amount for the assessment year 1996-97, a notice u/s 148 of the Act was issued for reassessment. Pursuant to

the same, the assessee filed returns on 28.10.2003 and thereafter, notice u/s 143(2) of the Act was issued.

2.2. The assessee also filed a letter requesting to consider the order of the Income Tax Tribunal and that a miscellaneous petition filed before the

Tribunal in respect of the above said order is pending. However, the unexplained investment was considered for the assessment year 1996-97 and

added to the income returned. Hence, the assessee filed an appeal, which was dismissed by the Commissioner. However, further appeal preferred

before the Income Tax Tribunal was allowed on the ground that amendment to Section 142A would not apply, as the order passed on

31.12.2003 in the assessee''s own case had become final. Hence, the above appeal.

The relevant portion of the order of the Tribunal dated 31.12.2003 made in assessee''s own case in ITA No.1499/Mds/2003, reads as follows:

Consideration of the rival submissions made by both the parties in the light of the facts and circumstances of the case and also in the light of the

decision of the Hon''ble Apex Court, which was relied on by the Id. representative of the assessee, we find that the Assessing Officer has failed to

exercise the powers conferred on him u/s 133(6) of the Act and/or u/s 142(2) of the I.T. Act. Further, the Assessing Officer has not pointed out

any other material which would support his action in adopting the value given in Departmental Valuation Officer''s report, which would have based

on some bills, vouchers, bank statements etc. In the absence of any concrete material evidence in possession of the Assessing Officer, which could

have reflected the value of the property, the value adopted by the Assessing Officer based on the D.V.O''s report is bad in law and cannot be

accepted as held by the Hon''ble Supreme Court in their judgment cited supra. In view of the above discussion, the action of the Assessing Officer

in this case cannot be sustained and accordingly we set aside the orders of the lower authorities. Thus the issue in the present case is decided in

favour of the assessee.

In the instant case, the Tribunal, holding that the said order dated 31.12.2003 had become final, refused to apply the amendment to Section

142A, as nothing was contained in Section 142A in respect of amendment made on or before 30.9.2004 and whether such amendment had

become final and concluded on or before that date.

However, the learned standing counsel for the revenue contends that the revenue has already filed a miscellaneous petition against the order

dated 31.12.2003 and the same is pending and therefore, the said order had not become final and concluded on or before 30.9.2004.

Unfortunately, the learned standing counsel is not in a position to place the correct facts as to the date of the filing of miscellaneous petition and

whether the said miscellaneous petition is pending or disposed of as on date.

That apart, we also notice that the tax effect involved is negligible and as such, the order of the Tribunal does not merit any interference by this

Court. Accordingly, the appeal is dismissed.