The DCIT, Central Circle, Rajahmundry v. M/s Sri Radha Krishna Vihar, Kakinada

MA 34/VIZ/2010 | misc
Pronouncement Date: 21-05-2010 | Result: Dismissed

Appeal Details

RSA Number 3425324 RSA 2010
Assessee PAN AAEFS4555N
Bench Visakhapatnam
Appeal Number MA 34/VIZ/2010
Duration Of Justice 3 month(s) 12 day(s)
Appellant The DCIT, Central Circle, Rajahmundry
Respondent M/s Sri Radha Krishna Vihar, Kakinada
Appeal Type Miscellaneous Application
Pronouncement Date 21-05-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 21-05-2010
Assessment Year misc
Appeal Filed On 09-02-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER AND SHRI BR BASKARAN ACCOUNTANT MEMBER MA NO.34/VIZAG/2010 (ARISING OUT OF ITA NO.2/VIZAG/2007) BLOCK PERIOD ENDING : 1.4.1996 TO 13.3.2003 DCIT CENTRAL CIRCLE RAJAHMUNDRY SRI RADHA KRISHNA VIHAR KAKINADA (APPELLANT) VS. (RESPONDENT) PAN NO.AAEFS 4555N MA NO.35/VIZAG/2010 (ARISING OUT OF ITA NO.1/VIZAG/2007) BLOCK PERIOD ENDING : 1.4.1996 TO 13.3.2003 DCIT CENTRAL CIRCLE RAJAHMUNDRY SRI S.V.V. SUBRAHMANYAM KAKINADA (APPELLANT) VS. (RESPONDENT) PAN NO.AARPV 1067H APPELLANT BY: SHRI SUBRATA SARKAR DR RESPONDENT BY: SHRI G.V.N. HARI CA ORDER PER SHRI S.K. YADAV JUDICIAL MEMBER:- THESE MISCELLANEOUS APPLICATIONS ARE PREFERRED BY THE REVENUE AGAINST THE CONSOLIDATED ORDER OF THE TRIBUNAL IN ITA NO.1 & 2/VIZAG/2007 DATED 21.8.2009 WITH THE SUBMISSIONS THAT THE TRIBUNAL HA S OBSERVED WHILE DELETING THE ADDITION THAT THE DDIT WAS NOT AUTHORIZED TO MA KE A REFERENCE TO THE VALUATION CELL ON 26.3.2003 U/S 131(1)(D) AFTER CON CLUSION OF THE SEARCH ON 13.3.2003. WHEREAS THE FACTS ARE OTHERWISE AND THE SEARCH AND SEIZURE OPERATION WAS CONCLUDED ON 10.4.2003. HENCE THE D DIT (INV.) WAS WELL WITHIN HIS POWERS TO REFER THE MATTER TO THE VALUAT ION CELL ON 26.3.2003. BY NOT APPRECIATING THE CORRECT FACTS THE TRIBUNAL HA S COMMITTED AN ERROR IN ITS ORDER WHICH CALLS FOR A RECTIFICATION. 2 2. DURING THE COURSE OF HEARING OF THE MISCELLANEOU S APPLICATION THE LD. DR HAS ALSO FILED THE COPIES OF WARRANT OF AUTHORIZ ATION ALONG WITH THE PANCHANAMA TO DEMONSTRATE THAT THE SEARCH WAS CONCL UDED ON 10 TH APRIL 2003 AND A REFERENCE WAS MADE BY THE DDIT (INV.) TO THE VALUATION CELL DURING THE COURSE OF SEARCH PROCEEDINGS. AS SUCH THE TRIBUNAL HAS WRONGLY HELD THAT THE REFERENCE WAS MADE BY THE DDIT WITHOU T HAVING ANY JURISDICTION. 3. IN OPPUGNITION THE LD. COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE ORDER OF THE TRIBUNAL WITH THE SUB MISSION THAT TRIBUNAL HAS NOT GIVEN ITS DECISION ON THE BASIS OF THAT THE DDI T HAS MADE A REFERENCE AFTER THE CONCLUSION OF THE SEARCH PROCEEDINGS ALON E. THE TRIBUNAL HAS ALSO EXAMINED THE POWERS OF THE SEARCH PARTIES TO MAKE A REFERENCE TO THE DVO DURING THE COURSE OF SEARCH PROCEEDINGS. THE TRIBU NAL HAS EXAMINED THE ISSUE IN THE LIGHT OF VARIOUS JUDICIAL PRONOUNCEMEN TS AND HAS FINALLY CONCLUDED THAT THE REFERENCE TO THE DVO WAS NOT VALID. THE L D. COUNSEL FOR THE ASSESSEE FURTHER CONTENDED THAT THIS WARRANT OF AUT HORIZATION AND PANCHNAMA WERE NEVER PLACED BY THE REVENUE AUTHORITIES DURING THE COURSE OF HEARING OF THE APPEAL. AS SUCH THESE DOCUMENTS CANNOT BE TAK EN INTO ACCOUNT DURING THE HEARING OF THE MISCELLANEOUS APPLICATION AS THE SCOPE OF SECTION 254(2) IS VERY LIMITED AND UNDER THE GARB OF RECTIFICATION T HE ORDER OF THE TRIBUNAL CANNOT BE REVIEWED. 4. HAVING HEARD THE RIVAL SUBMISSIONS AND FROM A CA REFUL PERUSAL OF THIS MISCELLANEOUS APPLICATION VIS--VIS THE ORDER OF TH E TRIBUNAL AND THE MATERIAL AVAILABLE ON RECORD WE FIND THAT DURING THE COURSE OF HEARING OF THE APPEAL THE LD. COUNSEL FOR THE ASSESSEES HAS RAISED SPECIF IC GROUND THROUGH ADDITIONAL GROUND THAT DDIT WHO MADE A REFERENCE TO VALUATION CELL FOR ESTIMATING THE COST OF CONSTRUCTION WAS NOT AUTHORI ZED U/S 142A OF THE I.T. ACT TO MAKE A REFERENCE. THE LD. COUNSEL FOR THE A SSESSEE HAS ALSO RAISED THE MAIN ARGUMENT THAT THE REFERENCE WAS MADE AFTER THE DATE OF SEARCH BY THE DDI TO THE DVO AND AS PER PROVISIONS OF SECTION 142A THE DDI IS NOT COMPETENT TO MAKE A REFERENCE TO THE VALUATION CELL . THE TIME OF REFERENCE BY THE DDI WAS NOT DISPUTED BY THE LD. D.R. DURING THE COURSE OF HEARING OF THE APPEAL. MOREOVER IN THE ORDER OF THE CIT(A) A T PAGE NO.3 CIT(A) HIMSELF HAS OBSERVED IN PARA NO.5.1 AND 5.2 THAT SU BSEQUENT TO THE SEARCH 3 OPERATION THE PROPERTY WAS REFERRED TO VALUATION C ELL WHICH VALUED THE PROPERTY AT RS.39 46 391/-. THE ASSESSEE HAS ALSO RAISED AN OBJECTION BEFORE THE CIT(A) THAT VALUATION REPORT IS A POST SEARCH E VENT AND ACCORDINGLY CANNOT BE SUBJECT MATTER OF BLOCK ASSESSMENT. THE WARRANT OF AUTHORIZATION ALONG WITH THE SEIZURE MEMO/PANCHNAMA WHICH IS FILED BEFO RE US DURING THE COURSE OF HEARING OF THIS MISCELLANEOUS APPLICATION WAS NO T FILED BY THE LD. D.R. DURING THE COURSE OF HEARING OF THE APPEAL THOUGH T IME OF REFERENCE TO VALUATION CELL BY THE DDIT WAS THE MAIN CONTROVERSY INVOLVED BEFORE US. EVEN THE TIME OF REFERENCE AS ALLEGED BY THE ASSESS EE WAS NOT DISPUTED BY THE LD. D.R. THE TRIBUNAL ACCORDINGLY PROCEEDED WI TH THE HEARING WITH THE PRESUMPTION THAT REFERENCE WAS MADE BY THE DDI TO TH E VALUATION CELL AFTER THE CONCLUSION OF THE SEARCH. THE TRIBUNAL HAS ADJ UDICATED THE ISSUE IN THE LIGHT OF LEGAL PROVISIONS AND THE VARIOUS JUDGEMENT S REFERRED TO BY THE PARTIES AND HAVE FINALLY CONCLUDED THAT THE REFERENCE MADE BY THE DDIT TO THE VALUATION CELL WAS NOT PROPER AND ACCORDINGLY THE V ALUATION REPORT SUBMITTED BY THE DVO CANNOT BE TAKEN INTO ACCOUNT WHILE ESTIM ATING THE COST OF CONSTRUCTION. THE RELEVANT OBSERVATION OF THE TRIB UNAL ARE EXTRACTED HEREUNDER FOR THE SAKE OF REFERENCE: 9. HAVING HEARD THE RIVAL SUBMISSIONS AND FROM A C AREFUL PERUSAL OF THE ORDERS OF THE LOWER AUTHORITIES AND THE RELEVAN T PROVISIONS OF THE ACT WE FIND THAT IN ORDER TO DETERMINE THE COST OF CONSTRUCTION OF THE PROPERTY THE COMMISSION WAS ISSUED TO THE DEPARTME NTAL VALUATION OFFICER BY THE DDI ON 23 RD MARCH 2003 AFTER THE CONCLUSION OF THE SEARCH ON 13.3.2003. 10. SECTION 142A ON WHICH HEAVY RELIANCE IS PLACED BY THE ASSESSEE WAS INTRODUCED BY THE FINANCE ACT 2004 WITH A RETRO SPECTIVE EFFECT 15.11.1972 ACCORDING TO WHICH A REFERENCE CAN BE MA DE TO ESTIMATE THE VALUE OF INVESTMENT REFERRED TO IN SECTION 69 O R SECTION 69B BY THE ASSESSING OFFICER. THIS AMENDMENT WAS MADE TO OVER COME THE COMPLICATIONS DEVELOPED ON ACCOUNT OF JUDGEMENT OF THE APEX COURT IN THE CASE OF SMT. AMIYABALA PAUL VS. CIT 262 ITR 407 (SC) IN WHICH IT WAS HELD THAT A.O. CANNOT REFER THE QUESTION OF EST IMATING THE COST OF CONSTRUCTION OF THE ASSESSEES HOUSE TO THE VALUATI ON OFFICER U/S 55A OF THE ACT. IN THE INSTANT CASE THE REFERENCE/COMMISSI ON WAS ISSUED TO 4 DETERMINE THE COST OF INVESTMENT IN THE PROPERTY U/ S 131(1)(D) BY THE DDI AFTER THE CONCLUSION OF THE SEARCH AND BEFORE TH E COMMENCEMENT OF THE ASSESSMENT PROCEEDINGS. WE THEREFORE OF TH E VIEW THAT APPLICATION OF PROVISIONS OF SECTION 142A IS NOT WA RRANTED IN THE PRESENT CASE AS THE REFERENCE WAS NOT MADE U/S 55A BY THE DDI. WE THEREFORE REJECT THE CONTENTION OF THE ASSESSEE TH AT THE REFERENCE WAS NOT MADE BY THE ASSESSING OFFICER AS PER PROVISIONS OF SECTION 142A OF THE ACT. 11. THE CONTROVERSY REGARDING THE VALIDITY OF THIS COMMISSION OR THE REFERENCE BY THE DDI STILL EXISTS AS IT WAS ISSUED A FTER THE CONCLUSION OF THE SEARCH PROCEEDINGS. WE HAVE CAREFULLY PERUSED THE PROVISIONS OF SECTION 131 OF THE ACT AND WE FIND THAT CERTAIN POW ERS AVAILABLE TO THE CIVIL COURT UNDER CPC 1908 WERE CONFERRED TO THE DE PARTMENTAL OFFICERS UNDER DIFFERENT CIRCUMSTANCES UNDER THIS SECTION. AS PER SUB-SECTION (1) THE ASSESSING OFFICER DY. COMMISSIONER (APPEAL S) JT. COMMISSIONER (APPEALS) CHIEF COMMISSIONER OR COMMI SSIONERS SHALL HAVE THE POWERS OF DISCOVERY AND INSPECTION ENFORC ING THE ATTENDANCE OF ANY PERSON INCLUDING ANY OFFICER OF A BANKING CO MPANY AND EXAMINING HIM ON OATH COMPELLING THE PRODUCTION OF BOOKS OF ACCOUNTS AND OTHER DOCUMENTS AND ISSUING COMMISSION S AS ARE VESTED IN A COURT OF CIVIL PROCEDURE 1908 WHEN TRYING A SU IT. BUT THESE POWERS CAN BE EXERCISED WHEN THE PROCEEDINGS ARE PENDING B EFORE THE AFORESAID OFFICERS. AN EXCEPTION WAS CARVED OUT BY INTRODUCING OF SECTION 1A THROUGH WHICH THE OFFICERS RELATING TO T HE SEARCH ARE ALSO CONFERRED WITH THE SAME POWERS THOUGH NO PROCEEDING S WITH RESPECT TO SUCH PERSONS OR CLASS OF PERSONS ARE PENDING BEF ORE HIM OR ANY OTHER INCOME TAX AUTHORITIES. MEANING THEREBY THER E ARE TWO CLAUSE OF OFFICERS OF THE INCOME TAX DEPARTMENT WHO WERE CONF ERRED WITH THE POWERS AS WERE VESTED IN A COURT UNDER THE COURT OF CIVIL PROCEDURE 1908 FOR TAKING AFORESAID ACTIONS. ONE CLASS OF OF FICERS CAN EXERCISE THE POWERS WHEN THE PROCEEDINGS ARE PENDING BEFORE THEM AND THE OTHER CLASS OF OFFICER CAN EXERCISE IT WITHOUT THE PENDENCY OF ANY PROCEEDINGS BEFORE THEM OR ANY OTHER INCOME TAX AUT HORITIES. BUT A 5 RIDER WAS PUT ON POWERS OF THE OFFICERS OF THE SECO ND CLASS RELATING TO SEARCH. AS PER SUB-SECTION 1A THE DIRECTOR GENERA L OR DIRECTOR OR JT. DIRECTOR OR ASST. DIRECTOR OR DY. DIRECTOR OR AUTHO RISED OFFICERS REFERRED TO IN SUB-SECTION (1) OF SECTION 132 ARE COMPETENT TO EXERCISE THE AFORESAID POWERS BEFORE THEY TAKES ACTION UNDER CLA USE (I) TO (V) OF SECTION 132(1) IF THEY HAVE REASON TO SUSPECT THAT INCOME HAS BEEN CONCEALED OR IS LIKELY TO BE CONCEALED BY ANY PERSO N WITHIN THEIR JURISDICTIONS WITHOUT ANY PENDENCY OF ANY PROCEEDIN GS EITHER BEFORE THEM OR ANY OTHER INCOME TAX AUTHORITIES. CLAUSE ( I) TO (V) OF SECTION 132(1) RELATE TO THE ENTRY IN THE BUILDING WHICH IS TO BE SEARCHED OR PROCEEDINGS TO BE CONDUCTED DURING THE COURSE OF SE ARCH. BUT ONCE THE SEARCH IS OVER THE AFORESAID POWER WITH THE OF FICERS REFERRED IN SUB-SECTION 1A CEASE TO EXIST AND THEY WILL NOT BE LEFT WITH ANY POWER MENTIONED IN SECTION 131(1). MEANING THEREBY ONCE THE SEARCH IS CONCLUDED THE SEARCH PARTIES ARE REQUIRED TO COLLE CT THE MATERIAL SEIZED DURING THE COURSE OF SEARCH AND SUBMIT OR HA NDOVER THE SAME ALONG WITH THE REPORT TO THE ASSESSING OFFICER FOR FURTHER INVESTIGATION/ENQUIRY AND FRAMING OF ASSESSMENT THE REON AGAINST THE ASSESSEES. SINCE WE HAVE DISCUSSED THE PROVISIONS OF SECTION 131(1) AND 1A ALONG WITH THE 132(1) CLAUSE (I) TO (V) WE FEEL IT PROPER TO REPRODUCE THE SAME HEREUNDER IN ORDER TO UNDERSTAND THE TRUE INTERPRETATION OF THESE PROVISIONS: 131 (1) THE [ASSESSING] OFFICER [DEPUTY COMMISSIO NER (APPEALS)] [JOINT COMMISSIONER] [COMMISSIONER (APP EALS)] AND [CHIEF COMMISSIONER OR COMMISSIONER] SHALL FOR TH E PURPOSES OF THIS ACT HAVE THE SAME POWERS AS ARE VESTED IN A C OURT UNDER THE CODE OF CIVIL PROCEDURE 1908 (5 OF 1908) WHEN TRY ING A SUIT IN RESPECT OF THE FOLLOWING MATTERS NAMELY:- (A) DISCOVERY AND INSPECTION; (B) ENFORCING THE ATTENDANCE OF ANY PERSON INCLUDING A NY OFFICER OF A BANKING COMPANY AND EXAMINING HIM ON OATH; (C) COMPELLING THE PRODUCTION OF BOOKS OF ACCOUNT AND O THER DOCUMENTS; AND (D) ISSUING COMMISSIONS. [1(A) [IF THE DIRECTOR GENERAL OR DIRECTOR OR [JOI NT] DIRECTOR OR ASSISTANT DIRECTOR [OR DEPUTY DIRECTOR] OR THE AUTHORISED OFFICER REFERRED TO IN SUB-SECTION (1) O F SECTION 132 BEFORE HE TAKES ACTION UNDER CLAUSES (I) TO (V) OF THAT SUB-SECTION ] 6 HAS REASON TO SUSPECT THAT ANY INCOME HAS BEEN CONC EALED OR IS LIKELY TO BE CONCEALED BY ANY PERSON OR CLASS OF P ERSONS WITHIN HIS JURISDICTION THEN FOR THE PURPOSES OF MAKING ANY ENQUIRY OR INVESTIGATION RELATING THERETO IT SHALL BE COMPETE NT FOR HIM TO EXERCISE THE POWERS CONFERRED UNDER SUB-SECTION (1) ON THE INCOME-TAX AUTHORITIES REFERRED TO IN THAT SUB-SECT ION NOTWITHSTANDING THAT NO PROCEEDINGS WITH RESPECT TO SUCH PERSON OR CLASS OF PERSONS ARE PENDING BEFORE HIM OR ANY OTHE R INCOME-TAX AUTHORITY.] SEARCH AND SEIZURE. 132 (1) WHERE THE [DIRECTOR GENERAL OR DIRECTOR] O R THE [CHIEF COMMISSIONER OR COMMISSIONER] [OR ANY SUCH [ JOINT DIRECTOR] OR [JOINT COMMISSIONER] AS MAY BE EMPOWERED IN THIS BEHALF BY THE BOARD] IN CONSEQUENCE OF INFORMATION IN HIS POSSES SION HAS REASON TO BELIEVE THAT (A) ANY PERSON TO WHOM A SUMMONS UNDER SUB-SECTION (1) OF SECTION 37 OF THE INDIAN INCOME-TAX ACT 1922(11 OF 1922) OR UNDER SUB-SECTION (1) OF SECTION 131 OF THIS ACT O R A NOTICE UNDER SUB-SECTION (4) OF SECTION 22 OF THE INDIAN INCOME-TA X ACT 1922 OR UNDER SUB-SECTION(1) OF SECTION 142 OF THIS ACT WAS ISSUED TO PRODUCE OR CAUSE TO BE PRODUCED ANY BOOKS OF ACCO UNT OR OTHER DOCUMENTS HAS OMITTED OR FAILED TO PRODUCE OR CAUS E TO BE PRODUCED SUCH BOOKS OF ACCOUNT OR OTHER DOCUMENTS AS REQUIRED BY SUCH SUMMONS OR NOTICE OR (B) ANY PERSON TO WHOM A SUMMONS OR NOTICE AS AFOR ESAID HAS BEEN OR MIGHT BE ISSUED WILL NOT OR WOULD NOT PRODUCE OR CAUSE TO BE PRODUCED ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS WHICH WILL BE USEFUL FOR OR RELEVANT TO ANY PROCE EDING UNDER THE INDIAN INCOME-TAX ACT 1922(11 OF 1922) OR UNDER TH IS ACT OR (C) ANY PERSON IS IN POSSESSION OF ANY MONEY BULL ION JEWELLERY OR OTHER VALUABLE ARTICLE OR THING AND SU CH MONEY BULLION JEWELLERY OR OTHER VALUABLE ARTICLE OR THING REPRES ENTS EITHER WHOLLY OR PARTLY INCOME OR PROPERTY [WHICH HAS NOT BEEN O R WOULD NOT BE DISCLOSED] FOR THE PURPOSES OF THE INDIAN INCOME-TA X ACT 1922(11 OF 1922) OR THIS ACT (HEREAFTER IN THIS SECTION RE FERRED TO AS THE UNDISCLOSED INCOME OR PROPERTY) [THEN - (A) THE [DIRECTOR GENERAL OR DIRECTOR] OR THE [CHIEF COMMISSIONER OR COMMISSIONER] AS THE CASE MAY BE MAY AUTHORISE ANY [JOINT DIRECTOR] [JOINT COMMISSIONER ] [ASSISTANT DIRECTOR [OR DEPUTY DIRECTOR]] [ASSISTANT COMMISSI ONER [OR DEPUTY COMMISSIONER] OR INCOME-TAX OFFICER] OR (B) SUCH [JOINT DIRECTOR] OR [JOINT COMMISSIONER] AS THE CASE MAY BE MAY AUTHORISE ANY [ASSISTANT DIRECTOR [ OR DEPUTY DIRECTOR]] [ASSISTANT COMMISSIONER [OR DEPUTY COMM ISSIONER] OR INCOME-TAX OFFICER] (THE OFFICER SO AUTHORISED IN ALL CASES BEING HEREI NAFTER REFERRED TO AS THE AUTHORISED OFFICER) TO--] (I) ENTER AND SEARCH ANY [BUILDING PLACE VESSEL VEHICLE OR AIRCRAFT] WHERE HE HAS REASON TO SUSPECT THAT SUCH BOOKS 7 OF ACCOUNT OTHER DOCUMENTS MONEY BULLION JEWELL ERY OR OTHER VALUABLE ARTICLE OR THING ARE KEPT; (II) BREAK OPEN THE LOCK OF ANY DOOR BOX LOCKER SAFE ALMIRAH OR OTHER RECEPTACLE FOR EXERCISING TH E POWERS CONFERRED BY CLAUSE (I) WHERE THE KEYS THEREOF ARE NOT AVAILABLE; ((IIA) SEARCH ANY PERSON WHO HAS GOT OUT OF OR IS ABOUT TO GET INTO OR IS IN THE BUILDING PLACE VESSEL VEHICL E OR AIRCRAFT IF THE AUTHORISED OFFICER HAS REASON TO SUSPECT THAT SUCH PERSON HAS SECRETED ABOUT HIS PERSON ANY SUCH BOOKS OF ACCOUNT OTHER DOCUMENTS MONEY BULLION JEWELLERY OR OTHER VALUA BLE ARTICLE OR THING;] [(IIB) REQUIRE ANY PERSON WHO IS FOUND TO BE IN POS SESSION OR CONTROL OF ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE FORM OF ELECTRONIC RECORD AS DEFINED IN CLAUSE (I) OF SUB-SECTION (1) OF SECTION 2 OF THE INFORMATION TECHNOLOGY ACT 2000 (21 OF 2000) TO AFFORD THE AUTHORISED OFFICER THE NECESSA RY FACILITY TO INSPECT SUCH BOOKS OF ACCOUNT OR OTHER DOCUMENTS;] (III) SEIZE ANY SUCH BOOKS OF ACCOUNT OTHER DOCUMENTS MONEY BULLION JEWELLERY OR OTHER VALUA BLE ARTICLE OR THING FOUND AS A RESULT OF SUCH SEARCH; [PROVIDED THAT BULLION JEWELLERY OR OTHER VALUABLE ARTICLE OR THING BEING STOCK-IN-TRADE OF THE BUSINESS FOUND AS A RE SULT OF SUCH SEARCH SHALL NOT BE SEIZED BUT THE AUTHORISED OFFIC ER SHALL MAKE A NOTE OR INVENTORY OF SUCH STOCK-IN-TRADE OF THE BUS INESS;] (IV) PLACE MARKS OF IDENTIFICATION ON ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR MAKE OR CAUSE TO BE M ADE EXTRACTS OR COPIES THEREFROM; (V) MAKE A NOTE OR AN INVENTORY OF ANY SUCH MONEY BULLION JEWELLERY OR OTHER VALUABLE ARTICLE OR THING; 12. THE ISSUE OF POWER OF JURISDICTION OF THE ADI TO ISSUE COMMISSION UNDER SECTION 131 FOR VALUATION OF THE P ROPERTY WAS RAISED BEFORE THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE DR. AVINESH KUMAR AGGARWAL VS. ADIT AND OTHERS 269 ITR 388 IN WHICH T HEIR LORDSHIP HAVE EXAMINED THE RELEVANT PROVISIONS OF THE ACT IN THE LIGHT OF JUDGEMENT OF THE APEX COURT IN THE CASE OF AMIYA BA LA PAUL (SUPRA) AND HAVE HELD THAT THE ADI (INV) HAS NO POWER U/S 13 1 TO REFER THE VALUATION OF THE PROPERTY TO THE VALUATION OFFICER. 8 13. IN THE CASE OF THE JAMNADAS MADHAVJI & CO. VS. J .B. PANCHAL ITO 162 ITR 331 (BOM) THEIR LORDSHIP OF BOMBAY HIGH COURT HAVE EXAMINED THE POWERS OF THE REVENUE AUTHORITIES CONF ERRED U/S 131(1) OF THE I.T. ACT AND THEY HELD THAT THE OFFICERS MENT IONED U/S 131(1) VIZ. ITO AIC IAC CIT(A) AND CIT ARE CONFERRED WI TH THE SAME POWERS AS ARE VESTED IN A COURT UNDER CPC WHEN TRY ING A SUIT. THE CPC CONFERS UPON COURT POWERS FOR THE EXERCISE WHER EOF EXISTENCE OF A SUIT OR A PROCEEDING IS A SINE QUA PERIMETERIA THER EFORE POWER IN RESPECT OF MATTERS MENTIONED IN SUB-SECTION (1) OF SECTION 131 VIZ. (A) DISCOVERY AND INSPECTION (B) ENFORCING THE ATTENDAN CE OF ANY PERSON AND EXAMINING HIM ON OATH (C) COMPELLING THE PRODUC TION OF BOOKS OF ACCOUNTS AND OTHER DOCUMENTS AND (D) ISSUING COMMIS SIONS CAN BE EXERCISED ONLY IF A PROCEEDING IS PENDING BEFORE TH E CONCERNED OFFICERS AND NOT OTHERWISE. FOR THE EXERCISE OF SUCH POWER EXISTENCE OF PENDENCY OF A PROCEEDING IS THEREFORE A MUST. 14. THEIR LORDSHIP HAVE ALSO EXAMINED THE PROVISION S OF SECTION 1(A) INTRODUCED BY THE TAXATION LAW AMENDMENT ACT 1975 TO SECTION 131 THROUGH WHICH SOME RELAXATION WAS GIVEN WITH RE GARD TO THE EXERCISE OF THESE POWERS BY THE OFFICERS INVOLVED I N SEARCH PROCEEDINGS. THEIR LORDSHIP HAS OBSERVED WITH REGA RD TO THE SUB- SECTION 1A THAT UNDER THIS SUB-SECTION IF THE ASST. DIRECTOR OF INSPECTION HAS REASON TO SUSPECT THAT AN INCOME HAS BEEN CONCE ALED OR IS LIKELY TO BE CONCEALED BY ANY PERSON OR A CLASS OF PERSONS WI THIN HIS JURISDICTIONS THEN FOR ENQUIRY OR INVESTIGATION REL ATING THERETO IT SHALL BE COMPETENT FOR HIM TO EXERCISE POWERS CONFERRED UNDE R SUB-SECTION 1 OF 131 NOTWITHSTANDING THAT NO PROCEEDINGS WITH RESPEC T TO SUCH PERSON OR CLASS OF PERSONS ARE PENDING BEFORE HIM OR ANY O THER I.T. AUTHORITIES. ABSENCE OF THIS NON OBSTENTE CLASS IN SECTION 131(1) IS SIGNIFICANT. FROM READING SECTION 131(1) AND SECTI ON 131 (1A) TOGETHER IT IS OBVIOUS THAT WHEREAS AN OFFICER MEN TIONED IN SUB- SECTION 1 CAN EXERCISE POWERS THEREUNDER ONLY IF A PROCEEDING IS PENDING BEFORE HIM THE OFFICERS MENTIONED IN SUB-S ECTION 1A VIZ. ASST. DIRECTORS OF INSPECTION CAN EXERCISE SUCH POWERS NOTWITHSTANDING 9 THAT NO PROCEEDINGS ARE PENDING BEFORE HIM OR BEFOR E ANY OTHER OFFICER. THEREFORE DISTINCTION HAS THUS BEEN CLEA RLY MAINTAINED BETWEEN THE CONDITIONS NECESSARY FOR THE EXERCISE O F POWERS BY THESE TWO CATEGORIES OF OFFICERS. 15. AS PER SUB-SECTION 1A THE POWERS CONFERRED TO THE ADIT OR DDI OR AUTHORISED OFFICER FOR DISCOVERY AND INSPECTION ENFORCING ATTENDANCE OF ANY PERSON COMPELLING THE PRODUCTION OF BOOKS OF ACCOUNTS AND OTHER DOCUMENTS AND ISSUING COMMISSION S CAN ONLY BE EXERCISED BEFORE IT TAKES ACTION UNDER CLAUSE (I) T O (V) OF SUB-SECTION 1 OF SECTION 132 WHICH ARE WITH REGARD TO THE CONDUCT OF THE SEARCH PROCEEDINGS AND NOT THEREAFTER. FROM READING SUB-S ECTION 1 & 1A OF SECTION 131 TOGETHER WE ARE OF THE VIEW THAT POWER OF INVESTIGATION ENSHRINED IN SUB-SECTION 1 ARE CONFERRED UPON TWO S ET OF OFFICERS OF THE INCOME-TAX DEPARTMENT WHICH ARE TO BE EXERCISED AT DIFFERENT POINT OF TIME. AS PER SUB-SECTION 1 THE POWERS OF INVESTIGATION ENSHRINED IN SUB-SECTION 1 ARE TO BE EXERCISED BY T HE ASSESSING OFFICERS DCIT (A) CIT(A) COMMISSIONER AND CHIEF COMMISSIONERS DURING THE COURSE OF ASSESSMENT PROCEEDINGS OR ANY SUCH PROCEEDINGS PENDING BEFORE THEM BUT THESE POWERS WHEN CONFERRED ON THE OFFICERS WHO ARE RELATING TO THE SEARCH PROCEEDINGS CAN BE EXERCISED BEFORE THE COMMENCEMENT AND CONCLUSION OF A SEARCH. IF THE SEARCH IS CONCLUDED THE POWER TO INVESTIGATE IN TERMS OF SUB- SECTION (1) SHIFTS UPON THE OFFICERS WHO ARE RESPONSIBLE FOR FRAMING T HE ASSESSMENT OR HEARING THE APPEALS OR REVISIONS ETC. BY INTRODUCI NG THESE SUB- SECTIONS THE LEGISLATURE HAS MADE IT EMPHATICALLY CLEAR THAT BEFORE CONDUCTING AND CONCLUDING THE SEARCH THE OFFICERS R ELATING TO SEARCH CAN INVESTIGATE OR INQUIRE IN TERMS OF SUB-SECTION (1) BUT AFTER CONCLUSION OF A SEARCH THE POWERS TO INVESTIGATE S HIFTS UPON THE ASSESSING OFFICER. MEANING THEREBY AFTER CONCLUDIN G A SEARCH THE OFFICERS OF THE DEPARTMENT RELATING TO SEARCH CANNO T ENJOY THE POWERS TO INVESTIGATE WHICH WERE BEING ENJOYED BY THEM BE FORE THE CONCLUSION OF THE SEARCH. IF THEY DO SO EVEN AFTER THE CONCLUSION OF THE SEARCH THAT EXERCISE OF POWER IS WITHOUT ANY JU RISDICTIONS AND ANY 10 REPORT SUBMITTED CONSEQUENT THERETO DOES NOT HAVE A NY LEGAL FORCE IN THE EYES OF LAW. 16. TURNING TO THE FACT OF THE CASE WE FIND THAT D DI HAS ISSUED A COMMISSION U/S 131(1)(D) AFTER THE CONCLUSION OF TH E SEARCH WHEREAS THIS POWER SHOULD HAVE BEEN EXERCISED BY THE ASSESS ING OFFICERS DURING THE COURSE OF ASSESSMENT PROCEEDINGS. WHAT WE GATH ER FROM READING OF THESE SECTIONS ARE THAT AFTER CONCLUDING THE SEA RCH THE SEARCH PARTY SHOULD STOP FURTHER INVESTIGATION AND HAND OVER THE SEIZED MATERIAL ALONG WITH THEIR REPORT TO THE ASSESSING OFFICER FO R MAKING FURTHER INVESTIGATION INQUIRY FOR FRAMING ASSESSMENT. AFT ER THE CONCLUSION OF THE SEARCH THE SEARCH PARTIES LOOSES THE POWER FOR MAKING FURTHER INVESTIGATION WITH REGARD TO THE MATERIAL FOUND DUR ING THE COURSE OF SEARCH. THESE POWERS VESTS WITH THE ASSESSING OFFI CERS WHILE FRAMING THE ASSESSMENT. WE THEREFORE OF THE VIEW THAT DDI HAS EXERCISED THE POWER TO ISSUE A COMMISSION U/S 131(1)(D) AFTER THE CONCLUSION OF THE SEARCH IS WITHOUT HAVING ANY JURISDICTIONS. AS SUC H THE DVOS REPORT SUBMITTED CONSEQUENT THERETO DOES NOT HAVE ANY LEGA L FORCE AND CANNOT BE RELIED ON BY THE ASSESSING OFFICER FOR MA KING THE ADDITIONS IN THE HANDS OF THE ASSESSEES. WE THEREFORE HOLD THAT THE REPORT SUBMITTED BY THE DVO IS NO LONGER PIECE OF EVIDENCE FOR MAKING AN ADDITION IN THE HANDS OF ASSESSEES ON ACCOUNT OF DI FFERENCE IN THE VALUATION OF COST OF CONSTRUCTION OF THE PROPERTY. 5. SINCE THE TRIBUNAL HAS TAKEN A PARTICULAR VIEW O N THE BASIS OF THE MATERIAL AVAILABLE ON RECORD DURING THE COURSE OF H EARING OF THE APPEAL THE SAME CANNOT BE REVIEWED UNDER THE GARB OF RECTIFICA TION U/S 254(2) OF THE ACT ON THE BASIS OF THE NEW EVIDENCE WHICH WERE NEVER P LACED BEFORE THE TRIBUNAL. WE THEREFORE DO NOT FIND ANY MERIT IN T HE MISCELLANEOUS APPLICATIONS. ACCORDINGLY WE DISMISS THE SAME. PRONOUNCED IN THE OPEN COURT ON 21.5.2010 SD/- SD/- (BR BASKARAN) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER VG/SPS VISAKHAPATNAM DATED 21 ST MAY 2010 11 COPY TO 1 SHRI RADHAKRISHNA VIHAR 2-2-8 BRINDAVAN STREET SRI NAGAR KAKINADA 2 SRI S.V.V. SUBRAHMANYAM D.NO.3-16C-13/2 SANTHI NAGAR KAKINADA 3 THE ACIT CENTRAL CIRCLE RAJAHMUNDRY 4 THE CIT HYDERABAD 5 THE CIT(A)-I HYDERABAD 6 THE DR ITAT VISAKHAPATNAM. 7 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM