Commissioner of Income Tax Del v. Tirath Ram Ahuja Huf

V. B. GUPTA, J.

MADAN B. LOKUR, J.

April 02, 2008 Bisht

* HIGH COURT OF DELHI : NEW DELHI ITA No.1629, 1630 & 1631 of 2006 % Judgment reserved on: 25th March, 2008 Judgment delivered on: 2nd April, 2008 COMMISSIONER OF INCOME TAX ..... Petitioner. Through: Mr.R.D.Jolly, Adv. Vs. SHRI TIRATH RAM AHUJA (HUF) ..... Respondent Through: Amit Mahajan, Adv. Coram: HON'BLE MR. JUSTICE MADAN B. LOKUR HON'BLE MR. JUSTICE V.B. GUPTA 1. Whether the Reporters of local papers may be allowed to see the judgment? Yes 2. To be referred to Reporter or not? Yes 3. Whether the judgment should be reported in the Digest? Yes V.B.Gupta, J. By way of this common judgment, all the above three appeals are being disposed of since the common question of law is involved in all these case. 2. The short question in these appeals raised by the Revenue is as to whether the Income Tax Appellate Tribunal (for short as "Tribunal") was correct in quashing the assessment framed under Sections 143(3) and 147 of the Income Tax Act, 1961 (for short as "Act") ignoring the provisions of Section 149(1)(a) of the Act. 3. Brief facts leading to dispute are that the original assessments for the assessment years 1991-92, 1992-93 and 1993-94 were completed on 28th October, 1993, 26th November, 1993 and 18th January, 2004 respectively under Section 143(3) of the Act at an income of Rs. 3,27,170/-, Rs. 7,84,160/- and Rs.6,21,830/- respectively. Subsequently, the Assessing Officer came to know that ratable value in respect of properties bearing No.B-6 and B-7, Asaf Ali Road, New Delhi owned by the Assessee have been determined at Rs. 10,28,900/- by the Municipal Corporation of Delhi against Rs. 3,61,000/- declared by the Assessee on the basis of actual rent received. Thus, the Assessing Officer reopened the assessment for these three assessment years by issuing notice under Section 148 of the Act on 31st March, 2000. 4. In response to subsequent notices, the Assessee replied that since the property is let, hence his case is covered under Section 23(1)(b) of the Act and, therefore, the annual value should be determined on the basis of the actual rent received. 5. The Assessing Officer was not satisfied as according to him the annual value of the property should be higher of the ratable value (as determined by the MCD) or the actual rent received. For this proposition, he relied on the judgment of Calcutta High Court in the case of CIT v. Satya Co.Ltd. (1994) 75 Taxman 193 (Cal) and completed the assessment by adopting annual value at Rs.10,28, 900/- as per the ratable value determined by the Municipal Corporation of Delhi. 6. Being aggrieved by the assessment order, the Assessee filed appeals before the Commissioner of Income Tax (Appeals) [for short as CIT(A)] which were decided in favour of the Assessee vide order dated 25th March, 2003. 7. Against thereby, Revenue had filed appeals (ITA Nos. 3750, 3751 & 3752/Del/2003 relevant for the assessment years 1991-92, 1992-93 and 1993-94 respectively) before the Tribunal and vide the impugned order dated 29th July, 2005, the appeals were rejected by the Tribunal. The Tribunal had quashed the re-assessment proceedings by holding that the same is barred by limitation. It was held that the case is covered by the proviso to Section 147 of the Act and it is not the case where there has been failure on the part of the Assessee to disclose truly all facts on records but the Assessing Officer had reopened the assessment after he came to know that the Assessee had not disclosed the correct valuation of the property. The assessment was reopened on the basis of the subsequent information received from Municipal Corporation of Delhi, as such the proviso to Section 147 is not applicable. 8. Now the Revenue has filed present appeals is before this Court. 9. Thus the question arises in the present appeals is whether the reassessment by the Assessing Officer based on the subsequent information is valid or not. 10. It is contended by learned counsel for the Revenue that in the present case, the Assessee h