Law: Income Tax Act, 1961

Section: 251

Section 251, read with section 55A, of the Income-tax Act, 1961 - Commissioner (Appeals) - Powers of (Reference to DVO) - Assessment year 2002-03 - Whether where Assessing Officer fails to make enquiry under section 55A while passing assessment order, Commissioner (Appeals) during appellate proceedings before him can make such an enquiry (by making reference to DVO) either himself or direct Assessing Officer to do so in terms of section 250(4) - Held, yes - Whether, however, before Commissioner (Appeals) makes such a reference to DVO in term of section 55A, he must be of opinion that value determined by Registered Valuer as FMV of property as on 1-4-1981 is less than its FMV - Held, yes [Paras 13,14 and 17] [Matter remanded] FACTS â–  The assessee filed its return claiming long term capital gains on sale of land. â–  In course of assessment, the Assessing Officer determined Fair Market Value (FMV) of land as on 1-4-1981 at a lower amount. He thus made certain addition to amount of capital gain disclosed by the assessee. â–  In its appeal, the assessee, inter alia challenged the FMV of the land as on 1-4-1981, done by the Assessing Officer. Pending disposal of the appeal by the Commissioner (Appeals), the assessee received a notice from the DVO under section 55A seeking particulars to determine the FMV of the land as on 1-4-1981. â–  The assessee filed instant petition challenging the notice issued by the DVO. â–  The objection taken in the petition was that after passing the assessment order, it was not open to the Commissioner (Appeals) to make any reference to the DVO to determine the FMV of the land as on 1-4-1981. HELD â–  First of all it is necessary to deal with the revenue's submission that the impugned communication are consequent to reference made by the Commissioner (Appeals) in exercise of his powers under section 250(4) as an appellate authority. [Para 10] â–  The power to make further enquiry under section 250(4) can only be in respect of issues which arise under the Act and for which specific provision have been made and the Assessing Officer has failed to do what he ought to have done. Thus, this power of…