TMI Blog2012 (5) TMI 505X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment, such action will be open to challenge by the petitioner and it is at that point of time that the Court may be called upon to examine the validity of the action taken by the revenue authorities. That stage has not yet arisen in the present case. Writ petition dismissed. - W.P. (C) no. 3795 of 2011 - - - Dated:- 21-5-2012 - SANJIV KHANNA AND R.V. EASWAR, JJ. JUDGMENT R.V. Easwar, J. This writ petition under Article 226 of the Constitution of India has been filed by M/s. ACC Ltd., hereinafter referred to as the 'petitioner', seeking a writ of prohibition, prohibiting the respondents from taking any action pursuant to the notices dated 07.04.2011 and 19.04.2011 and pursuant to the order of reference dated 20.12.2010 for valuation of the property, hereinafter referred to as 'Okhla land', as on 01.04.1981. A prayer has also been made for issue of writ of certiorari for quashing the aforesaid orders and the proceedings as well as issue of writ of mandamus directing the first respondent to withdraw, revoke or cancel the impugned valuation proceedings. 2. The brief facts leading to the filing of the present petition may be noticed. The petitioner is a publi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... valuer's report appears to be on a higher side, therefore, the same has been referred to the Government Valuation Cell, New Delhi on 20.12.2010 for having the valuation done as on 01.04.1981. On receipt of the valuation report, long term capital gain would be recomputed on the basis of the said valuation report. Till then, the capital gain is computed on the basis of the revised claim submitted by the assessee." 4. On 19.04.2011, about 4 months after the completion of the assessment, the petitioner received a notice from the respondent No.1, who is the District Valuation Officer, Income Tax Department, Rohit House, No.3 Tolstoy Marg, New Delhi proposing to estimate the fair market value of the land as on 01.04.1981 at Rs. 71,71,352/-. This valuation report was prepared and issued under Section 55A of the Act. It was stated in this report, which was only a proposal to value the Okhla land as on 01.04.1981 at Rs. 71,71,352/-, that the petitioner may file its objections to the proposed estimate and also submit any documentary evidence in support of the petitioner's valuation of the property at Rs. 21,72,95,000/- as on 01.04.1981. 5. It is against the aforesaid proposal issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ), under which the Assessing Officer can refer the valuation of property to the DVO "having regard to the nature of the asset and other relevant circumstances". The contention on behalf of the respondents is that since the value of Rs. 21,72,95,000/- as estimated by the registered valuer as the value of the Okhla land as on 01.04.1981 was on the higher side leading to a reduction in the amount of capital gains, it was necessary that the question as to what would be the proper fair market value to be adopted in respect of the property as on 01.04.1981 should be referred to the DVO. It is further contended that since the Assessing Officer has lawfully exercised his power under Section 55A, there is no question of quashing the proceedings for valuation or to stall them. It is submitted that even if the valuation report is received from the DVO after the completion of the assessment, it becomes part of the record and it is open to the respondents to take any action on the basis of the report as permissible under the Act, such as reopening of the assessment under Section 147, etc. 9. In the rejoinder affidavit filed by the petitioner it is submitted that there is a clear infringemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifications, apply in relation to such reference as they apply in relation to a reference made by the Assessing Officer under sub-section (1) of section 16A of that Act. Explanation. - In this section, "Valuation Officer" has the same meaning, as in clause (r) of section 2 of the Wealth-tax Act, 1957 (27 of 1957)." 11. A perusal and a plain reading of the section shows the circumstances under which the Assessing Officer may refer the valuation of the property to the DVO. The section can be invoked by the Assessing Officer for ascertaining the fair market value of a capital asset for the purpose of Chapter IV of the Act, which includes the provisions relating to capital gains. Sections 45 to 55 fall under the chapter, under the sub head "E.- Capital Gains". Section 55 (2) (b)(i) gives the assessee the option to substitute the fair market value of the property as on 01.04.1981 in the place of the cost of acquisition thereof, if the property had been acquired by the assessee before 01.04.1981. The option given to the petitioner was exercised by the petitioner by filing the letter dated 18.11.2010 before the Assessing Officer under which the original computation of the capital gai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present proceedings for the simple reason that the petitioner can be said to be effectively prejudiced only when action is taken by the income tax authorities on the basis of the report submitted by the DVO. Even otherwise there is no provision in the Act which deals with the situation as to what would happen to a reference made to the DVO under Section 55A which is pending completion at the time of passing the assessment order. Obviously the assessment order cannot be deferred in view of the limitation prescribed for passing the same. The report of the DVO, as and when received by the Assessing Officer, may be acted upon by the income tax authorities and if they do so, the validity of that action can be questioned by the assessee on grounds which he may be advised to take. That is not of any concern to us in the present proceedings. Section 55A does not in terms create any bar on the DVO proceeding to value the property on the basis of a valid reference made by the Assessing Officer. We need not speculate as to what purpose the report of the DVO would serve if it is received after the completion of the assessment. As already pointed out, if any action is taken by the departmental ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asis of the report of the DVO. The judgment of the Supreme Court has been adverted to by the Division Bench of this Court in CIT v . Smt. Suraj Devi ( supra ). The question before this Court was not with regard to the validity of the reopening of the assessment on the basis of the report of the DVO. There, on the basis of a search conducted in the premises of the assessee, in which a registered purchase deed for a property was recovered, the Assessing Officer, suspecting that the market value of the property was more than the disclosed purchase price, made a reference to the DVO under Section 142A. The DVO estimated the market value of the property at an amount which was much higher than the amount shown in the document. The Assessing Officer added the difference between the two figures as undisclosed investment. It was in this background that this Court held that the report of the DVO, per se , is not information and cannot be relied upon without the books of account maintained by the assessee being rejected. While coming to this conclusion, the Court relied on the judgment of the Supreme Court dated 19.10.2009 in Civil Appeal No.6973/2009, in which case the Supreme court had ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
