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TMI Blog2013 (7) TMI 204X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that if question (c) is, answered in favour of the department, it is not necessary to look into the said questions. 3. The facts are not in dispute. Search and seizure operations were carried on 27.09.2005 and a notice under Section 154A of the Income Tax Act, 1961 dated 05.12.2006 was served upon the said respondent - assessee on 18.12.2006. Notice under Section 142[1] along with detailed questionnaire was also served on the assessee on 25.09.2007. Assessee then filed a return of income on 08.10.2007, declaring total income of Rs. 2,07,44,890/. Assessee admitted long term capital gains from sale of immoveable property at Hyderabad and adopted actual sale consideration of Rs. 2,06,18,227/as basis therefor. The Assessing Officer found that as per concerned Stamp Valuation Authority, the market value of the property was Rs, 4,04,48,000/, on the basis of document found during the course of search. The Assessing Officer then proposed to adopt this value for computing long term gains as per provisions contained in Section 50C of the Income Tax Act, 1961. The assessee objected to this which resulted into reference to the Valuation Officer, as per Section 50C(2), for ascertaining fair ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 46,70,000/was subject to a condition that long term capital gain shown by the assessee would not be further disturbed and if it was done so, then the disclosure so made by the assessee would stand withdrawn. Again this aspect has no bearing & is not relevant for consideration at this stage. 5. Perusal of provisions of Section 50C of the Income Tax Act, 1961 shows that it is a special provision for full valuation consideration in certain cases inserted by Finance Act of 2000 w.e.f. 01.04.2003. Its subsection shows that where consideration received is less then the value adopted or assessed is, deemed to be the full value of consideration received for the purpose of Section 48. Section 48 is about computation of income chargeable under the head "Capital gains". Subsection (2) of Section 50C is without prejudice to subsection (1) thereof. We are concerned with Clause [a] thereof. According to said clause, where the assessee claims before any Assessing Officer that the value adopted or assessed by the Stamp Valuation Authority under subsection [1] exceeds the fair market value of the property as on the date of transfer, the Assessing Officer may refer the question of valuation of ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Allahabad High Court. 8. The Hon'ble Apex Court in (2003) 6 SCC 342 (Amiya Bala Paul .vrs. Commissioner of Income Tax, Shillong), considered the question of valuation of asset qua the provisions of Income Tax Act, 1961 and Wealth Tax Act, 1957. It has been held that a Valuation Officer can discharge the functions within the limits of statute under which he is appointed, and not otherwise. He cannot be required, nor he has a jurisdiction to give report to the Assessing Officer under the Income Tax Act, except in a reference made under and in terms of Section 55A or to a Competent Authority except under Section 269L of the Income Tax Act. It has been held that the Assessing Officer under Section 16A of the Wealth Tax Act, does not retain the power to enquire and the entire process of inquiry therein is, solely conducted by the Valuation Officer alone, whose responsibility itself is to arrived at a correct valuation of the asset. The said inquiry by the Valuation Officer is distinct from the power of the Assessing Officer, who is otherwise invested with the powers to enquire into the actual wealth of an assessee. For the purpose of present adjudication, it is not necessary to dea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s made appealable even for the purpose of Income Tax Act, 1961 as per scheme therein. Subsection (6) of Section 23A stipulates that when the valuation of any asset is objected to in an appeal, the Commissioner (Appeals) has to extend an opportunity of hearing to the Valuation Officer, who has made order under Section 16A. Subsection (7) enables such Commissioner to direct further inquiry to be made by the assessing officer or by the Valuation Officer. Section 50C makes both these subsections applicable even to determination of market value of a capital asset by the Valuation Officer. It therefore, follows that when in an appeal, such exercise of valuation officer is disputed, the Appellate Authority has to extend an opportunity of hearing to the Valuation Officer. Section 24 speaks of further appeals to the Appellate Tribunal and its subsection (5) had been made applicable even for the purpose of Section 50C proceedings. As per Section 24(5) of the Wealth Tax Act, 1957; the Appellate Tribunal has to extend opportunity of hearing to the Valuation Officer, and this provision is pari materia with Section 23(6) above. Therefore, when order of CIT (Appeal), is questioned in further appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessing officer was not warranted. There is a reference to report of registered valuer furnished by the assessee to counter the order of Valuation Officer. The ITAT has allowed the appeal of the assessee against the order of CIT (A), and that order of CIT (A) was in favour of the present appellantdepartment. The ITAT has in paragraph no.8 found faults with the report/order of District Valuation Officer. Admittedly the said Valuation Officer has not been heard and no opportunity was extended to him. This is contrary to obligation cast upon it by the proviso of S.24(5) of the Wealth Tax Act,1957 as attracted by S. 50C(2) of the Income Tax Act . 12. In this situation, we find that a mandatory requirement of law has been violated in present matter. The question framed above is answered in favour of the appellantdepartment. Hence, the impugned order of ITAT dated 03.07.2009 is, hereby quashed and set aside and the proceedings in ITSSA No. 41/Nag/2009 are restored back to the file of ITAT, Nagpur for taking decision a fresh therein, in accordance with law. Parties are directed to appear before the ITAT on 29.07.2013 and to abide by its further instructions in the matter. 13. Appeal i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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