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TMI Blog2019 (12) TMI 443X X X X Extracts X X X X X X X X Extracts X X X X ..... d to appreciate the facts and circumstances of the case and has grossly erred in arbitrarily holding that the assessment framed under section 143(3) by the Assessing Officer, is not barred by limitation, the order of the Commissioner of Income-tax (Appeals) is totally contrary to the provisions of law, the order framed by the Assessing Officer and upheld by the Commissioner of Income-tax (Appeals) be quashed. 3. Because on a proper appraisal of the facts and circumstances of the case, the interpretation of the provisions of law it would be found that the assessment order passed by the Assessing Officer and upheld by the Commissioner of Income-tax (Appeals) is barred by limitation; when read with the provisions of section 50C/55A/153 of the Income-tax Act, 1961, the order passed by the Commissioner of Income-tax (Appeals) be quashed." 2. At the outset, the learned authorised representative, explaining the facts of the case, submitted that during the year consideration, the assessee had sold two immovable properties and declared nil capital gains in her return of income. The Assessing Officer, during the assessment proceedings, referred the matter to the valuation cell on December ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on or before May 14, 2016. Explaining the provisions of section 153(1), the learned authorised representative submitted that it provides exclusion of time taken by the Assessing Officer in making ref- erence to the Valuation Officer under section 142A and getting report thereof, and it further provides that if the period available after exclusion of such period is less than 60 days then the period would be extended to make it 60 days. It was submitted that the second reference to the Valu- ation Officer was made on March 16, 2016 and the report of the Valuation Officer was received on March 21, 2016 which means that there was only 10 days left with the Assessing Officer and therefore as per the provision the period was to be extended to 60 days which means that the days between the reference date and date of receipt of report has to be excluded which means that the period 16 days was available in the month of March, 30 days in April and 14 days in May to make total sixty days and therefore, it was argued that in the second scenario also the assessment was to be completed on or before May 14, 2016 whereas the assessment order has been passed on May 19, 2016 therefore the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Explanation 1. 6. We have heard the rival parties and have gone through the material placed on record. We find that the assessee had sold its share in two prop- erties and while calculating long-term capital gain, the assessee took the circle rates and worked out the cost of acquisition as on April 1, 1981. After claiming exemption under section 54EC and 54F the assessee reported nil capital gain. The Assessing Officer, in order to arrive at the correct value as on April 1, 1981, referred the matter to the Valuation Officer on December 31, 2015 for estimating the fair market value of these properties as on April 1, 1981. We observe that the valuation report dated March 3, 2016 was received by the Assessing Officer on March 4, 2016. We further observe that the assessee in the meanwhile challenged the stamp value adopted by her by stating that the actual sale consideration was below the stamp val- uation and requested to refer the matter to the valuation cell for valuation of the property as on date of transfer. The Assessing Officer again referred the matter to the Valuation Officer on March 16, 2016 and the second val- uation report dated March 19, 2016 was received by the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other case, if the Assessing Officer is of opinion- (i) that the fair market value of the asset exceeds the value of the asset as claimed by the assessee by more than such percentage of the value of the asset as so claimed or by more than such amount as may be prescribed in this behalf ; or (ii) that having regard to the nature of the asset and other rel evant circumstances, it is necessary so to do." 6.2 In the present case, obviously the reference to the Valuation Officer was made for ascertaining the value of the asset as on April 1, 1981, which was sold. Similarly we find that the second reference was made for valuation of property as on the date of transfer which can only be made under the provisions of section 50C(2) of the Act. For the sake of com pleteness, the provisions of section 50C(1) and 50C(2) of the Act are repro duced below : "50C. Special provision for full value of consideration in certain cases.-(1) Where the consideration received or accruing as a result of the transfer by an assessee of a capital asset, being land or building or both, is less than the value adopted or assessed or assessable by any authority of a State Government (hereafter in this sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,700 and Rs. 4,08,000 respectively, as on April 1, 1981. Meanwhile, the assessee vide her letter dated January 25, 2016, has challenged the stamp valuation of the property by stating that the actual safe consideration was far below than the stamp valuation and requested to refer this matter to valuation cell for valuation of the property as on date of transfer. Therefore, this matter of valuation was again referred to the office of the District Valuation Officer on March 16, 2016. Valuation report dated March 19, 2016 in respect of the abovementioned properties was received in this office on March 21, 2016 and vide this report esti mation of the full value of consideration as on date of sale for the properties at 86/275 and 86/275A, jurwa, have been made as Rs. 4,64,79,300 and Rs. 1,53,49,100 respectively." 6.4 The above findings of the Assessing Officer coupled with the pro visions contained in section 55A and section 50C(2) clearly establishes that the first reference was made under section 55A and the second reference was made under section 50C(2) of the Act and none of the references were made under section 142A of the Act and therefore, the assessment order was to be passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b-section (3) of section 143 and ending with the date on which the copy of the order withdrawing the approval or rescinding the notification, as the case may be, under those clauses is received by the Assessing Officer or ; (iii) the period commencing from the date on which the Assess ing Officer directs the assessee to get his accounts audited under sub- section (2A) of section 142 and ending with the last date on which required to furnish a report of such audit under that sub-section ; or (a) ending with the last date on which the assessee is required to furnish a report of such audit under that sub-section ; or (b) where such direction is challenged before a court, ending with the date on which the order setting aside such direction is received by the Commissioner, or (iv) the period commencing from the date on which the Assessing Officer makes a reference to the Valuation Officer under sub-section (1) of section 142A and ending with the date on which the report of the Valuation Officer is received by the Assessing Officer ; or (iva) the period not exceeding sixty days commencing from the date on which the Assessing Officer received the declaration under sub-section (1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... foresaid period of limitation shall be deemed to be extended accordingly :" 7. The above provisions clearly states that the assessment has to be com- pleted within two years from the end of the assessment year in which the income was first assessable or one year from the end of the financial year in which return or revised return related to the assessment year commencing on first day of April, 1980 or any earlier assessment year is filed under sub- section (4) or sub-section (5) of section 139 whichever is later. Explanation 1 sub-clause (iv) of section 153 provides an extension from the above two years where the Assessing Officer makes a reference to the Valuation Officer under sub-section (1) of section 142A and does not talk about the extension of time if the reference is made under section 55A or section 50C of the Act. Therefore, in the present case the assessment order was to be passed on or before March 31, 2016 whereas the same has been passed on May 19, 2016 and therefore, the assessment order is barred by limitation and hence, the grounds of appeal of the assessee are accepted. In a nutshell the appeal of the assessee is allowed. 8. Since we have quashed the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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