TMI Blog2009 (9) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... .JUSTICE P. JYOTHIMANI , J. Mr. V. Ramachandran, Sr. Counsel for Dr. Anita Sumanth, for the appellant. Mr. Patti B. Jaganathan, for the respondent. JUDGMENT The writ petition is directed against the assessment order of the respondent dated 31.12.2008 by which the respondent, having referred the matter to the Valuation Cell on 17.12.2008 as per Section 50C(2) of the Income Tax Act, 1961 (for brevity, "the Act"), completed the assessment by invoking Section 50C of the Act by taking the value of land as determined for stamp duty purpose as the sale value, as no valuation report was received from the Valuation Cell till the said date. 2. The petitioner was the owner of a plot of land comprised in R.S.No.3123/2, Block No.51, Old No.258 (New No.849), Poonamallee High Road, Purasawalkam, Chennai. She leased out the said portion of land to the Indian Oil Corporation for more than 40 years in which the Corporation was operating a petrol bunk. The petitioner, having decided to sell the property to the Indian Oil Corporation, after negotiation, fixed the sale consideration at Rs.99 Lakhs. Pursuant to the agreement, a sale deed was executed in fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 22.4.2009 made in W.P.No.2092 of 2009 in an identical situation. It is his contention that there was no opportunity given before passing such order and the order itself is without jurisdiction since at the request of the petitioner the matter has been referred for the purpose of valuation and the assessment has been passed without the valuation report. 7. It is his submission that Section 55A of the Act cannot be invoked as that provision empowers the Assessing Authority to refer for valuation, while Section 50C(2) of the Act is the right of the assessee. 8. It is his submission that the valuation for the purpose of stamp duty and the dispute therein under Section 47A of the Indian Stamp Act is by the purchaser in the present case. Even though either of the parties, namely the vendor or the purchaser can raise such objection, in the present case, the petitioner being the vendor can raise his objection under Section 50C(2) of the Act. 9. He would also refer to Section 153(1) and 153(3) of the Act, especially with reference to the term "any time" and contend that any time which may be given by the Court will come within the meaning of the same saving the period of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r having paid the stamp duty, has not raised any dispute or filed any appeal and the matter has come to an end at that stage. Thus, when the Assessing Authority is well within his right to assess the capital gain on the basis of the registration value of the property, it was objected to by the petitioner by her letter dated 17.12.2008 requesting the matter to be referred to the valuation cell as per Section 50C(2) of the Act. It is also true that the Valuation Officer has not submitted his valuation report and in those circumstances, taking note of the fact that the assessment has to be completed within a period of one year as per Section 143(3) of the Act, the impugned assessment order came to be passed without waiting for the valuation report. 16. Section 153 of the Act which prescribes time limit for completion of assessments and reassessments which may be either under Sections 143 or 144 of the Act, no doubt contemplates that the assessment order should be passed within a period of 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 a return or a revised return relating to the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions of clause (21) or clause (22B) or clause (23A) or clause (23B) or sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10, under clause (i) of the proviso to sub-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; (iii) the period commencing from the date on which the Assessing Officer directs the assessee to get his accounts audited under sub-section (2A) of section 142 and ending with the last date on which the assessee is required to furnish a report of such audit under that sub-section, or (iv) * * * (iva) the period (not exceeding sixty days) commencing from the date on which the Assessing Officer received the declaration under sub-section (1) of section 158A and ending with the date on which the order under sub-section (3) of that section is made by him, or (v) in a case where an application made before the Income-tax Settlement Commission under section 245C is rejected by it or is not allowed to be proceeded with by it, the period commencing from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r's report assessment has been made. The learned Judge while setting aside the assessment has directed the Assessing Authority to pass fresh order of assessment after obtaining valuation certificate and by such direction, the period of assessment certainly stands extended by virtue of Section 153(3)(ii) of the Act. 19. As far as reference for estimation by Valuation Officer is concerned, under the Act there are three circumstances: (i) In cases of amounts of investments, etc., not fully disclosed in the books of accounts or unexplained expenditure as it is seen under Sections 69B and 69C of the Act, which are as follows: "Section : 69B. Amount of investments, etc., not fully disclosed in books of account.- Where in any financial year the assessee has made investments or is found to be the owner of any bullion, jewellery or other valuable article, and the Assessing Officer finds that the amount expended on making such investments or in acquiring such bullion, jewellery or other valuable article exceeds the amount recorded in this behalf in the books of account maintained by the assessee for any source of income, and the assessee offers no explanation about such exces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use (r) of section 2 of the Wealth-tax Act, 1957 (27 of 1957)." (ii) Cases covered under Section 55A of the Act, where, for the purpose of ascertaining the fair market value of the capital asset, the Assessing Officer is empowered to refer the valuation of the capital asset to the Valuation Officer. Section 55A of the Act is as follows: " Section : 55A. Reference to Valuation Officer.- With a view to ascertaining the fair market value of a capital asset for the purposes of this Chapter, the Assessing Officer may refer the valuation of capital asset to a Valuation Officer (a) in a case where the value of the asset as claimed by the assessee is in accordance with the estimate made by a registered valuer, if the Assessing Officer is of opinion that the value so claimed is less than its fair market value; (b) in any 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 relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t order has been passed by the Assessing Officer, by way of an academic exercise or to satisfy himself that he correctly determined the value of the property while computing the total income, he referred the matter for valuation, we are afraid, he is wrong. The entire exercise of reference to the Valuation Officer for ascertaining the fair market value of the capital assets of an assessee is for the purposes of computation of income from capital gains and for completion of the assessment order and once that has been done, the Assessing Officer has no competence to refer to the Valuation Officer." 21. The fact remains that the said power of the Assessing Officer under Section 55A of the Act is with reference to the capital gain. (iii) The other aspect is covered under Section 50C of the Act which is a special provision relating to the value of consideration inserted by the Finance Act, 2002 with effect from 1.4.2003. Section 50C of the Act is as follows: "Section: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 bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o prevent undervaluation of the real value of the property in the sale deeds. K. Raviraja Pandian and P.P.S. Janarthana Raja, JJ., after analyzing the entire case law on the issue, while deciding about the constitutional validity of the said provision, have held as follows: "Sub-sections (2) and (3) of Section 50C provides further safeguard to the assessee, in the sense that if the assessee claims before the assessing officer that the value adopted by the stamp duty authorities exceeds the fair market value and the value so adopted or assessed for the purpose of stamp duty has not been disputed in any appeal or revision before any authority, the Assessing Officer could refer the valuation of the capital asset to the Departmental Valuation Officer. On such reference, if the value determined by the Valuation Officer is more than the value adopted or assessed by the stamp duty authority, the Assessing Officer shall adopt the market value as determined by the Stamp duty authority. Thus, a complete foolproof safeguard has been given to the assessee to establish before the authorities concerned the real value. Thus, what is stated in Section 50C as a real value cannot be regarded as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... very guarantee granted to the assessee under Section 50C of the Act. That being the only safeguard available to the assessee in respect of the capital gain under the provisions of the Act, I am of the considered view that the impugned order of assessment is to be set aside. At the same time, since the Assessing Authority himself has no right to have extension of the period of assessment, by virtue of the powers under Section 153(3)(ii) of the Act, as explained above, which relates to "in an order of any court in a proceeding otherwise thank by way of appeal or reference under this Act", the Assessing Authority should be directed to proceed with the assessment of capital gain immediately after the valuation report is filed by the authority to whom the matter was referred by the respondent at the instance of the petitioner. 27. The contention raised by Mr.Patti B.Jaganathan, learned counsel appearing for the respondent about the availability of alternative remedy also deserves to be considered. 28. In M/s. Nivaram Pharma Private Limited v. The Customs, Excise and Gold (Control) Appellate Tribunal, South Regional Bench, Madras and others, [2005] 2 MLJ 246, it was held by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he alternative remedy provided the High Court should ensure that he has made out a strong case or that there exist good grounds to invoke the extraordinary jurisdiction. . . . . If, as was noted in Ram and Shyam Co. v. State of Haryana and Ors. AIR 1985 SC 1147 the appeal is from "Caeser to Caeser's wife" the existence of alternative remedy would be a mirage and an exercise in futility. In the instant case the writ petitioners had indicated the reasons as to why they thought that the alternative remedy would not be efficacious. Though the High Court did not go into that plea relating to bias in detail, yet it felt that alternative remedy would not be a bar to entertain the writ petition. Since the High Court has elaborately dealt with the question as to why the statutory remedy available was not efficacious, it would not be proper for this Court to consider the question again. When the High Court had entertained a writ petition notwithstanding existence of an alternative remedy this Court while dealing with the matter in an appeal should not permit the question to be raised unless the High Court's reasoning for entertaining the writ petition is found to be palpably un ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
