BABAN CHINDHU HARANE,TAL - SAHAPUR vs. ITO WARD 2(2), KALYAN, KALYAN

On the contrary, the Ld. D.R. refuted the claim of the Assessee.

This Court has given thoughtful considerations to the peculiar facts and circumstances of the case and the decision of the Hon’ble Kolkata High Court in the case of Sunil Kumar Agarwal Vs. Commissioner of Income Tax, Siliguri decided on 13.03.2014 (Kolkata – HC) which has also dealt with the identical issue, wherein the Assessee has not opted for valuation of the property for reference of valuation of the property to the Departmental Valuation Officer specifically, however, still the Hon’ble High Court has held that the AO in a case of this nature, in fairness should have given an option to the Assessee to have the valuation made by the Departmental Valuation Officer contemplated u/s 50C. As a matter of course, in all such cases the AO should give an option to the Mr. Baban Chindhu Harane Assessee to have the valuation made by the Departmental Valuation Officer. The valuation by the Departmental Officer contemplated u/s 50C is required to avoid miscarriage of justice. Even in case where no such prayer is made by the Ld. Advocate representing the Assessee, who may not have been properly instructed in law, the AO, discharging a quasi-judicial function, has the bounden duty to act fairly and to give a fair treatment by giving him an option to follow the course provided by law.

The Hon’ble High Court ultimately remanded the matter back to the AO with a direction to refer the matter to the Departmental Valuation Officer in accordance with law and after such valuation the assessment shall be made denovo in accordance with law. For brevity, the observation made and conclusion drawn by the Hon’ble High Court is reproduced herein below: “We have considered the rival submissions advanced by the learned advocates appearing for the parties. The submission of Ms. Ghutghutia that the requirement of clauses a) and (b) of sub- Section 2 of Section 50C has not been met by the assessee, can hardly be accepted. The requirement of clause (b) of sub-Section 2 of Section 50C was evidently met. The only question is whether the requirement of clause (a) of sub-Section 2 of Section 50C was met by the assessee. We have already set out hereinabove the recital appearing in the Deeds of Conveyance upon which the assessee was relying. Presumably, the case of the assessee was that price offered by the buyer was the highest prevailing price in the market. If this is his case then it is difficult to accept the proposition that the assessee had accepted that the price fixed by the District Sub Registrar was the fair market value of the property. No such inference can be made as against the assessee because he had nothing to do in the matter. Stamp duty was payable by the purchaser. It was for the purchaser to either accept it or dispute it. The assessee could not, on the basis of the price fixed by the Sub-Registrar, have claimed anything more than the agreed consideration of a sum of Rs.10 lakhs which, according to the assessee, was the highest prevailing market price. It would follow automatically that his case was that the fair market value of the property could not be Rs.35 lakhs as assessed by the District Sub Registrar. In a case of this nature the assessing Mr. Baban Chindhu Harane officer should, in fairness, have given an option to the assessee to have the valuation made by the departmental valuation officer contemplated under Section 50C. As a matter of course, in all such cases the assessing officer should give an option to the assessee to have the valuation made by the departmental valuation officer. For the aforesaid reasons, we are of the opinion that the valuation by the departmental valuation officer, contemplated under Section 50C, is required to avoid miscarriage of justice. The legislature did not intend that the capital gain should be fixed merely on the basis of the valuation to be made by the District Sub Registrar for the purpose of stamp duty. The legislature has taken care to provide adequate machinery to give a fair treatment to the citizen/taxpayer. There is no reason why the machinery provided by the legislature should not be used and the benefit thereof should be refused. Even in a case where no such prayer is made by the learned advocate representing the assessee, who may not have been properly instructed in law, the assessing officer, discharging a quasi judicial function, has the bounden duty to act fairly and to give a fair treatment by giving him an option to follow the course provided by law. aside. For the aforesaid reasons, the order under challenge is set The impugned order including orders passed by the CIT(A) and the assessing officer are all set aside. The matter is remanded to the assessing officer. He shall refer the matter to the departmental valuation officer in accordance with law. After such valuation is made, the assessment shall be made de novo in accordance with law.”

Thus, on the aforesaid analyzation it has become clear that it is the bounden duty of the AO to refer the matter/valuation to the Departmental Valuation Officer in case the Assessee disputes the valuation adopted and/or determined as per stamp duty valuation and considered by the AO. Thus, the orders passed by the authorities below are set aside and the case is remanded to the file of the AO with a direction to refer the valuation of the property to the District Valuation Officer as per the norms of the Act and after getting the valuation report to frame the assessment afresh as per law. Thus, the case is accordingly remanded to the file of the AO in the aforesaid terms.

In the result, the appeal filed by the Assessee is allowed for statistical purposes.