SANJIB KUMAR ROY,KOLKATA vs. ITO, WARD 61(1), KOLKATA

आयकर अपील�य अ�धकरण, कोलकाता पीठ “डी’’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH: KOLKATA �ी राजेशकुमार, लेखा सट�य एवं �ी �द�प कुमार चौबे, �या�यक सद�यके सम� [Before Shri Rajesh Kumar, Accountant Member&Shri Pradip Kumar Choubey, Judicial Member] I.T.A. Nos. 1355/Kol/2026 Assessment Years: 2015-16 Sanjib Kumar Roy Vs. NFAC (ITO, Ward-61(1), Kolkata)

(PAN: ADJPR 3792 E) ( अपीलाथ� ) Respondent / ��यथ� Appellant / Date of Hearing / सुनवाई 16.07.2026 क� �त�थ Date of Pronouncement/ 01.09.2026 आदेश उ�घोषणा क� �त�थ For the Appellant/ Shri Soumitra Choudhury, Advocate �नधा�रती क� ओर से Shri Pronobesh Sarkar, Advocate For the Respondent/ Shri Sanat Kuma Raha, CITDR राज�व क� ओर से

ORDER / आदेश Per Rajesh Kumar, AM: This is an appeal preferred by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)-NFAC, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 27.12.2024 for the AY 2015-16. 2. At the outset, we note that the appeal of the assessee is barred by limitation by 409 days. At the time of hearing, the counsel of the assessee explained the reasons for delay in filing the appeal. The Ld. D.R raised objections by submitting that the delay was not explained with reasons. After hearing the rival contentions and perusing the

2 I.T.A. No.1355/Kol/2025 Assessment Year: 2015-16 Sanjib Kumar Roy materials available on record, we find that the delay is for bonafide and genuine reasons and , hence, we condone the delay and adjudicate the appeal in the following paras.

3 I.T.A. No.1355/Kol/2025 Assessment Year: 2015-16 Sanjib Kumar Roy barred ,therefore the assessment was completed by the AO by taking the value as per stamp valuation authority and computed the capital gain accordingly thereby making an addition of Rs. 6,21,73,362/- to the income of the assessee.

4 I.T.A. No.1355/Kol/2025 Assessment Year: 2015-16 Sanjib Kumar Roy “The Valuation Officer shall send a copy of the report of the estimate made under sub- section (4) or sub-section (5), as the case may be, to the Assessing Officer the assessee, within a period of six months from the end of the month in which a reference is made under sub- section (1).” 7. We observe from the perusal of the above section and note that the valuation officer is obliged to send a copy of the report of valuation made under sub-section 4 or sub-section 5 as the case may be to the assessing officer within six months from the end of the month in which the reference was made under sub-section(1). However the Assessing Officer did not receive any report from the AO. Therefore, in our opinion, the Assessing Officer is duty bound to accept the value of the said property as declared by the assessee in the return of income and cannot take the value as per stamp valuation authority for the purpose of computing the capital gain/ loss. The case of the assessee is squarely covered by the decision of the Co-ordinate Bench of Kolkata in the case of Metiabruz Retail and Warehousing LLP vs. ITO, Ward-32(1), Kolkata in ITA No. 3238/Kol/2025 for AY 2022-23 dated 08.04.2026 by observing and holding as under:

“6. We have considered the rival submissions. The provisions of section 142A(6) reads as under: “142A(6) The Valuation Officer shall send a copy of the report of the estimate made under sub-section (4) or sub-section (5), as the case may be, to the Assessing Officer and the assessee, within a period of six months from the end of the month in which a reference is made under sub-section (1).” [underlined for emphasis] 7. The words used in the said provision are “shall’… within a period of six months…in which a reference is made”. Admittedly, the request for 3 ITA No.3238/Kol/2025 valuation has been sent by the Assessing Officer on 28.08.2023, the period of limitation u/s 142A(6) expires on 28.02.2024. The assessment order admittedly was passed on 21.03.2024. As the valuation report has not been provided by the DVO, the valuation as adopted by the assessee is liable to be considered as correct in the absence of any valuation report by the DVO. This being so, the addition as made by the Assessing Officer and confirmed by the ld. CIT(A) stands deleted. 8. In the result, the appeal of the assessee is allowed.” 8. Similarly the decision of co-ordinate Bench of Cuttack in the case of Lalit Kumar Jalan vs. ITO in [2024] 168 taxmann.com 529 (Cuttack-Trib) , it was held as under:

“6. We have considered the rival submissions and perused the material available on record. In this case, admittedly, the value adopted by the stamp duty authorities was challenged by the assessee in terms of Section 50C(2) of the Act and the AO has also referred the matter to

5 I.T.A. No.1355/Kol/2025 Assessment Year: 2015-16 Sanjib Kumar Roy the DVO for computing the fair market value as on the date of sale for the purpose of computing long term capital gain. It is also a matter of fact that till date the DVO has not submitted any report on such reference. On specific query to the ld. AR by the Bench that as to whether any communication is received from the DVO for submission of the requisite details of the properties sold, it was replied by the ld. AR at Bar that no communication was received by the assessee till date. It is also seen that assessee has explained various reasons as to why such land was sold at a lower rate which are reproduced herein above however, none of the said reason was answered nor considered by AO nor by stamp duty authorities and since the report of DVO is not yet received, we are unable to comment about the stand taken by DVO on such factors. Before going further, we need to examine the provisions of section 50C of the Act, as existed at that point of time, which reads as under: 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 section referred to as the "stamp valuation authority") for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed or assessable shall, for the purposes of section 48, be deemed to be the full value of the consideration received or accruing as a result of such transfer. Provided that where the date of the agreement fixing the amount of consideration and the date of registration for the transfer of the capital asset are not the same, the value adopted or assessed or assessable by the stamp valuation authority on the date of agreement may be taken for the purposes of computing full value of consideration for such transfer: Provided further that the first proviso shall apply only in a case where the amount of consideration, or a part thereof, has been received by way of an account payee cheque or account payee bank draft or by use of electronic clearing system through a bank account or through such other electronic mode as may be prescribed on or before the date of the agreement for transfer. (2) Without prejudice to the provisions of sub-section (1), where- (a) the assessee claims before any Assessing Officer that the value adopted or assessed or assessable or assessed or assessable by the stamp valuation authority under sub-section (1) exceeds the fair market value of the property as on the date of transfer; (b) the value so adopted or assessed or assessable or assessed or assessable by the stamp valuation authority under sub-section (1) has not been disputed in any appeal or revision or no reference has been made before any other authority, Court or the High Court, the Assessing Officer may refer the valuation of the capital asset to a Valuation Officer and where any such reference is made, the provisions of sub-sections (2), (3), (4), (5) and (6) of section 16-A, clause (i) of sub-section (1) and sub-sections (6) and (7) of section 23-A, sub-section (5) of section 24, section 34AA, section 35 and section 37 of the Wealth-tax Act, 1957 (27 of 1957), shall, with necessary modifications, 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 16-A of that Act. Explanation 1-For the purposes of this section, "Valuation Officer" shall have the same meaning as in clause (r) of section 2 of the Wealth- tax Act, 1957 (27 of 1957). Explanation 2. - For the purposes of this section, the expression "assessable" means the price which the stamp valuation authority would have, notwithstanding anything to the contrary contained in any other law for the time being in force, adopted or assessed, if it were referred to such authority for the purposes of the payment of stamp duty. (3) Subject to the provisions contained in sub-section (2), where the value ascertained under sub-section (2) exceeds the value adopted or assessed or assessable by the stamp valuation authority referred to in sub-section (1), the value so adopted or assessed or assessable by such authority shall be taken as the full value of the consideration received or accruing as a result of the transfer. 7. Sub-section (1) of section 50C of the Act applies where the consideration received or accrues as a result of transfer by an assessee of a capital asset, being land or building or both, is less that the value adopted or assessed by any authority of the State Government i.e.

6 I.T.A. No.1355/Kol/2025 Assessment Year: 2015-16 Sanjib Kumar Roy stamp valuation authority for the purpose of payment of stamp duty in respect of such transfer. In that case, the value so adopted or assessed shall, for the purposes of computing capital gains u/s 48, be deemed to be the full value of the consideration received or accruing as a result of such transfer. 8. However, where the assessee objected the value adopted or assessed by the stamp valuation authority referred in sub-section (1) during the course of assessment proceedings and stated that such value exceeds the fair market value of the property as on the date of the transfer, the Assessing Officer may refer the valuation of the capital asset to a Valuation Officer. Sub-section (2) further provides that where any such reference is made, the provisions of sub-section (2), (3), (4), (5) and (6) of section 16A, clause (i) of sub-section (1) and sub- section (6) and (7) of section 23A, sub-section (5) of sec. 24, 34AA, 35 and 37 of the Wealth Tax Act, 1957, shall, with necessary modifications, 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. 9. Section 16A(1) of the Wealth Tax Act provides for making reference to the Valuation Officer. Sub-sections (2) to (5) of section 16A provide for the mode and manner in which the value of an asset is to be estimated. Sub-section (6) of provides that on receipt of an order under sub-section (3) or sub-section (5) from the Valuation Officer, the Assessing Officer shall, so far as valuation of the asset in question is concerned, proceed to complete the assessment in conformity with the estimate of the Valuation Officer. Accordingly, once a reference is made u/s 50C of the Act to the Valuation Officer for valuation of the capital asset, the Assessing Officer is obliged to complete the assessment in conformity with the estimate made by the Valuation Officer pursuant to such reference made by him. However, nowhere in the Wealth Tax Act nor in section 50C any time limit is provided for valuation officer to submit the report to the AO. It must be within reasonable time frame and should not be delayed as has been done in the present case. 10. In the instant case after making reference to the Valuation Officer by the AO on 22.03.2021, no report is submitted by the valuation officer to the AO till date and assessment order was passed by AO by replacing the sale consideration as declared by the assessee with the value determined by stamp value authority though the same was already challenged by the assessee. Thus the assessee was asked to pay the taxes on the amount of capital gains which is subject to modifications based on the report of the valuation officer that has never come and under these circumstances the capital gains as computed by the AO has not attained the finality even on the part of the AO and the assessee was asked to pay the taxes on such provisional amount of capital gains. As per sub-section (3) to section 50C, the assessee is liable to pay capital gains tax when the valuation officer has valued the capital asset at the price more than the value determined by the stamp authorities. Since till date no report is submitted nor any time limit is provided in section 50C of the Act, assessee should not be punished for such an inordinate delay of almost 4 years which is solely attributable to the valuation officer and is beyond the control of the assessee. 11. Now the next issue came up for our consideration is with regard to the limitation in submitting the report by valuation officer to the AO. For this before taking resort to the provisions of General Clauses Act or Limitation Act, we have to examine whether any time limit is provided under any other section of Income Tax Act for submission of the valuation report. As per the Income Tax Act, 1961 other sections where reference to valuation officer could be made for estimate the value of asset are section 43CA, 55A and 142A. Provisions of section 43CA are as under:

7 I.T.A. No.1355/Kol/2025 Assessment Year: 2015-16 Sanjib Kumar Roy 43CA. Special provision for full value of consideration for transfer of assets other than capital assets in certain cases. (1) Where the consideration received or accruing as a result of the transfer by an assessee of an asset (other than 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 for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed or assessable shall, for the purposes of computing profits and gains from transfer of such asset, be deemed to be the full value of the consideration received or accruing as a result of such transfer. Provided that where the value adopted or assessed or assessable by the authority for the purpose of payment of stamp duty does not exceed one hundred and five per cent. of the consideration received or accruing as a result of the transfer, the consideration so received or accruing as a result of the transfer shall, for the purposes of computing profits and gains from transfer of such asset, be deemed to be the full value of the consideration. (2) The provisions of sub-section (2) and sub-section (3) of section 50C shall, so far as may be, apply in relation to determination of the value adopted or assessed or assessable under sub-section (1). (3) Where the date of agreement fixing the value of consideration for transfer of the asset and the date of registration of such transfer of asset are not the same, the value referred to in sub-section (1) may be taken as the value assessable by any authority of a State Government for the purpose of payment of stamp duty in respect of such transfer on the date of the agreement The provisions of sub-section (3) shall apply only in a case where the amount of consideration or a part thereof has been received by way of an account payee cheque or an account payee bank draft or by use of electronic clearing system through a bank account on or before the date of agreement for transfer of the asset. Provisions as contained in section 55A reads as under : 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 circumstances, it is necessary so to do, and where any such reference is made, the provisions of sub- sections (2), (3), (4), (5) and (6) of section 16-A, clauses (ha) and (i) of subsection (1) and sub-sections (3-A) and (4) of section 23, subsection (5) of section 24, section 34- AA, section 35 and section 37 of the Wealth-tax Act, 1957 (27 of 1957), shall, with the necessary modifications, apply in relation to such reference as they apply in relation

8 I.T.A. No.1355/Kol/2025 Assessment Year: 2015-16 Sanjib Kumar Roy to a reference made by the Assessing Officer under sub-section (1) of section 16-A 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) Provisions as contained in section 142A reads as under : 142A. (1) The Assessing Officer may, for the purposes of assessment or reassessment, make a reference to a Valuation Officer to estimate the value, including fair market value, of any asset, property or investment and submit a copy of report to him. (2) The Assessing Officer may make a reference to the Valuation Officer under sub-section (1) whether or not he is satisfied about the correctness or completeness of the accounts of the assessee. (3) The Valuation Officer, on a reference made under subsection (1), shall, for the purpose of estimating the value of the asset, property or investment, have all the powers that he has under section 38A of the Wealth-tax Act, 1957 (27 of 1957). (4) The Valuation Officer shall, estimate the value of the asset, property or investment after taking into account such evidence as the assessee may produce and any other evidence in his possession gathered, after giving an opportunity of being heard to the assessee. (5) The Valuation Officer may estimate the value of the asset, property or investment to the best of his judgment, if the assessee does not co-operate or comply with his directions. (6) The Valuation Officer shall send a copy of the report of the estimate made under sub-section (4) or sub-section (5), as the case may be, to the Assessing Officer and the assessee, within a period of six months from the end of the month in which a reference is made under sub-section (1). (7) The Assessing Officer may, on receipt of the report from the Valuation Officer, and after giving the assessee an opportunity of being heard, take into account such report in making the assessment or reassessment. 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)" 12. From the bare reading of all these three sections it may be seen that section 43CA deals with the valuation of all the assets other than capital assets and other provisions of section 50C are applicable. Section 55A can be invoked where estimation of fair market value of a capital asset is required for the purposes of chapter relating to capital gains in those cases where provisions of section 50C are not applicable. Section 142A can be invoked for estimation of value including fair market value of an asset, property or investment for the purposes of assessment or reassessment. As per the scheme of the Income Tax Act, Section 50C 13 ITA No.335/CTK/2024 and 55A are special provisions for determination of the fair market value of capital asset for computing capital gains whereas section 142A is a general provision for estimation of value of any asset, property or investment for the purposes of assessment / reassessment. Therefore, the scope of section 142A is very vide which also includes reference to valuation officer for valuation to compute capital gains. Since sections 50C and 55A are special provision applicable for estimation of fair market value of a capital asset to compute capital gains, thus, as per the maxim Generalia specialibus non derogant, special provision will prevail over general provision and, therefore, where the issue is of computation of capital gains, for estimating the value of a capital asset, reference to DVO can be made only u/s 50C or 55A of the Act, as the case may be, and not u/s 142A. However, from the perusal of all the four sections viz. 43CA, 50C, 55A and 142A of the Act, it can be seen that except in section 142A, in none of the other section i.e. 43CA, 50C and 55A time limit is provided by the Act to the valuation officer for submission of valuation report to the assessing officer. As per section 142A(6) it is mandatory for the valuation office that he shall submit the report to the assessing officer within a period of six months from the end of the month in which the reference was made. Thus for the limited purpose on the issue of limitation for submission of the valuation report by the valuation officer, time limit as provided in sub-section (6) of section 142A of the Act could be considered as a guiding factor in other sections where a refence is made to the valuation office to determination the fair market value etc., even though it is not a special provision for the purpose of computing

9 I.T.A. No.1355/Kol/2025 Assessment Year: 2015-16 Sanjib Kumar Roy capital gains. This can be done only in the special circumstances where the valuation officer has delayed in submitting the report for indefinite time period such as in the instant case where after making reference on 22.03.2021 by the AO till date i.e. after expiry of more than three and half year, no report is submitted. Nor the valuation officer has even bothered to communicate with the assessee or the assessing officer to collect the relevant details necessary for the purpose of valuation of the subject capital assets sold by the assessee. To our view any report submitted by the valuation officer after such an inordinate delay should be held as time barred and no cognizance of the same should be taken even where the reference is made u/s 50C of the Act. The Hyderabad bench of Tribunal in the case Shri Zulfi Revdjee vs. ACIT in ITA No. 2415/Hyd/2018 reported in [2019] 75 ITR (Trib.) 219 (Hyd.) vide its order dt. 05-09-2019 has held that it is mandatory for the Valuation Officer to submit the Valuation Report within six months from the date of receipt of the reference, delay in filing the report cannot be condoned. The relevant observations of the bench are as under: 7. Having regard to the rival contentions and the material on record, we find that the relevant A.Y before us is A.Y 2013-14 and the return of income was filed on 30.09.2013. Therefore, 21 months from such date would expire on 31.3.2016. Thus, the assessment order u/s 143(3) was required to be passed by 31.03.2016 but since the AO has made a reference to the valuation officer u/s 142A of the Act , vide letter dated 19.02.2016, and the valuation report was filed on 20.7.2017, the said period will have to be excluded for determining the time limit. However, the question before us is the period allowed to the DVO to submit the report. U/s 142A of the Act , the valuation report has to be submitted within six months from the date of the receipt of the reference. Admittedly, in the case before us, the valuation officer has submitted the report beyond a period of 15 months. Whether this period can be enlarged or condoned is to be seen. As rightly pointed by the learned Counsel for the assessee, the word used in sub-section 6 of section 142A is "shall" and in other sub sections, the word used is "may". The Hon'ble Delhi High Court in the case of B.K. Khanna & Co. vs Union Of India And Others on 14 September, 1984 (Supra) has clearly held that where the words "may" and "shall" are used in various provisions of same sections, then both of them contain different meaning and the word "shall" shall mean "mandatory". As argued by the learned Counsel for the assessee, the AO was required to call for a report from the valuation officer within six months from the date of the reference and the valuation officer was bound to give such a report with such prescribed period. Further, as seen from the assessment order, the AO had directed the valuation officer to give the valuation of the property as on 8.2.2010, whereas the valuation officer has given the report as on the date of the execution of the sale deed. Therefore, the DVO has clearly not followed the directions of the AO and also not followed the timeline fixed under the Act. When it is mandatory for an officer to follow the timeline prescribed under the Act, such delay cannot be condoned. Therefore, we agree with the contentions of the learned Counsel for the assessee that the report of the Valuation Officer has to be filed within the time given u/s 142A(vi) of the Act and therefore, the assessment order passed on the basis of such report of Valuation Officer beyond the time limit is not sustainable. Therefore, we allow the assessee's appeal and the assessment order is set aside. 13. Simultaneously, in this case the assessing officer is also on default who after making refence to the valuation officer on 22.03.2021 has not bothered to communicate with the valuation officer to find out the status of the action taken by him on the reference made. While inserting the time limits in section 142A, the spirit of the law was to restrict the revenue authorities from playing arbitrarily and unscrupulously. Under these circumstances the assessee should not be punished for the lapses on the part of the valuation officer who has not submit the valuation report even after expiry of such a long period. Also the AO who has

10 I.T.A. No.1355/Kol/2025 Assessment Year: 2015-16 Sanjib Kumar Roy computed the capital gains in the hands of the assessee by taking sale consideration at the value taken by stamp authorities by ignoring the fact that the same was only indicative price computed for charging the stamp duty and since the assessee has objected the same, it cannot be taken for charging capital gains tax. Under these circumstances, looking to the peculiar facts of the case and also keeping in the mind the circumstances under which the assessee was compelled to sale the said property at a lower rate, we are of the considered view that the sale consideration received by the assessee in terms of the registered sale deed should be taken for computing the capital gains. Further, we are not inclined to accept the contention of the ld. Sr. DR that the assessee would be given credit on the basis of the DVO’s report as and when the said report was received as it tantamount to delay the justice for indefinite time period. This will give the AO enhanced period for making the assessment in their own way. When the valuation officer is guilty of breach of the law by not submitting the valuation report within a reasonable time period thus for the breach of all such legal provisions, the lower authorities should not get some premium by enhancing the limitation period by leaving the assessment open with such condition for indefinite period. We are live to the issue that though the interest of revenue is vital, such interest cannot override considerations of probity and fairness in tax governance. A fair tax regime where no assessee is harassed is equally crucial. The reference was made to the valuation officer on 22.03.2021 and thereafter the assessment was completed on 18.04.2021 as by making reference of limitation for completing the assessment, the same cannot be extended now solely for want of the valuation report, at the same time, necessary steps should have been taken by the concerned officials to ensure that the report from the office of the valuation officer should reach to the office of the AO within a reasonable time period which both the lower authorities have miserably failed to do. If we allow the AO to modify the order after the receipt of the report from the valuation officer which otherwise is barred by limitations such action would not only reward the revenue with an enhanced limitation period but embolden unscrupulous tax officials to manipulate orders or otherwise mistreat the assessee. Therefore, we delete the addition made by AO who computed the amount of capital gains by taking Rs.1,15,51,737/- being the value taken by stamp authorities as sale consideration as against Rs.17,64,150/- as declared by the assessee and we direct accordingly. 14. In the result, appeal of the assessee is allowed with the directions given hereinabove.” 9. Similarly the decision of Co-ordinate Bench of Kolkata in the case of Maha Mai Developers & Co. vs. ITO in ITA No. 559/Kol/2026 for AY 2018-19 dated 29.06.2026 is also squarely applicable which is reproduced hereunder:

3.4. We have heard the rival condition and perused the materials available in the report. We find that undisputedly a reference was made by the AO to the DVO for the purpose of valuation of the immovable property where the difference between the stamp value duty valuation and the consideration paid by the assessee was worked out at ₹1,06,074,034, which was more than 50,000 as well as an amount equal to 5 percent of the consideration. The assessment was framed on 9-4-20-21 under section 143(3)of the Act with a remark that the same would be suitably modified under section 155(15) of the Act. Obviously, when the assessment has been framed by the AO then valuation report from the DVO was awaited. Moreover, the provisions of section 142A(5) and 142A(6) provides that where for the purpose of assessment or reassessment a reference is made to the DVO to estimate the value of property then, the valuation officer within a period of 6 months from the end of the month in which reference was made subsection (1), serve a copy on the AO to the assessee. We have also examined the provision of section 153 of the Act, which provides for time limit for

11 I.T.A. No.1355/Kol/2025 Assessment Year: 2015-16 Sanjib Kumar Roy completion of reassessment or computation and under that explanation 1 provides that in computing the period of limitation, the explanation 1 (v) to section 153 of the Act, provides that period commencing from the date on which the AO makes a reference to the valuation officer under subsection 1 of section 142A and ending with the date of which the report of valuation officer is received by the AO shall be excluded from the period of limitation. Therefore, the AO has unnecessarily and hurriedly framed of assessment without waiting for the report from the valuation officer. Further, this bench on 13th May, 2026 also be directed the DR to provide DVO's report on or before 02.07.2026.Now, the ld. DR on 14-05-26 has submitted before us that reference was wrongly made to the Mumbai TU instead of Kolkata TU and therefore, DVO report could not be furnished. The ld. DR prayed before the bench that the issue may be restored to the file of the ld. AO, so that the reference could be made and the actual value of the property could be ascertained and an assessment be made accordingly. In our opinion, the assessment framed by the AO is bad in law and cannot be sustained as he was not waited for the DVO's report and passed the assessment hurriedly and more so, when there was no reference and no valuation report available. The relevant extracts of the annexure filed by the DR before us are extracted below:-

12 I.T.A. No.1355/Kol/2025 Assessment Year: 2015-16 Sanjib Kumar Roy

3.4.1 Moreover, the case of the assessee is squarely covered by the decision of the court in the case of Rajni Arvind Birla (supra), Wherein similar issue has been decided in favor of the assessee and the assessment was quashed. The operative part of the decision is extracted below:- “18. We have carefully considered the rival submissions, perused the assessment order, rectification order under section 154, order of the learned CIT(A), the paper book filed by the assessee, and the judicial precedents cited. The controversy essentially lies within a narrow compass, whether the assessment order dated 22.09.2021 passed without awaiting the valuation report from the Departmental Valuation Officer (DVO) is legally sustainable and whether the subsequent rectification under section 154 could cure such a defect. It is an undisputed fact that the Assessing Officer, having noticed that the sale consideration disclosed by the assessee was lower than the stamp duty valuation, invoked section 50C(1) and, upon the assessee’s request, made a reference to the Valuation Officer under section 50C(2). Once such a reference is made, the statutory procedure mandates that the Assessing Officer must await the report of the Valuation Officer before finalising the assessment. The scheme of section 50C(2) read with section 142A(6) and Explanation 1(iii) to section 153 makes this position abundantly clear. The law explicitly excludes, for the purpose of limitation, the period commencing from the date of reference to the Valuation Officer till the date on which the report is received. 19. The legislative intent is that the assessment should be completed on the basis of the DVO’s determination and not by preempting it. Completion of assessment without

13 I.T.A. No.1355/Kol/2025 Assessment Year: 2015-16 Sanjib Kumar Roy awaiting the report would defeat the very purpose of the statutory reference mechanism. The assessment order dated 22.09.2021 passed while the reference was pending and before receipt of the DVO’s report cannot be said to be a valid and complete assessment in the eyes of law. The observation of the Assessing Officer that the assessment is “subject to rectification on receipt of valuation report” reinforces that the order was not final. Such a conditional or contingent assessment is alien to the scheme of the Act, which provides for only one final assessment under section 143(3) and does not contemplate a provisional or tentative determination of income. 20. The subsequent rectification order dated 20.11.2024, passed after receipt of the DVO’s report, seeks to re-compute the capital gains by adopting the DVO’s value. However, the DVO’s report was not in existence when the original assessment was framed and hence could not form part of the “record” of the assessment. The law is well settled that rectification under section 154 can be exercised only to correct an error apparent from the record and not to bring in or rely upon a subsequent event or fresh material. 21. The Co-ordinate Bench in case of Kirit P. Thakkar v. ITO, ITA No. 5892/Mum/2010 held that a valuation report received after completion of assessment cannot constitute a ‘mistake apparent from record’ within section 154. The power of rectification cannot be exercised to substitute or re-compute income on the basis of a subsequent report. Relevant paras are reproduced below: 5. After considering the rival contention and relevant material on record, we note that the original assessment was completed on 26.12.2006 whereby the long term capital gain on sale of 1/3rd shares in the residential property was computed at Rs. 25,62,833/-. The Assessing Officer allowed deduction u/s 54 for investment in the residential property by the assessee. Though, during the assessment proceedings, the Assessing Officer referred the property to the DVO for determining the FMV as on 1.4.1981 under the provisions of sec.55A; however, the DVO report was not received before completion of the assessment. Since the assessment was framed without the valuation report of the DVO; therefore, returned income was accepted by the Assessing Officer. Subsequently, the Assessing Officer received the DVO’s report which has valued the property as on 1.4.81 at Rs. 8,73,054/- 5.1 After receiving the report of the DVO, the Assessing Officer invoked the provisions of sec. 154 for re-computation of the long term capital gains on sale of 1/3rd shares of the residential property. The indexation cost of the property as per the valuation of the DVO is Rs. 40,42,240/- as against the indexed cost of acquisition adopted by the assessee is at Rs.1,04,17,500/-. The Assessing Officer accordingly worked out the capital gain at Rs. 46,87,920/- while passing the order u/s 154 dt 24.3.2008. 6. It is thus clear that while resorting to the provisions of sec. 154, the Assessing Officer re-determined the issue of long term capital gains and particularly, the FMV as on 1.4.1981. It is settled proposition of law that a decision of a debatable point of law or fact cannot be corrected u/s 154 of the I T Act. The issue of determining the FMV as on 1.4.81 is highly debatable one and based on the estimates. Therefore, on such issue, any decision is not free from subjective consideration. It is not the case of the simple overlooking a provision of law or clerical or calculation mistake in computation of income; but it is a point to be decided by application of fact, law and mind as well.

14 I.T.A. No.1355/Kol/2025 Assessment Year: 2015-16 Sanjib Kumar Roy Therefore, the issue of FMV as on 1.4.81 does not fall under the expression ‘mistake apparent on record’, which can be rectified without there being any necessity to re-work the matter or to re-appraisal the facts. Further, the DVO report is subsequent development to the completion of the assessment u/s 143(3) and therefore, considering the fresh material on the point of valuation/FMV of the property is beyond the scope of section 154. Under sec. 154 only a mistake obvious and apparent on record can be rectified and not something which can be established by a process of long drawn reasoning on the point on which there may conceivably be two opinion possible. Therefore, in the facts and circumstances of the case, the issue of valuation/FMV accepted by the Assessing Officer while passing the assessment order u/s 143(3) cannot be disturbed and re-determined under the provisions of sec. 154, as the said issue, in our view, is not an error or mistake apparent on the face of the order, which can be rectified under the provisions of sec. 154. The Assessing Officer has travelled beyond his jurisdiction while passing the order u/s 154. Accordingly, we set aside the order passed u/s 154 as well as the order of the CIT(A) and delete the addition made by the Assessing Officer while passing the order u/s 154. 22. Accordingly, the so-called rectification order dated 20.11.2024, passed after receipt of the DVO’s report, cannot be sustained in law. The report of the Valuation Officer came into existence only after the completion of assessment and, therefore, did not form part of the “record” of the assessment proceedings. The Assessing Officer could not invoke section 154 to re-compute capital gains on the strength of such subsequent material. The authority of law under section 154 extends only to correction of mistakes apparent from the record, not to a situation where a fresh valuation or new evidence is brought in after completion of the assessment. Further, the very act of the Assessing Officer recording in the assessment order that it was “subject to rectification on receipt of valuation report from the Valuation Officer” shows that the order was incomplete and contingent upon a future event. The Income-tax Act does not recognize or authorize any such provisional assessment under section 143(3). Once the Assessing Officer had chosen to refer the matter to the DVO under section 50C(2), he was bound by statute to await the report—especially since Explanation 1(iii) to section 153 expressly excludes such period from limitation. By proceeding to finalize the assessment without the DVO’s report and by leaving it open for rectification later, the Assessing Officer acted contrary to the legislative scheme and beyond the scope of his jurisdiction. Hence, the subsequent rectification purportedly made under section 154 is not a mere correction of an error apparent on record but a substantive re-determination of income on the basis of fresh material. Such an action amounts to review or reassessment, which is impermissible under section 154. 23. Section 153(5) read with Explanation 1(iii) provides that the period commencing from the date of reference to the Valuation Officer to the date of receipt of the report is to be excluded for computing the period of limitation. This statutory exclusion is a legislative recognition that the Assessing Officer is expected to await the valuation report and that the assessment cannot be completed prematurely. The Assessing Officer, therefore, had sufficient time in law to defer completion of assessment until the DVO’s report was received. The action of finalising the assessment despite the pending reference is contrary to this legislative mandate. 24. Section 50C(2) of the Act establishes a mandatory procedural safeguard in favour of the assessee whenever the value adopted by the stamp valuation authority is disputed. The provision obliges the Assessing Officer, upon such objection, to refer the valuation of the capital asset to a Departmental Valuation Officer for determination of

15 I.T.A. No.1355/Kol/2025 Assessment Year: 2015-16 Sanjib Kumar Roy its fair market value. This mechanism, by incorporation of the procedure prescribed under section 16A of the Wealth-tax Act, 1957, mandates that before finalising such valuation, the Valuation Officer must give the assessee a reasonable opportunity of being heard and to produce evidence in support of the declared value. Failure to adhere to this procedure or to afford the assessee an opportunity to raise objections to the proposed valuation constitutes a violation of the statutory right vested under section 50C(2) and renders the assessment legally unsustainable as being contrary to the principles of natural justice. In the present case, though the Assessing Officer did make the reference, he failed to await the DVO’s determination and instead proceeded to compute capital gains based on the stamp duty valuation. This deprived the assessee of the statutory right to contest the valuation before an independent authority. The violation of section 50C(2), being a procedural safeguard founded on principles of natural justice, renders the assessment unsustainable. 25. We also find substantial force in the assessee’s submission regarding the exceptional hardship under which the property in question was sold and the consequent deprivation of opportunity to be heard on the DVO’s valuation. The record reveals that the assessee was compelled to dispose of the property owing to acute personal and financial exigencies, and the sale was bona fide, negotiated at a price consistent with prevailing market conditions. In such circumstances, it cannot be said that the transaction was designed to evade tax or to understate consideration. Notwithstanding this, the Assessing Officer adopted the stamp duty valuation without awaiting the report of the Valuation Officer and without affording the assessee an opportunity to contest the valuation subsequently made. It is pertinent to note that no opportunity as mandated under section 16A(4) of the Wealthtax Act, 1957, incorporated into section 50C(2) of the Income-tax Act, was granted to the assessee. The absence of such opportunity constitutes a clear violation of the statutory procedure and the principles of natural justice. Having regard to these circumstances, we are of the opinion that the assessee suffered genuine hardship both in the course of sale and in the subsequent assessment proceedings. 26. We further observe that the learned CIT(A) has not dealt with the judicial precedents specifically relied upon by the assessee in support of her contentions. The order of the CIT(A) merely records that the decisions cited are “distinguishable on facts,” without undertaking any analytical discussion or assigning reasons for such distinction. The appellate authority is expected to examine each precedent cited before it, analyse its ratio, and record findings as to why it does or does not apply to the facts of the case. A summary rejection of binding or persuasive authorities without reasoned evaluation amounts to non-application of mind and renders the order vulnerable to judicial scrutiny. In the present case, such omission further weakens the sustainability of the impugned appellate order. 27. On merits, the disallowances made by the Assessing Officer and sustained by the CIT(A) also cannot be upheld. The records reveal that the assessee was not afforded an effective opportunity to substantiate the claims with documentary evidence. The CIT(A) decided the matter without any further hearing despite the assessee’s request to produce additional material. The findings of the CIT(A) thus suffer from violation of natural justice and cannot be treated as conclusive. The issues relating to cost of acquisition, indexed cost of improvement and transfer expenses require verification by the Assessing Officer in light of the supporting documents, if any, produced by the assessee. 28. In view of the above discussion, we hold that:

16 I.T.A. No.1355/Kol/2025 Assessment Year: 2015-16 Sanjib Kumar Roy i. The assessment order dated 22.09.2021 passed under section 143(3) read with section 144B without awaiting the DVO’s report, when such report was statutorily awaited, is not sustainable. ii. The subsequent rectification order dated 20.11.2024 under section 154 is also not sustainable, as it seeks to alter the assessment based on material not forming part of the original record and cannot be regarded as a “mistake apparent from record.” iii. The assessee’s statutory right under section 50C(2) stood violated, and the assessment is consequently vitiated for breach of mandatory procedure and principles of natural justice. iv. The CIT(A) erred in law and on facts in upholding both the assessment and rectification orders and in confirming disallowances without proper opportunity. 29. Accordingly, the assessment order dated 22.09.2021, framed without awaiting the valuation report in violation of the statutory mandate under section 50C(2) read with section 153, as well as the rectification order dated 20.11.2024 passed under section 154 on the basis of material not forming part of the assessment record, are declared to be invalid and are accordingly quashed. As the very foundation of the assessment stands vitiated on account of jurisdictional infirmities and breach of mandatory procedure, no further adjudication on the merits of the additions is warranted.” 3.4.2. Consequently, we quash the assessment framed by the AO. The additional ground raised by the assessee is allowed.” 10. Considering the above facts of the case and respectfully following the decision of Co-ordinate Benches, we are of the view that since there is no valuation report submitted within six months from the end of the month in which reference was made to DVO u/s 142A , accordingly in terms of section 142A(6) the same is barred by limitation as the valuation is not received within six months. Therefore, the Assessing Officer is bound to accept the sale value as declared by the assessee and cannot accept the value as per the stamp valuation authority. Accordingly, the addition made by the Assessing Officer is directed to be deleted.

17 I.T.A. No.1355/Kol/2025 Assessment Year: 2015-16 Sanjib Kumar Roy Bhattacharya by a registered deed of conveyance dated 07.07.2014 for a consideration of Rs. 3,00,00,000/- while the value as per registering authority was Rs. 4,81,71,750/-.

18 I.T.A. No.1355/Kol/2025 Assessment Year: 2015-16 Sanjib Kumar Roy We also note that the assessee computed the capital gain on the said property as per computation of income which is extracted below:

It is apparent from the above statement the assessee has computed the capital loss of Rs. 1,91,52,000/- from the said property. We note that the said amount has received in the bank account by account payee cheques though there was loss on the said property but the same was not claimed by the assessee as the assessee has been suffering from serious illness and was of more than 91 years of age. We also verified the bank account with Axis Bank and State Bank of India and note that consideration was received through various account payee cheques and credited in the bank account of the assessee. Therefore, keeping in view, the age of the assessee and the amount being fully credited in the bank account of the assessee and there being no capital gain arising therefrom, we are inclined to set aside the order of Ld. CIT(A) and direct the Assessing Officer to delete the addition. The ground no. 9 is allowed.

19 I.T.A. No.1355/Kol/2025 Assessment Year: 2015-16 Sanjib Kumar Roy 18. We have examined the records available before us and also for the submissions of both the parties. We have examined the cash tally furnished by the assessee which is available at page no. 76 and is extracted below:

20 I.T.A. No.1355/Kol/2025 Assessment Year: 2015-16 Sanjib Kumar Roy

Order is pronounced in the open court on 1st September, 2026

Sd/- Sd/-

(Pradip Kumar Choubey /�द�प कुमार चौबे) (Rajesh Kumar/राजेश कुमार) Judicial Member/�या�यक सद�य Accountant Member/लेखा सद�य Dated: 1st September, 2026 SM, Sr. PS Copy of the order forwarded to: 1. Appellant- Sanjib Kumar Roy, 2/6, Biren Roy Road (East), W.B.-700008 2. Respondent – NFAC (ITO, Ward-61(1), Kolkata) 3. Ld. CIT(A)- NFAC, Delhi 4. Ld. Pr. CIT- , Kolkata 5. DR, Kolkata Benches, Kolkata