RAKESHBHAI GEMABHAI OAD,SURAT vs. INCOME TAX OFFICER, WARD-2(3)(5), SURAT, SURAT

At the outset, Ld. Counsel for the assessee submits that ld. CIT(A) has passed an ex parte order without hearing the assessee. The Ld. Counsel pointed out that assessee has submitted the e-mail address i.e. cakkshahco@gmail.com to the lower authorities in Form No.35 which is mentioned in paper book page no.8. However, the ld.

ITA.510/SRT/2023/AY.2014-15 Rakeshbhai Gemabhai Oad CIT(A) has sent the notices on a different e-mail id, which is reproduced below ( vide page no.3 of paper book): “mstailor_kc@yahoo.com”

Therefore, Ld. Counsel contended that notices were issued by the ld. CIT(A) on a different e-mail id, therefore assessee could not get notice of hearing and as a result, the ld. CIT(A) has passed ex parte order. The Ld. Counsel also contended that the issue involved in assessee’s case was relating to the Provision of section 56(2)(vii)(b) of the Act wherein the Assessing Officer has made the addition on account of difference between registered value and the value as per section 56(2)(vii)(b) of the Act. The Ld. Counsel contended that Assessing Officer has not made reference to the Departmental Valuation Officer for determining the value of the property afresh, therefore, Ld. Counsel contended that matter may be remitted back to the file the Assessing Officer for fresh adjudication and for making the reference before the Departmental Valuation Officer. For that, Ld. Counsel relied on the judgment of the Co-ordinate Bench of ITAT, Pune in the case of Bhausaheb Sopanrao Bhoir vs ITO, dated 30.05.2023 wherein it was held as follows: “13. The ld. AR invited our attention towards the additional ground raised before the ld. CIT(A), as has been reproduced at page 3 of the impugned order, challenging the making of addition u/s. 56(2)(vii)(b) without making a reference to the Department Valuation Officer as required by the proviso after sub-clause (c) of section 56(2)(vii)(b). This shows that the assessee did raise the issue before the ld. CIT(A) about the stamp value of the property at this high level and hence the necessity to make a reference to the DVO. It further goes without saying that first appeal is a continuation of the assessment proceedings. The third proviso to section 56(2)(vii)(b) provides that where the stamp value of the immovable property is disputed by the assessee on the ground mentioned in section 50C(2), the AO may refer the valuation of such property to the Valuation Officer. The word `may’ in such provision has been interpreted as `shall’ in many cases, making it mandatory on the part of the AO to make a reference to the DVO, where the assessee asserts that the stamp value is excessive. The additional ground raised before the ld. CIT(A) in this ITA.510/SRT/2023/AY.2014-15 Rakeshbhai Gemabhai Oad regard has remained undisposed off, which in our considered opinion, is not correct. Going with the mandate of the third proviso to section 56(2)(vii)(b), we are of the considered opinion that it would be in the fitness of things if the impugned order on this score is set aside and the matter is remitted to the file of the AO for making a reference to the Departmental Valuation Officer for determining the value of the property afresh. It is thereafter that the computation of capital gain will be done by the AO after allowing a reasonable opportunity of hearing to the assessee.”

On the other hand, Learned Departmental Representative (ld. DR) for the Revenue submitted that assessee did not file any submissions before the ld. CIT(A), therefore assessee’s appeal may be dismissed.

Alternatively, ld. DR also argued that if the matter is to be remitted back to the file of the lower authorities, then in that circumstances, it should be remitted back to the file of the Assessing Officer for fresh assessment.

I have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee. I note that assessee could not plead his case successfully before the ld. CIT(A). I also note that Ld. CIT(A) has not passed the order as per the mandate of provisions of section 250(6) of the Act. That is, ld. CIT(A) did not pass order on merit based on the submission of the assessee, which would have been submitted by him provided ld. CIT(A) had granted the adjournment. Hence, I am of the view that one more opportunity should be given to the assessee to plead his case before the Assessing Officer and the Assessing Officer should make a reference to the Departmental Valuation Officer a required by the proviso of section 56(2)(vii)(b) of the Act. I note that it is settled law that principles of natural justice and fair play require that the affected party is granted

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