2014 (10) TMI 542 - HC - Income Tax

Maintainability of writ petition - AO rejected the request of assessee to refer the matter to DVO u/s 50C - alternative remedy - Held that - As the purchaser, which was a Government concern, has not taken any steps u/s 47A of the Indian Stamp Act and therefore the only remedy for the assessee was u/s 50C of the Act - As regards the availability of the alternative remedy, the matter was pending before the valuation officer which had been referred by the assessing officer and without waiting for the valuation report, the assessment was completed and therefore the availability of alternative remedy would not be a bar for the court to exercise its jurisdiction under Section 226 of the Constitution of India relying upon S.Muthuraja v. Commissioner of Income Tax 2013 (8) TMI 40 - MADRAS HIGH COURT - the assessee was the vendor of the property and the only right available to the assessee was u/s 50C(2). Valuation of property Held that - The AO was justified in considering the case along with other issues and passing the order of assessment - The only remedy left to the petitioner is to file an appeal before the Commissioner of Income Tax (Appeals III) under Section 246 of the Act the order is upheld Decided against revenue.

Issues:
Challenge to assessment order under Income Tax Act for the assessment year 2007-08; Request for valuation under Section 50C; Refusal to refer matter to Valuation Officer; Availability of alternative remedy under Section 246 of the Act.

Analysis:

1. The petitioner, an individual assessee under the Income Tax Act, filed a writ petition seeking to quash the order passed by the second respondent under Section 143(3) read with Section 147 for the assessment year 2007-08. The petitioner, a manpower consultant, sold a property in Bangalore Rural District for Rs. 95,00,000, with a guideline value of Rs. 3,00,00,000. The Assessing Officer noted discrepancies in the petitioner's income disclosure, particularly related to the sale of land, prompting the issuance of notices and reminders for filing returns.

2. The Assessing Officer highlighted that the petitioner had not disclosed income from the sale of land in previous years, raising concerns about the delayed filing of returns and objections to property valuation. Despite the petitioner's objections under Section 50C, the Assessing Officer proceeded with the assessment, considering the petitioner's conduct and the valuation accepted during property registration.

3. The petitioner contested the assessment order not on its merits but on the grounds that the matter should have been referred to the Valuation Officer, invoking the rights under Section 50C(2) of the Act. Citing relevant case law, the petitioner argued for the valuation to be revisited, emphasizing the importance of protecting the statutory rights of the assessee.

4. The learned Standing Counsel for the respondents highlighted the petitioner's conduct, emphasizing the delay in filing returns, lack of admission of capital gains, and acceptance of property valuation during registration. It was argued that the petitioner should exhaust the appeal remedy available under Section 246 of the Act instead of challenging the assessment order directly.

5. The Court considered the conduct of the petitioner, the relevance of the cited case law, and the refusal to refer the matter to the Valuation Officer. After detailed analysis, the Court concluded that the Assessing Officer's decision to reject the request for valuation under Section 50C was justified, given the circumstances of the case. The petitioner was directed to pursue the available appeal remedy under Section 246 of the Act.

6. The Court dismissed the writ petition, granting the petitioner 30 days to file an appeal before the Commissioner (Appeals) without rejecting it on the grounds of limitation. The Commissioner (Appeals) was instructed to independently consider the matter without being influenced by the Court's observations, ensuring a fair review of the appeal.

7. The judgment emphasized the importance of exhausting available remedies, respecting statutory rights, and ensuring a thorough assessment process under the Income Tax Act. The decision provided clarity on the role of the Valuation Officer, the significance of timely filings, and the proper channels for challenging assessment orders.

← Previous Next →