2018 (12) TMI 701 - HC - Income Tax

Objection to a report of the valuation by the DVO for four immovable properties - contention of the petitioner is that this report was finalized without following the requirements of hearing to be granted to the petitioner in terms of sub-section 4 of Section 142A - Held that - We are not inclined to interfere at this intermediary stage when the AO has yet to pass any final order of assessment. It is always open for the petitioner to contest the contents of the report before the AO. As is clear from sub-section 7 of Section 142A this provision provides that 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. Thus, even this provision enjoins a duty on the Assessing Officer to hear the assessee on the report of the DVO before he can act upon the same. At this stage, the petitioner would have ample opportunity to contest the report on all grounds including on the ground that reasonable opportunity of hearing as envisaged under sub-section 4 of Section 142A of the Act was not granted. We have not examined the validity of this contention. This observation would not limit the petitioner s objection only to this limited issue and would enable the petitioner to raise all objections on substance as well as contents of the report. At the stage where the assessment is not yet made, we do not find it appropriate to interference.

Summary

Issues:
1. Petitioner's prayer for a direction to be heard before finalization of valuation report by District Valuation Officer.
2. Petitioner's objection to the valuation report finalized without granting a hearing as per Section 142A of the Income Tax Act, 1961.

Analysis:
1. The petitioner, an individual, sought a direction to be heard before the District Valuation Officer (DVO) finalizes the valuation report. Although the petitioner also prayed for setting aside the notice for reopening of assessment, this aspect was not pressed in the petition. The petitioner's objection primarily pertained to the report of valuation by the DVO dated 23.7.2018 concerning four immovable properties. The contention was that the report was finalized without granting the petitioner a hearing as required by sub-section 4 of Section 142A of the Income Tax Act, 1961.

2. The petitioner's counsel argued that if a reasonable opportunity of hearing was provided, the petitioner could have presented evidence indicating that the valuation of the properties was undervalued according to the DVO's assessment. It was also highlighted that some properties mentioned in the report did not belong to the petitioner. However, the court, after hearing both parties and examining the documents, declined to interfere at an intermediary stage when the Assessing Officer had not yet made a final assessment order.

3. The court emphasized that the Assessing Officer, as per sub-section 7 of Section 142A of the Act, must give the assessee an opportunity to be heard after receiving the report from the Valuation Officer before considering the report for assessment or reassessment. Therefore, the petitioner would have the opportunity to contest the report before the Assessing Officer, including raising objections related to the lack of a proper hearing as required under sub-section 4 of Section 142A. The court refrained from delving into the validity of this contention, allowing the petitioner to raise objections on various grounds during the assessment process.

4. Given that the assessment had not been finalized, the court found it inappropriate to interfere at that stage. The court disposed of the petitions with the observation that the petitioner would have the opportunity to contest the valuation report and raise objections during the assessment process before the Assessing Officer.