2020 (6) TMI 289 - AT - Income Tax

Rectification application u/s 254 - assessee had deprived from raising objection regarding valuation made by DVO before the assessing officer and hence to be rectified - as directed AO to adopt the DVO s valuation or Registered Stamp Valuation whichever is less, however in the said direction, the assessee had not been given an opportunity of raising objection regarding valuation made by DVO before the assessing officer - HELD THAT - We note that AO was under a statutory obligation to serve notice of hearing to the DVO and assessee and afford them an opportunity of hearing but the AO has failed to do so, because this Tribunal has not given specific direction to AO while passing the order therefore it is a mistake apparent from record and should be rectified. Valuation report of the DVO is not the last word on valuation, it can be challenged by the assessee and for that we also rely on the judgment of Lovy Ranka Vs. DCIT 2019 (5) TMI 404 - ITAT AHMEDABAD - we direct the Assessing Officer to examine the DVO valuation report afresh and the assessee is at liberty to challenge the DVO report if it seems to him inconsistent on law as well as on facts. Order being pronounced after ninety (90) days of hearing - COVID-19 pandemic and lockdown - HELD THAT - Taking note of the extraordinary situation in the light of the COVID-19 pandemic and lockdown, the period of lockdown days need to be excluded. See case of DCIT vs. JSW Limited 2020 (5) TMI 359 - ITAT MUMBAI

Summary

Issues:
1. Whether the Tribunal's order directing the assessing officer to adopt the DVO's valuation or Registered Stamp Valuation whichever is less deprived the assessee of the opportunity to raise objections regarding the DVO's valuation?
2. Whether the assessing officer should entertain the assessee's challenge to the DVO's valuation even if it is an independent report?

Analysis:
1. The assessee contended that the Tribunal's order dated 11.03.2011 did not provide an opportunity for the assessee to object to the valuation made by the DVO before the assessing officer. The Tribunal had directed the assessing officer to adopt the DVO's valuation or Registered Stamp Valuation, whichever is less. The assessee argued that this deprived them of the chance to challenge the DVO's valuation. The Tribunal acknowledged this mistake and rectified it by directing the assessing officer to afford the assessee an opportunity to challenge the DVO's valuation.

2. The assessing officer argued that the DVO's valuation is an independent report and should not be subject to challenge by the assessee. However, the Tribunal noted that the DVO's valuation is not the final word on valuation and can be challenged by the assessee. Citing a judgment from the ITAT Ahmedabad, the Tribunal emphasized that the correctness of the DVO's report should be examined on merits. Therefore, the Tribunal directed the assessing officer to reexamine the DVO's valuation report and allowed the assessee to challenge it if found inconsistent on law or facts.

The Tribunal's decision highlighted the importance of affording the assessee the opportunity to challenge the DVO's valuation and rectifying the mistake in the Tribunal's previous order. The judgment also clarified that the DVO's valuation is not beyond challenge and should be subject to scrutiny based on law and facts.