Tribunal Grants Appeal, Favours Taxpayer, Orders Recomputation

The Tribunal condoned the delay in filing the appeal, considering it had a reasonable cause. It held that the Assessment Officer should have waited for the Departmental Valuation Officer's report before finalizing the assessment under section 143(3). The Tribunal also decided to apply the principle favoring the assessee in the computation of Long Term Capital Gains under section 50C of the Income Tax Act. The Tribunal set aside the previous orders and directed the Assessment Officer to recompute the LTCG after obtaining the DVO's valuation report, ensuring fair treatment to the taxpayer.

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Issues Involved:
1. Condonation of delay in filing the appeal.
2. Validity of assessment order under section 143(3) without waiting for the Departmental Valuation Officer (DVO) report.
3. Application of section 50C of the Income Tax Act for computation of Long Term Capital Gains (LTCG).

Detailed Analysis:

1. Condonation of Delay in Filing the Appeal:
The assessee filed an appeal with a delay of 46 days. The delay was attributed to improper advice from the tax consultant and subsequent referral to another Chartered Accountant. The Tribunal considered the principles laid down by the Hon’ble Apex Court in MST Katiji and Others (1987) and the Karnataka High Court in CIT Vs. ISRO Satellite Centre (2013), concluding that the delay was due to reasonable and sufficient cause. Thus, the delay was condoned, and the appeal was admitted for consideration.

2. Validity of Assessment Order under Section 143(3) Without Waiting for the DVO Report:
The assessee objected to the adoption of stamp duty valuation under section 50C for computing LTCG on the sale of property. The Assessing Officer (AO) referred the matter to the DVO but concluded the assessment hurriedly without waiting for the DVO’s report. The Tribunal noted that the AO should have waited for the DVO’s report, as per the provisions of section 50C(2). The CIT(A) dismissed the appeal on the grounds that the reference to the DVO was made suo-moto by the AO and not at the request of the assessee. However, the Tribunal found merit in the assessee’s contention that the AO’s reference to the DVO was based on the assessee’s oral objections, and the AO should have completed the assessment in accordance with the DVO’s valuation.

3. Application of Section 50C of the Income Tax Act for Computation of LTCG:
The Tribunal examined the conflicting judicial pronouncements on the issue, specifically the decisions of the Hon’ble Madras High Court in Ambattur Clothing Co. Ltd. Vs. ACIT (2010) and the Hon’ble Calcutta High Court in Sunil Kumar Agarwal Vs. CIT (2015). The Tribunal decided to follow the principle laid down by the Hon’ble Apex Court in CIT Vs. Vegetable Products Ltd. (1973), which states that in cases of conflicting judgments, the view favorable to the assessee should be adopted. Thus, the Tribunal followed the decision of the Calcutta High Court, which emphasized the necessity of obtaining a DVO’s report to ensure fair treatment to the taxpayer.

Conclusion:
The Tribunal set aside the orders of the AO and CIT(A) and remanded the matter back to the AO. The AO was directed to obtain the DVO’s valuation report and recompute the LTCG in accordance with the law, ensuring the assessee is given adequate opportunity to be heard. The assessee’s appeal was allowed for statistical purposes.

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