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of <h1>Tribunal sets aside assessment order due to delayed valuation report submission, upholding appellant's position on capital gains.</h1> <h3>Shri Zulfi Revdjee, Hyderabad Versus Asstt. Commissioner of Income Tax, Circle 14-1 Hyderabad</h3> Shri Zulfi Revdjee, Hyderabad Versus Asstt. Commissioner of Income Tax, Circle 14-1 Hyderabad - [2019] 75 ITR (Trib) 219 (ITAT [Hyd]) Issues:1. Assessment of long term capital gain based on SRO value discrepancy.2. Timeliness of valuation report submission by the DVO under section 142A.3. Interpretation of mandatory vs discretionary language in tax statutes.Analysis:1. Assessment of Long Term Capital Gain: The appellant contested the adoption of the SRO value as on the date of sale deed in 2012 for computing capital gains, arguing that the agreement of sale in 2010 should be considered. The AO referred the matter to the Valuation Officer, who submitted a report in 2017. The appellant relied on ITAT decisions and challenged the CIT (A)'s dismissal. The appellant's contention was that the valuation should be based on the agreement date. The Tribunal agreed, setting aside the assessment order due to the DVO's failure to submit the report within the prescribed time, holding that the assessment based on the delayed report was unsustainable.2. Timeliness of Valuation Report Submission: The appellant argued that the DVO's report was submitted beyond the six-month period stipulated under section 142A(vi). The Tribunal concurred, emphasizing the mandatory nature of the word 'shall' in the statute. Citing legal precedents, the Tribunal held that the DVO's delay in submitting the report could not be condoned, as it did not comply with the statutory timeline. Consequently, the assessment order based on the belated report was set aside, supporting the appellant's plea.3. Interpretation of Mandatory vs Discretionary Language: The Tribunal analyzed the language used in tax statutes, highlighting the distinction between 'shall' and 'may.' Referring to legal authorities, the Tribunal affirmed that 'shall' denotes a mandatory requirement. By applying this principle to the case, the Tribunal concluded that the DVO was obligated to adhere to the statutory timeline for submitting the valuation report. As the DVO's non-compliance with the timeline rendered the assessment unsustainable, the Tribunal ruled in favor of the appellant, emphasizing the importance of strict adherence to statutory provisions.In conclusion, the Tribunal allowed the appellant's appeal, setting aside the assessment order due to the DVO's delayed submission of the valuation report, which violated the mandatory timeline stipulated under section 142A(vi). The judgment underscored the significance of statutory compliance and upheld the appellant's position regarding the valuation date for computing capital gains.
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