Tribunal remits matter for fresh adjudication, directs consideration of objections and valuation report.

The Tribunal set aside the CIT(A)'s order and remitted the matter for fresh adjudication, directing consideration of the assessee's objections, valuation report, and providing a fair opportunity for both parties to be heard. The decision applies to all related appeals. All assessees' appeals were treated as allowed for statistical purposes, with the order pronounced on 01/02/2021.

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Issues Involved:
1. Validity of the reference made by the Assessing Officer (AO) to the District Valuation Officer (DVO) under section 55A of the Income Tax Act.
2. Accuracy and fairness of the DVO's valuation report.
3. Right of the assessee to challenge the DVO's valuation report.
4. Consideration of the valuation report submitted by the assessee's Registered Valuer.
5. Principle of natural justice in providing the assessee an opportunity to challenge the DVO's report.

Detailed Analysis:

1. Validity of the Reference to DVO:
The AO referred the valuation of the agricultural land to the DVO under section 55A of the Income Tax Act, 1961, due to a significant discrepancy between the assessee's valuation and the DVO's valuation. The AO's action was based on the belief that the assessee's declared value of Rs. 180 per square meter as of 01.04.1981 was excessively high compared to the DVO's valuation of Rs. 6.95 per square meter.

2. Accuracy and Fairness of the DVO's Valuation Report:
The DVO's report, dated 24.02.2016, valued the property significantly lower than the assessee's valuation. The assessee contested this valuation, arguing that the DVO's report was biased and defective, especially when compared to valuations of nearby properties where the DVO had given higher values. The AO, however, relied on the DVO's report to compute the capital gains, leading to an addition based on the lower valuation.

3. Right to Challenge the DVO's Valuation Report:
The assessee argued that the reference to the DVO was erroneous and that the DVO's report was not based on a scientific and objective basis. The assessee's counsel cited the judgment of the Hon'ble High Court of Allahabad in Chandra Narain Chaudhri, which emphasized the AO's duty to consider the assessee's objections and the approved valuer's report before referring the matter to the DVO. The Tribunal noted that the correctness of the DVO's report can indeed be challenged by the assessee, as supported by the ITAT Ahmedabad's decision in Lovy Ranka.

4. Consideration of the Assessee's Valuation Report:
The assessee had submitted a valuation report from a Government Approved Registered Valuer, valuing the property at Rs. 180 per square meter as of 01.04.1981. The CIT(A) failed to consider this report and did not provide the assessee an opportunity to challenge the DVO's valuation. The Tribunal highlighted that the CIT(A) should have considered the assessee's report and provided a fair opportunity to challenge the DVO's findings.

5. Principle of Natural Justice:
The Tribunal emphasized the principle of natural justice, stating that the assessee must be given a fair opportunity to challenge the DVO's report. The CIT(A)'s failure to consider the assessee's objections and the valuation report of Shri Ramesh Jain was against the principle of natural justice. The Tribunal reiterated that the DVO's report is not the final word on valuation and that there must be a mechanism for redressing grievances against incorrect valuations.

Conclusion:
The Tribunal set aside the order of the CIT(A) and remitted the matter back to the CIT(A) for fresh adjudication. The CIT(A) is directed to consider the assessee's objections, the valuation report submitted by the assessee, and provide a fair opportunity for both the assessee and the DVO to be heard. The Tribunal's decision applies mutatis mutandis to all related appeals.

Order Pronouncement:
The appeals of all the assessees are treated as allowed for statistical purposes, and the order was pronounced on 01/02/2021.

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