Timely Appeal Resolution Ordered; Recovery Actions Halted for Disputed Tax Until Fair Valuation Achieved.

The HC directed the fourth respondent to resolve the statutory appeal within three months, emphasizing the need for timely adjudication. It restrained the first and second respondents from initiating coercive recovery actions for the disputed tax demand of Rs. 19,41,080/- until the appeal's resolution, highlighting the significance of fair asset valuation under Section 50C of the Income Tax Act. The related application was closed without costs.

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Issues Involved:
The issues involved in the judgment are the delay in disposing of a statutory appeal challenging an assessment order and the request for an interim stay of the disputed tax demand.

Details of the Judgment:

Issue 1: Delay in Disposing of Statutory Appeal
The petitioner, an Income Tax assessee, sought direction for the fourth respondent to dispose of the statutory appeal challenging the assessment order within a reasonable time. The petitioner's return of income for the assessment year 2018 - 2019 was selected for scrutiny due to the difference between the income disclosed and the guideline value of an immovable property purchased by the petitioner. Despite the petitioner's request for valuation by the Departmental Valuation Officer, the assessment order was issued before receiving the valuation report. The petitioner argued for a stay of coercive action pending adjudication of the statutory appeal, citing Section 50C of the Income Tax Act as conferring a vital statutory right on an assessee regarding asset valuation.

Issue 2: Interim Stay of Tax Demand
The petitioner requested an interim stay of the disputed tax demand of Rs. 19,41,080/- pending the disposal of the statutory appeal. The assessment order was based on the guideline value of the property without waiting for the valuation report, causing prejudice to the petitioner. The petitioner contended that the guideline value did not represent the fair market value as specified in the sale deed. The respondents argued that the assessment order was issued before receiving the valuation report due to the prescribed limitation date for completion of assessment and that the statutory appeal was pending.

The Court directed the fourth respondent to dispose of the statutory appeal within three months and restrained the first and second respondents from initiating any coercive action for recovery of the disputed tax demand until the appeal is resolved. The judgment emphasized the importance of expeditiously disposing of the statutory appeal and closed the related application without any costs.

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