Section 142A valuation references require pending assessment or reassessment proceedings; pre-notice references cannot support consequential additions.

A reference to the Valuation Officer under Section 142A of the Income-tax Act, 1961 is described as valid only when assessment or reassessment proceedings are pending. The reference must therefore follow initiation of the relevant proceedings, including issuance of notice under Section 148. Where a valuation reference was made before such notice and no assessment or reassessment was pending, the foundational jurisdiction for Section 142A was absent. Any addition directly based on the resulting valuation report consequently lacked legal support and was described as liable to be deleted in favour of the assessee.

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Issues: Whether a reference to the Valuation Officer under Section 142A of the Income-tax Act, 1961 can validly be made before issuance of notice under Section 148 and in the absence of any pending assessment or reassessment proceedings.

Analysis: Section 142A of the Income-tax Act, 1961 permits a valuation reference for the purposes of making an assessment or reassessment, which requires the existence of pending assessment or reassessment proceedings at the time of reference. In the present case, the reference to the District Valuation Officer was made on 05.03.2015, whereas notice under Section 148 was issued only on 01.04.2015. Since no assessment or reassessment proceeding was pending on the date of reference, the foundational jurisdiction for invoking Section 142A was absent. The addition made by the Assessing Officer was directly based on such valuation report and therefore lacked legal support.

Conclusion: The reference under Section 142A of the Income-tax Act, 1961 having been made prior to initiation of reassessment proceedings was invalid, and the consequential addition was rightly deleted; the issue is decided in favour of the assessee.

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