TaxTMI 
TaxTMI 
2026 (7) TMI 1156
X X X X Extracts X X X X
X X X X Extracts X X X X
....hereinafter referred as "the Act"]. 2. The brief facts of the case are that the assessee had filed his return of income for A.Y. 2020-21 on 27.12.2020 declaring income of Rs5,49,255/-. The case was selected in e-Verification scheme in accordance with the provisions of section 135A of the Act, on the basis of mismatch report. Subsequently, a notice u/s. 148 of the Act was issued on 24.03.2024. The assessment was completed u/s. and 147 r.w.s 144 of the Act on 13.03.2025 on returned income of Rs. 5,49,255/-. The case record was subsequently called for and examined by the Ld. PCIT. He noticed that the assessee has taken the valuation of cost of the property as on 01.04.2001 on the basis of valuation report of a private registered valuer at R....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ailed to make inquiries ignoring the fact that issue based on which assessment order passed, which is sought to be revised was duly inquired and examined at length during assessment proceeding. details were specifically called for and were duly furnished during assessment proceeding 4. Ld. PCIT has erred in law and or on fact in revising the assessment order merely on account of change of opinion, which is not permitted under the Act 5. Ld. P.CIT. has erred in law and or on facts and invoked provision of section 263 on void assessment order passed u/s 147 r. w. s. 144 r. w s 1448 of the Income Tax Act. 6. The appellant Craves liberty to add, amend, alter or modify all or any grounds of appeal before final appeal. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f revenue. The Ld. CIT-DR submitted that as per clause (b) of Explanation-1 to section 263 of the Act, the record includes all records relating to the proceeding available at the time of examination by the PCIT. Thus, the order of the DVO received subsequent to the passing of assessment order was part of the record and on the basis of such record the Ld. PCIT had rightly concluded that the order of the AO was erroneous and pre-judicial to the interest of revenue. 7. We have considered the rival submissions. It is found that the case was selected for scrutiny to examine the purchase of an immovable property during the year being non-agricultural land at Zundal for Rs. 81 lakhs, in which the assessee had 34% share valued at Rs. 27.54 lakh.....
X X X X Extracts X X X X
X X X X Extracts X X X X
.....2001 and Rs. 14,16,000/-. Further, the fair market value of the property as on 26.06.2019, i.e. the date of sale, was determined by the DVO at Rs. 11.13 crores. From the report of the DVO, it was thus crystal clear that the order of the AO was erroneous and prejudicial to the interest of revenue. 8. Thus, the undisputed facts are that during the course of assessment proceedings, the AO entertained doubts regarding the fair market value of the property as on 01.04.2001 as well as its value on the date of transfer. Consequently, he made a reference to the DVO for determination of the valuation. However, as the DVO's report was not received before the limitation period for completion of assessment, the AO had completed the assessment u....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng u/s. 263 of the Act, includes all records as available at the time of examination by the PCIT. In the present case, the report of the DVO was part of the record when the case record was examined by the Ld. PCIT. 10. In the present case, the AO himself considered it necessary to ascertain the correct valuation of the property and, accordingly, made a reference to the DVO. Having formed such an opinion, he could not have finalized the assessment by mechanically accepting the assessee's computation merely because the valuation report had not been received by then. The assessment order itself records no independent examination of the valuation adopted by the assessee, nor does it contain any finding demonstrating that the AO was other....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uch erroneous assessments where the Revenue has suffered prejudice. 13. It is equally significant that the learned PCIT has not himself substituted the valuation adopted by the DVO for the purpose of making the addition. He has merely set aside the assessment on the limited issue with a direction to the AO to examine the DVO's report, afford adequate opportunity of hearing to the assessee, consider the assessee's objections, if any, and thereafter frame the assessment afresh in accordance with law. Such a course fully conforms to the principles of natural justice and falls squarely within the ambit of section 263 of the Act. 14. In view of the foregoing discussions, we are satisfied that the assessment order was passed without....