TaxTMI 
TaxTMI 
2026 (10) TMI 846
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to which the assessee had filed his return of income on 30.04.2022 disclosing income of Rs. 3,03,940/-. In the course of assessment, it transpired that the assessee had received an amount of Rs. 42,50,000/- being 1/8th of the sale consideration of Rs. 3.70 crores towards sale proceeds of an immovable property, in which the assessee was a co-owner. The assessee had claimed cost of acquisition of the said property at Rs. 43,21,060/- for which a valuation report of a registered valuer was filed. The AO had made a reference to the Departmental Valuation Officer (DVO) u/s. 142A of the Act, for determining the value of the property as on 01.04.2001 vis-a-vis the cost of acquisition as claimed by the assessee. The AO had, however, completed the assessment without awaiting for the report of the DVO and accordingly the assessment order was passed u/s. 147 read with section 144B of the Act on 18.09.2023 at total income of Rs. 3,03,940/-, as per return. Subsequently the case record was called for and examined by the Ld. PCIT. He noticed that the AO had accepted the value of the property as on 01.04.2001 at Rs. 43,21,060/-, as declared by the assessee, whereas the fair market value of the pro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dabad requires to be quashed. 6. Your appellant craves leave to add, alter, amend or drop any of the grounds till the appeal is finally heard and disposed of. 5. Shri Harish Gamara, the Ld. AR of the assessee submitted that in the course of assessment the AO had conducted proper inquiry, applied his mind and taken a plausible view and, therefore, the assessment order cannot be treated as erroneous. He explained that the valuation report of the DVO was received on 01.11.2023 which was beyond the statutory period of six months and, therefore, this report had no value. In this regard he relied upon the decision of Co-ordinate bench of Bangalore Tribunal in the case of Bashir Ahmed Abdurrahman Matte in ITA No 06 & 07/Bang/2021 dated 21.09.2022 [ITAT Bangalore]. The Ld. AR submitted that when the assessment was completed by the AO on 18.09.2023 the valuation report of the DVO was not available on record. Therefore, the order of the AO could not have been treated as erroneous and prejudicial to the interest of revenue. He submitted that the revisionary proceeding u/s. 263 of the Act on the basis of DVO report received after completion of assessment; was illegal, bad in law an....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... report. There is nothing brought on record before us to demonstrate that, in the absence of the DVO's report, the Assessing Officer had independently examined the valuation adopted by the assessee and recorded any satisfaction regarding its correctness. The assessment was thus completed by accepting the very valuation which the AO had considered necessary to verify through the DVO. 8. We also find merit in the submission of the learned CIT-DR that the subsequent availability of the DVO's report cannot, by itself, render the material irrelevant for the purposes of section 263. Clause (b) of Explanation 1 to section 263 specifically provides that, for the purposes of the said section, "record" shall include and shall be deemed always to have included all records relating to any proceeding under the Act available at the time of examination by the PCIT. The clause (b) of Explanation (1) of section 263 of the Act, stipulates as under: Explanation 1.-For the removal of doubts, it is hereby declared that, for the purposes of this sub-section,- (b) "record" shall include and shall be deemed always to have included all records relating to any proceeding under t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rence to the Valuation Officer under section 142A(1) and ending with the date on which the report of the Valuation Officer is received by the Assessing Officer. The language employed in the said clause specifically refers to the date on which the report of the Valuation Officer is actually received by the Assessing Officer. Thus, for the purposes of computation of the limitation period u/s 153, the statute contemplates exclusion of the period from the date of reference to the date of actual receipt of the DVO's report. In the present case, the reference to the DVO was made on 17.02.2023 and the DVO's report was received on 01.11.2023. The normal limitation period had expired on 31.03.2023. The period covered by the reference to the DVO was, however, liable to be excluded in accordance with Explanation-1 to section 153. Consequently, the mere fact that the DVO's report was received after six months cannot, in the facts of the present case, lead to the conclusion that the report was a nullity or that the AO was required to complete the assessment without awaiting the report. The relevant statutory provision for limitation itself contemplates that the period up to the actu....