Reference of Matter by AO to DVO for valuation of Property is Not Mandatory: ITAT [Read Order]

The Income Tax Appellate Tribunal ( ITAT ), Delhi bench has held that the reference of the matter by the Assessing Officer to DVO for valuation of the property is not mandatory under section 50C of the Income Tax Act.

As per the Act, the AO (assessing officer) may refer the matter to DVO (district valuation officer) for valuation of the property. If AO was satisfied from the valuation of the property, he did not refer the matter to the DVO and accepted the valuation report of the Registered Valuer (approved by the govt.) which was furnished by the assessee.

In the present case, the AO during the scrutiny proceedings found that there is an additional capital gain to the assessee by a developer In the Income Tax Appellate Tribunal, Delhi Bench held that section 55A of the Act provides that agreement with Uppal Housing Finance Pvt. Ltd. for the property. The assessee filed included the same in the original return or subsequently in his revised return, however, the assessee failed to do the same. The AO rejected the claim of the assessee and assessed the income. Thereafter, the successor AO made a proposal to the ld. Pr. CIT for remedial action u/s 263 of the Act. The assessee aggrieved by the decision of Pr. CIT and appealed.

The Tribunal observed that the AO was satisfied from the valuation of the property, he did not refer the matter to the DVO and accepted the valuation report of the Registered Valuer (approved by the Govt.) which was furnished by the assessee.

The AO passed the assessment order after application of mind and considered the revised computation of long term capital gain furnished by the assessee as well as the Valuation Report of Government Approved, Registered Valuer, therefore, he has taken a possible view, the Tribunal said.

“Therefore, the ld. Pr. CIT was not justified in interfering only on the basis of valuation report obtained for the subsequent assessment year i.e. the assessment year 2015-16. Moreover, the ld. Pr. CIT passed the assessment order himself which he should not have passed in view of the provision of the Income Tax Act which provides that only the Assessing Officer is authorized to pass the assessment order and not the Pr. CIT. The order passed by the Pr. CIT is quashed and the assessment order passed by the AO is restored,” it said.