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Judgment
ORDER
PER BRAJESH KUMAR SINGH, AM,
This appeal by the assessee is directed against the order dated 30.01.2023 of the Ld. Commissioner of Income Tax, (Appeal), Delhi-42 [hereinafter referred to as the ‘Ld. CIT(A)] arising out of the Assessment Order dated 26.05.2022 passed under section 143 r.w.s. 144C(3) of the Income Tax Act, 1961 (hereinafter referred to as the ‘the Act’) by the DCIT, Circle-1(3)(1), International Taxation, New Delhi, (hereinafter referred to as the ‘AO’) pertaining to Assessment Years (A.Y.) 2018-19.
Brief facts of the case: The assessee filed his return of income on 25.08.2018 for the concerned assessment year declaring taxable income of Rs. 11,32,95,620/-and claiming the refund of Rs. 3,96,95,300/-. The assessee during the F.Y. 2017-18 had sold a property and had claimed deduction of cost of acquisition amounting to Rs. 72,41,181/- with indexation amounting to Rs.2,81,59,000/- on 01.04.2001 as per valuer. The AO was not satisfied about the correctness of valuation report submitted by the assessee. Therefore, the AO referred the report to Valuation Officer, Income Tax Department u/s 142A of the IT Act, 1961 on 25.09.2021 for valuation of property and requested to estimate the value, including fair market value of the property as on 01.04.2001. The AO noted that valuation officer submitted the report on 14.12.2021 in which the indexed cost of acquisition amounting to Rs. 2,54,96,800/- was determined after considering the replies and information furnished by the assessee, an amount of Rs. 72,41,181/- was added back to the Long-Term Capital Gain for the F.Y. 2017-18.
Aggrieved with the said order, the assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) dismissed the appeal filed by the assessee.
Aggrieved with the order of the Ld. CIT(A), the assessee is in appeal before us, on the following grounds of appeal:
“For that the impugned order is erroneous in law, facts and procedure.
For that the impugned addition amounting to Rs. 72,41,181/-, being unsustainable. both in law and on facts, is liable to be deleted
For that the ld AO was not justified in arbitrarily substituting the cost of acquisition of the asset transferred, as on 1.4.2001, to Rs. 2,54,96,800/- in place of Rs. 2,81,59,000/-shown by the appellant on the basis of report of a registered government valuer. For that the Id CIT(A) was equally unjustified in confirming the substitution so made. Being unsustainable, both on facts and in law, the impugned addition is liable to be deleted.
For that reference to valuation officer having been made by the ld AO without forming opinion on the basis of relevant facts and the same having been formed without application of mind, the said reference is not in accordance with law and hence unsustainable and of no value in the eye of law.
For that valuation report of the departmental valuer having not been provided to the appellant in the course of assessment hearing, no reasonable opportunity of being heard was allowed, rendering the impugned addition to be unsustainable and liable to be deleted.
For that pre-decisional hearing cannot be substituted by post-decisional hearing.
For that the reply of the appellant was capriciously dismissed on suspicion, conjectures and surmises.
For that due process of law having not been followed, the impugned addition is unsustainable and liable to be deleted.
For that conditions precedent for invoking section 142A of the Act being absent, the reference made by the ld AO was not in accordance with law and the impugned addition is liable to be deleted.
For that the difference being within permissible limit, the impugned addition is unjustified and liable to be deleted.
For that general provision having been preferred to specific provision, the impugned order is not sustainable and liable to be quashed.
For that the appellant craves leave of this Hon'ble Tribunal to add to and/or amend and/or delete and/or modify and/or alter the aforesaid grounds of appeal as and when the occasion so demands.”
However, during the pendency of the appeal, the assessee filed additional grounds of appeal, which are reproduced as under:
“The appellant named herein above humbly and most respectfully seeks leave of this Hon'ble Tribunal to take the following legal grounds at the time of hearing of the said appeal:
1.For that the appellant not being an "eligible assessee" within the meaning of section 144C(15)(b) of the Income-tax Act, 1961, ("the Act"), as was in force at the material time, the orders passed by the lower authorities are bad in law and unsustainable.
2.For that the order passed by the Id Assessing Officer which was sustained by the First Appellate Authority, is barred by limitation.
3.For that in view of the specific provisions in section 55A of the Act, reference made under section 142A of the Act is invalid and the order passed pursuant thereto, is bad in law and unsustainable.
All the above grounds raise questions of law which go to the root of the matter. Facts relating thereto are already on record and in view of the law declared by the Hon'ble Supreme Court in National Thermal Power Co. Ltd., v. CIT, [(1998) 229 ITR 383 (SC)), the same merit to be admitted.
And for this act of kindness, the appellant shall ever remain grateful.”
In ground no. 2, the assessee submits that the assessment order was barred by limitation
In this regard, a report was submitted by the AO, which is reproduced as under:
“In the case of: Shri Surendra Pal Garg (PAN: AANPG6942N) Assessment Year: 2018-19 In compliance with the directions of the Hon'ble Bench, factual comments on the following additional grounds raised by the assessee are submitted as under:
(1)Whether the Assessment Order is Time-Barred;
The final assessment order u/s 143(3) r.w.s. 144C(3) was passed on 26.05.2022. Though the initial time limit to complete assessment for A.Y. 2018-19 was 31.03.2020, it was extended multiple times due to the COVID-19 pandemic with CBDT circulars. Thereafter the limit to complete the assessment in the instant case u/s 143(3) was extended to 30.09.2021.
Further, the assessee's case involved significant issues, including capital gain computation requiring expert valuation of immovable property as on 01.04.2001. The reference to the Valuation Officer uls 142A was made on 25.09.2021, well within the extended limitation period, and the report was received 14.12.2021. Thereafter, valuation report sent to assessee and an opportunity was given to respond for the same. The assessee submitted his reply on 16.03.2022, and the assessment was completed soon thereafter on 26.05.2022.
Therefore, it is respectfully submitted that the assessment proceedings were conducted in good faith, in a reasonable timeframe, and are not time-barred, particularly in light of the exceptional COVID-19 disruptions. The order is valid and sustainable.”
We have heard both the parties and perused the material available on record. As noted above, the assessee has raised additional grounds, in this appeal which are purely legal in nature. We further find that all the facts relevant for adjudication of the aforesaid additional grounds are already on record. Hence, in view of the decision of the Hon’ble Supreme Court in the case of NTPC Limited vs CIT 229 ITR 383(SC), the additional grounds raised by the assessee is hereby admitted and taken up for adjudication.
In this regard, the assessment was completed u/s 143 (3) of the Act for which the limitation date for passing the order is prescribed under sub section (1) of section 153 of the Act. In this regard, the list of dates relevant for deciding the appeal is reproduced as under:
| Sr. No. | Dates | Event |
| 1 | 25.09.2021 | AO referred the matter u/s 142A of the Act for valuation of the impugned property |
| 2 | 14.12.2021 | The valuation officer submitted the report |
| 3 | 26.05.2022 | Order u/s 143(3) r.w.s. 144(3) of the Act. |
Further, Explanation 1 (v) of section 153 of the Act regarding the exclusion of time taking from the reference to the receipt of the report is excluded and the relevant provision is reproduced as under:
“153 (1)(v) the period commencing from the date on which the Assessing Officer makes a reference to the Valuation Officer under sub-section (1) of section 142A and ending with the date on which the report of the Valuation Officer is received by the Assessing Officer; or”
Further, the first proviso to Explanation to section 153 of the Act provides that where the available time after the exclusion of the aforesaid period is less than sixty days then such remaining period shall be extended to sixty days and the aforesaid period of limitation shall be deemed to be extended accordingly. The relevant proviso is reproduced as under:
“Provided that where immediately after the exclusion of the aforesaid period, the period of limitation referred to in sub-sections (1), (2), (3) and sub section (8) available to the Assessing officer for making an order of assessment, reassessment or recomputation, as the case may be , is less than sixty days, such remaining period shall be extended to sixty days and the aforesaid period of limitation shall be deemed to be extended accordingly.”
In this case, it is an undisputed fact that the valuation report u/s 142A of the Act was received by the AO 14.12.2021 and sixty-days time limit as per the above proviso for passing the assessment order expired on 13.12.2021, whereas the impugned assessment order was passed on 26.05.2022. Therefore, as per the above provision of law, the impugned assessment order passed u/s 143(3) r.w.s. 144C(3) of the Act dated 26.05.2022 is barred by limitation. Therefore, the impugned assessment order is quashed. Ground no. 2 of the additional ground of the appeal of the assessee is allowed. In view of the fact that the additional ground no. 2 of the appeal being allowed, the original grounds of appeal and the balance additional grounds of appeal become academic and are left open in this case.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 13.04.2026.