Slimtile Private Limited Vs ACIT (Gujarat High Court)
DVO Reference Made One Day Before Limitation to Artificially Extend Assessment Time Quashed: Gujarat HC
Core Issue: The core issue was whether the Revenue was justified in making a reference to the District Valuation Officer under Section 142A of the Income Tax Act, 1961 immediately before expiry of the limitation period for completing the assessment, thereby seeking exclusion of the valuation period under Explanation 1(v) to Section 153, when valuation was not genuinely required for determining the assessee’s taxable income.
Facts: The assessee challenged the reference made to the District Valuation Officer for valuation of the company’s fixed assets. The reference was made on 24.06.2023, one day before the assessment was stated to become time-barred on 25.06.2023. The Revenue had alleged, inter alia, bogus depreciation and unaccounted payments in relation to the assets. However, the material concerning the assets and the assessee’s explanation were already available with the Department. The subsequent show-cause notices also did not raise any genuine issue requiring valuation of the assets. The assessee therefore contended that the reference was made only to obtain the benefit of exclusion of time under Explanation 1(v) to Section 153 and thereby keep the assessment proceedings alive.
