Pratap Vitthal Bandal Vs Union of India & Ors. (Bombay High Court)
Summary: The Bombay High Court, in Pratap Vitthal Bandal Vs Union of India & Ors., considered four connected writ petitions challenging the procedure adopted by the District Valuation Officer (DVO) while preparing valuation reports concerning four immovable properties. The petitioner contended that the DVO had finalised the valuation report dated 23 July 2018 without granting the reasonable opportunity of hearing contemplated under Section 142A(4) of the Income-tax Act, 1961. Although the petitions originally included a challenge to notices reopening the assessments, the petitioner’s counsel expressly declined to press that relief while reserving the right to raise all relevant contentions at the appropriate stage.
The petitioner submitted that a proper hearing before the DVO would have enabled him to produce material establishing that the actual values of the properties were substantially lower than those proposed in the valuation report. He further asserted that some properties covered by the report did not even belong to him. The dispute therefore concerned both the alleged procedural failure to provide a hearing and substantive objections to the valuation of the properties. The petitioner sought judicial intervention before the Assessing Officer completed the assessments.
The Division Bench comprising Justice Akil Kureshi and Justice M.S. Sanklecha declined to interfere at this intermediate stage because the Assessing Officer had not yet passed any final assessment order. The Court examined Section 142A(7) of the Income-tax Act, which expressly permits the Assessing Officer to consider a valuation report in assessment or reassessment proceedings only after providing the assessee an opportunity of being heard. The Bench emphasised that this provision imposes a duty on the Assessing Officer to hear the assessee before acting upon the DVO’s report. The petitioner would therefore have an opportunity to contest the report before the Assessing Officer on all available grounds.
The High Court clarified that the petitioner could challenge the valuation report not only on the ground that the DVO had allegedly failed to provide the hearing required under Section 142A(4), but also on substantive grounds concerning the valuation and ownership of the properties. Importantly, the Court did not determine whether the DVO had actually violated Section 142A(4) and expressly left that question open. Since the statutory assessment process still provided an opportunity to raise these objections, the Court considered immediate interference inappropriate. Accordingly, all four writ petitions were disposed of with these observations, without restricting the petitioner’s right to raise objections before the Assessing Officer.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. The petitioners in these petitions are common. The issues presented in these petitions are also common. For convenience, we may refer to the facts arising in Writ Petition No. 13771 of 2018.
2. The petitioner, an individual, has primarily prayed for a direction to be heard before the valuation report is finalized by respondent No. 2 – District Valuation Officer (“the DVO” for short). At the outset, learned counsel for the petitioner stated that though the petitioner has made the additional prayer for setting aside the notice for reopening of assessment, the same is not pressed in this petition, of course, keeping all the contentions of the petitioners open which may be raised at the appropriate stage.
3. The petitioner’s sole prayer pressed before us as noted above, arises out of the petitioner’s objection to a report of the valuation by the DVO dated 23.7.2018 which concerns four immovable properties. The contention of the petitioner is that this report was finalized without following the requirements of hearing to be granted to the petitioner in terms of sub-section 4 of Section 142A of the Income Tax Act, 1961 (“the Act” for short).
4. Learned counsel for the petitioner submitted that if the petitioner was granted reasonable opportunity of hearing, the petitioner would have been in a position to produce materials on record pointing out that the valuation of the properties in question is far below what the DVO wanted to adopt. He further submitted that some of the properties covered under the report did not even belong to the petitioner.
5. Having heard the learned counsel for the parties and having perused the documents on record, we are not inclined to interfere at this intermediary stage when the Assessing Officer has yet to pass any final order of assessment. It is always open for the petitioner to contest the contents of the report before the Assessing Officer. As is clear from sub-section 7 of Section 142A of the Act, this provision provides that the Assessing Officer may, on receipt of the report from the Valuation Officer, and after giving the assessee an opportunity of being heard, take into account such report in making the assessment or reassessment. Thus, even this provision enjoins a duty on the Assessing Officer to hear the assessee on the report of the DVO before he can act upon the same. At this stage, the petitioner would have ample opportunity to contest the report on all grounds including on the ground that reasonable opportunity of hearing as envisaged under sub-section 4 of Section 142A of the Act was not granted. We have not examined the validity of this contention. This observation would not limit the petitioner’s objection only to this limited issue and would enable the petitioner to raise all objections on substance as well as contents of the report.
6. At the stage where the assessment is not yet made, we do not find it appropriate to interference. With these observations, the petitions are disposed of.
