ACIT (E) Vs Harpyari Devi Welfare Society (ITAT Delhi)
ITAT Delhi: AO must accept registered valuer’s report if DVO reference not made – Exemption u/s 11 upheld; Delhi ITAT dismissed Revenue’s appeal, upholding CIT(A)’s order allowing exemption u/s 11 & 12 to the charitable society.
Assessee, registered u/s 12A & 80G, had purchased institutional land at Village Bajri & Pali for ₹7.11 crore. AO treated the purchase as agricultural land acquired at over twice the circle rate, alleging violation of section 13(2)(e) (benefit to specified persons), & denied exemption. CIT(A) deleted the addition after accepting the registered valuer’s report valuing the land at ₹9.43 crore, higher than the purchase price.
Revenue argued that CIT(A) erred in relying on the valuer’s report without referring the case to the DVO. ITAT rejected this contention, holding that when AO questions valuation, he must mandatorily refer the matter to the DVO; otherwise, the registered valuer’s report stands accepted. Citing CWT v. Raghunath Singh Thakur (304 ITR 268, HP) & CIT v. Raman Kumar Suri (29 taxmann.com 231, Bom), the Tribunal noted that AO’s reliance on unrelated sale deeds was arbitrary.
Since the purchase consideration was below the fair market value estimated by the valuer, no benefit accrued to related persons & hence no violation of section 13(1)(c) or 13(2)(e).
