Late Padmaben Zinabhai Trivedi Vs ITO (Gujarat High Court)
The Gujarat High Court considered a writ petition challenging a notice dated 30.03.2017 issued under Section 148 of the Income Tax Act, 1961 for reopening the assessment for Assessment Year 2010-11. During the relevant year, the assessee had sold land situated at village Bhimpore, Nani Daman, through a registered sale deed dated 24.06.2009 for ₹92,65,680. Since the property had been owned prior to 01.04.1981, the assessee obtained a registered valuer’s report dated 11.11.2009, which determined the fair market value as on 01.04.1981 at ₹81 per square metre. Based on that valuation, the return of income filed on 23.08.2010 declared total income including long-term capital gain. The assessee died on 21.05.2012. More than four years after the relevant assessment year, the Department issued a notice under Section 148 on 30.03.2017. After receiving the recorded reasons, objections to the reopening were filed but were rejected by the Assessing Officer.
The petitioner contended that under the unamended Section 55A(a), applicable before 01.07.2012, a reference to the Valuation Officer could be made only where the value declared by the assessee, supported by a registered valuer’s report, was considered lower than the fair market value. In the present case, the assessee had adopted ₹81 per square metre, whereas the Department calculated the value at ₹1 per square metre using a sale instance from 1982 obtained from the Sub-Registrar and applying the cost inflation index. It was argued that the 2012 amendment substituting the expression “is less than its fair market value” with “is at variance with its fair market value” was effective only from 01.07.2012 and could not apply retrospectively. The petitioner also raised an alternative contention that the notice had been issued in the name of a deceased person.
