Amit Roy Vs ITO (Calcutta High Court)
Summary: The petitioner challenged the legality and validity of the reference made by the Assessing Officer to the departmental Valuation Officer (DVO) vide letter No. ITBA/COM/F/17/2026-26/1088378438(1) dated 9th April, 2026 for Assessment Year 2014-15.
The petitioner stated that the assessment order for AY 2014-15 had been passed by the Assessing Officer on 29th December, 2016 and that an appeal was preferred before the Commissioner of Income Tax (Appeals) on 16th March, 2026 concerning valuation of the property situated at Jharkhand. According to the petitioner, the CIT(A), by order dated 16th March, 2026, directed that the stamp duty value of Rs.57,92,000/- be adopted for computation of capital gains, while alternatively granting the Assessing Officer liberty to refer the matter to the DVO if he considered that the stamp duty value did not reflect the fair market value.
The petitioner contended that the Assessing Officer’s subsequent reference to the DVO dated 9th April, 2026 was contrary to the appellate direction and was without jurisdiction. It was further submitted that an Assessing Officer is bound by the direction of the Appellate Authority, with reliance placed on ITO vs. Murlidhar Bhagwan Das, 52 ITR 335. The petitioner also stated that the Assessing Officer had been informed by email about the binding nature of the appellate order, but the reference was nevertheless made.
On behalf of the income-tax authorities, it was contended that the DVO reference was only an internal administrative step and had not culminated in a final order. The Revenue therefore submitted that the writ petition was premature and had been filed without exhausting the alternative statutory remedy. It was contended that the petitioner ought to await the DVO’s report and consequential assessment order and thereafter avail the appellate remedy, if necessary.
The Calcutta High Court examined the operative portion of the CIT(A)’s order dated 16th March, 2026, which provided two alternatives: adoption of the stamp duty value of Rs.57,92,000/- for computation of capital gains, or reference to the DVO if the Assessing Officer believed that the stamp duty value did not reflect the fair market value.
The Court observed that the Appellate Authority itself had provided for two alternatives. It held that whether the Assessing Officer was justified in invoking the second alternative was a matter requiring clarification from the Appellate Authority which had passed the order.
The Court further held that the reference to the DVO had not yet culminated in a final Assessment Order. Consequently, the writ petition had been filed at a premature stage and was not maintainable at that stage.
The writ petition was therefore disposed of. The petitioner was granted liberty to file an appropriate application before the CIT(A) within four weeks from the date of the order, seeking clarification of the operative portion of the order dated 16th March, 2026 for AY 2014-15. The CIT(A) was directed to consider and dispose of the application within four weeks from its receipt, after affording the petitioner an opportunity of personal hearing and by passing a reasoned and speaking order in accordance with law. The decision was to be communicated within one week thereafter.
The Court expressly kept all rights and contentions of both parties open to be agitated at the appropriate stage. Since no affidavit in opposition had been filed, the allegations made in the petition were deemed not to have been denied and admitted.
The decision thus disposed of the writ at the preliminary stage without adjudicating finally on the legality of the DVO reference. The immediate remedy left open to the petitioner was to seek clarification from the CIT(A) regarding the operative portion of its earlier appellate order.
Cases Discussed
- ITO vs. Murlidhar Bhagwan Das, 52 ITR 335 (SC) — The petitioner relied upon this Supreme Court decision for the proposition that the Assessing Officer is bound by the direction of the Appellate Authority. The High Court, however, disposed of the writ on the ground that the DVO reference had not culminated in a final assessment order and that clarification of the appellate order should first be sought from the CIT(A).
FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT
Affidavit of service filed in court today be taken on record.
The petitioner in the instant case, inter alia, challenges the legality and the validity of the reference made to the departmental Valuation Officer vide letter No. ITBA/COM/F/17/2026-26/1088378438(1) dated 9th April, 2026 issued by the Assessing Officer being the respondent no.1 herein for the assessment year 2014-15.
It is the case of the petitioner that the Assessment Order for the Assessment Year 2014-15 was passed by respondent no. 1 on 29th December, 2016. Being aggrieved, the petitioner preferred an appeal before the commissioner of Income Tax (Appeals) (hereinafter referred to as the CITA for sake of brevity and convenience) on 16th March, 2026 qua the valuation of the property situated at Jharkhand.
Learned counsel appearing for the petitioner submits as follows;
a. That the Appellate Authority vide order dated 16.3.2026 categorically directed that the stamp duty value of Rs. 57,92,000/- shall be adopted for computation of capital gains. Alternatively, the Assessing Officer was granted liberty to refer the mater to the DVO only if he was of the opinion that the Stamp Duty value did not reflect the fair market value.
b. That in complete disregard and defiance of the said appellate direction, the Assessing Officer has made a reference to the DVO vide letter dated 9.4.2026 seeking determination of fair market value. Such action is wholly without jurisdication and dehors the procedure prescribed under law.
c. That it is a settled proposition of law that an Assessing Officer is bound by the direction of the Appellate Authority. Reliance was placed on on 52 ITR 335 [ITO vs. Murlidhar Bhagwan Das].
d. That the petitioner had duly intimated respondent no. 1 via e-mail regarding the binding nature of the appellate order, but the same was ignored. Hence the present writ petition.
e. Learned counsel appearing for the respondent income tax authorities vehemently opposes the writ petition and submits as follows;
i. That the reference made to the DVO is an internal administrative step and has not yet been culmininated into a final order.
ii. That the writ petition is premature and has been filed without exhausting the alternative statutory remedy available to the petitioner.
iii. That the petitioner ought to have awaited the outcome of the DVOs report and the consequential assessment order and thereafter could have availed the remedy of appeal.
iv. Having heard learned counsel for parties and upon perusing the materials on record this court observes as under.
The operative portion of the order dated 16.3.2026 passed by the CIT (A) is quoted herein below:
“The correct approach is to adopt the stamp duty value of Rs.57,92,000/- for computation of capital gains, or alternatively, make a reference to the DVO if the AO believes the stamp duty value does not reflect the fair market value.”
From the above, it is evident that the Appellate Authority has itself provided for two alternatives. Whether the Assessing Officer was justified in invoking the second alternative is a matter that requires clarification from the Appellate Authority who passed the said order.
Furthermore, since the reference to the DVO has not yet culminated into a final Assessment Order, this court is of the considered view that the present writ petition has been filed at a premature stage and is therefore not maintainable.
In view of the above observations and directions the writ petition is disposed of with the following directions;
Liberty is granted to the petitioner to take necessary steps by filing an appropriate application before the CITA within a period of four weeks from date, seeking clarification of the operative portion of the order dated 16.3.2026 for the assessment year 2014-15. The CITA Appeals] shall consider and dispose of the said application within a period of four weeks from the date of receipt thereof after affording an opportunity of personal hearing to the petitioner and by passing a reasoned and speaking order in accordance with law and such decision shall be communicated within a week thereafter.
All rights and contention of both parties are kept open to be agitated at the appropriate stage.
Since no affidavit in opposition has been filed, allegations made in the petition are deemed not to have been denied and admitted.
