Madhya Pradesh H.C : Whether, on the facts and in the circumstances of the case, the Tribunal is legally correct in holding that a reference made to the Valuation Officer in compliance with the directions of the AAC cannot be a reference under s. 16A of the WT Act ?

Counsel Appeared

V. S. Samvastar, for the Revenue : Nazir, for the Assessee

V. D. GYANI, J.:

This is an application under s. 27(3) of the WT Act, 1957, calling for the statement of the case from the Tribunal, Indore Bench, Indore. The order in this case will also govern the disposal of other connected Miscellaneous Cases Nos. 131, 132, 133, 134, 146, 147, 148, 149 and 150 of 1988, as they involve a common question of law arising between the same parties, the only difference being that they relate to different assessment years. Facts leading to the presentation of this application, stated in brief, are that the assessments for the asst. yrs. 1964-65 to 1973-74 were completed by the WTO on 27th March, 1979. The valuation in question relates to a plot of land situated in Tukoganj, Indore, one of the assets held by the assessee. The WTO has assessed this plot at Rs. 3 per square foot for the asst. yrs. 1964-65 to 1969-70 and at Rs. 4 per square foot in the asst. yrs. 1970-71 to 1973-74. This assessment was challenged by the assessee before the AAC who set aside all the assessments and remanded the case to the WTO making the following observations : “It appears that all the ten impugned assessments completed on 27th March, 1979, were getting time-barred on 31st March, 1979, and as such, the WTO has completed the assessment without making the statutory reference to the Valuation Officer. 1, therefore, set aside all these assessments and direct the WTO to refer the matter of the valuation of the plot to the Valuation Officer and make the assessments afresh after giving proper opportunity to the appellant.” On remand, the WTO made a reference to the Valuation Officer, who valued the property involved in the plot in question. The WTO, however, while making subsequent assessment did not base the valuation on the report of the Valuation Officer, but determined the net wealth at various figures estimated by him and passed orders on 8th March, 1985. Later, the CIT exercising powers under s. 25 of the Act, considered the orders passed by the WTO on 28th March, 1985, and held them as erroneous and prejudicial to the interests of the Revenue. The CIT held that once reference is made to the Valuation Officer, it was obligatory on the part of the WTO to complete the assessments in conformity with the Valuation Officer’s report under s. 16A(6) of the Act. He accordingly set aside the order passed by the WTO and directed him to make a fresh assessment in accordance with law after giving an opportunity of hearing to the assessee. Aggrieved by this order, the assessee filed appeals before the CIT. A decision of this Court in M. V. Kibe’s case (1987) 168 ITR 82, held that the discretion and the decision by the WTO in the matter following the Valuation Officer’s report is entirely his and cannot be dictated by the appellate authority. In that view of the matter, the CIT was not correct in concluding that the WTO was duty bound to accept the Valuation Officer’s report. The Tribunal gave a clear finding that s. 16A of the Act was not applicable in this case and the WTO was not bound to make assessment in conformity with the report of the Valuation Officer. Thus, the Tribunal quashed the order passed by the CIT. Aggrieved by the order, the Department filed a reference application under s. 27(1) of the Act seeking a reference on the following three questions of law :

“(1) Whether, on the facts and in the circumstances of the case, the Tribunal is legally correct in holding that a reference made to the Valuation Officer in compliance with the directions of the AAC cannot be a reference under s. 16A of the WT Act ?

(2) Whether, on the facts and in the circumstances of the case, the Tribunal is legally correct in holding that the report from the Valuation Officer, although obtained on the basis of a reference made as a result of the AAC’s directions, is not binding on the WTO under s. 16A(6) of the WT Act ?

(3) Whether, on the facts and in the circumstances of the case, the Tribunal is correct in holding that the CIT was not correct in concluding that the WTO was duty bound to accept the Valuation Officer’s report so far as the valuation of assets was concerned and by not doing so, the assessments made by the WTO be treated as erroneous and prejudicial to the interests of the Revenue ?”

The short question that arises for consideration is whether the WTO was bound to adopt and act upon the valuation as reported by the Valuation Officer ? It cannot be disputed that the WTO is a quasi-judicial authority and his own discretion under s. 16A(1) cannot be directed or dictated to be exercised in a particular manner by the appellate authority. Reading s. 16A(1) of the Act, it is for the WTO to form the requisite opinion as required by s. 16A and the formation of such an opinion cannot be dictated by the appellate authority as has been held by this Court in M. V. Kibe’s case (supra). A reading of the judgment will further show that this Court has held that the AAC had no jurisdiction to refer the matter to the Valuation Officer. A Full Bench of this Court in CIT vs. K. L. Rajput (1987) 164 ITR 197 (MP) has held that when the AAC had considered the point of valuation and had issued necessary directions for fresh assessment and the WTO completes the assessment on such directions, the order stands merged with the AAC’s order and the CIT has no jurisdiction under s. 25(2) of the Act to revise that order. Shri Samvatsar, learned counsel for the applicant, pointed out that the assessee has at no stage challenged the CIT’s order. This again is a fallacious reasoning as has been pointed out by the Supreme Court in Raja Jagdambika Pratap Narain Singh’s case (1975) 100 ITR 698 (SC). If the order is without jurisdiction, and void ab initio, the same does not become legal or final merely because it was not challenged in appeal and the directions made by the CIT in the light of M. V. Kibe’s case (supra), was without any jurisdiction and void. The question of jurisdiction can be raised at any stage and at any point of time as againpointed out by the Supreme Court in Kiran Singh vs. Chaman Paswan, AIR 1954 SC 340. In the result, this reference application under s. 27(3) of the Act deserves to be rejected as it does not raise any question of law to be decided by this Court on reference. The questions raised are fully covered by M. V. Kibe’s case (supra).

Reference rejected.

[Citation :181 ITR 543]