Income Tax Appellate Tribunal - RaipurShree Krishna Builders, Raipur vs Principal Commissioner Of Income Tax, ... on 14 December, 2023आयकर अपीलीय अिधकरण, रायपुर               यायपीठ, रायपुर\n        IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR\n     ी र वश सूद, याियक सद य एवं        ी अ ण खोड़ पया, लेखा सद य के सम         ।\n      BEFORE SHRI RAVISH SOOD, JM & SHRI ARUN KHODPIA, AM\n                            (ITA No. 95/RPR/2022)\n                          (Assessment Year: 2017-18)\nShree Krishna Colonisers                V Principal Commissioner of Income Tax-\n0, Nemichand Gali, Ganj Para ward       s PCIT, Raipur-I\nNo.5, Ram Sagar para,\nRaipur, 492001, Chhattisgarh\nPAN: ABFFS7335G\n\n                            (ITA No. 96/RPR/2022)\n                          (Assessment Year: 2017-18)\n\nShree Krishna Builders                      Principal Commissioner of Income Tax-\n5/425, Nemichand Gali, Ramsagar Para        PCIT, Raipur-I\nWard, Raipur, Chhattisgarh\n\nPAN: AACFT1716A\n         (अपीलाथ /Appellant)            .           ( यथ / Respondent)\n                                        .\nिनधा रती क ओर से /Assessee by           : Shri R. B. Doshi, CA\n\nराज व क ओर से /Revenue by               : Smt. Ila M. Parmar, CIT-DR\n\nसुनवाई क तार ख/ Date of Hearing         :   09.10.2023\n\nघोषणा क तार ख/Date of                   :   14.12.2023\nPronouncement\n\n\n                           आदे श / O R D E R\n\nPer Arun Khodpia, AM:The aforesaid two appeals are filed by two Assessee's against two\n\nseparate orders of Principle Commissioner of Income Tax, Raipur-1, both\n\ndated 25.03.2022, which in turn arisen from the order u/s 143(3) passed by\n\nAssistant Commissioner of Income Tax, Circle-1(1), Raipur, both dated\n\n30/12/2019 for the relevant assessment year 2017-18.2ITA No. 95/RPR/2022, Shri Krishna ColonisersITA No. 96/RPR/2022, Shri Krishna Builders2.    As informed at the beginning of the hearing by the Ld. AR of the\n\nassessee that these two cases belong to two Assessee's but from one\n\ngroup under same management, having common and identical issues\n\nexcept the quantum of additions, thus, for the sake of convenience and\n\nbrevity, these matters are heard together, accordingly we are disposing off\n\nthe issues raised against the impugned orders, under this common order:First, we shall be taking ITA No.95/RPR/2022, pertains to the assessee\n\n"Shree Krishna Colonisers", as the lead case, result of which shall\n\nmutatis mutandis apply in the case of ITA No. 96/RPR/2022.3.    The Grounds of Appeal raised by the assessee in ITA No.\n\n95/RPR/2022 are extracted the same as under:1. In the facts, circumstances and material on all records relating to\n             the assessment proceedings under the Income tax Act, 1961, the\n             order u/s 143(3) dated 30/12/2019 is not erroneous in so far as it\n             is prejudicial to the interests of the revenue.2. In the facts, circumstances and material on all records relating to\n             the assessment proceedings under the Income tax Act, 1961, the\n             learned PCIT has erred to hold that in the order u/s 263 dated\n             25/03/2022, difference in column no. 7 in para no.2 which\n             reckons to Rs.2,80,08,200/-, is actual expenditure incurred by the\n             assessee, as per section 69C or is unexplained expenditure\n             incurred by the Assessee.3. In the facts, circumstances, and material on all records relating\n             to the assessment proceedings, the A.O. had passed the order\n             u/s 143(3) dated 30/12/2019 after taking into account all relevant\n             material which he gathered and had not omitted to assess any3ITA No. 95/RPR/2022, Shri Krishna ColonisersITA No. 96/RPR/2022, Shri Krishna Buildersamount accrued, due or received on which the Assessee was\n             liable to assessment.4. That order u/s 263 is illegal and not as per the provisions of the\n             Income tax Act 1961, due to illegal and invalid reference made\n             by the A.O. u/s 142A, reference made without any basis of\n             material for making reference, without existence of relevant facts\n             for application of section 142A, without relevance of valuation got\n             done at market value for examination of expenditure incurred at\n             cost or having assumed that the DVO's report itself is relevant\n             material for assessment of difference as alleged5. The learned PCIT has initiated section 263 merely to lift time\n             limitation u/s 153 and grant unfettered time and power to the A.O.\n             to conduct roving enquiry so that it may any how come out\n             something out of Assessee's no tax liability, at the cost of undue\n             harassment of tax assessment.6. The assessee humbly prays that he may be allowed to add,\n             amend or alter any ground of appeal at the time of hearing.4.    The Brief facts of the case are that the assessee is a partnership firm\n\nderiving income from real estate business. Return for the AY 2017-18 was\n\nfiled on 25.10.2017 declaring total income of Rs. 6,18,49,750/-. A Survey u/s\n\n133(A) was conducted at the premises of concerns of the assessee on\n\n27.01.2017. Later on, the case of the assessee was selected for scrutiny\n\nthrough CASS under the category complete scrutiny. Statutory notices were\n\nissued and served on the assessee. In response to the notices, the assessee\n\nhad submitted replies which were duly considered by the Ld. AO. During the\n\nsurvey proceedings u/s 133A, certain material in the form of a Classmate copy4ITA No. 95/RPR/2022, Shri Krishna ColonisersITA No. 96/RPR/2022, Shri Krishna Buildersnamed Annexure/B-2 (Page 1-21) has been found and impounded from the\n\npremises from Krishna Grand City, Kohka, Bhilai. The impugned document\n\nwas shown to Shri Sunil Kumar Taparia (Director of M/s Taparia Realtors Pvt.\n\nLtd., who is one of the partners in M/s Shree Krishna Colonisers i.e., the\n\nAssessee). Further, during the survey proceedings, certain discrepancies\n\nwere noted in the WIP (Work in Progress) of the assessee, Shri Sunil Kumar\n\nTaparia in his statement on oath on 27.01.2017 accepted that these are out\n\nof the books of account and, therefore, he has surrendered an amount of Rs.\n\n6,62,66,000/- as undisclosed income in this head. Further, in statement dated\n\n30.01.2017 Mr. Taparia has accepted a surrendered amount of Rs.\n\n28,37,645/- in the hands of M/s Krishan Colonisers. Subsequently, the\n\nassessee has retracted from the above statement and has submitted that the\n\nentries found in the loose papers have been entered in the respective books\n\nof account and submitted that the ledger account in respect of entries made.\n\nThe retraction of the assessee was considered as change of opinion to evade\n\ntax and penalty proceedings; therefore, the AO has added the amount of Rs.\n\n28,37,645/- to the income declared by the assessee and has culminated the\n\nassessment. While finalizing the assessment order Ld. AO recorded that the\n\nassessee has raised certain observations regarding valuation of Work in\n\nProgress (WIP), which has been kept on record. A reference u/s 142A(1) of\n\nthe Act has been made vide later dated 29.12.2019 to the valuation officer,\n\nIncome Tax Department, Bhopal for elucidation of valuation of immovable\n\nproperty for assessment, with a request to submit the report in 45 days. The5ITA No. 95/RPR/2022, Shri Krishna ColonisersITA No. 96/RPR/2022, Shri Krishna Buildersissue pertaining to discrepancies found in WIP in respect of the assessee was\n\nkept in abeyance to be decided after the receipt of the record of the\n\nDepartmental Valuation Officer, Bhopal.5.    The case of the assessee was subsequently examined by the Ld. PCIT,\n\nwho observed that during the course of assessment proceedings, the AO had\n\nmade referenceu/s 142A(1)of the I.T. Act for elucidation of valuation of\n\nimmovable property in the case of M/s Shree Krishna Colonisers to the\n\nvaluation officer of the Income Tax department. It was noticed by the Ld. PCIT\n\nthat the issue pertaining to discrepancies found in WIP in respect of the\n\nassessee were left open by the AO to be decided after the receipt of the report\n\nof DVO, Bhopal. From the case records, Ld. PCIT has further gathered that\n\non receipt of the DVO's report dated 24.12.2020, there was a huge difference\n\nin valuation as per books and DVO's report as on dated of survey.\n\nConsidering such facts, a show cause noticeu/s 263dated 03/02/2022 was\n\nissued to the assessee to furnish its replies in support of its claim. In response\n\nassessee has submitted its replies to the Ld. PCIT on various dates i.e.,\n\n08.02.2022, 09.02.2022, 16.02.2022, 28.02.2022, 01.03.2022, 08.03.2022\n\nand 12.03.2022. All the replies of assessee were considered and reproduced\n\nby the Ld. PCIT in orderu/s 263, however, he was not impressed by the\n\ncontentions raised by the assessee, supported with explanations and case\n\nlaws, so finally, invoking the provisions of Explanation-2 ofsection 263and\n\nhas set aside the assessment order passedu/s 143(3)by the Ld. AO,6ITA No. 95/RPR/2022, Shri Krishna ColonisersITA No. 96/RPR/2022, Shri Krishna Buildersconsidering the same as erroneous in so far as it is prejudicial to the interest\n\nof the revenue, with the directions to examine the issue afresh and to pass a\n\nfresh assessment order, providing proper opportunity of being heard to the\n\nassessee.6.    Aggrieved by the aforesaid order of Ld. PCIT, now the assessee has\n\npreferred the present appeal before us.7.    Ld. AR on behalf of the assessee before us, has furnished a written\n\nsynopsis, the same is extracted as under:M/S Shree Krishna Colonisers, RaipurAY 2017/18ITA No. 95RPR/2022 (Assessee)\n\n                                 Facts of the case1.    Surveyu/s 133Aconducted on 27.01.2017 during which the projects under\n      construction were got valued by the Department from approved valuer Shri\n      Manish Pilliwar. The projects got valued were "Krishna Grand City, Bhilai",\n      "Krishna City, Bhatapara" & "Krishna Apartment, Baloda Bazar". Details of cost\n      debited in books and the estimate of valuer are as under: -Project Name             Cost of WIP as          Value estimated by\n                                      per books of           registered valuer Mr.\n                                      accounts Rs.                Pilliwar Rs.\n        Krishna Grand Cit ,               4,23,67,000/-                8,76,47,000/-\n        Bhilai\n        Krishna Cit ,                     4,71,41,000/-                6,21,41,000/-\n        Bhatapara\n        Krishna Apartment,                1 ,46,19,000                   20,65,000/-\n        Baloda Bazar\n                             Total       10,41,27,000/-               15,18,53,000/-Copy of valuer's report is at page no. 42 to 54, 82 to 92 and 123 to 127 of PB.7ITA No. 95/RPR/2022, Shri Krishna ColonisersITA No. 96/RPR/2022, Shri Krishna Builders2.   During assessment proceedings, assessee objected to valuation done by the\n     Department's valuer Shri Manish Pilliwar. The assessment order came to be\n     passed on 30.12.2019. However, in view of objection raised by assessee, the\n     AO made referenceu/s 142A(l)to DVO on 29.12.2019 i.e., just one day prior to\n     passing of the assessment order.The AO completed assessmentu/s 143(3)accepting the value of WIP as per\n     books, subject to a note that the issue of difference in WIP would be decided\n     after receipt of the DVO's report.3.   DVO submitted his report dt. 21.12.2020 (Krishna Grand City), 1 1 .01 .2021\n     (Krishna City) & 21.01.2021 (Krishna Apartment) as per which the valuation\n     came as under: -Project Name           WIP as per            Value               Difference\n                               books as on        estimated by             (IRS.)\n                               27.01.2017          DVO (Rs.)\n     Krishna Grand Cit ,   4,23,67,000/-           6,28,45,900/-        2,04,78,900/-\n     Bhilai\n     Krishna City,         4,71,41,000/-           5,51,60,000/-          80,19,000/-\n     Bhatapara\n     Krishna Apartment,    1,46,19,000/-            1,41,29,300/-        (-)4,89,700/-\n     Baloda Bazar\n                   Total 10,41,27,000/-           13,21,35,200/-        2,80,08,200/-Copy of DVO's report at PN 77 to 81 (Krishna Grand City), PN 116 to 122\n     (Krishna City) & PN 154 to 161 (Krishna Apartment).4.   On the basis of DVO's report, Id. Pr. CIT issued show cause noticeu/s 263dt.03.02.2022 mentioning that difference between the DVO's estimate and the\n     value reflected in books has resulted into error and prejudice within the meaning\n     ofsec. 263. Ignoring the submissions made by assessee, Id. Pr. CIT set aside\n     the assessment order and directed the AO to frame fresh assessment in the light\n     of DVO's report.Submission of the assessee1.   Jurisdictionu/s 263invoked by Id. Pr. CIT on the basis of difference found\n     between DVO's valuation and the value declared in the books. Ld. Pr. CIT relied\n     upon definition of "record" given in Explanation -- 1 (b) tosec. 263(1)claiming\n     that the DVO's report, although received after completion of assessment, forms\n     part of "record" as the DVO's report was available at the time of examination of\n     Id. Pr. CIT.8ITA No. 95/RPR/2022, Shri Krishna ColonisersITA No. 96/RPR/2022, Shri Krishna Builders2.   The exercise of revisional jurisdictionu/s 263is thus solely on the basis of DVO's\n     report.3.   Settled position of law\n\n     For exercising jurisdictionu/s 263, impugned order should be erroneous, and\n     error should have resulted into prejudice to Revenue. The error in assessment\n     order and prejudice to Revenue is required to be established by Id. Pr. CIT,\n     before the assessment order can be revisedu/s 263. Error and prejudice should\n     be proved beyond doubt, and it should not be left to be decided by AO.4.   No error or prejudice established by Id. Pr. CIT: assumption of jurisdiction\n     u/s 263 vitiatedi)      DVO's report not binding on AOSection 142A (7)provides that the AO "may" take into account the\n               DVO's report in making assessment, after giving assessee an\n               opportunity of being heard. Since discretion is given to AO, DVO's\n               report is not binding on him.It was held inACIT vs Mfar Hotels & Resorts (P.) Ltd. in ITA no. 66\n               & 67/Coch/2017 dated 13.03.2019, (para no. 7.6), that DVO's report\n               is not binding on AO.Guidelines for Valuation of Immovable Properties 2009\n\n                Chapter 9 (Coordination with Assessing Officer), point (v) of\n                guidelines states that report of DVO is not binding and therefore,\n                the affected person should be confronted with it before same is\n                utilized against him. It also states that AO should allow reasonable\n                opportunity of being heard to such person and consider all his\n                objection, against the valuation report in accordance with law.Pratap Vitthal Bandal vs UOI(2020) 116 taxmann.com 919 (Bom.),\n               onsec. 142A (7).-CIT vs Naveen Gera(2010) 328 ITR 516 (Del)ii)     After allowing assessee opportunity in terms ofsec. 142A(7), AO to take\n             into consideration various objections that may be raised in respect of\n             DVO's report. Unless objections of assessee are considered and\n             decided upon, no action can be taken in the matter of assessment.\n             Therefore, whether any addition is required or not, can be concluded only\n             after deciding upon the objections of assessee.9ITA No. 95/RPR/2022, Shri Krishna ColonisersITA No. 96/RPR/2022, Shri Krishna Buildersiii)    DVO's report is not final. Unless objections of assessee were invited in\n              terms ofsec. 142A (7)& decided by AO/ Id. Pr. CIT/ DVO, no decision\n              could be arrived at as to whether any addition was required which not\n              having been made, resulted into prejudice to Revenue.iv)     When the difference in valuation may vary, prejudice to Revenue cannot\n              be established before deciding upon objections of assessee. In this\n              process, involvement of DVO may also be required.v)      Against the value estimated by DVO, assessee submitted objections\n              giving complete details, which is placed at PN 162 to 195 of PB,vi)     described in detail in para no. 6 to 9 infra. Such letters of objection were\n              on record when Id. Pr. CIT examined.vii)    Ld. Pr. CIT was bound to decide upon the objections of assessee before\n              he could conclude on "error" and "prejudice" in terms ofsec. 263.viii)   Perusal of revision order shows that Id. Pr. CIT has not dealt with any of\n              the objections raised by the assessee and therefore, it was not\n              established whether any "error" was there in the assessment order, which\n              resulted into prejudice to Revenue. Reliance on: --Metacaps Engineering & Mahendra Construction Co. (JV) vs CITin\n                  ITA no. 2895/Mum/2014 dated 11.09.2017, relevant findings at para\n                  no. 13 & 14 of order.-ITO vs DG Housing Projects Ltd.(2012) 343 ITR 329 (Del.), relevant\n                  findings at 16, 17 & 19 of order.DIT vs Jyoti Foundation(2013) 357 ITR 388 (Del.), relevant findings\n                  at para no. 5 of order, followingDG Housing's case.ix)     In view of this, revision order passedu/s 263is illegal & unsustainable.5.   Objections taken by assessee(i)    Detailed, item-wise objections filed with DVO. DVO\n                      considered only some of them and rejected the remaining.(ii)    Letter filed before AO, who gave opportunity to assessee\n                      after receipt of DVO's report, pointing out mistakes in DVO's\n                      report. Letter dt. 14.02.2021 & 26.07.2021 (two letters of\n                      26.07.2021) placed at PN 162 to 192 of PB. Contents described\n                      in para no. 6 to 10 below.10ITA No. 95/RPR/2022, Shri Krishna ColonisersITA No. 96/RPR/2022, Shri Krishna Builders(iii)  Similar objections taken before Id. Pr. CIT vide letter\n             dated 08.02.2022 & 08.03.2022, described in detail in para no. 6\n             to 10 below.(iv)   Ld. Pr. CIT did not deal with these objections, nor did he\n             give any reason as to why such mistakes do not require\n             consideration.(iv)   Assessment order neither proved to be erroneous\n             nor prejudice to Revenue established by Id. Pr. CIT.\n             Revision order illegal.6.    Regarding difference in valuation of "Krishna Grand City, Bhilai"(Rs.2,04,78,900/-)i)     Department's valuer Mr. Manish Pilliwar valued entire project\n             (including sold part) at Rs. 30,61,89,900/- (as reduced by DVO)\n             while total cost debited in books of assessee is Rs. 31,04,91,251/-. No excess expenditure.ii)    Differences requiring further reduction in valuation of\n             "Krishna Grand City, Bhilai:11ITA No. 95/RPR/2022, Shri Krishna ColonisersITA No. 96/RPR/2022, Shri Krishna Builders12ITA No. 95/RPR/2022, Shri Krishna ColonisersITA No. 96/RPR/2022, Shri Krishna Builders7.Regarding difference in valuation of "Krishna Apartment, Balodabazar"Differences explained in letter dated 26.07.2021 filed before AO & DVO, at PN\n       182 to 192 of PB.i)     Deduction on account of architectural & design work, Rs. 9,69,800/-, PN 183 of\n       PB, para no. 1.ii)    Deduction on account of "other development works, Rs. 3,31,594/-, PN 183 of\n       PB, para no. 2 (below).iii)   Deduction on account of tubewell cost, Rs. 1,30,330/-, PN 183 of PB, para no. 3\n       (below).iv)    Deduction on account of lifting charges, Rs. 4,20,504/-, PN 184 of PB, para no.4.v)     Deduction on account of different items, Rs. 8,13,900/-, PN 184 of PB, para no.5.vi)    Deduction on account of flooring cost, Rs. 8,55,712/-, PN 184 & 195 of PB, para\n       no. 6 & 4 respectively.Submission reiterated vide letter dt. 08.02.2022 & ()8.03.2022 filed before Pr. CIT\n       (PN 9 to 16 & 27 to 33 of PB respectively), relevant explanation on PN 15 (top\n       portion) & 30 of PB.8.Regarding difference in valuation of "Krishna City, Bhatapara"Differences explained in letter dated 26.07.2021 filed before AO & DVO, at PN\n       174 to 181 of PB.13ITA No. 95/RPR/2022, Shri Krishna ColonisersITA No. 96/RPR/2022, Shri Krishna Builders9.Deduction on a/c of contractor's profit not allowed\n\n      DVO's report is based on item rate basis/contract rate whereas assessee being\n      builder, substantial savings of 15% on account of contractor's profit should have\n      been deducted. Deduction of Rs. 1,98,20,280/- being 15% of Rs. 13,21,35,200/-\n      (value worked out by DVO). Submission made before Id. Pr. CIT vide letter dated\n      08.02.2022 & 08.03.2022, at PN 9 to 16 & 27 to 33 of PB, relevant claim at PN\n      15 & 30 of PB, para no. (5) of letters.10.Difference less than 15% is to be ignored(i)     Ahmed Shareef vs DCIT (2021) 189 ITD 522 (Bang.) - Difference\n      between cost of construction shown by assessee and as determined by AO being\n      less than 15 per cent, same is to be ignored for purposes of addition, more so\n      when the construction was spread over a period of seven years.(ii)   Bimla Singh vs CIT(2009) 308 ITR 71 (Patna)11.In view of above, order passedu/s 263is illegal & unsustainable.8.    Based on aforesaid written submissions, it was the prayer of the Ld AR\n\nof the assessee that, the order passedu/s 263is illegal and unsustainable,\n\ntherefore, the same is liable to be quashed.9.    Ld. AR also placed his reliance on following judgments:(i)    Pratap Vitthal Bandal vs UOI(2020) 116 taxmann.com 919\n\n             (Bom.), onsec. 142A (7).As is clear from sub-section 7ofsection 142Aof the Act, this\n                    provision provides that the Assessing Officer may, on receipt of the\n                    report from the Valuation Officer, and after giving the assessee an\n                    opportunity of being heard, take into account such report in making\n                    the assessment or reassessment. Thus, even this provision\n                    enjoins a duty on the Assessing Officer to hear the assessee on\n                    the report of the DVO before he can act upon the same.(ii)   CIT vs Naveen Gera(2010) 328 ITR 516 (Del)14ITA No. 95/RPR/2022, Shri Krishna ColonisersITA No. 96/RPR/2022, Shri Krishna Builders10.   It was the further submitted by the Ld. AR that the assessee has\n\nraised of the objections against the report of the DVO's, which were raised\n\nbefore the AO after completion of the assessment when the report of the\n\nDVO's was confronted to the assessee, objections were raised before the\n\nLd. PCIT also but Ld. PCIT who was bound to decide upon and dispose off\n\nsuch objections has refrained to do so, therefore, the conclusion that the\n\norder of Ld. AO was erroneous as well as prejudicial to the nature of\n\nrevenue was not established. Ld. AR placed his reliance in this respect from\n\nthe following judgment.Metacaps Engineering & Mahendra Construction Co. (JV) vs CITin ITA no. 2895/Mum/2014 dated 11.09.2017, relevant findings at\n\n        para no. 13 & 14 of order:13.        However, we find that the CIT without pointing out any\n                 infirmity in the reply/explanations of the assessee, and as to why\n                 the same could not be accepted had rather hushed through the\n                 matter and concluded that the assessment order passed by the AO.was found to be erroneous and prejudicial to the interest of the\n                 revenue.14.       We are of the considered view that it is obligatory on the\n                 part of the CIT to consider the reply of the assessee in respect of\n                 the issues on which the order of the A.O. is sought to be revised by\n                 him. We are of the considered view that the CIT after receiving the\n                 reply/objections of the assessee in respect of the issues on which\n                 the order of the A.O. is sought to be revised, in all fairness, is\n                 required to deliberate on the same, and thereafter on the basis of\n                 the logical reasoning conclude as to whether in the backdrop of the\n                 reply/ explanations of the assessee can the order of the A.O. be\n                 characterized as both erroneous and prejudicial to the interest of\n                 the revenue.We are of the considered view that in the absence of clear\n                 observations of the CIT as to how the order of the A.O. after15ITA No. 95/RPR/2022, Shri Krishna ColonisersITA No. 96/RPR/2022, Shri Krishna Buildersconsidering the explanation/objections filed by the assessee was\n                      found to be erroneous in respect of the said respective issues, thus,\n                      can safety be held to have failed the fundamental requirement for\n                      valid assumption of jurisdiction as per the mandate of law.-ITO vs DG Housing Projects Ltd.(2012) 343 ITR 329 (Del.),\n               relevant findings at 16, 17 & 19 of order.16.    The matter cannot be remitted for a fresh decision to the\n                    Assessing Officer to conduct further enquiries without a finding that\n                    the order is erroneous. Finding that the order is erroneous is a\n                    condition or requirement which must be satisfied for exercise of\n                    jurisdictionu/s 263of the Act. In such matters, to remand the\n                    matter/issue to the Assessing Officer would imply and mean the CIT\n                    has not examined and decided whether or not the order is erroneous\n                    but has directed the Assessing Officer to decide the aspect/question.17.     An order or remit cannot be passed by the IT to ask the\n                    Assessing Officer to decide whether the order was erroneous. This is\n                    not permissible. An order is not erroneous, unless the CIT hold and\n                    records reasons why it is erroneous. An order will not become\n                    erroneous because on remit, the Assessing Officer may decide that\n                    the order is erroneous.18.    The CIT should have examined the said aspect himself\n                    and given a finding that the order passed by the Assessing officer was\n                    erroneous.-DIT vs Jyoti Foundation(2013) 357 ITR 388 (Del.), relevant\n                findings are at para no. 5 of order, followingDG Housing's case.11.   Ld. CIT DR on the other hand has vehemently supported the order of\n\nLd. PCITu/s 263and submitted that the AO has passed the order without\n\nconsidering the report of DVO, therefore, the same is undoubtedly an\n\nerroneous order and the differential valuation in the books of valuation of DVO\n\nitself justifies that the order of AO was prejudicial to the interest of revenue,\n\nthus the prompting of provision ofsection 263to initiate the revisionary\n\nproceedings against the assessee was justified and correct course of action16ITA No. 95/RPR/2022, Shri Krishna ColonisersITA No. 96/RPR/2022, Shri Krishna Buildersadopted by the Ld. PCIT. The order of Ld. PCIT, thus, is justified on facts as\n\nwell as in terms of provisions of law, hence, the same merits to be upheld.12.   We have considered the rival contentions, perused the material\n\navailable on record in his case laws raised before us for our consideration.\n\nIn the present case the controversy raised by the assessee was w.r.t.\n\ninitiation of revisionary proceedingsu/s 263based on the DVO's report\n\ncalled for under the provisions ofsection 142A(1)by the Ld. AO, which was\n\nreceived after the culmination of the assessment. In this respect, the\n\nassessee has contended that DVO's report is not binding on AO to be\n\nfollowed to support this contentions reliance was placed on order of the\n\ncoordinated bench of ITAT, Cochin wherein in ITA No.66/Coch/2017 for the\n\nAY 2002-2003 vide order dated 13.03.2019, it was the observation of bench\n\nthat "The AO had stated that the DVO's report is binding on him, this\n\nstatement of AO is incorrect. The report of DVO's is only an advisory in the\n\nnature and not binding on the AO." Ld. AR further submitted that as persection 142A (7), the AO may consider the DVO's report in making\n\nassessment, but only after giving assessee an opportunity of being heard.\n\nNo such opportunity during the assessment proceedings were provided to\n\nthe assessee, however, after completion of the assessment proceedings\n\nthe report of DVO almost after one year has been provided to the assessee\n\ni.e. the reference was made by the Ld AO on 29.12.2019 and the reports\n\nwere furnished by the DVO on 21.12.2020, 11.01.2021, 21.01.2021, copies17ITA No. 95/RPR/2022, Shri Krishna ColonisersITA No. 96/RPR/2022, Shri Krishna Buildersof report furnished at page 77-81, 116-122 and 154-161 of the Assessee's\n\npaper book, this was again in violation of provisions ofsection 142A(6),\n\nwherein the report of DVO must reach the Assessing Officer within the\n\nperiod of six months from the end of the month in which a reference is made\n\nunder subsection (1), for completeness and for interpretations, provisions\n\nofsection 142Aare extracted as under:142A. (1) The Assessing Officer may, for the purposes of assessment or\n    reassessment, make a reference to a Valuation Officer to estimate the value,\n    including fair market value, of any asset, property or investment and submit a\n    copy of report to him.(2) The Assessing Officer may make a reference to the Valuation Officer under\n    sub-section (1) whether or not he is satisfied about the correctness or\n    completeness of the accounts of the assessee.(3) The Valuation Officer, on a reference made under sub-section (1), shall,\n    for the purpose of estimating the value of the asset, property or investment,\n    have all the powers that he has undersection 38Aof the Wealth-tax Act, 1957\n    (27 of 1957).(4) The Valuation Officer shall, estimate the value of the asset, property or\n    investment after taking into account such evidence as the assessee may\n    produce and any other evidence in his possession gathered, after giving an\n    opportunity of being heard to the assessee.(5) The Valuation Officer may estimate the value of the asset, property or\n    investment to the best of his judgment, if the assessee does not co-operate or\n    comply with his directions.(6) The Valuation Officer shall send a copy of the report of the estimate made\n    under sub-section (4) or sub-section (5), as the case may be, to the Assessing\n    Officer and the assessee, within a period of six months from the end of the\n    month in which a reference is made under sub-section (1).\n\n\n    (7) The Assessing Officer may, on receipt of the report from the Valuation\n    Officer, and after giving the assessee an opportunity of being heard, take into\n    account such report in making the assessment or reassessment.18ITA No. 95/RPR/2022, Shri Krishna ColonisersITA No. 96/RPR/2022, Shri Krishna Builders13.    In backdrop of aforesaid observations, certain admitted facts of\n\nthe case are that the Ld PCIT has not dealt with the objections raised\n\nby the assessee regarding anomalies in the report of the DVO, which\n\nwas the sole basis for invoking and initiating the proceedingsu/s 263.\n\nMoreover as per subsection (4) ofsection 142A, it was incumbent upon\n\nthe valuation officed to "The Valuation Officer shall, estimate the value of the\n\nasset, property or investment after taking into account such evidence as the\n\nassessee may produce and any other evidence in his possession gathered, after\n\ngiving an opportunity of being heard to the assessee. , apparently no such\n\nopportunity was provided to the assessee. Further as per sub section\n\n(6) ofsection 142A"The Valuation Officer shall send a copy of the report of the\n\nestimate made under sub-section (4) or sub-section (5), as the case may be, to the\n\nAssessing Officer and the assessee, within a period of six months from the end of\n\nthe month in which a reference is made under sub-section (1)", in present case\n\nthe report of the DVO was send to department way beyond the\n\nstipulated time period which shows complete violation of provisions ofsection 142A. Under such circumstances the report of DVO barred by\n\nlimitation should be categorized as non-est, thus, cannot be the basis\n\nfor revisionary proceedingsu/s 263.14.    Our view is supported by the decision of coordinate bench of\n\nITAT Hyderabad in the case ofShri Zulfi Revddjee vs ACITin ITA No.\n\n2415/HYD/2018 vide order dated 05/09/2019, wherein the tribunal has\n\nheld as under:19ITA No. 95/RPR/2022, Shri Krishna ColonisersITA No. 96/RPR/2022, Shri Krishna Builders7. Having regard to the rival contentions and the material on record, we find\n\nthat the relevant A.Y before us is A.Y 2013-14 and the return of income was\n\nfiled on 30.09.2013. Therefore, 21 months from such date would expire on\n\n31.3.2016. Thus, the assessment orderu/s 143(3)was required to be passed by\n\n31.03.2016 but since the AO has made a reference to the valuation officeru/s\n\n142Aof the Act, vide letter dated 19.02.2016, and the valuation report was filed\n\non 20.7.2017, the said period will have to be excluded for determining the time\n\nlimit. However, the question before us is the period allowed to the DVO ITA\n\nNo 2415 of 2018 Zulfi Revdjee Hyderabad.to submit the report. U/s 142A of the Act, the valuation report has to be\n\nsubmitted within six months from the date of the receipt of the reference.\n\nAdmittedly, in the case before us, the valuation officer has submitted the report\n\nbeyond a period of 15 months. Whether this period can be enlarged or\n\ncondoned is to be seen. As rightly pointed by the learned Counsel for the\n\nassessee, the word used in sub-section 6ofsection 142Ais "shall" and in other\n\nsub sections, the word used is "may". The Hon'ble Delhi High Court in the case\n\nofB.K. Khanna & Co. vs Union Of India And Otherson 14 September, 1984\n\n(Supra) has clearly held that where the words "may" and "shall" are used in\n\nvarious provisions of same sections, then both of them contain different\n\nmeaning and the word "shall" shall mean "mandatory". As argued by the\n\nlearned Counsel for the assessee, the AO was required to call for a report from\n\nthe valuation officer within six months from the date of the reference and the\n\nvaluation officer was bound to give such a report with such prescribed period.\n\nFurther, as seen from the assessment order, the AO had directed the valuation20ITA No. 95/RPR/2022, Shri Krishna ColonisersITA No. 96/RPR/2022, Shri Krishna Buildersofficer to give the valuation of the property as on 8.2.2010, whereas the\n\n      valuation officer has given the report as on the date of the execution of the sale\n\n      deed. Therefore, the DVO has clearly not followed the directions of the AO and\n\n      also not followed the timeline fixed under the Act. When it is mandatory for an\n\n      officer to follow the timeline prescribed under the Act, such delay cannot be\n\n      condoned. Therefore, we agree with the contentions of the learned Counsel for\n\n      the assessee that the report of the Valuation Officer has to be filed within the\n\n      time givenu/s 142A(vi)of the Act and therefore, the assessment order passed\n\n      on the basis of such report of Valuation Officer beyond the time limit is not\n\n      sustainable. Therefore, we allow the assessee's appeal and the assessment\n\n      order is set aside.15.   The interpretations in the order of ITAT Hyderabad in the case ofShri Zulfi Ravdjee(supra) is based on principle of lawlaid down byHon'ble\n\nDelhi Highcourt in the case ofB.K. Khanna & Co. vs Union Of India And\n\nOtherson 14 September, 1984 reported in 156 ITR 796, wherein Hon'ble\n\nHighcourt has categorically interpreted the seriousness of word 'Shall'\n\nplaced in the sections and provisions of the Act and the significance and\n\nprerequisite of its mandatory compliance. Non adherence to such strict\n\nmandatory provision thus entails the proceedings illegal and the outcome\n\nas not est.16.   The issue regarding valuation report without adhering to prerequisite\n\nconditions of prescribed in relevant section renders the reopening21ITA No. 95/RPR/2022, Shri Krishna ColonisersITA No. 96/RPR/2022, Shri Krishna Buildersassessment bad has been discussed in the case ofReliance Jute and\n\nIndustries Ltd. vs Income-Tax Officer and Orsdated 23 March, 1984\n\nreported in 1984 150 ITR 643 Cal, wherein Hon'ble Calcutta High court\n\nhad held that provisions of law need to be followed strictly, failure of\n\ncompliance to prerequisite essential conditions tantamount the valuation as\n\nincompetent, so as the assessment based on such report. The relevant\n\nobservations are as under:-5. Dr. Pal, in support of his above contention, has relied on the decision in\n\n       the case ofCIT v. Ranchhoddas Karsondas, to show that an assessee is\n\n       entitled to file his return any time before his assessment, provided there is no\n\n       time-limit. Their Lordships of the Supreme Court while deciding that case\n\n       observed that even a return filed on the last day could not be ignored on the\n\n       ground that the Department would be driven to complete the assessment\n\n       proceeding within a few hours or lose the right to send a notice underSection\n\n       34(1). The argument of inconvenience was held to be hot a decisive argument\n\n       and there were means and methods which could be availed of by the\n\n       Department to save the bar of limitation from becoming operative. It was\n\n       further pointed out by their Lordships of the Supreme Court that it was for\n\n       the courts to administer the laws as they stood and they were seldom required\n\n       to be astute to defeat the law of limitation. Dr. Pal relied on this decision to\n\n       counter the submissions on behalf of the respondents that the ITO had no\n\n       other alternative but to complete the assessment without waiting for the\n\n       valuation report to avoid the bar of limitation. In the facts and circumstances\n\n       of the case, it is, however, found that sufficient time was still left for the22ITA No. 95/RPR/2022, Shri Krishna ColonisersITA No. 96/RPR/2022, Shri Krishna BuildersDepartment to take steps to get the valuation report and to complete the\n\nproceedings within the statutory time-limit but failure of the Department to\n\ntake necessary steps cannot be rewarded with a premium at the cost of the\n\nassessee.Lastly, reliance was placed in the case of Uma Debi Jhawar v. WTO\n\n, where M.N. Roy J. held in a proceeding for making assessment if pending,\n\na reference to the Valuation Officer could be made. The reasons given in the\n\nsaid decision make it amply clear that where the assessment is completed and\n\nproceeding for reopening of such assessment was not in existence, the\n\nvaluation became incompetent. Applying the said principles to the facts of the\n\npresent case, it was argued on behalf of the petitioner that a valuation\n\nreference, even if validly made, lost its utility and should not be allowed to\n\ncontinue and is liable to be quashed. On behalf of the respondents, Mr. Balai\n\nPal appearing with Mr. Rupen Mitra contended that the cases cited on behalf\n\nof the petitioner were distinguishable on facts inasmuch as all those cases\n\nreferred to valuation after completion of the assessment and, as such, can\n\nhave no application to the facts of the present case. In fact, it was repeated\n\nthat the ITO was compelled to complete the assessment to avoid the same\n\ngetting time-barred.6. Reliance was also placed on the decision in the case of Satyendra Chunder\n\nGhosh v. WTO , where it was held by B.C. Basak J. that in the case of a\n\ncompleted assessment, which was not reopened, the WTO was not entitled to\n\nmake a reference under Section 16A of the W.T. Act. It has been urged that\n\nalthough the aforesaid case was distinguishable on facts, yet the principle\n\nlaid down 'therein applies on all fours to the facts of the present case23ITA No. 95/RPR/2022, Shri Krishna ColonisersITA No. 96/RPR/2022, Shri Krishna Buildersinasmuch as during the pendency of the valuation proceeding the assessment\n\nhaving been completed, the said proceeding has lost its utility. It is not\n\ncontended that there has been any reopening of the assessment so as to open\n\nup a scope for application of the valuation report to such reopened\n\nproceeding which would have also been a pending assessment proceeding.Moreover, in terms of the decision in the case of Nawal Kanwar v. WTO , the\n\nRajasthan High Court laid down that the report of the Valuation Officer\n\nunder Section 16A could not be used as the basis for reopening an assessment\n\nalready completed. Though the reference for valuation, in that case, was\n\nmade in connection with a completed assessment, yet the reason for which\n\nsuch a valuation proceeding was declared void ab initio holds good in a case\n\nwhere during the pendency of the valuation proceeding the assessment is\n\ncompleted, because the whole purpose of a valuation report would be to\n\nenable the officer concerned to complete the assessment in conformity\n\ntherewith. It has not even been stated before me that the reopening or revision\n\nof the completed assessment is pending.7. In my view, there is considerable force in the arguments of Dr. Pal and the\n\nvaluation proceeding is liable to be quashed on the grounds that :(a) the opinion of the ITO which is an essential prerequisite for making a\n\nreference for valuation underSection 55Aof the I.T. Act is absent in the\n\npresent case, and(b) the purpose for which alone a valuation report can be utilised, namely,\n\nfor completion of the assessment in conformity with the valuation report is no24ITA No. 95/RPR/2022, Shri Krishna ColonisersITA No. 96/RPR/2022, Shri Krishna Builderslonger existent, the assessment having been completed in the meantime. In\n\n       such circumstances, to allow the assailed valuation proceeding to continue,\n\n       would militate against well-known canons of strict construction of taxing\n\n       statutes.8. The Rule is, therefore, made absolute and the\n\n       impugned      proceedings        is      quashed        by     a    writ      of\n\n       certiorari. Let a writ of mandamus also issue directing\n\n       the respondents to forbear from proceeding any further\n\n       with, or making any valuation under or pursuant to,\n\n       the impugned reference.                 There will be, however, no\n\n       order as to costs.17.In terms of aforesaid guiding principle led by the Hon'ble High Courts\n\nreferred to supra and respectfully following the decision of ITAT Hyderabad\n\nin the case ofZulfi Revdjee(supra), in absence of any contrary information\n\nor decision by the revenue to counter these observations, we have no\n\nhesitation to concur with the contentions raised by the Ld AR that the non-\n\ndisposal of the objections of the assessee on DVO's report by the Ld PCIT\n\nin revisionary proceedings against the principle of natural justice, though\n\nset aside to AO for opportunity to assessee, however the report of DVO\n\nwas prepared, completed and furnished by the DVO to the department\n\nbeyond the stipulated time provided insection 142A(vi)of the Act, thus the\n\nsame is against the mandate of law and literal interpretation of provisions\n\nofsection 142A, therefore the revisionary proceedings initiatedu/s 26325ITA No. 95/RPR/2022, Shri Krishna ColonisersITA No. 96/RPR/2022, Shri Krishna Buildersbased such report are unjustified as well as against the intent of law, thus\n\nthe same has been rendered as illegal / bad in law, consequently\n\nunsustainable.18.    In the result appeal of the assessee M/s Shree Krishna Colonisers\n\nin ITA . 95/RPR/2022 stands allowed.19.    Since appeal in the case of M/s Shree Krishna Colonisers in ITA No.\n\n95/RPR/2022 is decided by us in favour of the assessee, having similar\n\nfacts and circumstances, our decision rendered therein shall equally apply\n\nin the case of Shree Krishna Builders in ITA No. 96/RPR/2022. In result the\n\nappeal of the assessee is allowed.20.    In combined result both the above appeals of the assessees are\n\nallowed in terms of our aforesaid observations.Order pronounced in the open court on 14/12/2023.Sd/-                                         Sd/-\n         (RAVISH SOOD)                                (ARUN KHODPIA)\n      याियक सद य / JUDICIAL MEMBER            लेखा सद य / ACCOUNTANT MEMBER\n\nरायपुर/Raipur; दनांक Dated 14/12/2023\nVaibhav Shrivastav\nआदे श क ितिल प अ े षत/Copy of the Order forwarded to :\n 1.   अपीलाथ / The Appellant-\n 2.     यथ / The Respondent-\n 3.   आयकर आयु    (अपील) / The CIT(A),\n 4.   आयकर आयु    / CIT26ITA No. 95/RPR/2022, Shri Krishna ColonisersITA No. 96/RPR/2022, Shri Krishna Builders5.   िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, रायपुर/ DR, ITAT,\n     Raipur6.   गाड फाईल / Guard file.// स या पत   ित True Copy //\n\n\n\n                                                              आदे शानुसार/ BY ORDER,\n\n\n                                                              (Assistant Registrar)\n                                                    आयकर अपीलीय अिधकरण, रायपुर/ITAT, Raipur