P.K. Ammini, Judicial Member -
(1.) TO 6. [These paras are not reproduced here as they involve minor issues.]
7. In the revenue's appeal for the assessment year 1983-84 (WTA No. 345/Coch/91) one of the issues raised is in respect of the deletion of disallowance of Rs. 12,87,600 claimed as deduction in computing the net wealth of the assessee. The CWT (Appeals) directed the Assessing Officer TO deduct the impugned amount following the order of his predecessor and also in view of the Cochin Bench of IT AT in the assessee's own case. It is agreed before us that the issue is covered in favour of the assessee in WTA No. 233/Coch/83 for the assessment year 1978-79. The facts being similar, we uphold the Vindings of the CWT (Appeals) on this point.
8. The other issue is against the order of CWT (Appeals) in setting aside the assessment in respect of the valuation of 16 items of properties as per the Valuation Officer's report. We have heard rival submissions and perused the records. The assessment for the assessment year under consideration was made on 24-3-1986. By then the Assessing Officer did not receive the detailed valuation report. All that he had in his possession at the time of completion of assessment was an intimation from the valuation cell about the value fixed by it and such intimation was despatched by the valuation cell on 14-3-1988. It was only later and that TOo on passing of assessment order, that the valuation cell has chosen TO enclose its Report No. 45:724 on 5-7-1988 as will be seen from the following correspondence:
No. EE(VAL)/TVM/87-88/11Office of the Executive Engineer(Valuation), Income-tax Dept., Trivandrum-3,Dated the 5th July, 1988.
The Asstt. Commissioner of Income-tax,
Central Circle, Trivandrum.
Sub:-Fair market value of the properties owned by Shri A. Younus Kunju, Younus Cashew Industries, Quilon-
In continuation of this office letter No. EE (VAD/TVM/87-88/11 dated 14-3-1988, Report No. 45:724 is enclosed.
Yours faithfully,(V. Mukundan)Executive Engineer, ValuationOfficer (Immovable Properties)Income-tax Dept., Trivandrum.
1. Shri A. Younus Kunju, Younus Cashew Industries, Vadakkevila, Quilon along with a copy of the report.
(2.) The Chief Engineer (Valuation), Income-tax Dept., Madras-6 along with a copy of the report.
The Supdtg. Engineer (Valuation), Income-tax Dept., Madras-6 along with a copy of the report.
Sd/-(V. Mukundan)Executive Engineer, ValuationOfficer (Immovable Properties)Income-tax Dept., Trivandrum.
Thus at the time of completion of the assessment, neither the Assessing Officer nor the assessee had detailed valuation report determining the value of each of 16 items of properties. Not only this. In the absence of a detailed valuation report from the valuation cell prior to the completion of the assessment, there could be no knowing on the part of the Assessing Officer whether all the properties as referred by him had been considered for valuation in accordance with law. The state of affairs with the assessee is still worse because he has been slapped with a valuation, the details of which are not known to him, mode and method by which such valuation was done was also unknown to him. Therefore, when he filed an appeal before the CWT (Appeals) within the statutory time allowed, he could not effectively defend his stand and object to the valuation as determined by the valuation cell. Therefore, in our considered view the CWT (Appeals) was justified in setting aside the order of the Assessing Officer with a direction to redo the assessment after giving an adequate opportunity to the assessee. The revenue vehemently contends that under Section 16A(6) of the WT Act, the Assessing Officer is bound by the value as determined by the Valuation Officer and as he had received the intimation from the valuation cell about the total of the value determined, the Assessing Officer need not wait for the details of the valuation. Further it is contended that the communication dated 14-3-1988 by the valuation cell under Section 16A(5) of the Wealth-tax Act is at any rate binding on the Assessing Officer. We are not persuaded by the arguments of the revenue. When the question of valuation of the property is referred to the Valuation Officer under Section 16A(1) of the WT Act, insofar as the subject-matter of valuation is concerned, the powers of the Assessing Officer stand, so to speak, delegated to the Valuation Officer. This will be evident from the provisions of Section 16A(2) to (5) which are as follows :-
16A(2) For the purpose of estimating the value of any asset in pursuance of a reference under Sub-section (1), the Valuation Officer may serve on the assessee a notice requiring him to produce or cause to be produced on a date specified in the notice such accounts, records or other documents as the Valuation Officer may require.
(3) Where the Valuation Officer is of opinion that the value of the asset has been correctly declared in the return made by the assessee under Section 14 or Section 15, he shall pass an order in writing to that effect and send a copy of his order to the Wealth-tax Officer and to the assessee.
(4) Where the Valuation Officer is of opinion that the value of the asset is higher than the value declared in the return made by the assessee under Section 14 or Section 15 or where the asset is not disclosed or the value of the asset is not declared in such return or where no such return has been made, the Valuation Officer shall serve a notice on the assessee intimating the value which he proposes to estimate and giving the assessee an opportunity to state, on a date to be specified in the notice, his objections either in person or in writing before the Valuation Officer and to produce or cause to be produced on the date such evidence as the assessee may rely in support of his objections.
(5) On the date specified in the notice under Sub-section (4), or as soon thereafter as may be, after hearing such evidence as the assessee may produce and after considering such evidence as the Valuation Officer may require on any specified points and after taking into account all relevant material which he has gathered, the Valuation Officer shall, by order in writing, estimate the value of the asset and send a copy of his order to the Wealth-tax Officer and to the assessee.
On a careful reading of the provisions, it will be evident that the order to be passed by the Valuation Officer should be a speaking order. If an order which is made appealable is a non-speaking order, the person affected cannot effectively assail the grounds on which the decision was rendered against him. Therefore, the first communication issued by the valuation cell dated 14-3-1988 without enclosing the details of valuation cannot be considered in law as an order in writing under Section 16A(5) of the WT Act. Further, even if it is considered as an order, in writing, it was served on the Assessing Officer only, before the completion of assessment and not on the assessee as enjoined under Section 16A(5) of the Act. For these reasons we uphold the order of the CWT(A) in having set aside the order of the Assessing Officer in adopting the value of the properties as given by the valuation cell and in having restored the issue for compliance with the provisions of the Act. Thus, we reject the contention of the revenue.
9. In the result, ITA No. 335/Coch/91 is treated as partly allowed for statistical purposes whereas ITA No. 345/Coch/91 is dismissed.