G.N.DESAI, R.P.BHAT, R.P.BHATT, J.P.SHAH, DIVAN, J. - (1.) IN this case, which is an appeal on a point of law under the provisions of S. 269H of the IT Act, 1961, one point on which arguments have been advanced is regarding the failure on the part of the ITAT to give an opportunity of being heard to the Valuation Officer nominated by the Competent Authority under S. 269L(3). Under the scheme of Chapter XX A which covers ss. 269A to 269S, provision has been made for acquisition under S. 269F by the order of the Competent Authority when, in the case of sale of any immovable property, the Competent Authority comes to the conclusion that the immovable property to which the proceedings relate is of a fair market value exceeding twenty five thousand rupees and that the fair market value of the property exceeds the apparent consideration thereof by more than fifteen per cent and that it is for one of the objects mentioned in S. 269C(1), cls. (a) and (b). In the instant case, the Competent Authority came to the conclusion that the requirements of S. 269F were satisfied and he, therefore, passed, after obtaining the approval of the CIT, an order for acquisition of the immovable property under the provisions of Chapter XX A. Against this decision of the Competent Authority, two appeals were filed to the Appellate Tribunal under the provisions of S. 269G, one by the transferor and the other by the transferee. Both the appeals were disposed of by a common judgment by the ITAT. Under s. 269L, Sub S. (3), it is provided that if in an appeal under S. 269G against the order for acquisition of any immovable property, the fair market value of such property is in dispute, the Appellate Tribunal shall, on a request being made in that behalf by the Competent Authority, give an opportunity of being heard to any Valuation Officer nominated for the purpose by the Competent Authority. In the instant case, the major point in dispute in the two appeals filed by the transferor and transferee was about the fair market value arrived at by the Competent Authority in his order. It appears from the record of the Tribunal which we have examined that, on 9th Oct., 1974, while the appeal before the Appellate Tribunal was pending, the Competent Authority addressed a request to the Tribunal in the form of a letter addressed to the Registrar, ITAT, Ahmedabad, referring to the numbers of the two appeals and also stating in the second paragraph of the letter : "In this connection I have to invite your kind attention to the provisions contained in S. 269L(3) of the IT Act, 1961, and to request that as the fair market value of the property is in dispute, the Appellate Tribunal may kindly grant an opportunity of being heard to Shri U.S. Shah, Valuation Officer Unit I, IT Department, Ahmedabad, who is hereby nominated for the said purpose."
(2.) ONCE the Valuation Officer was thus nominated by the Competent Authority, it is obvious that, under the provisions of S. 269L(3), it was incumbent upon the Appellate Tribunal to give an opportunity of being heard to that Valuation Officer. From the record of the case, it is clear that no such opportunity of being heard was given to this Valuation Officer, Shri U.S. Shah, who was nominated by the Competent Authority on the request made by the letter of 9th Oct., 1974. One of the grounds in appeal which has been preferred to this High Court under S. 269H which can be on any question of law, setting out the grievance of the CIT is that the Tribunal had not given an opportunity of being heard to the Valuation Officer nominated by the Competent Authority on 9th Oct., 1974. In our opinion, this grievance on the part of the CIT is justified and there is nothing on the record of the Tribunal, which we have examined for ourselves, to show that the Appellate Tribunal had given such an opportunity of being heard to the Valuation Officer, namely, U.S. Shah. It is possible that, at the time when the appeal was heard before the Bench of the Appellate Tribunal on 3rd Dec., 1974, specific attention of the Bench of the Tribunal was not drawn to the letter of 9th Oct., 1974, by which the request that the Valuation Officer should be heard was made by the Competent Authority. But, in view of the mandatory language of S. 269L(3), which makes it incumbent upon the Appellate Tribunal to give an opportunity of being heard to the Valuation Officer the question whether, at the time of the hearing, the request was pressed or not is comparatively insignificant. What really matters is whether the Tribunal, in view of the mandatory language of S. 269L(3), had taken any steps to give an opportunity of being heard to the Valuation Officer, U.S. Shah. Since that opportunity was not given, this appeal must be allowed on this narrow ground and the matter must now go back to the Appellate Tribunal to be decided in accordance with law after giving an opportunity of being heard to U.S. Shah, Valuation Officer.
(3.) WE wish to make it clear that the concept of giving an opportunity of being heard covers two distinct concepts. One is the concept of merely hearing arguments and taking assistance in the shape of hearing arguments from the Valuation Officer, and the other is to treat the Valuation Officer as a witness in the matter so far as the Appellate Tribunal is concerned and, after treating him as a witness, accept the opinion of the Valuation Officer on the valuation as an expert. 23rd August, 1978 However, an examination of the scheme of the relevant provisions of Chapter XX A is required to be made in order to find out in what capacity the Valuation Officer nominated under S. 269L(3) will be appearing before the Appellate Tribunal. The Explanation to S. 269L says that the Valuation Officer has the same meaning as in cl. (r) of S. 2 of the WT Act, 1957. Sec. 2(r) of the WT Act is in these terms : " 'Valuation Officer' means a person appointed as a Valuation Officer under S. 12A, and includes a Regional Valuation Officer, a District Valuation Officer, and an Assistant Valuation Officer." Sec. 12A provides that the Central Government may appoint as many Valuation Officers as it thinks fit. Under Sub S. (2), subject to the rules and orders of the Central Government regulating the conditions of service of persons in public services and posts, a wealth tax authority may appoint as many overseers, surveyors and assessors as may be necessary to assist the Valuation Officers in the performance of their functions. Sec. 38A of the WT Act, which is referred to in S. 269L(2), provides for the powers of the Valuation Officer and it states that : "(1) For the purposes of this Act, a Valuation Officer or any overseer, surveyor or assessor authorised by him in this behalf may, subject to any rules made in this behalf and at such reasonable times as may be prescribed, (a) enter any land within the limits of the area assigned to the Valuation Officer, or (b) enter any land, building or other place belonging to or occupied by any person in connection with whose assessment a reference has been made under S. 16A to the Valuation Officer, or (c) inspect any asset in respect of which a reference under S. 16A has been made to the Valuation Officer,....". It may be pointed out that the powers of a Valuation Officer under S. 38A are similar to the powers given under the Land Acquisition Act for the purpose of carrying out survey, etc., to demarcate the land with a view to considering the desirability of acquiring any particular land for public purposes. It is clear under S. 269L(1)(a) that the Competent Authority may require a Valuation Officer to determine fair market value of the property under consideration and report the fair market value to the Competent Authority under two sets of circumstances (a) for the purpose of initiating proceedings for the acquisition of any immovable property under S. 269C, and (b) for the purpose of making an order, under S. 269F, of acquisition in respect of any immovable property. Thus, the Valuation Officer, who is called upon to determine fair market value of any particular immovable property, is acting as an expert authority and adviser to the Competent Authority for the purpose of enabling the Competent Authority to determine the fair market value, either prima facie at the stage of initiation of the proceedings or finally at the time when he has to decide the question whether the property should be acquired or not under the provisions of S. 269F. The Valuation Officer thus being a statutory authority has certain functions to perform. It is true that he acts in an advisory capacity and has to help the Competent Authority to determine the fair market value. We are not concerned in the present case with the question whether the Valuation Officer, whose report is called for under S. 269L(1)(a) either at the stage of initiation of proceedings or at the stage of passing the final order under S. 269L, can or cannot be examined as a witness before the Competent Authority. That question does not arise before us in the present case and we do not express any opinion on that aspect of the matter. As such adviser to the Competent Authority, the Valuation Officer, of course, has to collect materials which will enable him to evaluate and determine the fair market value of any property on known principles of valuation of property and to submit his report together with the materials gathered by him to the Competent Authority, and there upon the Competent Authority has to exercise his own independent judgment at each stage and come to his own conclusion, either at the initiation of the proceedings or at the stage of passing final order under S. 269F as to what is the fair market value.;