The main legal point established in the judgment is the validity of the reference made to the District Valuation Officer under Section 55A of the Income Tax Act, 1961, and the Assessing Officer's power to refer the valuation to the DVO.

R.V. EASWAR, J.

1. This writ petition under Article 226 of the Constitution of India has been filed by M/s. ACC Ltd., hereinafter referred to as the “petitioner”, seeking a writ of prohibition, prohibiting the respondents from taking any action pursuant to the notices dated 07.04.2011 and 19.04.2011 and pursuant to the order of reference dated 20.12.2010 for valuation of the property, hereinafter referred to as “Okhla land”, as on 01.04.1981. A prayer has also been made for issue of writ of certiorari for quashing the aforesaid orders and the proceedings as well as issue of writ of mandamus directing the first respondent to withdraw, revoke or cancel the impugned valuation proceedings.

2. The brief facts leading to the filing of the present petition may be noticed. The petitioner is a public limited company incorporated under the Indian Companies Act, 1913. It is engaged in the business of manufacture and sale of cement and also in the generation of power. It is regularly assessed to income tax under the Income Tax Act, 1961, hereinafter referred to as “the Act”. Under a sale deed dated 10.04.2006, the petitioner sold the Okhla land which is situated at Mathura Road, Okhla, New Delhi. It was sold to M/s. S.S.P. Buildcon Pvt. Ltd. for a consideration of Rs.1,40,20,00,000/-. The property had been taken on lease by the petitioner from Delhi Shimla Catholic Archdiocese under a lease agreement dated 24.04.1953 for a period of 99 years. By a deed of conveyance dated 12.02.1999, the residuary rights in the Okhla land were transferred in favour of the petitioner. In the income tax return filed by the petitioner in respect of the assessment year 2007-08, the petitioner declared capital gain on the sale of Okhla land. It appears that the date of acquisition of the property was taken as 12.02.1999 allegedly by mistake and, therefore, in the course of the assessment proceedings, the petitioner modified the claim by letter dated 18.11.2010. By virtue of the modification, the petitioner claimed that it had the option to take the fair market value of the Okhla land as on 01.04.1981 in the place of the original cost of acquisition. In order to support the claim of valuation of the Okhla land as on 01.04.1981, the petitioner also filed a valuation report dated 16.11.2010 from a registered valuer, in which the Okhla land was valued at Rs.21,72,95,000/- as on 01.04.1981.

3. In the course of the assessment proceedings, the Assessing Officer, who is the second respondent, passed an order purporting to refer the question of valuation of the Okhla land as on 01.04.1981 to the District Valuer Officer (“DVO”). Apparently the report of the Valuation Officer was not received by him before the completion of the assessment proceedings, and therefore in the assessment order passed on 29.12.2010 under Section 143(3) of the Act, he observed as under with reference to the assessee”s claim regarding the fair market value as on 01.04.1981: -

“14.3 The assessee’s submission has been considered. However, the assessee has now submitted a valuation report dated 16.11.2000 from an approved valuer who has valued the cost of property as on 01.04.1981 at Rs.21,72,95,000/-. The valuer’s report appears to be on a higher side, therefore, the same has been referred to the Government Valuation Cell, New Delhi on 20.12.2010 for having the valuation done as on 01.04.1981. On receipt of the valuation report, long term capital gain would be recomputed on the basis of the said valuation report. Till then, the capital gain is computed on the basis of the revised claim submitted by the assessee.”

4. On 19.04.2011, about 4 months after the completion of the assessment, the petitioner received a notice from the respondent No.1, who is the District Valuation Officer, Income Tax Department, Rohit House, No.3 Tolstoy Marg, New Delhi proposing to estimate the fair market value of the land as on 01.04.1981 at Rs.71,71,352/-. This valuation report was prepared and issued un