- 1 - HC-KAR NC: 2025:KHC:53372 WP No. 37809 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 15TH DAY OF DECEMBER, 2025 BEFORE THE HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO.37809 OF 2025 (T-IT) BETWEEN: SRI NITHIN NAGARAJ REDDY S/O. SRI T.C. NAGARAJA, AGED 31 YEARS, R/AT NO.304, VISHNU RESIDENCY, THUBARAHALLI, VARTHUR MAIN ROAD, BANGALORE-560 037. …PETITIONER (BY SRI. M.V. SESHACHALA, SENIOR COUNSEL FOR SRI. NAGHARISH G.S, ADVOCATE) AND: 1. ASSESSMENT UNIT FACELESS ASSESSMENT CENTRE NORTH BLOCK, NEW DELHI-110001 REP. BY ASSESSING OFFICER. 2. NATIONAL FACELESS ASSESSMENT CENTRE, NO.412-413, 1ST FLOOR, OPP. METRO PILLAR NO.793 DWARKA MOR, NEW DELHI-110 059. REP. BY ASSESSING OFFICER. 3. JURISDICTIONAL ASSESSING OFFICER INCOME TAX OFFICER, WARD-6(3)(4) BMTC BUILDING, 80 FEET ROAD, KORAMANGALA, BANGALORE-560 095. 4. PRINCIPAL COMMISSIONER OF INCOME TAX-6 BMTC BUILDING, 80 FEET ROAD, Digitally signed by CHANDANA B M Location: High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC:53372 WP No. 37809 of 2025 KORAMANGALA, BANGALORE-560 095. …RESPONDENTS (BY SRI. M. DILIP, ADVOCATE) THIS W.P IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT OF MANDAMUS OR SUCH OTHER WRIT DECLARING TO IMPLEMENT THE DISTRICT VALUATION REPORT OF INCOME TAX DEPARTMENT, BANGALORE DATED 22.08.2025 ANNEXURE-F1 OBTAINED BY THE ASSESSING OFFICER FOR A.Y.2022-23 IN THE CASE OF THE ASSESSEE AS PER SECTIONS 55A, 142A OF THE INCOME TAX ACT, 1960, AND SECTION 16A OF THE WEALTH TAX ACT, 1957 AS IT BE MANDATORY AND ETC. THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR ORAL ORDER In this petition, petitioner seeks the following reliefs: “(a) Issue a writ of mandamus or such other writ declaring to implement the District Valuation report of Income Tax Department, Bangalore dated 22.08.2025 Annexure-F1 obtained by the Assessing Officer for A.Y.2022-23 in the case of the assessee as per Sections 55A, 142A of the Income Tax Act, 1960 and Section 16A of the Wealth Tax Act, 1957 as it is mandatory. (b) Issue a writ of mandamus or such other writ declaring that acceptance of the valuation report in respect of 50% share of the building at property No.5658, Whitefield, Bangalore in the case of cost of construction/improvement U/s. 48 of the IT Act, petitioner’s brother Sri.Pavan would - 3 - HC-KAR NC: 2025:KHC:53372 WP No. 37809 of 2025 amount to discrimination and violation of Article 14 if the other 50% is not valued at the same rate and accepted. (c) Issue a writ of certiorari quashing the assessment order dated 28.10.2025 bearing No. ITBA/AST/S/143(3)/2025-26/1082035856(1) Annexure-K for the Assessment year 2022-23 passed by the first respondent. (d) Issue such other Writ or direction as this Hon’ble Court deem fit to grant in the facts and circumstances of the present case.” 2. Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record. 3. A perusal of the material on record will indicate that aggrieved by the assessment order dated 12.03.2024 passed by the respondents, the petitioner approached this Court in W.P.No.17026/2024, which was allowed by setting aside the assessment order and remitting the matter back to the respondents for reconsideration afresh in accordance with law vide final order dated 12.07.2024, which reads as under: “1. The petitioner has sought for setting aside the assessment order dated 12.03.2024 at Annexure-K passed for the Assessment Year 2022-23 and to remand the matter back for fresh adjudication in accordance with procedure under 144-A of the Income Tax Act, 1961. - 4 - HC-KAR NC: 2025:KHC:53372 WP No. 37809 of 2025 2. The case of the petitioner is that during the course of the assessment proceedings, show-cause notice came to be issued on 21.02.2024 directing compliance by 28.02.2024. It is submitted that though some information was given, request was made in terms of Annexure-J5 seeking for an additional two weeks time to complete details regarding the details of the bank account related to an account from Andhra Bank, which subsequently was merged with Union Bank of India. Further, request was made to the Bank to provide the account statement for the relevant financial year which pertains to a time period beyond ten years and procurement of statements required additional time. However, it is submitted that the assessment proceedings itself were concluded as on 12.03.2024. It is submitted that the request for adjournment has not been considered despite the reasonableness of such request. Taking note that the assessment order is passed on 12.03.2024 and the request at Annexure-J5 having been made on 20th February 2024, further time as requested ought to have been granted in light of the assertion made regarding merger of Andhra Bank with Union Bank of India. 3. The assessment order clearly proceeds on the premise that the petitioner has failed to furnish documentary evidence. In the light of the same, it would meet the ends of justice in affording an opportunity to the petitioner to furnish necessary details as made out in their request at Anenxure- J5. - 5 - HC-KAR NC: 2025:KHC:53372 WP No. 37809 of 2025 4. Accordingly, Writ Petition is allowed and order at Annexure-K is set aside. Matter is remitted for fresh consideration. Petitioner to make out the necessary details upon appearing before the Assessing Officer. All other contentions are kept open. The matter is relegated as observed above.” 4. In pursuance of the said remand order, the respondents referred the matter to the District Valuation Officer, Income Tax Department, Bangalore under Section 55A read with Section 142A of the Income Tax Act for ascertaining valuation and submitting the report in terms of Section 16A of the Wealth Tax Act. In this context, learned Senior Counsel for the petitioner submits that the District Valuation Officer submitted a report dated 22.08.2025, in the case of the petitioner valuing the cost of construction / improvement at Rs.2,03,29,359.50/-. The respondent proceeded to pass the impugned assessment order without considering the said valuation report, which is contrary to Section 55A of IT Act r/w Section 16A of the Wealth Tax Act and as such, the petitioner is before this Court by way of the present petition. It is also pointed out that insofar as the petitioner’s brother-N.Pavan is concerned, who jointly sold the property in question vide registered Sale Deed dated 20.09.2021, the said valuation report - 6 - HC-KAR NC: 2025:KHC:53372 WP No. 37809 of 2025 has been accepted by the respondents and on the ground of parity, the petitioner’s contention are to be accepted by setting aside the impugned assessment order. 5. Per Contra, learned counsel for the respondents submits that there is no merit in the petition and that the same is liable to be dismissed. 6. Before adverting to the rival submissions, it is necessary to refer to Section 55A of the Income Tax Act, which reads as under: “Reference to Valuation Officer. 55A. - With a view to ascertaining the fair market value of a capital asset for the purposes of this Chapter, the [Assessing] Officer may refer the valuation of capital asset to a Valuation Officer— • in a case where the value of the asset as claimed by the assessee is in accordance with the estimate made by a registered valuer, if the [Assessing] Officer is of the opinion that the value so claimed is less than its fair market value; • in any other case, if the[Assessing] Officer is of opinion— (i) that the fair market value of the asset exceeds the value of the asset as claimed by the assessee by more than such percentage of the value of the asset as so claimed or by more than such amount as may be prescribed on this behalf; or (ii) that having regard to the nature of the asset and other - 7 - HC-KAR NC: 2025:KHC:53372 WP No. 37809 of 2025 relevant circumstances, it is necessary to do, and where any such reference is made, the provisions of sub-sections (2), (3), (4), (5) and (6) of section 16A, clauses (ha) and (i) of sub-section (1) and sub-sections (3A) and (4) of section 23, sub-section (5) of section 24, section 34AA, section 35 and section 37 of the Wealth-tax Act, 1957 (27 of 1957), shall with the necessary modifications, apply in relation to such reference as they apply in relation to a reference made by the [Assessing] Officer under sub-section (1) of section 16A of that Act. 7. So also, Section 142A of the Income Tax Act reads as under: Estimation of value of assets by Valuation Officer. 142A. (1) The Assessing Officer may, for the purposes of assessment or reassessment, make a reference to a Valuation Officer to estimate the value, including fair market value, of any asset, property or investment and submit a copy of report to him. (2) The Assessing Officer may make a reference to the Valuation Officer under sub-section (1) whether or not he is satisfied about the correctness or completeness of the accounts of the assessee. (3) The Valuation Officer, on a reference made under sub- section (1), shall, for the purpose of estimating the value of the asset, property or investment, have all the powers that he has under section-38A of the Wealth-tax Act, 1957 (27 of 1957). - 8 - HC-KAR NC: 2025:KHC:53372 WP No. 37809 of 2025 (4) The Valuation Officer shall, estimate the value of the asset, property or investment after taking into account such evidence as the assessee may produce and any other evidence in his possession gathered, after giving an opportunity of being heard to the assessee. (5) The Valuation Officer may estimate the value of the asset, property or investment to the best of his judgment, if the assessee does not co-operate or comply with his directions. (6) The Valuation Officer shall send a copy of the report of the estimate made under sub-section (4) or sub-section (5), as the case may be, to the Assessing Officer and the assessee, within a period of six months from the end of the month in which a reference is made under sub-section (1). (7) The Assessing Officer may, on receipt of the report from the Valuation Officer, and after giving the assessee an opportunity of being heard, take into account such report in making the assessment or reassessment. Explanation.—In this section, "Valuation Officer" has the same meaning as in clause (r) of section-2 of the Wealth- tax Act, 1957 (27 of 1957). 8. Further, Section 16A of the Wealth Tax Act reads as under: 16A. Reference to Valuation Officer.—(1) For the purpose of making an assessment (including an assessment in respect of any assessment year commencing before the - 9 - HC-KAR NC: 2025:KHC:53372 WP No. 37809 of 2025 date of coming into force of this section) under this Act, 5[where under the provisions of section 7 read with the rules made under this Act, or, as the case may be, the rules in Schedule III, the market value of any asset is to be taken into account in such assessment,] the 6 [Assessing Officer] may refer the valuation of any asset to a Valuation Officer— (a) in a case where the value of the asset as returned is in accordance with the estimate made by a registered valuer, if the 6[Assessing Officer] is of opinion that the value so returned is less than its fair market value ; (b) in any other case, if the 6[Assessing Officer] is of opinion— (i) that the fair market value of the asset exceeds the value of the asset as returned by more than such percentage of the value of the asset as returned or by more than such amount as may be prescribed in this behalf; or (ii) that having regard to the nature of the asset and other relevant circumstances, it is necessary so to do. (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 6[Assessing Officer] and to the assessee. - 10 - HC-KAR NC: 2025:KHC:53372 WP No. 37809 of 2025 (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 that 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 1[Assessing Officer] and to the assessee. (6) On receipt of the order under sub-section (3) or sub-section (5) from the Valuation Officer, the 1[Assessing Officer] shall, so far as the valuation of the asset in question is concerned, proceed to complete the assessment in conformity with the estimate of the Valuation Officer.” 9. A perusal of the aforesaid provisions and conjoint reading of the aforesaid Rules will clearly indicate that upon receipt - 11 - HC-KAR NC: 2025:KHC:53372 WP No. 37809 of 2025 of the order under Sub-section (iii) and (v) of Section 16A of the Wealth Tax Act, the Assessing Officer insofar as the valuation of the asset in question is concerned, the proceedings has to be completed in conformity with the report of the Valuation Officer, it follows therefrom that when the matter is referred to the District Valuation Officer in terms of Section 55A read with Section 142A of the Income Tax Act, it becomes incumbent upon the respondents to complete the assessment in conformity with the decision of the District Valuation Officer in terms of Section 16A of the Wealth Tax Act and failure on the part of the respondents – Assessing Officer to consider and taking into account the said valuation report, the impugned assessment order deserves to be set aside and matter remitted back to the respondents for reconsideration afresh in accordance with law. 10. It is also relevant to state that the petitioner sold the subject asset / property along with his brother N. Pavan vide registered Sale Deed dated 20.09.2021 since the petitioner and his brother N. Pavan were joint owners and having regard to the fact that the valuation submitted by petitioner’s brother in relation to his undivided ½ share in the property was accepted, the respondents - 12 - HC-KAR NC: 2025:KHC:53372 WP No. 37809 of 2025 would necessarily have to verify the same and apply / invoke the doctrine of parity while reconsidering the matter afresh in accordance with law. 11. In the result, I pass the following: ORDER (i) The petition is hereby allowed. (ii) The impugned order at Annexure – K dated 28.10.2025 passed by 1st respondent is hereby quashed (iii) Matter is remitted back to the respondents for reconsideration of the matter afresh in accordance with law by taking into account and considering the Valuation Report dated 22.08.2025 as well as verifying the records relating to the petitioner’s brother N. Pavan and the assessment done in relation to the petitioner’s brother and pass appropriate orders in accordance with law. Sd/- (S.R.KRISHNA KUMAR) JUDGE SV List No.: 2 Sl No.: 45