HIGH COURT OF JUDICATURE AT ALLAHABAD INCOME TAX APPEAL No. - 191 of 2026 INCOME TAX APPEAL DEFECTIVE No. - 110 of 2026 Court No. - 39 HON'BLE SAUMITRA DAYAL SINGH, J. HON'BLE SWARUPAMA CHATURVEDI, J. 1. Heard Ms. Shalini Goel, learned counsel for the revenue and perused the record. 2. Present appeals have arisen against the impugned order dated 06.03.2026 in ITA No.883/DEL/2021 for A.Y. 2010-11 and ITA No.884/DEL/2021 for A.Y. 2011-12 passed in assessee's appeals. By that order, the tribunal has allowed the appeals filed by the assessee against the order of the Principal Commissioner of Income Tax, Ghaziabad dated 08.03.2021 under Section 263 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'). Revenue claims exception to the Circular governing the institution of revenue appeals, on the strength of the proceedings arise under Section 263 of the Act. 3. The Tribunal has allowed the appeals on the following reasoning: Versus Counsel for Appellant(s) : Shalini Goel Counsel for Respondent(s) : Along with Versus Counsel for Appellant(s) : Shalini Goel Counsel for Respondent(s) : Principal Commissioner Of Income Tax And Another .....Appellant(s) Sh. Chandra Prakash Goel .....Respondent(s) Principal Commissioner Of Income Tax And Another .....Appellant(s) Sh. Chandra Prakash Goel .....Respondent(s) "16. Considering the peculiar facts, record and reliance on the decision of Anil Kripalani, as per ratio of the above decision, it was held that the provisions of Section 55A(a) of the Act cannot be applied and no reference is possible to be made to the DVO for determining the market value of the property at a figure less than that shown by the Assessee. However, in our considered view, in this case also the income declared by the assessee in the original return of income was without the valuation report, in the set aside proceedings, the AO had the convenience to appreciate the actual valuation to determine the actual income under the head's capital gain and business income. There is no possibility to refer to the DVO since the AO had accepted the valuation report moreover, the estimation was made not for the present value, but it is for value as on 01.04.1981. Even the DVO would have estimated based on the value as existed at that point of time and again it is also subject to adoption of estimations. It is evident from the fact that the Assessing Officer in the order giving effects to the proceedings under Section 263 of the Act, it is brought to our notice that the Assessing Officer has obtained the repart from the DVO, who assessed the FMV as on 01.04.1981 at Rs. 9.82 per sq. meters (Rs. 25 per sq. yards). In our considered view, the above report was not challenged by the assessee at this stage. Both the reports are extreme to each other. Considering the overall facts on record, both the valuers adopted different estimates to value which as existed at 01.04.1981. As discussed above, there is certain FMV based on stamp duty, which varies from Rs. 90 to Rs. 330 based on whether the land is adjacent to the road or not. Considering the overall information available with the registered valuer had estimated the FMV for specific purpose of capital gain. 17. Considering the above facts on record and the case law relied by the Ld DR are distinguishable, in our considered view, the order passed by the AO may be prejudicial to the interest of the revenue but not erroneous, therefore, the order pansed u/s 263 is set aside. Therefore, the assessment order passed u/s 143(3)/254 of the Act dated 24.12.2018 is not erroneous in so far as it is prejudicial to the interest of the Revenue. Accordingly, we are inclined to allow the appeal filed by the assessee. 18. With regard to ITA No. 884/Del/2021, we observed that the issue involved is exactly similar to the facts in ITA No. 883/Del/2021and the findings are applicable mutatis mutandis to ITA No. 884/Del/2021, accordingly, the appeal filed by the assessee is allowed. 19. In the result, both appeals of the assessee are allowed." 4. Learned counsel for the revenue has pressed the following two questions of law: IAPL No. 191 of 2026 2 "1. WHETHER on the facts and circumstances of the case and in law, passing of assessment order below the returned income declared by the assessee by entertaining new facts, do not render the assessment order erroneous and prejudicial to the interest of revenue, without application of mind? 2. WHETHER, on the facts and circumstances of the case and in law, the ITAT is justified in allowing the appeal of the assessee against the order passed by the Principal Commissioner of Income Tax, Ghaziabad under section 263 of Income Tax Act, 1961, ignoring the finding that the Assessing Officer had passed the assessment order without application of mind and fulfilling the conditions specified under Explanation 2 to section 263 of the Act, thereby rendering assessment order dated 24.12.2018 erroneous as well as prejudicial to the interest of revenue ?" 5. Having heard learned counsel for the revenue and having perused the record, we find that the Tribunal has reasoned that the valuation made by the DVO, though values the property higher than the valuation disclosed by the assessee, at the same time, it could not be doubted that the valuation disclosed by the assessee was also based on an Approved Valuer's report. To that extent, the Tribunal has reasoned that though the revenue may claim that the order is prejudicial to the interest of the revenue, it may not be erroneous inasmuch as the order may have been passed on the strength of the report of the Approved Valuer, as well. 6. Leaving that issue apart, at present, we note, against loss return Rs.2,29,920/-, if the DVO report is accepted, the tax difference would be about Rs. 7 lakhs. 7. We recognize that by way of a principle, the revenue may be entitled to claim exception to the applicability of the CBDT Circular (governing the monetary limit for filing appeals), arising out of proceedings under Section 263 of the Act), at the same time, it cannot be lost sight, that that exception may not have been carved out to overlook the tax effect, in every case. 8. The general policy of the Union of India being that no litigation involving tax dispute below Rs. 2 crores may reach any High Court at the instance of the revenue, the quantum of dispute may still remain relevant. Here, there is no allegation of the repeated nature of transaction as may IAPL No. 191 of 2026 3 involve that or issue of multiplicity of proceedings. Sale of land transactions, by very nature, are standalone transactions. Occasioned by change of land use, the agricultural land earlier owned by the assessee may have been converted and sold after plotting. 9. In view of that light, the revenue dispute is small, and in any case the tax effect is miniscule, as may not merit consideration in view of the general policy of the Union, to litigate only in cases involving tax dispute in excess of Rs. 2 crores. 10. Thus, leaving the question of law being raised to be adjudicated in proper set of facts, where substantial dispute may be involved, the present appeals are, accordingly, dismissed as below monetary limit. September 30, 2026 Anurag/- IAPL No. 191 of 2026 4 (Swarupama Chaturvedi,J.) (Saumitra Dayal Singh,J.) Digitally signed by :- ANURAG JAISWAL High Court of Judicature at Allahabad Digitally signed by :- ANURAG JAISWAL High Court of Judicature at Allahabad