Estimation of value of assets by Valuation Officer.
269(1)
The Assessing Officer may, for the purposes of assessment or reassessment, make a reference to a Valuation Officer to estimate the value, including the fair market value, of any asset, property or investment and submit a copy of report to him.
269(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.
269(3)
- (a) For estimating the value, including the fair market value, of the asset, property, or investment, the Valuation Officer or any engineer, overseer, surveyor, or assessor authorized by him, may, subject to any rules made in this regard and at such reasonable times, as prescribed,–– (i) enter any land within the limits of the area assigned to the Valuation Officer; or(ii) enter any land, building, or other place belonging to or occupied by any person in connection with whose assessment a reference has been made to the Valuation Officer; or (iii) inspect any asset, property, or investment in respect of which a reference has been made to the Valuation Officer.
- (b) The Valuation Officer or any engineer, overseer, surveyor, or assessor, may require any person in charge of, or in occupation or possession of, such land, building, or other place or such asset, property, or investment to afford the necessary facility to: (i) survey or inspect such land, building, or other place or such asset, property, or investment; (ii) estimate its value; or (iii) inspect any books of account, document, or record relevant for the valuation of such asset, property, or investment and gather other particulars relating to it.
- (c) No Valuation Officer, engineer, overseer, surveyor, or assessor shall enter any land, building or place referred to in clause (a)(ii), or inspect any asset, property, or investment referred to in clause (a)(iii), except with the consent of the person in charge of, or in occupation or possession of, such land, building, place, or asset, property, or investment, without providing such person at least two days' notice in writing of their intention to do so.
- (d) If a person who, under this sub-section, is required to afford any facility to the Valuation Officer or the engineer, overseer, surveyor, or assessor, either refuses or evades to afford such facility, the Valuation Officer shall have all the powers as are vested in a court under the Code of Civil Procedure, 1908, when trying a suit in respect of the following matters,— (i) discovery and inspection; (ii) enforcing the attendance of any person, including any officer of a banking company, and examining him on oath; (iii) compelling the production of books of account and other documents; and (iv) issuing commissions.
269(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.
269(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.
269(6)
The Valuation Officer shall send the report of the estimate made under sub-section (4) or (5), to the Assessing Officer and the assessee.
269(7)
With a view to rectifying any mistake apparent from the record, the Valuation Officer may amend any report made by him, as per section 287.
269(8)
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.
269(9)
The Valuation officer shall send the report referred to in sub-section (6) within six months from the end of the month in which the reference is made under sub-section (1).
269(10)
For the purposes of this Act,––
- (a) the Central Government may appoint as many Valuation Officers, as necessary; and
- (b) subject to the rules and orders of the Central Government regulating the conditions of service of persons in public services and posts, a Principal Chief Commissioner, or a Chief Commissioner, or a Principal Commissioner or a Commissioner may appoint as many engineers, overseers, surveyors and assessors as may be necessary to assist the Valuation Officers in the performance of their functions.
Section Summary:
This section outlines the process for estimating the value of assets, properties, or investments by a Valuation Officer at the request of the Assessing Officer. It provides the framework for how valuations are conducted, the powers granted to Valuation Officers, and the rights and obligations of taxpayers during the process. The purpose is to ensure accurate valuation of assets for tax assessment or reassessment purposes.
Key Changes:
- Expanded Powers of Valuation Officers: The section explicitly grants Valuation Officers and their authorized personnel the authority to inspect assets, properties, or investments, and access relevant documents or records for valuation purposes.
- Notice Requirement: A minimum of two days' written notice is required before entering private property for inspection, unless consent is provided.
- Non-Cooperation Consequences: If a taxpayer refuses to cooperate, the Valuation Officer can estimate the value based on their judgment, and they are granted powers similar to those of a civil court to enforce compliance.
- Timeline for Reports: Valuation Officers must submit their valuation report within six months from the end of the month in which the reference was made.
Practical Implications:
- For Taxpayers:
- Taxpayers must cooperate with Valuation Officers during inspections and provide necessary documentation. Non-cooperation can lead to a valuation based on the officer's judgment, which may not favor the taxpayer.
- Taxpayers have the right to be heard and present evidence during the valuation process.
- For Businesses:
- Businesses must ensure proper documentation of asset values and be prepared for potential inspections by Valuation Officers.
- For Compliance Processes:
- The process introduces additional steps in tax assessments, particularly for cases involving high-value assets or disputes over valuation.
Critical Concepts:
- Fair Market Value: The estimated price at which an asset would change hands between a willing buyer and seller, neither being under compulsion to buy or sell.
- Valuation Officer: A government-appointed officer responsible for estimating the value of assets, properties, or investments.
- Code of Civil Procedure, 1908: A law that governs civil court procedures in India. Valuation Officers are granted similar powers under this section to enforce compliance.
Compliance Steps:
- For Taxpayers:
- Maintain accurate records of asset values, including supporting documents.
- Respond promptly to notices from Valuation Officers and provide requested information.
- Attend hearings and present evidence if disputing a valuation.
- For Valuation Officers:
- Provide at least two days' written notice before inspecting private property, unless consent is given.
- Complete and submit the valuation report within six months of the reference.
Examples:
- Scenario 1: A taxpayer owns a commercial property. The Assessing Officer suspects the declared value is undervalued and refers the case to a Valuation Officer. The Valuation Officer inspects the property, reviews relevant documents, and estimates the fair market value. The taxpayer is given an opportunity to present evidence before the final valuation is submitted.
- Scenario 2: A business refuses to allow a Valuation Officer to inspect its machinery. The Valuation Officer uses their judgment to estimate the value and submits the report to the Assessing Officer. The business cannot challenge the valuation unless it can prove the estimate was unreasonable.
This section ensures transparency and fairness in asset valuation while granting Valuation Officers the necessary tools to perform their duties effectively.