Per Smt. P. Madhavi Devi, J.M. This is Assessees appeal for the A.Y 2013-14 against the order of the CIT (A)-6, Hyderabad, dated 3.9.2018.

2. Brief facts of the case are that the assessee, an individual, filed his e-return of income for the A.Y 2013-14 on 30.09.2013, admitting total income of Rs.2,48,03,550/-. The return was initially processed u/s 143(1) of the and subsequently it was selected for scrutiny under CASS. Accordingly, notices u/s 143(2) and 142(1) of the were issued to the assessee. During the assessment proceedings u/s 143(3) of the, the AO observed that the assessee has sold a property at Shangrila Apartments for Rs.1,65,00,000/- as against the SRO ITA No 2415 of 2018 Zulfi Revdjee Hyderabad. Page 2 of 8 value of Rs.2,12,73,600/-. Therefore, vide notice u/s 142(1) of the, dated 6.1.2016, the assessee was required to explain as to why the provisions of section 50C should not applied. The assessee, vide letter dated 28.1.2016 explained that he had entered into an agreement of sale for a consideration of Rs.1,65,00,000 on 8.2.2010 and also submitted the copy of the sale agreement and claimed that the same should be adopted as the sale consideration u/s 50C of the. The AO however, did not accept the assessees contention and observed that as on the date of the registered sale deed dated 3.9.2012, the SRO value of the property was at Rs.2,12,73,600/- and further that the agreement of sale is not a registered document. Therefore, he sought to bring the difference of Rs.47,73,600/- to tax u/s 50C of the. The assessee further submitted that the SRO value as on the date of the agreement of sale dated 8.2.2010 was Rs.1,65,00,000/- and the same should only be considered as the SRO value of the property and further submitted that subsequently only, the SRO value was revised to Rs.2,12,73,600/-. Since the assessee objected to the adoption of the SRO value for the purpose of computation of long term capital gain, the AO, vide letter dated 19.6.2016, referred the matter to the Valuation Officer, Hyderabad, for determination of the fair market value of the property as on 8.2.2010.

3. The Valuation Officer, however, vide letter dated

20.7.2017 submitted his report by estimating the fair market value of the property as on 3.9.2012 at Rs.2,55,28,320/-. The assessee was again issued a show cause notice, in response to which, the assessee submitted that since the date of agreement of ITA No 2415 of 2018 Zulfi Revdjee Hyderabad. Page 3 of 8 sale and the date of execution of the sale deed are two different dates, in view of the proviso to section 50C of theinserted by the Finance Act, as on 1.4.2017, the SRO value as on the date of the agreement of sale should be considered. In support of this contention, he also placed reliance upon the decision of theAT, Vizag Bench in the case of Smt. Chalasani Naga Ratna Kumari vs. ITO. The AO however, did not accept the assessees contention and adopted the SRO value of Rs.2,12,73,600/- as the value of the sale consideration for the purpose of computation of capital gain and accordingly brought the difference to tax.

4. Aggrieved, the assessee preferred an appeal before the CIT (A), stating that as per section 142(1)(vi) of the Act, the DVO is required to submit the valuation report within six months from the date of the reference and further that the AO has to complete the assessment within two months thereafter, as per clause (iv) of Explanation 1 to section 153 of the. Further, he also challenged the adoption of SRO value as on the date of sale on

3.9.2012 whereas the agreement of sale is dated 8.2.2010 particularly since the AO also had made reference to the DVO to determine the value of the property as on 8.2.2010. The CIT (A) however, dismissed the assessees appeal and the assessee is in second appeal before us by raising the following grounds of appeal:

1. The order of the Learned CIT(Appeals)-6, Hyderabad is against law, weight of evidence and probabilities of the case. 2.(a) The learned CIT(A) grossly erred in dismissing the additional ground raised before him that the impugned ITA No 2415 of 2018 Zulfi Revdjee Hyderabad. Page 4 of 8 assessment is barred by limitation in terms of the provisions of Section 153 r/w. section 142A of the Income Tax Act, 1961. (b) The learned CIT(A) failed to appreciate that the maximum time limit stipulated for receipt of valuation report from the DVO under subsection (6) of section 142A is a period of six months form the end of the month in which a reference is made under sub-section (1) of section 142A of the Income Tax Act, 1961. Consequently, he erred in holding that the impugned assessment is not barred by the limitation. (c) The learned CIT(A) failed to appreciate that reference to the Valuation Officer u/s.142A(1) was made by letter dated 19.02.2016 and consequently the Valuation Officer should have sent a copy of the report of estimate made under sub-section (4) or sub-section (5) within a period of 6 months, i.e., by end of August 2016. Whereas the report was submitted by him only in July 2017 and consequently the impugned assessment is barred by limitation.

3. Without prejudice to ground No.2: (a) The learned CIT(A) grossly erred in confirming the adoption of sale consideration as per Section SOC valuation as on the date of sale deed viz., 03.09.2012 ignoring the applicability of the first proviso and the second proviso to sub-section (1) of section 50C. (b) The appellant prays that the appeal be allowed in toto on the above grounds

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4. For the above grounds and such other grounds that may be urged at the time of hearing, the appellant prays that the appeal be allowed.

5. The appellant craves leave to add to, amend or modify the above grounds of appeal either before or at the time of hearing of the appeal, if it is considered necessary.

5. The learned Counsel for the assessee, while reiterating the submissions made before the AO and the CIT (A), submitted that section 153 provides the time limit for completion of an assessment or re-assessment and re-computation and theA No 2415 of 2018 Zulfi Revdjee Hyderabad. Page 5 of 8 explanation(1) thereof, provides the period which is to be excluded from the limitation period. He submitted that sub-section (1) of section 153 provides for the limitation period of 21 months from the end of the A.Y in which the income was assessable, if the assessment is to be made u/s 143 or 144 of the I.T. Act. He referred to clause (v) of Explanation 1 to section 153, which provides that the period commencing from the date on which the AO makes a reference to the valuation officer under sub-section 142A and that the date on which the report of the valuation officer is received by the AO is to be calculated for calculating the limitation period. He thereafter referred to section 142A(vi) of thewhich provides that the Valuation Officer shall send a copy of the report under sub-section (v), as the case may be, to the AO 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) of the. He submitted that the since the words used in this clause is shall, it is mandatory for the valuation officer to follow the timeline given in the. He also referred to the other sub- sections of section 142(A), where the words may or shall are used in different contexts. In support of his contention that, where in the same section both the words are used, word shall be considered mandatory, he relied on Central Board of Direct Taxes Circular reported in 371 ITR 22 and also the decision of the Honble Delhi High Court in the case of B.K. Khanna & Co. vs Union Of India And Others on 14 September, 1984(156 ITR 796 (Del.). He submitted that as per section 153A of the Act, the assessment order has to be passed on or before 31.03.2016, whereas the assessment order is passed on 19.09.2017. Therefore, he sought the setting aside of the assessment order on this ground alone. ITA No 2415 of 2018 Zulfi Revdjee Hyderabad. Page 6 of 8 On merits also, he argued that the SRO value as on the date of the agreement of sale should be considered and though the AO had referred the valuation of the property as on agreement of sale, the DVO has submitted the report giving the value as on the date of the execution of the sale deed. Therefore, according to him, the assessment order on the basis of such an erroneous valuation report also is not sustainable.

6. The learned DR, on the other hand, supported the orders of the authorities below and submitted that prior to the insertion of sub-section (vi) to section 142A of the Act, there was no time limit for the valuation officer to submit the report and the period taken by the valuation officer from the date of reference to the submission of the report, was to be excluded while computing the period of 21 months from the end of the relevant A.Y as provided under section 153 of the. Therefore, he submitted that the assessment order is to be upheld.

7. Having regard to the rival contentions and the material on record, we find that the relevant A.Y before us is A.Y 2013-14 and the return of income was filed on 30.09.2013. Therefore, 21 months from such date would expire on 31.3.2016. Thus, the assessment order u/s 143(3) was required to be passed by

31.03.2016 but since the AO has made a reference to the valuation officer u/s 142A of the, vide letter dated 19.02.2016, and the valuation report was filed on 20.7.2017, the said period will have to be excluded for determining the time limit. However, the question before us is the period allowed to the DVO ITA No 2415 of 2018 Zulfi Revdjee Hyderabad. Page 7 of 8 to submit the report. U/s 142A of the, the valuation report has to be submitted within six months from the date of the receipt of the reference. Admittedly, in the case before us, the valuation officer has submitted the report beyond a period of 15 months. Whether this period can be enlarged or condoned is to be seen. As rightly pointed by the learned Counsel for the assessee, the word used in sub-section 6 of section 142A is shall and in other sub sections, the word used is may. The Honble Delhi High Court in the case of B.K. Khanna & Co. vs Union Of India And Others on 14 September, 1984 (Supra) has clearly held that where the words may and shall are used in various provisions of same sections, then both of them contain different meaning and the word shall shall mean mandatory. As argued by the learned Counsel for the assessee, the AO was required to call for a report from the valuation officer within six months from the date of the reference and the valuation officer was bound to give such a report with such prescribed period. Further, as seen from the assessment order, the AO had directed the valuation officer to give the valuation of the property as on 8.2.2010, whereas the valuation officer has given the report as on the date of the execution of the sale deed. Therefore, the DVO has clearly not followed the directions of the AO and also not followed the timeline fixed under the. When it is mandatory for an officer to follow the timeline prescribed under the, such delay cannot be condoned. Therefore, we agree with the contentions of the learned Counsel for the assessee that the report of the Valuation Officer has to be filed within the time given u/s 142A(vi) of the and therefore, the assessment order passed on the basis of such report of Valuation Officer beyond the time limit is not ITA No 2415 of 2018 Zulfi Revdjee Hyderabad. Page 8 of 8 sustainable. Therefore, we allow the assessees appeal and the assessment order is set aside.

8. In the result, assessees appeal is allowed. Order pronounced in the Open Court on 5 th September, 2019. Sd/- Sd/- (S. RIFAUR RAHMAN) (P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER Hyderabad, dated 5 th September, 2019. Vinodan/sps Copy to: 1 Shri Zulfi Revdjee, 8-2-494/501, Road No.7, Banjara Hills, Hyderabad 500034 2 ACIT, Circle 14(1) Room No.636, 6 th Floor, C Block, IT Towers, AC Guards, Hyderabad 3 CIT (A)-6 Hyderabad 4 Pr. CIT 6 Hyderabad 5 The DR, ITAT Hyderabad 6 Guard File By Order