Amendment to Section 55A(a) regarding fair market value variance applies prospectively from July 1, 2012.

The petitioner (assessee) sold land in Daman on June 24, 2009, for ₹92,65,680

For computing Capital Gains for A.Y. 2010-11, she adopted a Fair Market Value (FMV) as of April 1, 1981, at ₹81/sq. mtr. based on a registered valuer's report

She passed away on May 21, 2012

On March 30, 2017—the last day of limitation—the Respondent issued a notice under Section 148 to reopen assessment, alleging that the FMV in 1981 was only ₹1/sq. mtr. based on a reverse calculation of a 1982 sale instance

The petitioner's representative challenged the reopening, arguing that the law did not permit a reference to a Valuation Officer when the assessee’s declared value was higher than the department’s estimate

1. Whether the Assessing Officer (AO) could validly refer the matter to a Valuation Officer under Section 55A(a) when the value claimed by the assessee was higher than the FMV estimated by the AO.

2. Whether the amendment to Section 55A(a) by the Finance Act, 2012, has retrospective application to Assessment Year 2010-11.

The court applied Section 55A of the Income Tax Act, 1961, which governs references to Valuation Officers

The court relied on the un-amended Section 55A(a), which permitted a reference only if the AO believed the value claimed by the assessee was less than the FMV

Early Section 55A does not allow a downward revision of value declared via a registered valuer [Hiaben Jayantilal Shah v. ITO (2009)]

The 2012 amendment to Section 55A (substituting "less than" with "at variance with") is prospective from July 1, 2012, and not clarificatory or retrospective [CIT v. Puja Prints (2014)]

The court reasoned that for A.Y. 2010-11, the un-amended Section 55A(a) applied

Under this provision, a reference to a Valuation Officer is only jurisdictional if the AO opines that the assessee's valuation is "less than" the FMV. Here, the assessee claimed a higher FMV (₹81) to reduce capital gains, while the AO sought to lower it to ₹1; thus, the assessee’s value was not "less than" the market value, but rather higher

Consequently, the AO lacked the statutory authority to disturb the valuation

The court rejected the Revenue's argument on the 2012 amendment, noting that the Parliament specifically made the change effective from July 1, 2012, without retrospective intent

Since the statutory precondition for reopening based on valuation was not met, the notice lacked legal basis

The court allowed the petition and quashed the impugned notice dated March 30, 2017

The issue regarding the validity of a notice issued to a dead person was left open as the petition was decided on the merits of Section 55A