JUDGMENT [ENTITY], J.
1. The petitioner, in this case, has challenged a proceeding arising out of a reference under [SECTION] of the [ACT]. The above reference was made by the ITO for valuation of a property sold by the petitioner resulting in loss which was incorporated in the income-tax return filed by the petitioner. Before such sale, the petitioner got the property valued through its own valuer. The reference was made on or about December 12, 1975, when the assessment was still pending. Prior to receipt of the valuation report, however, the assessment was completed by the ITO.
2. The main point that has been urged on behalf of the petitioner is that the valuation proceeding has become infructuous in view of the completion of the assessment (before receipt of report) and, as such, is liable to be quashed.
3. Dr. [ENTITY], appearing on behalf of the petitioner, has drawn my attention to the terms of [SECTION] of the [ACT]. He has argued that, in the first place, before referring any particular case for valuation, the ITO has to form an opinion that one of the circumstances as mentioned in [SECTION] of the [ACT] exists and (a reference) should be made. As far as the present case of reference for valuation is concerned, the petitioner has challenged the same as not bona fide. It is alleged that the same has been made to carry out a fishing and roving investigation for finding out materials for reopening or revising a completed assessment. It may be pertinent to note in this connection that, in the course of the hearing, the letter of the ITO referring the matter to the valuer dated December 12, 1975, was produced before me along with the records relating to the valuation proceeding and in compliance with my desire a true copy of the said letter has also been placed on the records of the present case by the learned counsel representing the Department. It has been submitted by Dr. [ENTITY] that the letter of reference does not indicate compliance with the pre-condition of [SECTION] of the [ACT]. It clearly shows that the necessary reference was made in compliance with a direction given to the ITO without formation of any independent opinion by him as required by the terms of the said [SECTION]
4. Dr. [ENTITY] has also drawn my attention to a decision of [ENTITY] J. in the case of [PRECEDENT]. In that case, a completed proceeding under the [ACT] was sought to be reopened on the basis of records to the effect that unquoted shares were not properly valued. It has been contended on the basis of the principle laid down in that decision that where discretion was vested in a statutory authority to take a particular course of action upon fulfilment of a particular pre-condition, the said action cannot be taken unless such condition or prerequisite has been fulfilled. In the instant case, the reference to the Valuation Officer could be made only when the ITO concerned "was of opinion" that having regard to the nature of the asset and other relevant circumstances, it was necessary to do so. From the letter subsequently issued making the reference, it appears that the ITO did not form any independent opinion of his own but in referring the matter to the Department's valuer under [SECTION] of the [ACT], he was merely carrying out the directions of some other officer. In that context, it has been contended by Dr. [ENTITY] that the entire reference is void ab initio and, further, the proceeding arising out of such reference is liable to be quashed at least on this ground. Reference was also made to the Supreme Court in the case of [PRECEDENT]. , where in considering Section 52, Sub-section (2) of the [ACT], their Lordships laid down that before a particular statutory provision could be invoked, the statutory pre-conditions must have to be fulfilled. In that case, it was held that for the application of [SECTION] of the [ACT], two conditions were needed to be fulfilled one was understatement or concealment by the assessee and, secondly, the opinion of the ITO formed reasonably. In the absence of fulfilment of either of the conditions/the said Sub-Section could not be invoked. In the instant case, the opinion of the ITO is absent as will appear from the letter of reference. Secondly, it has been argued by Dr. [ENTITY] that assuming for the sake of argument that reference to the valuer was validly made but in terms of the provisions of [SECTION], adopting, inter alia, [SECTION] of the [ACT], mutatis mutandis, such valuation has become infructuous in view of the fact that in terms of [SECTION] of the [ACT], the valuation report can be utilised only for the purpose of completing an assessment in conformity with the said report. Mr. [ENTITY] on behalf on the respondents has taken the stand that if the ITO had waited for the valuation report, the assessment would have become time-barred.
5. Dr. [ENTITY], in support of his above contention, has relied on the decision in the case of [PRECEDENT] , to show that an assessee is entitled to file his return any time before his assessment, provided there is no time-limit. Their Lordships of the Supreme Court while deciding that case observed that even a return filed on the last day could not be ignored on the ground that the Department would be driven to complete the assessment proceeding within a few hours or lose the right to send a notice under [SECTION]. The argument of inconvenience was held to be hot a decisive argument and there were means and methods which could be availed of by the Department to save the bar of limitation from becoming operative. It was further pointed out by their Lordships of the Supreme Court that it was for the courts to administer the laws as they stood and they were seldom required to be astute to defeat the law of limitation. Dr. [ENTITY] relied on this decision to counter the submissions on behalf of the respondents that the ITO had no other alternative but to complete the assessment without waiting for the valuation report to avoid the bar of limitation. In the facts and circumstances of the case, it is, however, found that sufficient time was still left for the Department to take steps to get the valuation report and to complete the proceedings within the statutory time-limit but failure of the Department to take necessary steps cannot be rewarded with a premium at the cost of the assessee. Lastly, reliance was placed in the case of [PRECEDENT] , where [ENTITY] J. held in a proceeding for making assessment if pending, a reference to the Valuation Officer could be made. The reasons given in the said decision make it amply clear that where the assessment is completed and proceeding for reopening of such assessment was not in existence, the valuation became incompetent. Applying the said principles to the facts of the present case, it was argued on behalf of the petitioner that a valuation reference, even if validly made, lost its utility and should not be allowed to continue and is liable to be quashed. On behalf of the respondents, Mr. [ENTITY] appearing with Mr. [ENTITY] contended that the cases cited on behalf of the petitioner were distinguishable on facts inasmuch as all those cases referred to valuation after completion of the assessment and, as such, can have no application to the facts of the present case. In fact, it was repeated that the ITO was compelled to complete the assessment to avoid the same getting time-barred.
6. Reliance was also placed on the decision in the case of [PRECEDENT] , where it was held by [ENTITY] J. that in the case of a completed assessment, which was not reopened, the WTO was not entitled to make a reference under [SECTION] of the [ACT]. It has been urged that although the aforesaid case was distinguishable on facts, yet the principle laid down 'therein applies on all fours to the facts of the present case inasmuch as during the pendency of the valuation proceeding the assessment having been completed, the said proceeding has lost its utility. It is not contended that there has been any reopening of the assessment so as to open up a scope for application of the valuation report to such reopened proceeding which would have also been a pending assessment proceeding. Moreover, in terms of the decision in the case of [PRECEDENT] , the Rajasthan High Court laid down that the report of the Valuation Officer under [SECTION] could not be used as the basis for reopening an assessment already completed. Though the reference for valuation, in that case, was made in connection with a completed assessment, yet the reason for which such a valuation proceeding was declared void ab initio holds good in a case where during the pendency of the valuation proceeding the assessment is completed, because the whole purpose of a valuation report would be to enable the officer concerned to complete the assessment in conformity therewith. It has not even been stated before me that the reopening or revision of the completed assessment is pending.
7. In my view, there is considerable force in the arguments of Dr. [ENTITY] and the valuation proceeding is liable to be quashed on the grounds that :
(a) the opinion of the ITO which is an essential prerequisite for making a reference for valuation under [SECTION] of the [ACT] is absent in the present case, and
(b) the purpose for which alone a valuation report can be utilised, namely, for completion of the assessment in conformity with the valuation report is no longer existent, the assessment having been completed in the meantime. In such circumstances, to allow the assailed valuation proceeding to continue, would militate against well-known canons of strict construction of taxing statutes.
8. The Rule is, therefore, made absolute and the impugned proceedings is quashed by a writ of certiorari. Let a writ of mandamus also issue directing the respondents to forbear from proceeding any further with, or making any valuation under or pursuant to, the impugned reference. There will be, however, no order as to costs.
9. On the prayer of Mr. [ENTITY], appearing on behalf of the respondents, I stay the operation of my order for a period of six weeks from the date subject to the condition that the injunction already granted during the pendency of the writ proceeding would continue in the meantime.
10. On the prayer of the learned counsel appearing for the parties, I direct the office of this Hon'ble court to expedite the supply of certified copy of this judgment and order, if the same are applied for.