DIVAN C. J. - In this case, which is an appeal on a point of law under the provisions of s. 269H of the I.T. Act, 1961, one point on which arguments have been advanced is regarding the failure on the part of the Tribunal to give an opportunity of being heard to the valuation officer nominated by the competent authority under section 269L(3). Under the scheme of Chap. XX-A which covers ss. 269A to 269S , provision has been made for acquisition under s. 269F by the order of the competent authority when in the case of sale of any immovable property. the competent authority comes to the conclusion that the immovable property to which the proceedings relate is of a fair market exceeding twenty-five thousand rupees and that the fair market value of the property exceeds the apparent consideration thereof by more than fifteen per cent. and that it is for one of the objects mentioned in s. 269C(1), cls. (a) and (b) . In the instant case, the competent authority came to the conclusion that the requirements of s. 269F were satisfied and he, therefore, passed, after obtaining the approval of the Commissioner, an order for acquisition of the immovable property under the provisions of Chap. XX-A. Against this decision of the competent authority, two appeals were filed to the Tribunal under the provisions of s. 269G , one by the transferor and the other by the transferee. Both the appeals were disposed of by a common judgment by the Tribunal. Under s. 269L, sub-s. (3) , it is provided that if in an appeal under s. 269G against the order for acquisition of any immovable property, the fair market value of such property is in dispute the Tribunal shall, on a request being made in that behalf by the competent authority, give an opportunity of being heard to any valuation officer nominated for the purpose by the competent authority. In the instant case, the major point in dispute in the two appeals filed by the transferor and transferee was about the fair market value arrived at by the competent authority in his order. It appears from the record of the Tribunal which we have examined that, on October 9, 1974, while the appeals before the Tribunal was pending, the competent authority addressed a request to the Tribunal in the form of a letter addressed to the Registrar, Income-tax Appellate Tribunal, Ahmedabad, referring to the numbers of the two appeals and also stating in the second paragraph of the letter :
'In this connection I have to invite your kind attention to the provisions contained in section 269L (3) of the Income-tax Act, 1961, and to request that as the fair market value of the property is in dispute, the Appellate Tribunal may kindly grant on opportunity of being heard to Shri. U. S. Shah, Valuation Officer Unit-I, Income-tax Department, Ahmedabad, who is hereby nominated for the said purpose.'
Once the valuation officer was thus nominated by the competent authority, it is obvious that, under the provisions of s. 269L (3) , it was incumbent upon the Tribunal to give an opportunity of being heard to that valuation officer. From the record of the case, it is clear that no such opportunity of being beard was given to this valuation officer, Shri U. S. Shah, who was nominated by the competent authority in the request made by the letter of October 9, 1974. One of the grounds in appeals which has been preferred to this High Court under s. 269H , which can be on any question of law, setting out the grievance of the CIT is that the Tribunal had not given an opportunity of being heard to the valuation officer nominated by the competent authority on October 9, 1974.
In our opinion, this grievance on the part of the Commissioner is justified and there is nothing on the record of the Tribunal, which we have examined for ourselves, to show that the Tribunal had given such an opportunity of being heard to the valuation officer, namely, U. S. Shah. It is possible that, at the time when the appeal was heard before the Bench of the Appellate Tribunal on December 3, 1974, specific attention of the Bench of the Tribunal was not drawn to the letter of October 9, 1974, by which the request that the valuation officer should be heard was made by the competent authority. But, in view of the mandatory language of s. 269L (3) , which makes it incumbent upon the Tribunal to give an opportunity of being heard to the valuation officer, the question whether at the time of the hearing, the request was pressed or not is comparatively insignificant. What really matters is whether the Tribunal, in view of the mandatory language of s. 269L (3) , had taken any steps to give an opportunity of being heard to the valuation officer, U. S. Shah. Since that opportunity was not given, this appeal must be allowed on this narrow ground and the matter must now go back to the Tribunal to be decided in accordance with law after giving an opportunity of being heard to U. S. Shah, the Valuation Officer.
We wish to make it clear that the concept of giving an opportunity of being heard covers two distinct concept. One is the concept of merely hearing arguments and taking assistance in the shape of hearing arguments from the valuation officer, and the other is to treat the valuation officer as a witness in the matter so far as the Tribunal is concerned and, after treating him as a witness, accept the opinion of the valuation officer, on the valuation, as an expert.
However, an examination of the scheme of the relevant provisions of Chap. XX-A is required to be made in order to find out in what capacity the Valuation Officer nominated under s. 269L (3) , will be appearing before the Tribunal. The Explanation to s. 269L says that the Valuation Officer has the same meaning as in cl. (r) of s. 2 of the W.T. Act, 1957. Section 2 (r) of the W.T. Act is in these terms :
'Valuation Officer means a person appointed as a Valuation Officer under section 12A , and includes a Regional Valuation Officer, a District Valuation Officer, and an Assistant Valuation Officer.'
Section 12A provides that the Central Government may appoint as many valuation officers as it thinks fit. Under sub-s. (2), subject to the rules and orders of the Central Government regulating the conditions of service of the persons in public services and posts, a wealth-tax authority may appoint as many overseers, surveyors and assessors as may be necessary to assist the valuation officers in the performances of their functions. Section 38A of the W.T. Act, which is referred to in 269L(2), provides for the powers of the valuation officer and it states that :
'(1) For the purposes of this Act, a Valuation Officer or any overseer, surveyor or assessor authorised by him in this behalf may, subject to any rules made in this behalf and at such reasonable times as may be prescribed -
(a) enter any land within the limits of the area assigned to the Valuation Officer, or
(b) enter any land, building or other place belonging to or occupied by any person in connection with whose assessment a reference has been made under section 16A to the Valuation Officer, or
(c) inspect any asset in respect of which a reference under section 16A has been made to the Valuation Officer,....'
It may be pointed out that the powers of a valuation officer under s. 38A are similar to the powers given under the Land Acquisition Act for the purpose of carrying out survey, etc., to demarcate the land with a view to consider the desirability of acquiring any particular land for public purposes. It is clear that under s. 269L(1)(a) the competent authority may require a valuation officer to determine fair market value of the property under consideration and report the fair market value to the competent authority under two sets of circumstances - (a) for the purpose of initiating proceedings for the acquisition of any immovable property under s. 269C , and(b) for the purpose of making an order, under s. 269F , of acquisition in respect of any immovable property. Thus, the valuation officer, who is called upon to determine the fair market value of any particular immovable property, is acting as an expert authority and adviser to the competent authority for the purpose of enabling the competent authority to determine the fair market value, either prima facie at the stage of initiation of the proceedings or finally at the time when he has to decide the question whether the property should be acquired or not under the provisions of s. 269F. The valuation officer, thus being a statutory authority, has certain functions to performs. It is true that he acts in an advisory capacity and has to help the competent authority to determine the fair market value. We are not concerned in the present case with the question whether the Valuation Officer, whose report is called for under s. 269L(1)(a) either at the stage of initiation of proceedings or at the stage of passing the final order under s. 269L , can or cannot be examined as a witness before the competent authority. That question does not arise before us in the present case and we do no express any opinion on that aspect of the matter. As such adviser to the competent authority, the Valuation Officer, of course, has to collect materials which will enable him to evaluate and determine the fair market value of any property on known principles of valuation of property and to submit his report together with the materials gathered by him to the competent authority, and thereupon the competent authority has to exercise his own independent judgment at each stage and come to his own conclusion, either at the initiation of the proceedings or at the stage of passing the final order under s. 269F as to what is the fair market value.
However, so far as the stage of appeal before the Tribunal under s. 269L(3) is concerned, it assumes a different aspect altogether. That aspect is that the valuation officer, who is nominated by the competent authority as an expert in his line as a statutory authority functioning under the provisions of the I.T. Act, has been given a right of audience, that is, he has to be given an opportunity of being heard before the Tribunal, so that he can assist the Tribunal in determining the disputed question of fair market value of an immovable property which is sought to be acquired under the provisions of s. 269F. Looking to the provisions of s. 269-O(b) which give a right to any person who is required to attend before the competent authority or the Tribunal in any proceedings under the Chapter to attend the proceedings by a registered valuer, it is clear that a similar right is sought to be conferred on the competent authority by s. 269L(3) to render assistance by the submissions to be made by the valuation officer. We must make it clear that, at the stage of appeal, the valuation officer nominated by the competent authority, has to be merely heard for the limited purpose of making submissions on the disputed question of fair market value of the immovable property in acquisition. It is but common sense that such valuation officer making submissions must make his submissions on the materials on record. He cannot introduce any new materials or any new facts for the purpose of enabling the Tribunal to decide the disputed question of fair market value of the immovable property under acquisition. If any new material is to be introduced or any new evidence is to be led before the Tribunal, the provisions of s. 255, sub-ss. (5) and(6) read with the provisions of rr. 29 and 30 of the Appellate Tribunal Rules will have to be kept in mind. But, so long as the valuation Officer nominated by the competent authority is being heard only on the materials on record and is making his submissions only on the materials on record before the Tribunal or before the competent authority, there can be no question of treating him as a witness before the Tribunal. He is not a party to the appeal or in proceedings before the competent authority. He is permitted by the statue to appear as an expert assisting the Tribunal on the technical aspects of the question regarding the determination of the fair market value in the light of known principles of valuation of property. In the light of the concept of an opportunity of being heard, it will be open to the valuation officer functioning under s. 269L(3) to make his written submission or offer oral comments, and it will be desirable that such valuation officer offers his comments on the materials on record in writing and also makes his submissions orally, so that the other side can met his representations by making suitable comments, either in writing or orally. In any event, we must make it clear that such written representation of the valuation officer must be confined to the materials already on record and the right of making written representation should not be used for the purpose of introducing new material on record.
We must also point out that the valuation officer, who is thought of as an expert assisting the Tribunal under s. 269L(3) , should be a person other than the valuation officer who made the report under s. 269L (1)(a) , either at the stage of initiation of the proceedings or at the stage of s. 269F proceedings, so that the objective of assistance which an expert valuation officer can render to the Tribunal is not reduced to that of a valuation officer substantiating his own report which he had made to the competent authority under s. 269L (1)(a) , either at the stage initiation or at the subsequent stage of s. 269F proceedings.
We would also like to point out to the Tribunal that it would be advisable to have framed rules about the procedure to be followed when notice under s. 269A (3) is served, so that the other side in the appeal is aware of such a request having been made and may be ready at the time of hearing with their own registered valuer under s. 269-O (b) . A suitable procedure and practice should be evolved, so that nobody is taken by surprise at the final stage by the presence of a valuation officer nominated by the competent authority under s. 269L (3).
Mr. J. P. Shah, learned advocate appearing for the respondents in this appeal, urged before us that in the instant case the competent authority must be deemed to have waived the right of being heard through the valuation officer nominated by the competent authority, because, after writing the letter of October 9, 1974, no further steps were taken and even at the stage of hearing of the appeal before the Bench of the tribunal or even after the order was passed by the Tribunal on December 16, 1974, or in the intermediate stage between the hearing of the appeal on December 3, 1974, and December 16, 1974, when the Tribunal actually pronounced its order, no attempt was made by the competent authority to point out that the valuation officer nominated by the competent authority under s. 269L (3) had not been given an opportunity of being heard. Mr. Shah further urged that the valuation officer was not kept present at the time of hearing of the appeal on December 3, 1974. We are unable to accept this argument urged on behalf of the respondents because, in our opinion, the provisions of s. 269L (3) are mandatory and once the competent authority has made the request, it is incumbent upon the Tribunal to afford an opportunity of being heard to the valuation officer. In view of the mandatory language of s. 269L (3) , there must be an express waiver and there cannot be any question of any implied waiver form the circumstances of the type relied upon by Mr. Shah. Hence, we have rejected this submission urged on behalf of the respondents.
Two courses are open to us, either to send down the matter for the limited purpose of enabling the valuation officer nominated by the competent authority to be heard by the Tribunal and asking the Tribunal to record its finding on that limited point of fair market value and report the matter back to us. But, in view of the fact that this is the first time when the Tribunal itself was considering the matter and also looking to the fact the practically everyone was new to the practice and procedure under Chap. XX-A and further in view of the fact that it would be desirable, in the interest of justice, that the entire matter is sent back to the Tribunal, we are allowing this appeal on this limited point under s. 269L (3) and sending the entire matter back after setting aside the order of the Tribunal, so that the Tribunal may dispose of the matter in the light of the correct legal position as explained in this judgment.
We are sending the entire matter back to the Tribunal at the express request of Mr. G. N. Desai, appearing on behalf of the Commissioner, in order that the matter may be disposed of within as short as time as possible in view of the time that has elapsed and the Tribunal is requested to dispose of the mater as expeditiously as possible and within four weeks, if it can be done, from the date of receipt of the record and proceedings. Record and proceedings to be sent down immediately. There will be no order as to costs of the appeal.