ARNAB KUMAR GOSWAMI,KOLKATA V. I.T.O., WARD - 62(1), KOLKATA, KOLKATA

ITA 1710/KOL/2024

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The case involves Arnab Kumar Goswami, the appellant, who contested the reassessment notice issued by the Income Tax Officer (ITO) under section 148 of the Income Tax Act. The reassessment was based on the difference between the stamp duty value and the sale consideration of a property purchased by the appellant. The ITO added Rs. 5,18,327 to the appellant's income as 'income from other sources'. The appellant's appeal to the CIT(A) was dismissed, leading to the current appeal before the Tribunal. The primary legal contention was the validity of the reassessment notice, which was issued without the necessary approval from the PCCIT, as required under section 151 of the Act for cases where the income escaped assessment is below Rs. 50 lakh and the reassessment is beyond three years from the end of the assessment year.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 36059 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Other Referred Cases: Union of India vs Ashish Agarwal, Subhra Basu vs. Union of India
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; Sale consideration of property below Jantri Value; Period of limitation; Time period of passing order
• Section: 148; 250; 139(1)

Judgement Text

"आयकर अपीलȣय अͬधकरण, कोलकाता पीठ, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH KOLKATA Before Shri Sonjoy Sarma, Judicial Member and Shri Rakesh Mishra, Accountant Member I.T.A. No.1710/Kol/2024 Assessment Year: 2017-18 Arnab Kumar Goswami……….. ……..…..…………………....Appellant Flat – 1C, Subham Apartment, Narayantala East, Baguiati, Kolkata – 700059. [PAN: AHBPG0395G] vs. ITO, Ward-62(1), Kolkata…. ….…….…............................…..…..... Respondent Appearances by: Shri Dilip Sahu, AR, appeared on behalf of the appellant. Shri Somnath Das Biswas, Sr. DRs, appeared on behalf of the Respondent. Date of concluding the hearing : December 18, 2024 Date of pronouncing the order : January 01, 2025 आदेश / ORDER Per Sonjoy Sarma, Judicial Member: The present appeal has been preferred by the assessee against the order dated 27.06.2024 of the National Faceless Appeal Centre [hereinafter referred to as ‘CIT(A)’] passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’). 2. The assessee is an individual and filed his return of income u/s 139(1) of the Act by declaring total income of Rs.3,52,310/- during the relevant assessment year. The assessee purchased an immovable property at Rajarhat at sale consideration of Rs.25,00,000/-. However, the stamp duty value of the property as per deed of conveyance dated 05.09.2016 was Rs.35,36,655/-. The difference of Rs.10,36,655/- was splitted between the assessee and his spouse amounting to Rs.5,18,327/-. Accordingly, the Assessing Officer invoked section 56(2)(vii) of the Act and added Rs.5,18,327/- to the total income of the assessee as ‘income from other sources’ while framing assessment. The I.T.A. No.1710/Kol/2024 Assessment Year: 2017-18 Arnab Kumar Goswami 2 Assessing Officer issued notice u/s 148 of the Act for reassessment. The assessee in response to the notice reiterated the earlier disclosed income and furnished computation of total income, bank account statements and supporting documents relating to the property purchased. 3. Aggrieved by the above order, the assessee went in appeal before the ld. CIT(A), where, the appeal of the assessee was dismissed by upholding the order of the Assessing Officer. 4. Dissatisfied with the above order, the assessee is in appeal before the Tribunal contending that the reassessment notice u/s 148 of the Act was beyond 3 years from the end of the relevant assessment year as per section 149(1)(b) of the Act which specified the limitation period of 3 years. The ld. AR stated that in the case of the assessee, the notice u/s 148 of the Act was issued under the extended period under Taxation and Other Laws (Relaxation and Amendment of Certain Provisions Act) (TOLA) 2020 which was upheld by the Hon’ble Supreme Court in the case of Union of India vs Ashish Agarwal reported in 2022 SCC Online SC 543. The ld. AR further contended that the addition in the case of the assessee was below 50 lakh and as per section 151(1) of the Act, prior approval should be obtained from Principal Chief CIT (PCCIT) and not Principal CIT (PCIT), which was wrongly done in the case of the assessee. Therefore, he stated that the impugned order of the ld. CIT(A) by sustaining the order of the Assessing Officer be liable to be set aside by deleting the addition made by the Assessing Officer. 5. On the other hand, the ld. DR relied the decisions of the authorities below. 6. We, after hearing the rival submissions and perusing the materials available on record, find that the notice u/s 148 was issued after the expiry of 3 years from the end of the relevant assessment year which I.T.A. No.1710/Kol/2024 Assessment Year: 2017-18 Arnab Kumar Goswami 3 makes it subject to compliance with the mandate of the provision of section 149(1) of the Act. We note that in the present case, the income alleged to have escaped assessment was Rs.5,18,327/- which was below the threshold limit of Rs.50 lakh, hence, prior approval should require to obtain from PCCIT as per section 151 of the Act for the cases which exceeds 3 years but within 10 years. However, in the present case, the Assessing Officer obtained approval only from PCIT which is contrary to the statutory requirement. We place reliance in the decision of Hon’ble Jurisdictional High Court in the case Subhra Basu vs. Union of India in WPA 18828 of 2022, wherein, the Hon’ble High Court held that reassessment notice issued without prior approval as mandated u/s 151 of the Act is invalid and liable to be quashed. We further note that since in the present case the Assessing Officer failed to obtain requisite approval from PCCIT for issuance of reassessment notice beyond 3 years, the proceedings are deemed to be non-compliance to the statutory requirement under the law and the consequent additions made by the Assessing Officer are also not justified. Therefore, the additions made by the Assessing Officer are quashed. In view of the above, we hold that the notice issued u/s 148 of the act is invalid due to non-compliance of section 151 of the Act. Accordingly, we delete the impugned addition made by the Assessing Officer. 7. In the result, the appeal of the assessee is allowed. Kolkata, the 1st January, 2025. Sd/- Sd/- [Rakesh Mishra] [Sonjoy Sarma] लेखा सदèय/Accountant Member ÛयाǓयक सदèय/Judicial Member Dated: 01.01.2025. RS I.T.A. No.1710/Kol/2024 Assessment Year: 2017-18 Arnab Kumar Goswami 4 Copy of the order forwarded to: 1. Arnab Kumar Goswami 2. ITO, Ward-62(1), Kolkata 3.CIT (A)- 4. CIT- , 5. CIT(DR), //True copy// By order Assistant Registrar, Kolkata Benches "