CHANDER PAL TANWAR,GURGAON V. ITO WARD - 1(3), GURGAON

ITA 4867/DEL/2019

AI Insights

The case involves Shri Chander Pal Tanwar, who appealed against the order of the Commissioner of Income Tax (Appeals)-1, Gurgaon, which confirmed the AO's decision regarding the reopening of his assessment under section 147 of the Income Tax Act, 1961. The primary contention was the lack of provision of reasons for reopening the case and the validity of the assessment order passed under sections 143(3) read with section 147. The assessee contested the addition of Rs.7,17,03,333 as long-term capital gain from the sale of agricultural land, which was claimed to be exempt. The Tribunal noted that similar issues had been previously addressed in the cases of the assessee's brothers, where it was decided to restore the matter to the AO for fresh assessment after providing the necessary reasons for reopening the case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 314331 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Other Referred Cases: Karam Singh Tanwar Vs. ITO, Om Singh Vs. ITO, CIT vs. Safetag International India (P) Ltd., GKN Driveshafts (India) Ltd. vs ITO
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR DHANESTA
• Assessee Lawyers: JAI BHAGWAN SAINI
• Keywords: Set aside; Capital asset; Fair market value; Cost of acquisition; Capital Gains
• Section: 148; 143(3); 54B; 54F; 2(14)

Judgement Text

"Page | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “B”: NEW DELHI BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI VIMAL KUMAR, JUDICIAL MEMBER ITA No. 4867/Del/2019 (Assessment Year: 2013-14) Shri Chander Pal Tanwar, V. B. Arya, Advocate, H. No. 7, Friends Colony, Gurgaon Vs. ITO, Ward-1(3), Gurgaon (Appellant) (Respondent) PAN: BYOPP9897B Assessee by : Shri Jai Bhagwan Saini, Adv Revenue by: Shri Rajesh Kumar Dhanesta, Sr. DR Date of Hearing 06/03/2025 Date of pronouncement 07/05/2025 O R D E R PER M. BALAGANESH, A. M.: 1. The appeal in ITA No.4867/Del/2019 for AY 2013-14, arises out of the order of the Commissioner of Income Tax (Appeals)-1, Gurgaon [hereinafter referred to as „ld. CIT(A)‟, in short] in Appeal No.649/17-18 dated 12.03.2019 against the order of assessment passed u/s 143(3) r.w.s. 147 of the Income-tax Act, 1961 (hereinafter referred to as „the Act‟) dated 22.12.2017 by the Assessing Officer, ITO, Ward-2(3), Gurgaon (hereinafter referred to as „ld. AO‟). 2. The assessee has raised the following grounds of appeal:- “1. On the facts and circumstances of the case as well as in Law, the Learned CIT(A) has erred in confirming the action of Learned Assessing Officer in reopening the case u/s.147 of the Income Tax Act, 1961, without considering the facts and circumstances of the case. ITA No. 4867/Del/2019 Shri Chander Pal Tanwar Page | 2 2. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in confirming the action of Learned Assessing Officer in passing the order u/s. 143(3) r.w.s 147 which is bad in law as no reasons for reopening were provided to the appellant and hence the assessment order is null and void ab-initio. 3. On the facts and circumstances of the case as well as in Law, the Learned Assessing Officer as well as Learned CIT(A) has erred in not appreciating the fact that there was no effective notice u/s.143(2) of the Income Tax Act, 1961 and accordingly Assessment Order passed u/s.143(3)r.w.s 147 is bad in law. 4. On the facts and circumstances of the case as well as in Law, the Learned CIT(A) has erred in confirming the action of Learned Assessing Officer in making an addition of Rs.7,17,03,333/- as alleged Long Term Capital Gain earned by the appellant on account of sale of agriculture land, without considering the facts and circumstances of the case. 5. On the facts and circumstances of the case as well as in Law, the Learned CIT(A) has erred in confirming the action of Learned Assessing Officer in considering the agricultural land of assessee as capital asset defined u/s. 2(14) of Income Tax Act, 1961, without considering the facts and circumstances of the case. 6. On the facts and circumstances of the case as well as in Law, the Learned CIT(A) has erred in confirming the action of Learned Assessing Officer in not taking the Fair market value of land as on 01.04.1981 as cost of acquisition, without considering the facts and circumstances of the case. 7. On the facts and circumstances of the case as well as in Law, the Learned CIT(A) has erred in confirming the action of Learned Assessing Officer in not allowing deduction u/s.54F/54B of the Income Tax Act, 1961, without the considering circumstances of the case and ciucmstances of the case. 8. The appellant craves leave to add, amend, alter or delete the said ground of appeal.” 3. We have heard the rival submissions and perused the material available on record. The assessee filed his return of income for AY 2013-14 on 12.08.2013 declaring taxable income of Rs. 4,24,480/- which was duly processed u/s 143(1) of the Act. The assessee had an ancestral agricultural land situated in the revenue estate of Village Gwal Pahari, Tehsil Sohna, ITA No. 4867/Del/2019 Shri Chander Pal Tanwar Page | 3 Distt. Gurgaon (Haryana) and had cultivating the same since generations. The land in question came to the assessee and his brothers from their forefathers. The said land had been with the family since 1897. The assessee sold his agricultural land along with his brothers on 12.04.2012 to M/s. Massif Conbuild Pvt. Ltd. Two sale deeds were got registered vide Vasika No. 328 dated 12.04.2012 for Rs. 22,92,00,000/- and Vasika No. 329 dated 12.04.2012 for Rs. 15,12,50,000/-. In the return filed by the assessee, the said land was construed as agricultural land situated more than 8 kms from the Municipality limits of Sohna and Gurgaon and accordingly exemption from capital gain was claimed. The ld AO disallowed the exemption of capital gains as claimed by the assessee and also denied the exemption u/s 54/ 54F and 54B of the Act in respect of reinvestment made either in assessee‟s own name or in the name of his wife. The ld CIT(A) gave partial relief to the assessee. 4. Both the parties before us mutually agreed that the very same issue in dispute was already the subject matter of consideration by this Tribunal in assessee‟s own brother‟s case in the case of Karam Singh Tanwar Vs. ITO in ITA 5109/Del/2019 for AY 2013-14 dated 11.09.2023 and another brother‟s case Om Singh Vs. ITO dated 5108/Del/2020 for AY 2013-14 dated 11.09.2023 wherein, the issue was restored to the file of ld AO. Relevant portion of the order of this tribunal is reproduced herein:- 8. We have heard the Ld. Representative of the parties and perused the records. The Ld. AR emphatically submitted that reasons for re- opening were never provided to the assessee. The Ld. AR and Ld. DR agreed that both the appeals be sent back and restored to the file of the Ld. AO with a direction to him to provide copy of reasons and decide the appeals afresh. 9. In the course of hearing it was emphasised on behalf of the assessee that the reasons recorded in writing under section 148(2) was never provided to the assessee despite specific oral requests to the Ld. AO. The assessee was thus prevented from filing objections thereto, if any and ITA No. 4867/Del/2019 Shri Chander Pal Tanwar Page | 4 bring the correct facts before the Ld. AO. The re-assessment order has been framed without supply of reasons and thus such order rendered without reasons made available to the assessee is bad in law. 10. On perusal of record, it is noticed that the assessee has taken specific ground before the Ld. CIT(A) that reasons under section 148 was never communicated to the assessee and therefore the consequent proceedings cannot be countenanced. It is further observed from para 4.7 of the first appellate order wherein the written submissions filed in the course of first appellate proceedings are reproduced. The assessee vide its written submissions has pointed out before the Ld. CIT(A) that reasons were demanded orally by the Chartered Accountant of the assessee. To this effect, two affidavits of Chartered Accountants were also placed. The CIT(A) has rejected the plea of the assessee holding such affidavits to be self-serving in nature, However, despite a specific issue raised the Ld. CIT(A) has not attempted to provide the reasons recorded even at the first appellate stage. The assessment order is also bereſt of the reasons recorded for assuming jurisdiction under section 147 of the Act. Under the circumstances the decision relied upon by the Ld. CIT(A) in the case of CIT vs. Safetag International India (P) Ltd. 332 ITR 622 (Del) has no application. In that case the reasons were not supplied as the assesee did not ask for it whereas in the instant case the assessee has made all efforts to procure the reasons recorded which has granted the vital jurisdiction under section 147 of the Act. Neither has the assessment order nor the first appellate order has shown the reasons for reopening the concluded assessment. Under these circumstances, it is evident that the assessee has been deprived of its rights to challenge the assumption of jurisdiction as laid down by the Hon'ble Supreme Court in the case of GKN Driveshafts (India) Ltd. vs ITO 259 ITR 19. In the circumstances narrated above, refusal to supply reasons are wholly unwarranted. Consequently, we consider it expedient to set aside the first appellate order and restore the matter back to the file of the Ld. AO. The Ld. AO shall supply the reasons recorded under section 148(2) of the Act and underlying material in support of such reasons to enable the assessee to defend its stance on law of jurisdiction if he so desires. It shall be open to the assessee to raise his objection to such reasons and adduce such evidences as may be considered necessary. The Ld. AO shall dispose off the objections in writing and follow the course thereafter in accordance with law while framing the fresh reassessment order. 11. The decision (supra) in the case of Shri Karam Singh Tanwar in ITA No. 5019/Del/2019 will apply mutatis mutandis to the case of Shri Om Singh as well. 12. In the result, both the appeals of the assessee are treated as allowed for statistical purposes.” ITA No. 4867/Del/2019 Shri Chander Pal Tanwar Page | 5 5. Considering the consent given by both the sides and in the light of the aforesaid decision of this Tribunal in the brothers‟ cases, the grounds raised by the assessee are allowed for statistical purposes. 6. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 07/05/2025. -Sd/- -Sd/- (VIMAL KUMAR) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 07/05/2025 A K Keot Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi "