Income Tax Officer, Ward 2(3), RAIPUR (CG) V. Narayan Singh Kalra, RAIPUR (CG)

CO 17/BIL/2012

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 1540 (ITAT-RAIPUR)
• Duration Of Justice: 2 year(s) 11 month(s) 29 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 09-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 11-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MEENA
• Assessee Lawyers: B H SHAH
• Keywords: Reopening of assessment; Sale consideration of property below Jantri Value; Tangible material; Difference of opinion; Change of opinion; Reassessment proceedings
• Section: 143(3); 50C; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER ITA NO. 92 / BLPR /201 2 & CO NO. 17 / BLPR /201 2 / ASSESSMENT YEAR: 2007 - 0 8 INCOME TAX OFFICER 2(3) RAIPUR VS. SHRI NARAYAN SINGH KALRA, H.NO. 56, SRISTI GARDEN, TELIBANDHA, OPP. AIRTEL OFFICE RAIPUR (CG) PAN : APUPK 3961 P CH / (APPELLANT) / (RESPONDENT /CROSS - OBJECTOR ) REVENUE BY : SHRI S. K. MEENA, DR ASSESSEE BY : SHRI B.H. SHAH, AR / DATE OF HEARING : 0 9 / 10 /2015 / DATE OF PRONOUNCEMENT: 09 / 10 /201 5 / O R D E R PER BENCH : THIS IS AN APPEAL FILED BY THE REVENUE AND THE CROSS - OBJECTION THEREOF FILED BY THE ASSESSEE, BOTH AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) , RAIPUR (CG), D ATED 30 .0 4 .201 2 , PERTAINING TO ASSESSMENT YEAR 200 7 - 0 8 . 2. IN THIS APPEAL BY THE REVENUE, FOLLOWING GROUNDS ARE RAISED: - 1. WHETHER IN LAW AND ON FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.15,45,264/ - MADE BY AO BY INVOKING PROVISIONS OF SECTION 50C OF THE INCOME - TAX ACT, 1961 UNDE R THE HEAD CAPITAL GAIN ON SALE OF HOUSE PROPERTY 2.THE ORDER OF THE LD. CIT(A) IS ERRONEOUS BOTH IN LAW AND ON FACTS ITA NO. 92/BLPR/2012 & CO 17/BLPR/ 2012 ITO VS. SHRI NARAYAN SINGH KALRA AY: 200 7 - 0 8 2 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED BEFORE US. THE CIT(A) QUASHED THE ASSESSMENT ORDER BY HOLDING THE RE - OPENING OF ASSESSMENT TO BE INVALID. THE RELEVANT FINDING OF THE CIT(A) READS AS UNDER: - 3.2 I HAVE GONE THROUGH THE OBSERVATIONS OF THE AO, SUBMISSIONS OF THE APPELLANT, THE REASONS REPRODUCED IN THE IMPUGNED ASSESSMENT ORDER AND THE FINDINGS GIVEN IN THE ORIGINAL ASSESSMENT ORDER. IN PARA - 2 OF THE ASSESSMENT ORDER PASSED U/S 143(3) ON 27.02.2009, THE AO OBSERVED THAT THE APPELLANT HAS SOLD AND PURCHASED HOUSE DURING THE YEAR AND IN THIS REGARD HE FILED SALE DEED/REGISTRY PHOTO COPY AND OTHER DOCUME NTS. THEY WERE EXAMINED AND AFTER VERIFICATION THE TOTAL INCOME WAS ASSESSED AS DECLARED BY THE APPELLANT. COPY OF THE SALE DEED FILED BEFORE THE AO, REVEALS THAT THE VALUE FOR STAMP VALUATION PURPOSE WAS RS.45,24,000/ - AND THUS, THE AO, THE AO WAS IN KN OWLEDGE OF THIS FACT AT THE RELEVANT POINT OF TIME BUT HE DID NOT INVOKE PROVISION OF SEC. 50C. HOWEVER, THE SAME WERE SOUGHT TO BE APPLIED IN THE REASSESSMENT PROCEEDINGS. THE AO HAS COMPUTED THE CAPITAL GAIN ON THE BASIS OF THE SAME DOCUMENT, WHICH WAS AVAILABLE BEFORE HIM IN THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS. THEREFORE, REOPENING OF THE ASSESSMENT WAS APPARENTLY MADE ON THE BASIS OF CHANGE OF OPINION BY FRESH APPLICATION OF MIND. THIS CONSTITUTES REVIEW OF THE ASSESSMENT ORDER ON THE BA SIS OF CHANGE OF OPINION IN THE GRAB OF REOPENING. AS PER THE LAW LAID DOWN BY THE HONBLE SC IN THE CASE OF KELVINATOR OF INDIA LTD (SUPRA) THE AO HAS POWER TO REOPEN THE ASSESSMENT, BUT HE HAS NO POWER TO REVIEW AND IF THE CONCEPT OF CHANGE OF OPINION IS REMOVED, REVIEW WOULD TAKE PLACE IN THE GRAB OF REOPENING OF ASSESSMENT. IN THE INSTANT CASE, THE MATERIAL RELIED ON BY THE AO FOR TAKING ACTION U/S 147 WAS THE SAME COPY OF SALE DEED, WHICH WAS CONSIDERED BY THE AO AT THE TIME OF ORIGINAL ASSESSMENT PROCEEDINGS. THEREFORE, THE PRESENT ACTION IS OVERTLY A PRODUCT OF CHANGE OF OPINION AND THERE IS NO TANGIBLE MATERIAL OTHER THAN SAID SALE DEED TO ACT AS LIVE LINK FOR FORMATION OF THE BELIEF. THEREFORE, IN VIEW OF THE ABOVE DISCUSSION AND THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF KELVINATOR INDIA LTD (SUPRA), I AM OF THE CONSIDERED OPINION THAT THE ACTION OF INVOKING PROVISION OF SECTION 147 IS BAD IN LAW. THEREFORE, THE ASSESSMENT ORDER IS TREATED AS INVALID AND ANNULLED. THE APPEAL IS ALL OWED ON THIS GROUND. 4. THUS, THE CIT(A) ALLOWED THE ASSESSEES APPEAL BY HOLDING THAT REOPENING OF ASSESSMENT U/S 147 WAS NOT VALID. IN THE APPEAL FILED BY THE ITA NO. 92/BLPR/2012 & CO 17/BLPR/ 2012 ITO VS. SHRI NARAYAN SINGH KALRA AY: 200 7 - 0 8 3 REVENUE, NO SUCH GROUND IS RAISED. ON THE OTHER HAND, THE ONLY GROUND RAISED IS AGAINST THE DELETION OF ADDITION OF RS.15,45,264/ - WHICH WAS MADE BY THE ASSESSING OFFICER BY INVOKING THE PROVISIONS OF SECTION 50C. THE CIT(A) DID NOT ADJUDICATE THIS GROU ND BECAUSE ONCE THE ASSESSMENT WAS QUASHED, THE ASSESSMENT ORDER DOES NOT SURVIVE AND THEREFORE, THERE WAS NO NECESSITY OF ADJUDICATION OF SUCH GROUND. IN VIEW OF ABOVE, IN OUR OPINION, THE REVENUES APPEAL HAS NO MERIT AND THE SAME IS DISMISSED. 5. AT THE TIME OF HEARING BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE DID NOT PRESS THE CROSS - OBJECTION ; ACCORDINGLY , THE SAME IS REJECTED BEING NOT PRESSED. 6. IN THE RESULT, THE REVENUES APPEAL AS WELL AS ASSESSEES CROSS - OBJECTION, BOTH ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON 9 T H OCTOBER, 2015 AT RAIPUR . SD/ - SD/ - (MUKUL KR. SHRAWAT) JUDICIAL MEMBER (G.D. AGRAWAL) VICE - PRESIDENT RAIPUR ; DATED 0 9 / 1 0 /201 5 BIJU T., PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, RAIPUR 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, RAIPUR