Vivekanand Tulsiram Kharade (HUF), Thane V. Asst. Commissioner of Income-Tax, Cir-1, Solapur

ITA 140/PUN/2021

AI Insights

The case revolves around the reassessment of capital gains tax on compensation received for compulsorily acquired land and property by the assessee, Vivekanand Tulsiram Kharade (HUF). Initially, the compensation was not taxed in A.Y. 1995-96 as the transfer occurred in 1993, prior to the assessment year. However, the Assistant Commissioner of Income Tax later reopened the assessment for A.Y. 1994-95, leading to a legal dispute. The Tribunal examined whether the reassessment was justified, particularly focusing on the absence of a specific direction from the Tribunal in previous rulings that capital gains should be taxed in A.Y. 1994-95.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 132808 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-11-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 21-09-2022
• Assessment Year: misc
• Appeal Filed On: 02-05-2021
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Capital Gains
• Section: 147; 148; 142(1); 150(1)

Judgement Text

आयकर अपीलीय अधिकरण “एक सदस्य मामला” न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, PUNE श्री एस.एस. विश्वनेत्र रवि, न्याविक सदस्य के समक्ष । BEFORE SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER आिकर अपील सं. / ITA No.140/PUN/2021 वनर्ाारण िर्ा / Assessment Year : 1994-95 Vivekanand Tulsiram Kharade (HUF), 702, Shrusthi Heights, Opp. Vandana Society, Off LBS Road, Teen Haat Naka, Naupada, Thane-400602 PAN : AAIHV7936G .......अपीलार्थी / Appellant बनाम / V/s. Asstt. Commissioner of Income Tax, Circle – 1, Solapur ......प्रत्यर्थी / Respondent Assessee by : N O N E Revenue by : Shri M.G. Jasnani सुनवाई की तारीख / Date of Hearing : 22-09-2022 घोषणा की तारीख / Date of Pronouncement : 25-11-2022 आदेश / ORDER PER S.S. VISWANETHRA RAVI, JM : This appeal by the assessee against the order dated 03-03-2021 passed by the National Faceless Appeal Centre (“NFAC”), Delhi for assessment year 1994-95. 2. I find no representation on behalf of the assessee nor any application filed seeking adjournment. Thus, the assessee called absent and set ex- 2 ITA No.140/PUN/2021, A.Y. 1994-95 parte. Therefore, I proceed to dispose of the appeal by hearing the ld. DR and perusing the material available on record. 3. The assessee raised nine grounds of appeal amongst which the only issue emanates for my consideration is as to whether the CIT(A), NFAC, Delhi justified in confirming the addition made by the AO on account of capital gain after lapse of six years without recording reasons for reopening in the absence of assessee. 4. The facts of the case emanating from record are that the land and property owned by the assessee (HUF) situated in Akkalkot, Dist. Solapur, Maharashtra was acquired compulsorily by the State Government The assessee received compensation of Rs.12,81,321/-. The AO charged the said compensation to tax in A.Y. 1995-96 under the head capital gain vide its order dated 10-03-1998. In first appeal, the CIT(A) vide its order dated 22-04-1998 held that the said compensation is not chargeable to tax in A.Y. 1995-96 for the reason, that the transfer of land and property had taken place by way of a compulsorily acquisition on 13-12-1993. The Tribunal confirmed the order of CIT(A) vide its order dated 15-06-2005 in ITA No. 38/PN/1999. The relevant portion of Tribunal’s order is reproduced at page No. 16 of the impugned order are as under : “In our considered opinion, the CIT(A) has rightly held that the capital gains cannot be assessed in the assessment year 1995-96. We accordingly uphold his order” 5. A plain reading of the above finding of Tribunal which clearly shows the order of CIT(A) in holding that the alleged capital gain is not chargeable 3 ITA No.140/PUN/2021, A.Y. 1994-95 to tax for A.Y. 1995-96 is confirmed, but there is no finding by the Tribunal that the alleged capital gains should be taxed in A.Y. 1994-95. 6. While matter stood thus, the AO reopened assessment for A.Y. 1994- 95 u/s. 147 of the Act, but however, dropped the said reopening vide its order dated 29-03-2001. 7. In the present proceedings, the assessee raised its objection before the CIT(A) vide its ground challenging reopening of assessment after lapse of 11 years from the end of the A.Y. 1994-95, violating the provisions of section 149 of the Act. The CIT(A) held that the AO reopened assessment for A.Y. 1994-95 only on the directions of the Tribunal. Admittedly, the notice dated 16-05-2019 u/s. 142(1) r.w.s. 150(1) of the Act was issued after 24 years from the end of A.Y. 1994-95. Therefore, the only contention before me is as to whether the AO is empowered to reopen the assessment after lapse of period of 24 years from the end of the A.Y. 1994-95 without there being any direction from ITAT. Admittedly, as has been examined from the relevant portion of Tribunal’s order which is reproduced at page 16 of the impugned order, there was no finding from the Tribunal that the capital gains should be taxed in the end of A.Y. 1994-95, but, only confirmed the order of CIT(A) in holding i.e. not chargeable to tax in A.Y. 1995-96. On perusal of the assessment order dated 27-12-2019 passed by the AO stated to be in pursuance of Tribunal’s order dated 11-12-2018, I note that the assessment order goes to show that the AO issued notice dated 16-05-2019 u/s. 142(1) r.w.s. 150(1) of the Act and completed reassessment. 4 ITA No.140/PUN/2021, A.Y. 1994-95 8. The assessee raised its grounds of appeal primarily contending that the AO violated the provisions of the Act and the reassessment completed thereon is bad under law. 9. Further, for better understanding the provisions u/s. 150(1) of the Act is reproduced here-in-below : “Provision for cases where assessment is in pursuance of an order on appeal, etc. 150. (1) Notwithstanding anything contained in section 149, the notice under section 148 may be issued at any time for the purpose of making an assessment or reassessment or recomputation in consequence of or to give effect to any finding or direction contained in an order passed by any authority in any proceeding under this Act by way of appeal, reference or revision [or by a court in any proceeding under any other law]. (2) The provisions of sub-section (1) shall not apply in any case where any such assessment, reassessment or recomputation as is referred to in that sub-section relates to an assessment year in respect of which an assessment, reassessment or recomputation could not have been made at the time the order which was the subject-matter of the appeal, reference or revision, as the case may be, was made by reason of any other provision limiting the time within which any action for assessment, reassessment or recomputation may be taken.” 10. A plain reading of provisions u/s. 150(1) of the Act provides provision for cases where assessment is in pursuance of an order on appeal, etc. On careful reading of the said provision, I note that the notice u/s. 148 of the Act may be issued at any time for the purpose of making an assessment or reassessment or recomputation in consequence direction contained in an order passed by any authority in any proceeding under this Act by way of appeal reference or revision. Admittedly, there was no such direction by the Tribunal to AO that the capital gains is chargeable to A.Y. 1994-95 but however, it only upheld the order of CIT(A) in finding that the capital gains is not chargeable to tax for A.Y. 1995-96. Therefore, when there is no direction from the Tribunal, issuing a notice u/s. 150(1) 5 ITA No.140/PUN/2021, A.Y. 1994-95 of the Act is not available to the AO, since there was no direction or finding by the Tribunal in appeal order for A.Y. 1995-96 that the capital gain is chargeable to tax for A.Y. 1994-95, thus, the reassessment made by the AO by issuing a notice u/s. 142(1) r.w.s. 150(1) of the Act is not maintainable and the order of CIT(A) is confirming the same is not justified. Thus, grounds raised by the assessee are allowed. 11. In the result, the appeal of assessee is allowed. Order pronounced in the open court on 25 th November, 2022. Sd/- (S.S. Viswanethra Ravi) JUDICIAL MEMBER पुणे / Pune; दिनाांक / Dated : 25 th November, 2022. रदव आदेश की प्रविवलवप अग्रेवर्ि / Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The CIT(A), NFAC, Delhi. 4. The CIT concerned. 5. धिभागीय प्रधिधिधि, आयकर अपीलीय अधिकरण, “एक सदस्य मामला” बेंच, पुणे / DR, ITAT, “SMC” Bench, Pune. 6. गार्ड फ़ाइल / Guard File. //सत्यादपत प्रदत// True Copy// आिेशानुसार / BY ORDER, वररष्ठ दनजी सदिव / Sr. Private Secretary आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune