Narendra Kumar Gill, Muzaffarnagar V. ITO, Muzaffarnagar

ITA 1532/DEL/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 0872 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2009-2010
• Appeal Filed On: 15-03-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Value adopted by valuation officer; Capital asset; Invalid notice; Gift; Depreciation; Source of fund; Cost of acquisition; Fair market value; Valuation report; Reason to believe; Reassessment proceedings; Capital Gains
• Section: 50C; 142(1); 195; 292BB; 143(2); 55A; 43; 48; 13; 22; 147; 148; 12; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E, NEW DELHI BEFORE SH. KULDIP SINGH, JUDICIAL MEMBER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER (THROUGH VIDEO CONFERENCING) ITA NO. 1532/DEL/2017 : ASSTT. YEAR : 2009-10 NARENDRA KUMAR GILL, C/O SHRI N.K. ARORA, ADV., 219, CIVIL LINE SOUTH, MUZAFFARNAGAR VS INCOME TAX OFFICER, WARD-2(1), MUZAFFARNAGAR (APPELLANT) (RESPONDENT) PAN NO. A CVPG8013G ASSESSEE BY : SH. PREM LATA BANSAL, SR. ADV. REVENUE BY : MS. RAKHI VIMAL, SR. DR DATE OF HEARING: 23.11.2020 DATE OF PRONOUNCEMENT: 22.12.2020 ORDER PER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A), MUZAFFARNAGAR, DATED 2 5.01.2017. 2. FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESS EE: 1. THAT THE LEARNED CIT(A) HAS GROSSLY ERRED BOTH IN LAW AND ON FACTS IN UPHOLDING THE REASSESSMENT PROCEEDI NGS AND CONFIRMING THE ADDITIONS SO MADE BY THE LD. ASSESSING OFFICER BY DISALLOWING THE CAPITAL GAINS AS CLAIMED BY THE ASSESSEE. THE ADDITION MADE THEREIN HAS BEEN MADE WITH PRECONCEIVED NOTIONS AND SUCH IMPUGN ED ORDER IS WITHOUT JURISDICTION, LIABLE TO BE QUASHED , AS SUCH. 2. THAT THE IMPUGNED ORDER SO PASSED BY THE LEARNED CIT(A) IS BAD IN LAW AS IT IS DEVOID OF THE ACKNOWL EDGMENT OF THE FACT THAT NO VALID NOTICE U/S 148 OF THE ACT WAS ISSUED TO THE ASSESSEE PRIOR TO CULMINATION OF THE ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 2 REASSESSMENT PROCEEDINGS AND AS SUCH, THE ASSESSMEN T SO MADE IS LIABLE TO BE QUASHED. 2.1. THAT THE LEARNED CTT(A) HAS FURTHER ERRED BOTH IN LAW AND ON FACTS IN UPHOLDING THE VALIDITY OF THE N OTICE U/S 148 OF THE ACT WHEN THE SAID NOTICE WAS ISSUED TO NARENDRA KUMAR GILL (HUF)'' HAVING A DIFFERENT PAN , HOWEVER, THE ASSESSMENT AS FRAMES WAS THAT OF THE INDIVIDUAL' BEARING A DIFFERENT PAN AS THAT MENTIO NED ON THE NOTICE U/S 148 OF THE ACT. 2.2 THE LEARNED CIT(A) FAILED TO QUASH THE IMPUGNED ORDER BY OVERLOOKING THAT THE LEARNED ASSESSING OFF ICER ARBITRARILY MISUSED THE POWERS GIVEN UNDER THE ACT BY FURTHER NOT PROVIDING THE REASONS RECORDED TO THE ASSESSEE BEARING HIS PAN AND THUS, THE LEARNED ASSE SSING OFFICER HAS GROSSLY VIOLATED AND MISUSED THE PROVIS IONS OF THE STATUTE AND THE ASSESSMENT MADE THERETO SHOULD BE QUASHED, AS SUCH. 2.3 THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN INVOKING THE PROVISIONS OF SECTION 292B OF THE ACT FOR RECTIFYING THE DEFECTS OF THE NOTICE U/S 148 OF THE ACT BY WRONGLY INTERPRETING THE PROVISIONS AND NOT CONS IDERING THE CASE LAWS ASSESSEE RELIED UPON WHEREIN THE FACT S SQUARELY COVERED ASSESSEE'S EASE. 3. THAT WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED CIT(A) HAS FURTHER ERRED BOTH IN LAW AND ON FACTS IN NOT T AKING INTO COGNIZANCE THE PROVISIONS OF SECTION 55(2)(B)( I) WHEREIN THE VALUATION BY AN APPROVED VALUER IS TO B E TAKEN AS 'FAIR MARKET VALUE FOR ACQUISITION OF PRO PERTY. 3.1. THAT THE PROVISION OF SECTION 55A(A) AUTHORIZE THE ASSESSING OFFICER TO REFER FOR VALUATION ONLY WHEN THE VALUE AS CLAIMED IS LESS THAN ITS 'FAIR MARKET VALU E'. THE PROVISION PRIOR TO AMENDMENT ON 01.07.2012 IS RELEV ANT TO ASSESSMENT YEAR 2009-10. LD. PR. CIT HAS ERRED I N HOLDING THAT AMENDED PROVISIONS WILL APPLY ON THE ASSESSMENTS WHICH ARE PENDING ON THE DATE OF AMENDM ENT AND SECTION 55A OF THE ACT LAYS DOWN THE PROCEDURE AND ERRED IN HOLDING THAT AMENDED PROVISIONS ARE APPLIC ABLE ON THE ASSESSMENT PROCEEDINGS FOR YEAR 2009-10 IN S PITE OF THE AMENDMENT ON 01.07.2012. 3.2. THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND O N FACTS TO HELD THAT REFERENCE IS RIGHTLY MADE TO DVO IN PROVISIONS OF SECTION 55A WITHOUT CONSIDERING THE W ORDS 'IS LESS THAN THE FAIR MARKET VALUE' AND ERRED IN ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 3 CONSIDERING THE REFERENCE UNDER SECTION 55A(B) WHIC H CLEARLY STATES THAT IT WILL APPLY IN ANY OTHER CASE I.E. A CASE NOT COVERED BY SECTION 55A(A) OF THE ACT. 3.3. THAT THE LEARNED CIT(A) HAS WITHOUT CONSIDERIN G THE PROVISIONS OF SECTION 55A HAS ERRED IN APPROVING TH E VALUATION REPORT OF DVO, WHICH WAS NOT PLACED ON RE CORDS UPTO ASSESSMENT AND WITHOUT CONSIDERING THE BASIS O F VALUATION TAKEN BY DVO, WHO HAS APPLIED THE STAMP VALUATION NOT THE FAIR MARKET VALUE AS ON 01.04.198 1. SO THE REFERENCE AND CONSEQUENTIAL REPORT OF DVO IS BE YOND THE PREVIEW OF SECTION 55A. 3.4. THAT FURTHER THE LEARNED CIT(A) FAILED TO APPR E4CIATE THE RATIO LAID DOWN IN ITO V PADARTI VENKATA RAMA CHANDRA RAO [2016] 74 TAXMANN.COM 195 IN DIFFERENTIATING COST OF ACQUISITION U/S 55(2)(B) OF THE ACT FROM 'FAIR MARKET VALUE'. 4. THAT THE LEARNED CIT(A) HAS ERRED ON FACTS THAT STAMP VALUATION AS ADOPTED FOR CAPITAL GAIN UNDER SECTION 50C IS OF 'G.T. ROAD, MUZAFFARNAGAR', WHILE THE FAIR MARKE T VALUE IS TAKEN OF 'RAMPURI, MUZAFFARNAGAR', SO THE VALUAT ION IS CONSIDERED FOR THE PLACE WHICH IS NOT ON 'G.T. ROAD , MUZAFFARNAGAR'. 4.1. THAT THE LEARNED CIT(A) HAS FURTHER ERRED BY N OT APPRECIATING THAT THE VALUE AS TAKEN BY THE ASSESSE E IS BASED ON VALUATION OF REPORT OF GOVT. APPROVED VALU ER. 4.2. THAT THE REFERENCE TO THE VALUATION OFFICER CA N ONLY BE MADE WHEN THE LEARNED ASSESSING OFFICER IS OF TH E OPINION THAT THE VALUE AS DECLARED BY THE ASSESSEE IS BELOW THE FAIR MARKET VALUE OF THE PROPERTY. THE RE FERENCE OF PROPERTY WHICH IS LOCATED AT 'G.T. ROAD, MUZAFFA RNAGAR AND COMMERCIAL PROPERTY' MENTIONING AS THE PROPERTY SITUATED IN 'RAMPURI MOHALLA, MUZAFFARNAGAR' IS BOR NE OUT OF MERE SUSPICION AND SURMISES. 4.3. THAT THE LEARNED CIT(A) HAS GROSSLY ERRED BOT H IN LAW AND ON FACTS IN RELYING ON THE DVO REPORT BELIE VING THAT THE SAME WAS ON RECORD, HOWEVER, THE ASSESSMEN T AS FRAMED BY THE LEARNED ASSESSING OFFICER LACKED THE RELIANCE ON THE SAME, AS THE IMPUGNED ORDER WAS PAS SED ON 31.03.2015 AND THE REPORT, A FACT ALSO AFFIRMED BY THE LEARNED CIT(A) WAS PASSED ON 08.01.2016. THE RELIAN CE ON THE4 SAME BELIEVING IT TO BE BROUGHT ON RECORD I S NOT ONLY WRONG BUT MAKES THE IMPUGNED ASSESSMENT AS FRAMED AS VOID-AB-INITIO. ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 4 5. THAT THE CAPITAL GAIN AS COMPUTED BY LEARNED ASSESSING OFFICER IS WRONG AND LEARNED CIT(A) HAS E RRED IN RE-COMPUTING THE CAPITAL GAIN ON THE BASIS OF VA LUATION REPORT OF DVO, WHICH AMOUNT TO RE-ASSESSMENT, WHICH IS BARRED BY LIMITATION. RELIEF CLAIMED: IT IS THEREFORE, PRAYED THAT THE ORDER OF LEARNED C IT(A) BE HELD TO BE UN-TENABLE AND FURTHER, ASSESSMENT UNDER SECTION 147/143(3) OF THE ACT IS WITHOUT JURISDICTI ON AND ALSO, ADDITIONS MADE ALONG WITH INTEREST LEVIED MAY KINDLY BE DELETED AND APPEAL OF THE APPELLANT BE ALLOWED. BRIEF FACTS OF THE ISSUE 3. THE ASSESSEE WAS RUNNING A PETROL PUMP IN THE NA ME OF MODERN SERVICE STATION AFTER CONSTRUCTING A BUILD ING OF 82 SQ. MTS. ON THE LAND MEASURING 689 SQ. MTS. (821 SQ. YD S.). THE SAID LAND WAS SOLD VIDE SALE DEED DATED 31.12.2008 REFLECTING THE SALE CONSIDERATION OF LAND OF RS.50 LACS OUT OF WHICH THE SHARE OF THE ASSESSEE WAS RS.37,50,000/-. THE AO DE TERMINED THAT THE STAMP DUTY VALUE OF THE PROPERTY OF RS.1,9 3,93,650/- AND MADE ADDITION OF RS.1,40,33,973/- UNDER THE HEA D LONG TERM CAPITAL GAIN AFTER INVOKING THE PROVISIONS OF SECTION 50C R.W.S. 48 OF THE INCOME TAX ACT, 1961. 4. OWING TO THE REASON TO BELIEVE, THAT THE INCOME OF THE ASSESSEE ESCAPED ASSESSMENT WITH REGARD TO THE CAPI TAL GAINS ARISING OUT OF THE SALE OF IMMOVABLE PROPERTY NAMEL Y MODERN SERVICE STATION SITUATED AT RAMPURI, MUZAFFARNAGAR . THE ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 5 ASSESSING OFFICER, ITO WARD-1(2), MUZAFFARNAGAR ISS UED NOTICE U/S 148 OF THE INCOME TAX ACT, 1961 ON 18.03.2014. 5. FURTHER, NOTICES U/S 143(2) AND 142(1) WERE ISSU ED AND DULY SERVED ON THE ASSESSEE. ON THE DATES OF HEARIN G FIXED ON 11.12.2014, 17.12.2014, 29.12.2014, 12.01.2015, 15. 01.2015, 02.02.2015, 19.02.2015 AND 03.03.2015 NOBODY ATTEND ED. THE ASSESSEE HAS NOT FILED ANY RETURN INCOMPLIANCE TO T HE NOTICE. HENCE, AN OPPORTUNITY WAS GIVEN TO THE ASSESSEE VID E NOTICE U/S 144 OF THE ACT DATED 13.03.2015. THEN, IN COMPLIANC E TO THE NOTICE ISSUED, THE ASSESSEE FILED THE ITR ON 16.03. 2015 DECLARING AN INCOME OF RS.5,53,890/-. THE ASSESSEE FILED REPLIES TO THE QUERIES OF THE ASSESSING OFFICER ON 19.03.20 15 AND ON 20.03.2015. FINALLY, THE ASSESSMENT PROCEEDINGS HAV E BEEN CONCLUDED ON 31.03.2015 RESULTING IN PASSING ON AN ASSESSMENT ORDER WITH THE INCOME DETERMINED OF RS.1,41,79,759/ - WHICH INCLUDES LONG TERM CAPITAL GAIN OF RS.1,40,33,973/- AGAINST THE RETURN INCOME OF RS.5,53,890/- WHICH WAS INCLUSIVE OF THE CAPITAL GAIN OF RS.4,08,107/- AS DETERMINED BY THE ASSESSE. JURISDICTIONAL ISSUE NOTICE U/S 148: 6. THE LD. AR ARGUED ELOQUENTLY AND ALSO HAS FILED WRITTEN SUBMISSIONS SUMMING OF THE ARGUMENTS ALONGWITH THE CASE LAWS ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 6 WHICH HAVE BEEN DULY PERUSED IN DETAIL ALONGWITH TH E PAPER BOOK AND RECORD AVAILABLE BEFORE US. THE CRUX OF T HE ARGUMENTS ARE AS UNDER: 1. THE ASSESSEE IS HAVING PAN IN TWO CAPACITY ONE KART A OF HUF HAVING PAN AAAHN8408F AND ANOTHER IN INDIVIDU AL CAPACITY HAVING PAN ACVPJ8013G. 2. THE ASSESSEE RECEIVED NOTICE U/S 148 ISSUED BY ITO, WARD-1(2), MUZAFFARNAGAR REFLECTING THE PAN OF THE HUF OF THE ASSESSEE I.E. AAAHN8408F. 3. THEREAFTER, ANOTHER NOTICE DATED 20.05.2014 WAS REC EIVED BY THE ASSESSEE, ISSUED BY ITO WARD-1(2), MUZAFFARN AGAR U/S 142(1) OF THE ACT DIRECTING HIM TO COMPLY WITH THE NOTICE ISSUED U/S 148. 4. THEREAFTER, ANOTHER NOTICE DATED 05.01.2015 ISSUED BY ITO WARD-1(2), MUZAFFARNAGAR U/S 142(1) WAS RECEIVE D BY THE ASSESSEE, DIRECTING HIM TO FURNISH THE DETAILS OF INCOME OF FAMILY, PURCHASE DEED OF PROPERTY SOLD DU RING FY 2008-09, DETAILS OF MOVABLE AND IMMOVABLE PROPER TIES HELD BY THE ASSESSEE OR HIS FAMILY MEMBERS AS ON 31.03.2009 AND ALSO THE NAMES OF FAMILY MEMBERS, TH EIR SOURCES OF INCOME AND COPIES OF ITRS, IF ANY. THE ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 7 ASSESSEE REPLIED TO THE QUERIES ON 19.03.2015 AND 20.03.2015. 5. THE ASSESSEE SUBMITTED THAT THE LAND BELONGS TO THE ASSESSEE IN HIS INDIVIDUAL CAPACITY AND THE SAME WA S SOLD IN THE INDIVIDUAL CAPACITY. 6. THE ASSESSEE WAS SERVED WITH THE NOTICE ISSUED BY T HE ASSESSING OFFICER U/S 144 REFLECTING PAN ACVPG801 3G, THIS PAN PERTAINED TO THE ASSESSEE INDIVIDUAL. 7. IN ORDER TO AVOID BEST JUDGEMENT ASSESSMENT, THE ASSESSEE FILED THE RETURN IN HIS INDIVIDUAL CAPACIT Y ON 16.03.2015 ALONG WITH DETAILED REPLY. 8. DURING THE PROCEEDING, THE ASSESSEE WAS ALSO INFORM ED THAT REASSESSMENT PROCEEDING WAS INITIATED ON THE B ASIS OF SALE OF LAND ON 31.12.2008. 9. THAT THE IMPUGNED ORDER SO PASSED BY THE LD. CIT(A) IS BAD-IN-LAW AS IT IS DEVOID OF THE ACKNOWLEDGMENT OF THE FACT THAT NO VALID NOTICE U/S 148 OF THE ACT WAS IS SUED TO THE ASSESSEE PRIOR TO CULMINATION OF THE RE-ASSESSM ENT PROCEEDINGS AND AS SUCH, THE ASSESSMENT SO MADE IS LIABLE TO BE QUASHED. 10. THE LD. CIT(A) HAS FURTHER ERRED BOTH IN LAW AND ON FACTS IN UPHOLDING THE VALIDITY OF NOTICE U/S 148 OF THE ACT ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 8 WHEN THE SAID NOTICE WAS ISSUED TO NARENDRA KUMAR GILL (HUF) HAVING A DIFFERENT PAN, HOWEVER, THE ASSESSM ENT AS FRAMED WAS THAT OF THE INDIVIDUAL BEARING A DI FFERENT PAN AS THAT MENTIONED ON THE NOTICE U/S 148 OF THE ACT. 11. THE LD. CIT(A) FAILED TO QUASH THE IMPUGNED ORDER B Y OVERLOOKING THAT THE LD. ASSESSING OFFICER ARBITRAR ILY MISUSED THE POWERS GIVEN UNDER THE ACT BY FURTHER N OT PROVIDING THE REASONS RECORDED TO THE ASSESSEE BEAR ING HIS PAN AND THUS, THE LD. ASSESSING OFFICER HAS GRO SSLY VIOLATED AND MISUSED THE PROVISIONS OF THE STATUTE AND THE ASSESSMENT MADE THERETO SHOULD BE QUASHED AS SU CH. 12. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN INV OKING THE PROVISIONS OF SECTION 292B OF THE ACT FOR RECTI FYING THE DEFECTS OF THE NOTICE U/S 148 OF THE ACT BY WRO NGLY INTERPRETING THE PROVISIONS AND NOT CONSIDERING THE CASE LAWS ASSESSEE RELIED UPON WHEREIN THE FACTS SQUAREL Y COVERED ASSESSEES CASE. 13. THE ASSESSMENT ORDER-DATED 31.03.2015 FRAMED BY THE ASSESSING XXXXXXXXXXXXX INDIVIDUAL CAPACITY IS BAD- IN- LAW AS NO NOTICE U/S 148 HAD BEEN ISSUED BY THE ASSESSING OFFICER TO THE ASSESSEE IN HIS INDIVIDUAL CAPACITY. ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 9 14. THE NOTICE U/S 147 WAS ISSUED BY THE ASSESSING OFFI CER TO THE ASSESSEE IN HIS HUF CAPACITY AS IT REFLECTED TH E PAN OF ASSESSEE HUF AS AAAHN8408F. 15. THE NOTICE U/S 147 OF THE ACT CLEARLY REFLECTED THA T THE ASSESSING OFFICER WAS REQUIRING THE RETURN CONTAINI NG DETAILS OF THE PERSON IN RESPECT OF WHICH ASSESSEE WAS ASSESSABLE OR WHOSE INCOME WAS CHARGEABLE TO TAX IN THE HANDS OF ASSESSEE. 16. THE NOTICE-DATED 05.01.2015 ALSO REFLECTED THAT THE ASSESSEE WAS DIRECTED TO FILE THE DETAILS OF INCOME OF HIS FAMILY. 17. THE ISSUANCE OF VALID NOTICE U/S 147 IS A JURISDICT IONAL ASPECT AND ANY DEFECT THEREIN IS NOT CURABLE. IT IS NOT AN IRREGULARITY BUT AN ILLEGALITY. 18. A VALID NOTICE U/S 147 CONFERS JURISDICTION ON THE ASSESSING OFFICER TO ASSESS / REASSESS THE INCOME O F ASSESSEE OR THE INCOME OF PERSON IN RESPECT OF WHIC H ASSESSEE IS ASSESSABLE, WHICH HAS ESCAPED ASSESSMEN T. IN THE PRESENT CASE, ASSESSMENT IS FRAMED IN INDIVIDUA L CAPACITY BUT NO NOTICE U/S 148 HAD BEEN ISSUED TO T HE ASSESSEE IN INDIVIDUAL CAPACITY. ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 10 19. IT IS AN UNDISPUTED FACT THAT NOTICE U/S 148 REFLEC TED PAN OF HUF, IT WAS ADMITTED EVEN BY THE ASSESSING OFFIC ER IN HIS REMAND REPORT STATING THAT PAN OF HUF WAS WRONG LY MENTIONED. 20. THE ASSESSING OFFICER HAS ALSO TRIED TO SAVE THE NO TICE BY STATING IN THE REMAND REPORT THAT NOTICE U/S 142(1) DATED 05.01.2015 HAD REFLECTED THAT THE ASSESSEE WAS REQU IRED TO MAKE COMPLIANCE OF PARA (B) ONLY WHICH WAS RIGHT TICK MARKED. ASSESSING OFFICER HAD CROSSED PARA (A) & (C ). THUS, THE ASSESSING OFFICER HAD ALLEGEDLY NOT REQUI RED THE DETAILS OF INCOME OF FAMILY BUT REQUIRED DETAILS OF INCOME OF THE INDIVIDUAL. 21. THE ASSESSING OFFICER HAS ALSO STATED THAT IN THE O FFICE COPY OF THE NOTICE-DATED 05.01.2015, PARIVAAR WOR D HAS NOT BEEN RIGHT TICK MARKED WHEREAS IN THE NOTICE SE RVED UPON THE ASSESSEE, THE SAID WORD PARIVAAR HAS BEE N RIGHT TICK MARKED. IT IS TO BE SUBMITTED THAT A WRO NG INFERENCE HAD BEEN DRAWN BY THE CIT(A) THAT THE ASS ESSEE HAD TEMPERED WITH THE SAID NOTICE- DATED 05.01.2015 . SUCH AN OBSERVATION IS HIGHLY OBJECTIONABLE. 22. EVEN OTHERWISE, WITHOUT PREJUDICE TO ABOVE, IT IS SUBMITTED THAT THE NOTICE U/S 148 HAS TO BE VALIDLY ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 11 ISSUED. IF IT IS NOT SO THEN THE ASSESSMENT FRAMED IN PURSUANCE TO SUCH NOTICE IS A NULLITY. EVEN SUBSEQU ENT NOTICES, ISSUED U/S 142(1), THOUGH CORRECT, DO NOT CONFER JURISDICTION ON THE ASSESSING OFFICER TO ASSESS / R EASSESS THE ESCAPED INCOME. IT IS A WELL ESTABLISHED PRINCI PLE OF LAW THAT EVEN ACQUIESCENCE DOES NOT CONFER JURISDIC TION ON THE ASSESSING OFFICER. 23. THE ASSESSING OFFICER HAS TAKEN SUPPORT OF SECTION 292B & 292BB IN THE REMAND REPORT; HOWEVER THE SAID SECT IONS ARE NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE . SECTION 292B IS QUOTED AS UNDER: 292B - NO RETURN OF INCOME, ASSESSMENT, NOTICE, SUMMONS OR OTHER PROCEEDING, FURNISHED OR MADE OR ISSUED OR TAKEN OR PURPORTED TO HAVE BEEN FURNISHED OR MADE OR ISSUED OR TAKEN IN PURSUANCE OF ANY OF THE PROVISIONS OF THIS ACT SHALL BE INVALID OR SHALL BE DEEMED TO BE INVALID MERELY BY REASON OF ANY MISTAKE, DEFE CT OR OMISSION IN SUCH RETURN OF INCOME, ASSESSMENT, NOTI CE, SUMMONS OR OTHER PROCEEDING IF SUCH RETURN OF INCOM E, ASSESSMENT, NOTICE, SUMMONS OR OTHER PROCEEDING IS IN SUBSTANCE AND EFFECT IN CONFORMITY WITH OR ACCORDIN G TO THE INTENT AND PURPOSE OF THIS ACT. ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 12 24. SECTION 292B SAVES ONLY THOSE NOTICES IN WHICH THER E IS AN INADVERTENT ERROR OR AN APPARENT ERROR. IT SAVES THOSE NOTICES WHICH IN SUBSTANCE AND EFFECT ISSUED ACCORD ING TO THE INTEREST AND PURPOSE OF THE ACT. IN THE PRESENT CASE, THERE IS NO INADVERTENT ERROR IN THE NOTICE ISSUED BY THE ASSESSING OFFICER. IT SPECIFICALLY REFLECTS THE PAN OF HUF. 7. THE LD. DR ARGUED THAT HAVING RECEIVED INFORMATI ON BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS SOLD IMMOVA BLE PROPERTY NAMELY MODERN SERVICE STATION, THE ASSESSI NG OFFICER HAS RECORDED THE REASONS TO BELIEVE IN THE CASE OF SHRI NARENDRA KUMAR GILL (INDIVIDUAL) FOR THE INSTANT ASSESSMENT YEAR AND THE SAME CAN BE VERIFIED FROM THE RECORD. THE ASSESSING OFFICER HAS ISSUED NOTICE VALIDLY AND IN THE SAID NOTICE IT HAS BEEN CLEARLY MENTIONED THAT THE STATUS OF THE ASSESSEE AS MEANING THEREBY THE NOTICE HAS BEEN ISSUED TO INDIVIDUAL IN ENGLISH. FURTHER, THE ASSESSMENT WAS ALSO COMPLETED IN THE N AME OF THE ASSESSEE IN HIS INDIVIDUAL CAPACITY. ALSO THE NOTIC E U/S 142(1) OF THE ACT DATED 05.01.2015 ISSUED BY THE AO TO THE AS SESSEE IS MEANT TO ASSESS THE ASSESSEE IN INDIVIDUAL CAPACITY . IT HAS BEEN ARGUED THAT THE NOTICE WAS MEANT FOR ASSESSING SHRI NARENDRA KUMAR GILL AND IT IS A FACT ON RECORD THAT ONLY THE PAN NUMBER WAS MISTAKENLY QUOTED. IT WAS ARGUED THAT PARAS IN THE NOTICE ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 13 , HAVE BEEN TICKED OFF WHICH PROVES THAT THE NOTICE W AS NOT ISSUED TO SHRI NARENDRA KUMAR GILL (HUF). IT WAS AL SO ARGUED THAT IN THE NOTICE ISSUED U/S 148, THE STATUS OF TH E ASSESSEE HAS BEEN CLEARLY MENTIONED AS INDIVIDUAL IN THE SECOND PARA OF THE NOTICE U/S 148. IT WAS FURTHER ARGUED THAT THE ASSE SSEE WAS FULLY AWARE THAT THE NOTICE HAS BEEN ISSUED TO HIM IN INDIVIDUAL CAPACITY AND ALSO FILED THE RETURN OF INCOME ON 16. 03.2015 IN HIS INDIVIDUAL CAPACITY. HAVING FILED THE RETURN IN HIS INDIVIDUAL CAPACITY WHICH WAS ASSESSED AS INDIVIDUAL, THE CONT ENTION OF THE ASSESSEE AT THIS JUNCTURE, THAT THE NOTICE WAS ISSU ED TO HUF WAS WRONG ON FACTS. IT WAS ARGUED THAT THE ITR IN THE C APACITY OF INDIVIDUAL HAS BEEN FILED WITH PAN NO. ACPBG8013G W HICH HAS BEEN DULY ASSESSED AFTER GOING THROUGH THE DETAILS FILED BY THE ASSESSEE IN HIS INDIVIDUAL CAPACITY IN RESPONSE TO THE NOTICE ISSUED. THE OFFICE RECORD ALSO SHOWS THAT NO SIGN H AS BEEN MARKED BY THE BY THE ASSESSING OFFICER WHICH INDICA TES (I.E. HUF) . RATHER, IT CLEARLY MENTIONS MEANS INDIVIDUAL. 8. HEARD THE ARGUMENTS OF BOTH THE PARTIES AND PERU SED THE MATERIAL AVAILABLE ON RECORD. ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 14 9. FROM THE ABOVE DISCUSSION, THE MOOT ISSUE TO BE DECIDED IS WHETHER MENTIONING THE PAN OF ANOTHER ENTITY MISTAK ENLY INSTEAD OF THE PAN OF THE ASSESSEE MAKES THE NOTICE ISSUED U/S 148 INVALID OR NOT WHEN THE NOTICE IS ADDRESSED TO SHRI NARENDRA KUMAR GILL AND THE BODY OF THE NOTICE CLEA RLY REFLECTS THAT THE NOTICE HAS BEEN ISSUED TO THE ASSESSEE IN HIS INDIVIDUAL CAPACITY. 9.1 AT THIS JUNCTURE, WE HOLD THAT THERE IS NO NEED TO DWELL UPON THE ISSUE OF NOTICE U/S 142 OR THE CONTENTS TH EREOF, AS THE NOTICE U/S 142(1) DO NOT CONFER ANY JURISDICTION TO THE ASSESSING OFFICER. HENCE, TAKING COGNIZANCE OF THE NOTICE U/S 142(1) OR THE CONTENTS OF THE NOTICE WILL ONLY DEVIATE THE MA IN ISSUE OF INVOKING THE JURISDICTION. 10. WE HAVE PERUSED THE REASONS RECORDED AS TO WHOM THE ESCAPEMENT OF INCOME WAS ATTRIBUTED AND ALSO THE NO TICE ISSUED BY THE AO. THE REASONS RECORDED BY THE AO ON 14.03. 2014 CLEARLY MENTIONS THE NAME OF THE ASSESSEE AS SHRI N ARENDRA KUMAR GILL. THERE WAS NO MENTION OF HUF IN THE REAS ONS. FOR THE SAKE OF READY REFERENCE, THE SCANNED VERSION OF REASONS RECORDED BY THE AO FOR ISSUE OF NOTICE U/S 148 IS R EPRODUCED BELOW: ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 15 REASON FOR ISSUING NOTICE U/S 148 OF THE INCOME TAX ACT, 1961 SH. NARENDRA KUMR GILL 861, MANGAL BHAWAN, SOUTH BHOPA ROAD, MUZAFFARNAGAR, A.Y. 2009-10 DATED: 14.03.2014 AS PER INFORMATION AVAILABLE WITH THE UNDERSIGNED, THE ASSESSEE HAS SOLD AN IMMOVABLE PROPERTY IN THE JOINT NAME OF 3 PERSONS SITUATED AT MOH. RAMPURI, MUZAFARNAGAR AREA 689.70 SQ. MTR. DURING THE FINANCIAL YEARS A.Y. 2008-09 AT A SALE CONSIDERATION AT RS.50,00,000/- WHEREAS STAMP DUTY HAS BEEN PAID ON CIRCLE RATE AT RS.1,93,93,650/- WH ICH IS THE DIFFERENCE OF CONSIDERATION RS.1,93,93,650 - RS.50,00,000/- = RS.71,96,825/- TAXABLE UNDER THE PROVISIONS OF 50-C OF THE INCOME TAX ACT, 1961. AS PER SALE DEED THE SHARE OF THE ASSESSEE IS SHA RE OF THE TOTAL PROPERTY. THEREFORE, I HAVE THE REASON TO BELIEVE THAT THE ASSESSEE HAS INCOME CHARGEABLE TO TAX OF RS.71,96,825/-. THEREFORE, IT IS NECESSARY SO ISSUE NOTICE U/S 148 OF THE INCOME TAX ACT, 1961. YOURS FAITHFULLY, SD/- (A.K. RAJAK), INCOME TAX OFFICER, WARD-1(2), MUZAFFARNAGAR 11. WE HAVE ALSO PERUSED THE NOTICE ISSUED U/S 148. IN THE NOTICE DATED 18.03.2014, THERE HAS BEEN A CLEAR MEN TION OF THE WORD WHICH MEANS INDIVIDUAL. FOR THE SAKE OF READY REFERENCE, THE SCANNED VERSION OF NOTICE U/S 148 IS REPRODUCED BELOW: [PAGE NO. 61 OF THE CIT(A)] ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 16 ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 17 NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT, 196 1 4 9 PAN AAAHN8408F OFFICE OF THE INCOME TAX OFFICER, WARD-1(2), MUZAFFARNAGAR DATED: 18.03.2014 J, TO SHRI NARENDRA KUMAR GILL, 861, MANGAL BHAWAN, BHOPA ROAD, MUZAFFARNAGAR S V V 2009-10 ZV /. \] J V , V WHEREAS I HAVE REASON TO BELIEVE THAT YOU INCOME/T HE INCOME OF.IN RESPECT OF WHICH YOU ARE ASSESSABLE CHARG EABLE TO TAX FOR THE ASSESSMENT YEAR 2009-10 HAS ESCAPED ASSESSM ENT WITHIN THE MEANING OF SECTION 147 OF THE INCOME TAX ACT, 1 961. H V V V / / J / ZL M P Q M H V U / , \] J V , V V J ZL J I, THEREFORE, PROPOSE TO ASSESS/RE-ASSESS THE INCOM E/RE-COMPUTE LOSS/DEPRECIATION ALLOWANCE FOR THE SAID ASSESSMENT YEAR AND I HEREBY REQUIRE YOU TO DELIVER TO ME WITHIN 30 DAYS FROM THE DATE OF SERVICE OF THIS NOTICE, A RETURN IN THE PRESCRIB ED FORM OF YOU INCOME/THE INCOME OF.IN RESPECT OF WHICH YOU AR E ASSESSABLE. H / H Y J Z Z{Q V J Z} THIS NOTICE IS BEING ISSUED AFTER OBTAINING THE NEC ESSARY SATISFACTION OF THE COMMISSION OF INCOME TAX/ ADDL. COMMISSIONER OF INCOME TAXTHE CENTRAL BOARD OF DIRECT TAXES. SD/- (SIGNATURE OF OFFICER) (A.K. RAJAK) ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 18 12. WE ALSO FIND THAT ONLY THE PAN MENTIONED IN THE NOTICE DO NOT BELONG TO THE ASSESSEE. 13. WE HAVE ALSO GONE THROUGH THE CASE LAWS RELIED BY THE LD. AR. 14. COMMISSIONER OF INCOME TAX, GUJARAT II VS. KURB AN HUSSAIN IBRAHIMJI MITHIBORVALA (1971) 82 ITR 821 (S C): REFERS TO REOPENING OF A WRONG YEAR. IN THAT CASE THE ASSE SSMENT FOR YEAR 1949-50 HAS BEEN REOPENED INSTEAD OF ASSESSMEN T YEAR 1948-49. 14.1 THE ISSUE IN THE INSTANT CASE IS DIFFERENT. WH EREAS IN THE INSTANT CASE, THE ASSESSMENT WAS RIGHTLY REOPENED A ND RIGHTLY COMPLETED IN THE HANDS OF THE ASSESSEE FOR THE CORR ECT YEAR. 15. CIT VS. K. ADINARAYANA MURTY (1967) 65 ITR 607 (SC) HELD THAT UNDER THE SCHEME OF THE INCOME-TAX ACT THE IN DIVIDUAL AND THE 'HINDU UNDIVIDED FAMILY' ARE TREATED AS SEP ARATE UNITS OF ASSESSMENT AND IF A NOTICE UNDER S. 34 OF THE A CT IS WRONGLY ISSUED TO THE ASSESSEE IN THE STATUS OF AN 'INDIVID UAL' AND NOT IN THE CORRECT STATUS OF 'HINDU UNDIVIDED FAMILY', THE NOTICE IS ILLEGAL AND ULTRA-VIRES AND WITHOUT JURISDICTION. [ 391F-G] THE INCOME-TAX OFFICER WAS THEREFORE JUSTIFIED IN IGNOR ING THE FIRST ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 19 NOTICE UNDER S. 34 OF THE ACT AND THE RETURN FILED BY THE ASSESSEE IN RESPONSE TO THAT NOTICE AND CONSEQUENTL Y THE ASSESSMENT MADE BY THE INCOME-TAX OFFICER PURSUANT TO THE SECOND NOTICE WAS A VALID ASSESSMENT. [391H] IN THI S CASE THE HONBLE SUPREME COURT REVERSED THE JUDGMENT OF THE HONBLE HIGH COURT WHEREIN THE HONBLE HIGH COURT HELD THAT IN REFERENCE, THE HIGH COURT HELD THAT THE FIRST OF T HE NOTICES UNDER S. 34 WAS NOT INVALID IN LAW AND CONSEQUE NTLY THE ISSUE OF THE SECOND NOTICE WAS ILLEGAL AND THE ASSESSM ENT MADE IN PURSUANCE OF IT WAS ILLEGAL. 15.1 WE HAVE GONE THROUGH ABOVE SAID JUDGMENT. IN T HIS CASE FIRST NOTICE WAS ISSUED IN THE NAME OF THE INDIVID UAL INSTEAD OF HUF AND THE CORRECT NOTICE ISSUED TO THE HUF IS AFTER A PERIOD OF 8 YEARS. HENCE, THE HONBLE COURT RULED T HAT THE SECOND NOTICE WAS INVALID. THUS, THE FACTS OF THIS CASE ARE DIFFERENT SET OF FACTS, HENCE NOT APPLICABLE. 16. CIT VS RAM DAS DEOKINANDAN PRASAD (HUF) (2005) 277 ITR 17 (ALL): THE LEARNED COUNSEL FOR THE REVENUE HAS NOT ADVANCED ANY ARGUMENT THAT THE FINDING OF THE TRIBU NAL THAT NOTICE UNDER SECTION 148 OF THE ACT WAS MEANT FOR T HE KARTA OF THE HUF AND NOT IN HIS INDIVIDUAL CAPACITY. THE ONL Y POINT URGED ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 20 BY THE LEARNED COUNSEL FOR THE REVENUE WAS THAT SIN CE THE ASSESSEE HAS FILED A RETURN OF HUF AND THE INCOME S OUGHT TO BE REASSESSED WAS OF HUF, THE PROCEEDINGS ARE VALID, NOTWITHSTANDING THE FACT THAT THE NOTICE WAS ISSUED TO THE ASSESSEE IN HIS INDIVIDUAL CAPACITY. MOREOVER, THE FINDING OF THE TRIBUNAL THAT THE NOTICE UNDER SECTION 148 OF THE A CT DID NOT DISCLOSE THAT IT WAS ISSUED TO REASSESS THE ESCAPED INCOME OF THE HUF, IS A FINDING OF FACT. IN THE STATEMENT OF THE CASE, THE TRIBUNAL HAS MENTIONED THAT IT IS ANNEXING THE COPI ES OF THE NOTICES ISSUED UNDER SECTION 148 OF THE ACT. BUT, T HE COPIES OF THOSE NOTICES HAVE NOT BEEN ANNEXED ALONG WITH THE STATEMENT OF THE CASE, SENT BY THE TRIBUNAL. NOR THEY HAVE BE EN INCLUDED IN THE PAPER BOOK FILED BY THE DEPARTMENT. IN THIS STATE OF AFFAIRS, THIS COURT PROCEEDED TO ADJUDICATE THE REF ERRED TWO QUESTIONS IN THE LIGHT OF THE FINDINGS OF FACT RECO RDED BY THE TRIBUNAL, TAKING THEM TO BE CORRECT. BOTH THE COUNS EL ADVANCED THE ARGUMENTS ONLY ON THE QUESTION AS TO WHETHER TH E NOTICE ISSUED TO AN ASSESSEE IN HIS INDIVIDUAL CAPACITY CA N BE TREATED TO BE A VALID NOTICE TO REASSESS THE INCOME OF HUF OF WHICH HE IS A KARTA. ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 21 16.1 IN THE ABOVE CASE, THE NOTICE WAS ISSUED TO TH E INDIVIDUAL AND ASSESSMENT WAS COMPLETED IN THE CASE OF HUF. HO WEVER, IN THE INSTANT CASE, THE NOTICE WAS ISSUED TO THE INDI VIDUAL, IT WAS MENTIONED IN THE NOTICE SPECIFICALLY THAT IT IS FOR THE INDIVIDUAL AND ASSESSMENT WAS ALSO COMPLETED IN THE CASE OF IN DIVIDUAL. 17. MADAN LAL AGGARWAL VS CIT (1983) 13 TAXMANN 120 (ALL): WE ARE, THEREFORE, OF OPINION THAT THE NOTICE UNDER SECTION 34 ISSUED TO SRI MADAN LAL AGARWAL ON 29TH SEPTEMBE R, 1962, WAS VAGUE AND AS SUCH INVALID. THE VAGUENESS OF THE SAID NOTICE DID NOT STAND CURED BECAUSE THE ITO AT A LATER STAG E INFORMED THE ASSESSEE THAT HE WAS TO FILE HIS RETURN IN THE STATUS OF HUF. THE PROCEEDINGS FOLLOWING SUCH A VAGUE AND INVALID NOTICE ALSO STAND VITIATED. IN THIS VIEW OF THE MATTER, IT IS N OT NECESSARY FOR US TO GO INTO THE VARIOUS OTHER GROUNDS RAISED BY T HE LEARNED COUNSEL FOR THE ASSESSEE FOR QUESTIONING THE VALIDI TY OF THE PROCEEDINGS UNDER SECTION 147(A) OF THE I.T. ACT, 1 961. 17.1 WHILE THE ABOVE JUDGMENT CLEARLY DEALS WITH TH E VAGUENESS, IN THE CASE BEFORE US, THE NOTICE RATHER SPECIFICALLY MENTIONED THAT IT IS MEANT FOR INDIVIDUAL . ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 22 18. P.N. SASIKUMAR AND OTHERS VS CIT (1987) 170 ITR 80 (KER): IN THIS CASE, THE DISPUTE IS WHETHER THE NOT ICE HAS TO BE SERVED ON THE AOP OR AN INDIVIDUAL WHEN THE ASSESSM ENT WAS MEANT TO BE MADE IN THE HANDS OF THE AOP. THE FACTS ARE NOT APPLICABLE TO THE INSTANT CASE. 19. DNYANESHWAR GOVIND KALBHOR (HUF) VS ACIT (2016) 74 TAXMANN.COM 67 (PUNE-TRIB): IN THIS CASE, THE PAN NUMBER APPEARING IN THE NOTICE UNDER SECTION 148 PERTAINS TO INDIVIDUAL (KARTA) AND NOT THE NOTICEE HUF. HE NEXT CONTENDED THAT A BARE PERUSAL OF RECORDED REASONS UNDER SECTION 148(2) WO ULD SHOW THAT THE REASONS HAVE BEEN RECORDED IN THE NAME OF INDIVIDUAL I.E. 'SHRI DNYANESHWAR GOVIND KALBHOR' WHEREAS THE ASSESSMENT IS FRAMED IN THE HANDS OF HUF AND NOT THE INDIVIDUA L. IN THIS CASE, THE NOTICE ISSUED TO ENTITY X AND ASSESSMEN T WAS MADE IN THE CASE OF ENTITY Y, HENCE THESE FACTS ARE NO T APPLICABLE TO THE INSTANT CASE BEFORE US. 19.1 IN THE CASE BEFORE US, THE LAND HAS BEEN SOLD BY THE ASSESSEE, THE SATISFACTION HAS BEEN RECORDED BY THE AO IN THE CASE OF THE ASSESSEE, THE NOTICE HAS BEEN ISSUED IN THE CASE OF THE ASSESSEE, THE NOTICE HAS BEEN ADDRESSED AND SER VED ON THE ASSESSEE, THE NOTICE CLEARLY MENTIONED THAT THE ASS ESSMENT IS ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 23 BEING MADE IN HIS INDIVIDUAL ( ) CAPACITY. THERE WAS NO MENTION OF HUF EITHER IN THE SATISFACTION RECORDED NOR IN THE BODY OF THE NOTICE THAT HAS BEEN ISSUED. 20. AS ESTABLISHED BY THIS TIME, THE ACTION U/S 147 IMPOSES CERTAIN OBLIGATIONS AND AMOUNTS TO DISTURBING THE SETTLED P OSITION OF THE ASSESSEE. NO DOUBT, SUCH ACTION HAS CERTAIN CIVIL CONSEQUENCE S IMPLICIT IN IT AND IT IMPARTS JURISDICTION TO THE ASSESSING OFFICER TO RE OPEN A COMPLETED OR A TIME BARRED ASSESSMENT AND THUS SEEKS TO DISTURB AN ASSESSMENT WHICH HAS OTHERWISE REACHED FINALITY. SECTION 147, THUS C ANNOT BE INVOKED LIGHTLY OR WITHOUT APPLICATION OF MIND AND WITHOUT REASONAB LE SATISFACTION OF THE ASSESSING OFFICER AND WITHOUT MEETING THE TIME LIMI TS SET OUT IN THE PROVISIONS OF SECTION 147 AS IS A SUBSTANTIVE PROVI SION AND IMPARTS JURISDICTION. A JURISDICTIONAL DEFECT CANNOT BE ASC RIBED TO BE A MERE TECHNICAL DEFECT AND THUS CANNOT BE CONDONED BY INV OKING SECTION 292B OF THE ACT. THERE IS A MARKED DISTINCTION BETWEEN WANT OF BASIC AND INHERENT JURISDICTION AND IRREGULAR EXERCISE OF JURISDICTION . DEFECT ON IRREGULAR EXERCISE OF JURISDICTION ALONE CAN POSSIBLY BE CURE D BY TAKING SHELTER OF SECTION 292B. IN THE INSTANT CASE, ON GOING THRO UGH THE RECORD, IT CAN BE SAID THAT THE ASSESSING OFFICER INVOKED THE PROVISI ONS WHICH CAN BE CONSIDERED JUDICIOUS IN INVOKING THE JURISDICTION. THE REASONS HAVE BEEN RECORDED RIGHTLY AFTER GOING THROUGH THE INFORMATIO N AND THE NOTICE HAS BEEN RIGHTLY ISSUED. WHEN WE TRY TO LOOK INTO THE J URISDICTIONAL DEFECT, WE ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 24 DONT FIND THERE IS ANY JURISDICTIONAL DEFECT BY TH E ASSESSEE BY THE WAY OF ASSUMING OF JURISDICTION OR RECORDING OF SATISFACTI ON OR ISSUE OF NOTICE OR SPECIFYING VERY CLEARLY TO WHOM THE ASSESSMENT IS P ROPOSED. THE WRONG MENTION OF PAN MAY UTMOST TAKEN AS A MISTAKE BUT NO T A DEFECT. THERE IS NO DEFECT IN EXERCISE OF JURISDICTION ONLY THERE IS A MISTAKE OF TYPING A WRONG PAN. WHEN WE EXAMINE WHETHER THIS INCORRECT M ENTION OF PAN CAN MAKE THE ENTIRE NOTICE INVALID, WE ARE GUIDED BY TH E ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE. WE ARE NOT PERSUADED BY THE ARGUMENTS OF THE REPRESENTATIVE OF THE ASSESSEE TO READ HUF IN THE NOTICE WHEN THE NOTICE MENTIONS CLEARLY ABOUT THE INDIVIDUAL ( ). IN THE PRINTED NOTICE, THE WORD HAS BEEN SPECIFICALLY MENTIONED IN THE HANDWRITING BY THE AO INDICATES CLEAR APPLICATION O F THE MIND OF THE ASSESSING OFFICER WHILE ISSUING THE NOTICE. WE CANNOT READ INTO HUF WHEN IS WRITTEN ON THE NOTICE. THE REASONS RECORDED WERE NOT OF HUF BUT OF THE ASSESSEE IN IN DIVIDUAL CAPACITY. NEITHER THE WORD HUF NOR THE PAN OF HU F MENTIONED IN THE REASONS RECORD, HENCE WE CANNOT AS SUME SOMETHING WHICH IS NOT ON RECORD. 21. IN SARDAR HARBINDERSINGH SEHGAL V CIT, (227 ITR 512 GAU), THE HONBLE COURT HELD THAT THE NOTICE TO BE VALID IN VIEW OF SECTION 292-B OF THE ACT AS IT CONFORMED TO THE SUBSTANCE OF THE ACT AND WAS TO EFFECTUATE ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 25 THE PURPOSE OF THE ACT. FURTHER IT WAS HELD THAT DE FECTS OR OMISSIONS, IF ANY, IN THE NOTICE DID NOT CAUSE ANY PREJUDICE TO T HE PETITIONERS. THE COURT WENT ON TO STATE THAT IT CAN ASSUME JURISDICTION ON LY WHEN THE NOTICE ON THE FACE OF IT IS ILLEGAL AND THAT THE COURT MUST N OT ADOPTED A HYPERTECHNICAL APPROACH TO QUASH A NOTICE BECAUSE I T DOES NOT CONFORM TO ALL THE NICETIES EXPECTED BY AN ASSESSEE IN SUCH A NOTICE. THE COURT HAS TO ADOPT A BROAD AND PRAGMATIC VIEW IN CONSTRUING SUCH A NOTICE IN ORDER TO FIND OUT WHETHER IN SUBSTANCE AND EFFECT IT IS IN C ONFORMITY WITH OR ACCORDING TO THE INTENT AND PURPOSE OF THE ACT. AN INCONSEQUENTIAL TECHNICALITY MUST NOT BE ALLOWED TO DEFEAT JUSTICE. 22. THE PROVISIONS OF SECTION 292B READS AS UNDER: 292B - NO RETURN OF INCOME, ASSESSMENT, NOTICE, SUMMONS OR OTHER PROCEEDING, FURNISHED OR MADE OR ISSUED OR TAKEN OR PURPORTED TO HAVE BEEN FURNISHED OR MADE OR ISSUED OR TAKEN IN PURSUANCE OF ANY OF THE PROVISIONS OF THIS ACT SHALL BE INVALID OR S HALL BE DEEMED TO BE INVALID MERELY BY REASON OF ANY MISTAKE , DEFECT OR OMISSION IN SUCH RETURN OF INCOME, ASSESSMENT, NOTICE, SUMMONS OR OTHER PROCEEDING IF SUCH RETURN OF INCOME, ASSESSMENT, NOTICE, SUMMONS OR OTHER PROCEEDING IS IN SUBSTANCE AND EFFECT IN CONFORMITY WITH OR ACCORDING TO THE INTENT AND PURPOSE OF THIS ACT. 23. A CAREFUL READING OF THE SECTION POINT TOWARDS THE BENEFIT ENVISAGED TO ALL THE STAKEHOLDERS WHETHER IT IS THE CITIZEN OR THE STATE. IN OUR CASE, THE ASSESSEE AS WELL AS THE REV ENUE. EVEN, THE REVENUE IS PRECLUDED FROM TREATING THE RETURN OF INCOME FILED BY THE ASSESSEE AS NULL AND VOID IN CASES WHE RE THERE HAS ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 26 BEEN A MISTAKE, DEFECT OR OMISSION IN SUCH RETURN O F INCOME. THE MISTAKES IN THE RETURN SUCH AS WRONG QUOTING OF THE SECTION OR PROVISION PERTAINING DEDUCTION, EXEMPTION OR WRO NG FILING OF THE COLUMN OR WRONG TYPING OF PAN OR ADDRESS ARE NO T TO BE TREATED AS FATAL TO MAKE A VALID RETURN INVALID. SE CTION 292B HAS BEEN INVOKED TO BENEFIT THE ASSESSES WHERE THE RETU RNS HAVE BEEN FILED IN CORRECT JURISDICTION. IN THE CASE OF NICHOLAS APPLEGATE SOUTH EAST ASIA FUND LTD. VS ADIT, THE CO -ORDINATE BENCH OF ITAT HELD THAT THE QUESTION OF APPLICATION OF SECTION 292B CANNOT BE PREJUDGED BY FINDING THAT RETURN, NO TICE, ETC. IS NOT AS PER THE REQUIREMENT OF THE STATUTE AND IS/AR E INVALID; THE FINDING THAT THE RETURN OR NOTICE ETC. IS INVALID O R TO WHAT EXTENT IT IS INVALID IS UNNECESSARY AND COUNTERPRODUCTIVE; IF IN SUBSTANCE AND IN EFFECT RETURN, NOTICE OR ASSESSMEN T IS IN CONFORMITY WITH OR ACCORDING TO INTENT AND PURPOSE OF THE ACT, THE MISTAKE DEFECT OR OMISSION IS TO BE IGNORED AS PER THE UNDERLINING PHILOSOPHY OF SECTION 292B. THERE IS A MARKED DIFFERENCE BETWEEN WANT OF BASIC OR INHERENT JURISD ICTION AND EXERCISE OF AUTHORITY WHICH HAS NOT BEEN VESTED WIT H THE ASSESSING OFFICER. IN THE INSTANT CASE, THE ASSESSI NG OFFICER HAS RIGHTLY INVOKED THE PROVISIONS OF SECTION 148 BY RE CORDING THE REASONS AND BY ISSUE OF NOTICE TO THE PROPER PERSON TO WHICH IT ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 27 WAS INTENDED TO. THE CO-ORDINATE BENCH OF THE TRIBU NAL IN ITA NO. 3875/MUM/2005 IN THE CASE OF NASE ASIA FUND LTD . HELD THAT 10. ON A PLAIN READING OF THIS SECTION, IT IS OBSERVED THAT THE RETURN OF INCOME, ETC., SHALL NOT BE CONSIDERED AS INVALID MERELY BY DEFECT OR OMISSION IN SUCH RETURN IF IT IS IN SUBSTANCE AND EFFECT IN CONFORMITY WITH THE INTENT AND PURPOS E OF THIS ACT. THE RATIONALE BEHIND THIS SECTION IS THAT THE RETUR N OF INCOME, ASSESSMENT NOTICE, SUMMONS OR OTHER PROCEEDINGS SHO ULD NOT BE HELD TO BE INVALID DUE TO TECHNICAL MISTAKES, WHIC H OTHERWISE DO NOT HAVE MUCH IMPACT TOUCHING ITS LEGALITY PROVI DED SUCH RETURN, ASSESSMENT NOTICE, SUMMONS OR OTHER PROCEED INGS, ETC., ARE OTHERWISE IN CONFORMITY WITH THE PURPOSE OF THE ACT. THE PURPOSE OF THE ACT IS TO CHARGE INCOME TAX ON THE TOTAL INCOME OF THE ASSESSEE. THIS PURPOSE IS BEST FULFILLED I F THE CORRECT INCOME IS DETERMINED AND TAX IS CHARGED THEREON. IT INVOLVES THE MAKING OF ASSESSMENT BY THE AO IN WHICH THE PAR TICULARS AT INCOME AS FURNISHED BY THE ASSESSEE ARE SCRUTINIZED FOR DETERMINING THE CORRECT TOTAL INCOME. THERE MAY BE A CASE IN WHICH THE ASSESSEE HAS INTENTIONALLY OR UNINTENTION ALLY CLAIMED WRONG DEDUCTIONS OR EXEMPTIONS ETC., TO WHICH HE IS NOT ENTITLED. IN THAT CASE THE AO MAKES THE DISALLOWANC ES AS PER LAW. STILL IN ANOTHER SITUATION THE ASSESSEE MAY HA VE STATED THE ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 28 CORRECT INCOME AND NO DISALLOWANCE ETC. ARE REQUIRE D. THE PURPOSE OF THE ACT IS ACHIEVED WHEN THE CORRECT T OTAL INCOME IS DETERMINED EITHER BY WAY OF MAKING ADJUSTMENTS BY T HE ASSESSING OFFICER AND ENHANCING THE STATED INCOME T O THE CORRECT INCOME OR BY THE ASSESSEE HIMSELF BY FURNIS HING THE CORRECT PARTICULARS OF INCOME, NOT WARRANTING ANY E NHANCEMENT BY THE AO. IT, THEREFORE, TRANSPIRES THAT IF A RETU RN HAS BEEN FURNISHED BY THE ASSESSEE WHICH IS OTHERWISE IN SUB STANCE AND EFFECT IN CONFORMITY WITH OR ACCORDING TO THE INTEN T AND PURPOSE OF THIS ACT, THEN ANY TECHNICAL DEFECT IN IT WOULD NOT RENDER IT TO BE INVALID. IN SUCH A SITUATION THE PROVISIONS OF S ECTION 292B WOULD COME TO THE RESCUE OF THE ASSESSEE AND THUS D EBAR THE REVENUE AUTHORITIES FROM DECLARING SUCH RETURN TO B E INVALID. 24. SIMILARLY, WHEN THE PROCEEDING (ISSUE OF NOTICE IN THIS CASE) IS IN SUBSTANCE AND EFFECT IN CONFORMITY WITH OR ACCORDING TO THE INTENT AND PURPOSE OF THE ACT, THE ACTION OF THE AO CANNOT BE FAULTED WITH. SECTION 292B MEANT TO SAVE ONLY THOSE NOTICES IN WHICH THERE IS IN ADVERTENT ERROR. ITS S AVES THOSE NOTICES WHICH IN SUBSTANCE AND EFFECT ISSUED ACCORD ING TO THE INTEREST AND PURPOSE OF THE ACT. IN THE PRESENT CAS E, THERE IS AN IN ADVERTENT ERROR IN THE NOTICE ISSUED BY THE AO R EFLECTING ONLY THE PAN COLUMN OF THE NOTICE MENTIONS PAN OF THE H UF INSTEAD ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 29 OF THE INDIVIDUAL WHEREAS THE BODY OF THE NOTICE AND THE ADDRESS SHOWS THAT THE NOTICE IS CLEARLY MEANT FOR THE ASSESSEE HIMSELF. THE PROVISIONS OF SECTION 292B HAVE BEEN F URTHER CLARIFIED THE CIRCULAR NO. 179 OF CBDT DATED 30.09. 1975 THAT THIS PROVISION HAS BEEN MADE TO PROVIDE AGAINST PUR ELY TECHNICAL OBJECTS WITHOUT SUBSTANCE COMING IN THE WAY OF VALI DITY OF THE ASSESSMENT PROCEEDINGS. IN THE CASE OF CIT VS MASON ELLAN INDIA LTD. 245 ITR 568 (KER.), THE HONBLE COURT HELD THA T SECTION 292B CAN BE INVOKED IF THE ACTION WAS IN SUBSTANCE AND IN EFFECT IN CONFORMITY WITH THE INTENT AND PURPOSE OF THE AC T. THE ENTIRE PROPOSITION ARISES FROM THE ESTABLISHED JURIS PRUDENCE THAT SUBSTANCE OVER FORM IS THE UNDERLYING PHILOSOPHY OF SECTION 292B. IF IN SUBSTANCE AND IN EFFECT THE NOTICE IS I N CONFORMITY AND WITH OR ACCORDING TO THE INTENT AND PURPOSE OF THE INCOME TAX ACT, THE MISTAKE IS TO BE IGNORED. QUOTING A WR ONG PAN IN THE PRESENCE OF NUMEROUS EVIDENCES TO PROVE THE INT ENT AND THE PURPOSE IS A SUBJECT MATTER OF SECTION 292B IN THE INSTANT CASE. IF THE SIGNIFICANCE OF WORD SUBSTANCE AND EFFECT IS KEPT IN MIND THEN THERE IS NO JUSTIFICATION TO TREAT THE NO TICE AS IN VALID. IN THE CASE OF SHRISH M. DALVI 287 ITR 242 ( MUM), THE HONBLE COURT OBSERVED THAT AS LONG AS THE DEFECT O R MISTAKE HAS NOT CAUSED PREJUDICE TO THE ASSESSEE, THE MISTA KE WAS ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 30 PROTECTED UNDER THE UMBRELLA OF SECTION 292B OF THE ACT. THE PROCEDURAL PROVISION HAS TO BE EXAMINED FROM THE ST AND POINT OF SUBSTANTIAL COMPLAINTS. WHERE SUCH VIOLATION HAS OC CASIONED PREJUDICE TO THE ASSESSEE THEN ONLY THE ASSESSEE IS PROTECTED FROM THE RIGORS OF WRONG EXERCISE OF JURISDICTION. AS LONG AS, NO PREJUDICE IS OCCASIONED TO THE ASSESSEE, AS IN THIS CASE THE NOTICE ISSUED IS PROTECTED BY THE PROVISIONS OF SEC TION 292B. 25. WE ARE NOT CERTAINLY SUPPORTING OR HOLDING THAT A NOTICE ISSUED TO SHRI XXXXX HUF OR SHRI XXXXX KARTA OR SHRI XXXXX KARTA HUF IS A VALID NOTICE WHEN THE ASSESS MENT PROCEEDINGS ARE MEANT FOR SHRI XXXXX INDIVIDUAL. IN THE INSTANT CASE, THE NOTICE HAS BEEN ADDRESSED TO SHR I NARENDRA KUMAR GILL AND ALSO MENTIONED THE WORD WHICH MAKES IT MORE CLEAR AND EXPLICIT TO WHOM THE NOTICE IS AIMED AT. IT IS THE ASSESSEE WHETHER INDIVIDUAL, HUF, COMPANY, FIRM, AO P WHICH OWNS THE PAN. WHEN THE ISSUE OF PRIMACY OF THE ASSE SSEE OVER THE PAN OR PRIMACY OF THE PAN OVER THE ASSESSEE IS TO BE CONSIDERED, IT IS CERTAINLY THE ASSESSEE (INDIVIDUA L, HUF, COMPANY, FIRM, AOP) TAKES PRECEDENCE. 26. THUS, ON GOING THROUGH THE PROVISIONS OF THE AC T, JUDGMENTS OF THE VARIOUS COURTS, THE REASONS RECORD ED, THE ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 31 ADDRESS ON THE NOTICE, THE BODY OF THE NOTICE ISSUE OF NOTICE, WE HOLD THAT THE NOTICE OF THE ASSESSING OFFICER WHERE IN THERE IS A MISTAKE ONLY IN THE PAN NUMBER, THE NOTICE IS COVER ED BY THE PROVISIONS OF SECTION 292B. THE ISSUE OF VALUATION : 27. BEFORE THE AO, THE ASSESSEE FURNISHED PURCHASE DEED OF THE PROPERTY WHICH WAS PURCHASED BY HIS FATHER SHRI BUI CHAND ON 03.07.1969 ALONGWITH OTHER CO-OWNERS, HIS FATHER SHRI MANGAI SINGH, MOTHER SMT GIRIRAJ KAUR AND BROTHER S HRI OM PRAKASH. MEANWHILE SHRI MANGAI SINGH EXPIRED AND HI S SHARE DEVOLVED ON HIS SON SHRI BUI CHAND AND SHRI OM PRAK ASH. VIDE HIBENAMA (GIFT DEED) DATED 10.06.1974, SHRI OM PRAK ASH GIFTED HIS SHARE IN LAND TO HIS BROTHER SHRI BUI CHAND. SH RI BUI CHAND EXPIRED ON 08.08.1972 AND THE ASSESSEE - NARENDRA K UMAR GILL INHERITED THE ASSETS OF HIS FATHER SHRI BUI CHAND I NCLUDING THE LAND IN QUESTION. THUS ASSESSEE OWNED 75% OF THE LA ND MEASURING 689.70 SQ MTR (825 SQ YD). ON THIS LAND, ASSESSEE WAS RUNNING A PETROL PUMP IN THE NAME OF MODERN SER VICE STATION AFTER CONSTRUCTING A BUILDING ON 82 SQ MTR OF LAND. THE ASSESSEE FURNISHED A SALE DEED DATED 31.12.2008 REF LECTING THE SALE OF LAND AT A CONSIDERATION OF RS.50,00,000/-, SHARE OF THE ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 32 ASSESSEE BEING 37,50,000/- THOUGH THE BUILDING OF P ETROL PUMP AND THE MACHINERY THEREON WAS NOT SOLD BY THE ASSES SEE. THE ASSESSEE ALSO EXPLAINED THAT THE PROPERTY WAS MORTG AGED WITH THE BANK AND THEREFORE, IT WAS A DISTRESS SALE. SIN CE AS A CONSEQUENCE OF SALE, LOSS WAS INCURRED BY THE ASSES SEE THE SAME WAS NOT REFLECTED IN THE RETURN FILED ORIGINAL LY. 28. DURING THE ASSESSMENT PROCEEDING, ITO WARD-1 (2 ), MUZAFFARNAGAR SOUGHT THE INFORMATION REGARDING COMM ERCIAL RATE OF THE PROPERTY FROM TEHSILDAR SADAR MUZAFFARNAGAR, WHO VIDE LETTER-DATED 02.02.2015 STATED THAT IN THE YEAR 198 1, RATE OF THE COMMERCIAL PROPERTY WERE NOT AVAILABLE THOUGH T HE RATE OF PROPERTY SITUATED IN RAM PURI LABDAWALA WAS RS.2000 -3000 PER SQ YD. TEHSILDAR HAS ALSO STATED THAT ON LOCAL INQU IRY IT WAS INFORMED THAT THE MARKET RATE OF THE AFORESAID AREA WAS APPROX 72,000 TO 73,000 PER SQ. YD. BEFORE THE ASSESSING O FFICER, ASSESSEE HAD FURNISHED VALUATION REPORT OF THE REGI STERED VALUER, REFLECTING THE VALUE OF PROPERTY AT RS.32,3 9,000/- AS ON 01.04.1981, SHARE OF THE ASSESSEE WAS 24,29,060/-. REGISTERED VALUER HAD TAKEN THE VALUE OF PROPERTY A T RS.3,600/- PER SQ. MTR. ON THE BASIS OF REPORT OF TEHSILDAR. T HE ASSESSEE ALSO FURNISHED THE RATE LIST OF VARIOUS PERIOD TO S TRESS THE POINT THAT AT ALL POINTS OF TIME, THE VALUE OF COMMERCIAL PROPERTY AND ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 33 RESIDENTIAL PROPERTY WAS DIFFERENT. SINCE FOR THE P URPOSES OF SALE CONSIDERATION, RATE OF COMMERCIAL PROPERTY WAS ADOPTED THEREFORE FOR THE PURPOSES OF COST OF ACQUISITION A LSO COMMERCIAL RATE WAS TO BE ADOPTED. 29. THE ASSESSING OFFICER WAS NOT CONVINCED WITH TH E VALUATION CLAIMED BY THE ASSESSEE SOUGHT THE INFORMATION FROM ADM FINANCE WHO STATED THE RATE OF THE PROPERTY AT RS.1 00/- PER SQ. YD. AS ON 01.04.1981. ACCORDINGLY, ASSESSING OFFICE R TOOK THE SALE CONSIDERATION AT THE CIRCLE RATE WHICH WAS RS.24,500/- PER SQ MTR AT THE RELEVANT TIME AND CALCULATED THE CAPI TAL GAIN AS UNDER:- FULL VALUE OF CONSIDERATION : 24,500 X 689.70 SQ MTR = 1,93,93,650/- LESS : VALUE OF MACHINERY = 2,00,000/- NET AMOUNT = 1,91,93,650/- COST OF ACQUISITION : RS.120 PER SQ MTR X 689.70 SQ MTR = RS.82,764 INDEXED COST OF LAND = 82764X582/100 RS.4,81,686/- LONG TERM CAPITAL GAIN RS.1,87,11,964/- SHARE OF ASSESSEE (75%) RS.1,40, 33,973/- ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 34 ACCORDINGLY, ASSESSING OFFICER MADE THE ADDITION OF CAPITAL GAIN OF RS.1,40,33,973/- TO THE INCOME OF ASSESSEE. 30. AGAINST THIS ORDER, THE ASSESSEE FILED AN APPE AL BEFORE THE LD. CIT(A). ON MERITS, THE ASSESSEE CHALLENGED THE VALUATION OF LAND AS ON 01.04.1981 TAKEN BY THE ASSESSING OFFICE R AT RS.120/- PER SQ MTR CLAIMING THAT THE SAID VALUATIO N PERTAINED TO RAMPURI WHICH WAS A RESIDENTIAL AREA WHEREAS LAN D IN QUESTION WAS SITUATED ON GT ROAD, ROORKEE ROAD, MUZ AFFARNAGAR WHICH WAS A COMMERCIAL PROPERTY. 31. DURING THE PROCEEDING, CIT(A) RECEIVED THE VALU ATION MADE BY THE DVO (REFERENCE WAS MADE BY THE ASSESSING OFF ICER DURING THE ASSESSMENT PROCEEDING) WHO HAD ADOPTED T HE VALUE OF LAND AT RS.167.50 SQ MTR (RS.120/- PER SQ MTR + 20% ON ACCOUNT OF LOCATION BEING CORNER PLOT + 20% BEING C OMMERCIAL PROPERTY). 32. THE LD. CIT (A) DIRECTED THE ASSESSING OFFICER TO ADOPT THE VALUATION AS MADE BY THE DVO. HE DIRECTED TO TAKE S ALE CONSIDERATION AT RS.24,500/- PER SQ. MTR. AS PER ST AMP DUTY VALUATION AND TO TAKE COST OF ACQUISITION AS ON 01. 04.1981 AT RS.167.50 PER SQ MTR AS TAKEN BY DVO AND TO COMPUTE THE CAPITAL GAIN ACCORDINGLY. THE REPORT OF THE DVO HAS BEEN ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 35 RECEIVED DURING THE PROCEEDINGS BEFORE THE LD. CIT( A), WHILE THE REFERENCE HAS BEEN MADE DURING THE ASSESSMENT PROCE EDINGS. 33. THE CRUX OF THE ISSUE ARE AS UNDER: 1. AREA OF THE PROPERTY 689.70 SQ.MT. 2. CONSTRUCTED AREA OF THE PROPERTY 82 SQ.MT . 3. SALE PRICE OF THE PROPERTY RS.50,00,000 4. STAMP DUTY VALUE OF THE LAND RS.1,68,97,650 5. VALUE OF THE MACHINERY AND CONSTRUCTION RS.24 ,96, 000 6. STAMP DUTY VALUE OF THE PROPERTY (LAND AND CONSTRUCTION) RS.1,93,93,650 7. STAMP DUTY VALUE OF THE LAND RS.24,500/SQ.MT. 7. COST OF ACQUISITION AS PER AO (AS PER ADM FINANCE)-1981 RS.120/SQ.MT. 8. COST OF ACQUISITION AS PER CIT(A) (AS PER DVO REPORT) - 1981 RS.167/SQ.MT. 9. COST OF ACQUISITION AS PER THE ASSESSEE (AS PER RV REPORT)-1981 RS.3600/SQ.MT. 34. BEFORE US DURING THE HEARING, AT THE OUTSET, TH E LD. AR OBJECTED TO THE REFERENCE MADE TO THE VALUATION OFF ICER BY THE ASSESSING AUTHORITY. 35. THE ARGUMENTS OF THE LD. DR ARE AS UNDER: 1. THE LD. CIT(A) HAS TAKEN INTO COGNIZANCE THE PROVISIONS OF SECTION 55(2)(B)(I) WHEREIN THE VALUA TION BY AN APPROVED VALUER IS TO BE TAKEN AS FAIR MARKET VALU E FOR ACQUISITION OF PROPERTY. 1.1 THE PROVISIONS OF SECTION 55A(A) AUTHORIZE THE ASSESSING OFFICER TO REFER FOR VALUATION ONLY WHEN THE VALUE ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 36 AS CLAIMED IS LESS THAN ITS FAIR MARKET VALUE. TH E PROVISION PRIOR TO AMENDMENT ON 01.07.2012 IS RELEVANT TO AY 2009-10. AUTHORITIES ERRED IN HOLDING THAT AMENDED PROVISION S WILL APPLY ON THE ASSESSMENT WHICH ARE PENDING ON THE DA TE OF AMENDMENT AND SECTION 55A OF THE ACT LAYS DOWN THE PROCEDURE AND ERRED IN HOLDING THAT AMENDED PROVISI ONS ARE APPLICABLE ON THE ASSESSMENT PROCEEDINGS FOR YEAR 2 009-10 IN SPITE OF AMENDMENT ON 01.07.2012. 2 THE LD. CIT(A) WRONGLY HELD THAT REFERENCE IS RI GHTLY MADE TO DVO IN PROVISIONS OF SECTION 55A WITHOUT CONSIDE RING THE WORDS IS LESS THAN THE FAIR MARKET VALUE AND ERRE D IN CONSIDERING THE REFERENCE UNDER SECTION 55A(B) WHIC H CLEARLY STATES THAT IT WILL APPLY IN ANY OTHER CASE I.E. A CASE NOT COVERED BY SECTION 55A(A) OF THE ACT. 3 THAT THE LD. CIT(A) HAS WITHOUT CONSIDERING THE PROVISIONS OF SECTION 55A HAS ERRED IN APPROVING THE VALUATION REPORT OF DVO, WHICH WAS NOT PLACED ON RECORDS UPTO ASSESSMEN T AND WITHOUT CONSIDERING THE BASIS OF VALUATION TAKEN. 4. REITERATING THE SUBMISSIONS MADE BEFORE THE LD. CIT (A), THE LD. AR HAS ARGUED THAT THE REFERENCE TO THE VAL UATION OFFICER U/S 55A CANNOT BE RESORTED TO WHEN THE VALU E CLAIM IS MORE THAN THE FAIR MARKET VALUE. THE LD. AR ARGUED THAT THE ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 37 PROVISIONS THAT HAVE COME INTO FORCE W.E.F. 01.07.2 012 CANNOT BE APPLIED TO THE CASE OF THE ASSESSEE PERTA INING TO THE ASSESSMENT YEAR 2009-10. 5. THERE WAS DIFFERENCE IN THE DESCRIPTION OF THE P ROPERTY AS SITUATED AT GT ROAD, MUZAFFARNAGAR AND COMMERCIAL P ROPERTY WHICH WAS WRONGLY MENTIONED AS RAMPURI MOHALLA, MUZAFFARNAGAR. THE VALUATION OF THE PRICES AT RAMPU RI AND GT ROAD VARIES TO A GREAT EXTENT. 6. THE LD. AR RELIED ON THE JUDGMENTS IN THE CASE O F CIT VS MANJULABEN M. UNADKAT (2015) 55 TAXMANN 62 (GUJ.), MR. ANJALI BHARAT KABRA VS ITO, WARD-2(2), JALGAON (201 6) 75 TAXMANN 5 (PUNE-TRIB.), CIT VS PUJA PRINTS (2014) 2 24 TAXMANN 22/360 (BOM.). 36. THE LD. DR RELIED ON THE ORDERS OF THE AUTHORIT IES BELOW WHICH HAVE BEEN DULY PERUSED. 37. HEARD THE ARGUMENTS OF BOTH THE PARTIES AND PER USED THE MATERIAL AVAILABLE ON RECORD. 38. WE DEAL FIRST WITH THE ARGUMENT RELATING TO INV OKING THE JURISDICTION BY THE AO U/S 55A. ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 38 39. THE PROVISIONS OF SECTION 55A BEFORE 01.07.2012 READS AS UNDER: 55A. WITH A VIEW TO ASCERTAINING THE FAIR MARKET V ALUE OF A CAPITAL ASSET FOR THE PURPOSES OF THIS CHAPTER, THE ASSESSING OFFICER MAY REFER THE VALUATION OF CAPITA L ASSET TO A VALUATION OFFICER (A ) IN A CASE WHERE THE VALUE OF THE ASSET AS CLAI MED BY THE ASSESSEE IS IN ACCORDANCE WITH THE ESTIMATE MAD E BY A REGISTERED VALUER, IF THE ASSESSING OFFICER IS OF O PINION THAT THE VALUE SO CLAIMED IS LESS THAN ITS FAIR MARKET VALUE ; (B) IN ANY OTHER CASE, IF THE ASSESSING OFFICER IS OF OPINION (I) THAT THE FAIR MARKET VALUE OF THE ASSET EXCEED S THE VALUE OF THE ASSET AS CLAIMED BY THE ASSESSEE BY MO RE THAN SUCH PERCENTAGE OF THE VALUE OF THE ASSET AS SO CLA IMED OR BY MORE THAN SUCH AMOUNT AS MAY BE PRESCRIBED IN TH IS BEHALF; OR (II) THAT HAVING REGARD TO THE NATURE OF THE ASSET AND OTHER RELEVANT CIRCUMSTANCES, IT IS NECESSARY SO TO DO, AND WHERE ANY SUCH REFERENCE IS MADE, THE PROVISION S OF SUB-SECTIONS (2), (3), (4), (5) AND (6) OF SECTION 16A, CLAUSES (HA) AND (I) OF SUB-SECTION (1) AND SUB-SEC TIONS (3A) AND (4) OF SECTION 23, SUB-SECTION (5) OF SECT ION 24, SECTION 34AA, SECTION 35 AND SECTION 37 OF THE WEAL TH-TAX ACT, 1957 (27 OF 1957), SHALL WITH THE NECESSARY MODIFICATIONS, APPLY IN RELATION TO SUCH REFERENCE AS THEY APPLY IN RELATION TO A REFERENCE MADE BY THE ASSESS ING OFFICER UNDER SUB-SECTION (1) OF SECTION 16A OF THA T ACT. EXPLANATION.IN THIS SECTION, 'VALUATION OFFICER' H AS THE SAME MEANING, AS IN CLAUSE (R) OF SECTION 2 OF THE WEALTH- TAX ACT, 1957 (27 OF 1957). 40. THE AMENDED PROVISIONS OF SECTION 55A WHICH CAM E INTO FORCE W.E.F. 01.07.2012 READ AS UNDER: 55A. WITH A VIEW TO ASCERTAINING THE FAIR MARKET V ALUE OF A CAPITAL ASSET FOR THE PURPOSES OF THIS CHAPTER, T HE ASSESSING OFFICER MAY REFER THE VALUATION OF CAPITA L ASSET TO A VALUATION OFFICER ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 39 (A) IN A CASE WHERE THE VALUE OF THE ASSET AS CLAIM ED BY THE ASSESSEE IS IN ACCORDANCE WITH THE ESTIMATE MAD E BY A REGISTERED VALUER, IF THE ASSESSING OFFICER IS OF OPINION THAT THE VALUE SO CLAIMED [IS AT VARIANCE WITH ITS FAIR MARKET VALUE]; (B) IN ANY OTHER CASE, IF THE ASSESSING OFFICER IS OF OPINION (I) THAT THE FAIR MARKET VALUE OF THE ASSET EXCEED S THE VALUE OF THE ASSET AS CLAIMED BY THE ASSESSEE BY MO RE THAN SUCH PERCENTAGE OF THE VALUE OF THE ASSET AS S O CLAIMED OR BY MORE THAN SUCH AMOUNT AS MAY BE PRESCRIBED IN THIS BEHALF; OR (II) THAT HAVING REGARD TO THE NATURE OF THE ASSET AND OTHER RELEVANT CIRCUMSTANCES, IT IS NECESSARY SO TO DO, 41. THE MAJOR DIFFERENCE BEING THE CHANGE OF WORDS LESS THAN ITS FAIR MARKET VALUE TO IS AT VARIANCE WITH ITS FAIR MARKET VALUE. 42. WE HAVE EXAMINED THE EXPLANATORY NOTE TO THE FI NANCE ACT, 2012. CLAUSE 20 OF THE BILL SEEKS TO AMEND SECTION 55A OF THE INCOME- TAX ACT RELATING TO REFERENCE TO VALUATION OFFICER. THE EXISTING PROVISIONS CONTAINED IN CLAUSE (A) OF THE AFORESAID SECTION 55 A PROVIDE THAT AN ASSESSING OFFICER WITH A VIEW TO ASCERTAIN THE FAIR MARKET VALUE OF A CAPITAL ASSET MAY REFER THE VALUATION OF A CAPITAL ASSET TO A VALUATION OFFICER WHERE, IN HIS OPINION THE VALUE OF THE ASSET AS CLA IMED BY THE ASSESSEE IS LESS THAN ITS FAIR MARKET VALUE. IT IS PROPOSED TO AMEND THE AFORESAID CLAUSE SO AS TO PROVIDE THAT REFERENCE MAY BE MADE TO THE VALUATION OFFICER FOR ASCERTAINING THE FAIR MARKET VALUE OF A CAPITAL ASSET IN CASE SUCH ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 40 VALUE IS AT VARIANCE WITH ITS FAIR MARKET VALUE INS TEAD OF MAKING A REFERENCE ONLY WHEN SUCH VALUE IS LESS THAN ITS FAI R MARKET VALUE. THIS AMENDMENT WILL TAKE EFFECT FROM 1ST JULY, 2012. 43. REFERENCE TO A VALUATION OFFICER [SECTION 55A]: IN A CASE WHERE THE CAPITAL ASSET BECAME THE PROPERTY OF THE TAX PAYER (OR OF THE PREVIOUS OWNER) BEFORE 1ST APRIL, 1981, THE TAX PAYER HAS TH E OPTION OF SUBSTITUTING THE COST OF ACQUISITION WITH THE FAIR MARKET VALUE OF THE ASSET AS ON 1ST APRIL, 1981. HIGHER THE FAIR MARKET VALUE ADOPTED B Y THE TAX PAYER AS COST, THE LOWER WOULD BE HIS CAPITAL GAINS ON SALE. AS PE R PRESENT PROVISIONS OF THE INCOME-TAX ACT, THE ASSESSING OFFICER COULD NOT REFER THIS VALUATION TO A VALUATION OFFICER, EVEN IF HE WAS OF THE OPINION THAT THE VALUE CLAIMED BY THE TAX PAYER IS HIGHER THAN THE FAIR MARKET VALUE, DUE TO THE SPECIFIC WORDING OF THE RELEVANT PROVISION. IT IS PROPOSED T O CHANGE THE WORDING SO THAT IF THE ASSESSING OFFICER IS OF THE OPINION THA T THE VALUE TAKEN BY THE TAX PAYER IS HIGHER THAN THE FAIR MARKET VALUE OF T HE ASSET AS ON 1ST APRIL 1981, THEN HE CAN MAKE A REFERENCE TO THE VALUATION OFFICER. THE VALUATION OFFICER WOULD THEN DETERMINE THE FAIR MAR KET VALUE OF THE PROPERTY AS ON 1.4.1981. THIS AMENDMENT IS APPLICAB LE WITH EFFECT FROM 1ST JULY, 2012. 44. WE HAVE ALSO EXAMINED WHETHER THE AMENDMENT BRO UGHT W.E.F. 01.07.2012 IS CLARIFICATORY OR PROCEDURAL OR SUBSTANTIVE OR ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 41 RATIFICATORY OR DECLARATORY OR RETROSPECTIVE OR PRO SPECTIVE. ON GOING THROUGH THE EXPLANATORY NOTE TO THE FINANCE B ILL 2012, WE FIND THAT THE AMENDMENT IS SUBSTANTIVE IN NATURE AN D IS PROSPECTIVE. THE AMENDMENT IS APPLICABLE TO ALL THE PROCEEDINGS TAKEN UP AFTER 01.07.2012. IN THE CASE OF DOVE INVE STMENTS PVT. LTD. VS GUJARAT INDUSTRIAL INVESTMENT CORPORAT ION (2006) 129 COMP CASES 929 (SC), THE HONBLE APEX COURT HAS OBSERVED THAT REGARD MUST BE HAD TO THE CONTEXT, THE SUBJECT MATTER AND OBJECT OF THE STATUTORY PROVISION IN QUESTION IN DE TERMINING WHETHER THE SAME IS MANDATORY OR DIRECTORY. NO UNIV ERSAL PRINCIPLE OF LAW COULD BE LAID DOWN IN THAT BEHALF AS TO WHETHER A PARTICULAR PROVISION OR ENACTMENT SHALL BE CONSID ERED MANDATORY OR DIRECTORY. IT IS THE DUTY OF THE COURT TO TRY TO GET THE REAL INTENTION OF THE LEGISLATURE BY CAREFULLY ANALYZING THE WHOLE SCOPE OF THE STATUTE OR SECTION OR PHRASE UND ER CONSIDERATION. IN THE INSTANT CASE, THE NOTICE HAS BEEN ISSUED ON 18.03.2014 AND THE PROCEEDINGS HAVE BEEN CONCLUD ED ON 31.03.2015. HENCE, THE INVOKING OF PROVISIONS OF SE CTION 55A EXISTING FROM 01.07.2012 BY THE ASSESSING OFFICER A ND REFERENCE TO THE VALUATION OFFICER WHICH IS IN ACCORDANCE WIT H THE PROVISIONS OF THE ACT INFORCE AT THAT TIME, CANNOT BE FAULTED WITH. ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 42 OBJECTION TO THE VALUATION PROCESS : 45. BEFORE US, THE LD. AR HAS TAKEN OBJECTIONS TO T HE PROCESS OF VALUATION ON THE GROUNDS THAT THE AREA OF GT ROA D AND RAMPURI MOHALLA ARE DIFFERENT. THE PROPERTY IS SITU ATED AT ROORKEE ROAD, MUZAFFARNAGAR BETWEEN HOSPITAL TO ROO RKEE CHUNGI. THE LD. AR ARGUED THAT THE ASSESSING OFFICE R HAS NO REASON TO REFER THE PROPERTY FOR VALUATION AT THE F IRST INSTANCE. FURTHER, IT WAS ARGUED THAT THE REGISTERED VALUER H AS DETERMINED THE VALUE AS ON 01.04.1981 @ RS.3,600. T HE TAHSILDAR SADAR HAS REPLIED THAT THE RATES RANGE FR OM RS.2000- 3000 PER SQ. YD. WHEREAS THE AO HAS TAKEN RS.120/- PER SQ. YD. BASED ON THE REPORT OF THE ADM FINANCE AND THE LD. CIT(A) HAS DETERMINED THE PRICE @ RS.167.50 PER SQ. MTR. B ASED ON THE REPORT OF THE DVO. IT WAS ARGUED THAT THE REFERENCE ITSELF IS ILLEGAL AND THE VALUATION PROCESS IS FAULTY. 46. THE LD. DR RELIED ON THE ORDERS OF THE AUTHORIT IES BELOW. 47. HEARD THE ARGUMENTS OF BOTH THE PARTIES AND PER USED THE MATERIAL AVAILABLE ON RECORD. 48. IN THE PRECEDING PARAGRAPH, WE HAVE ALREADY HEL D THAT THE ASSESSING OFFICER HAS RIGHTLY INVOKED THE PROVISION S OF SECTION ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 43 55A. TO ASCERTAIN THE VALUE OF THE CAPITAL ASSET DU RING THE ASSESSMENT PROCEEDINGS, THE AUTHORITIES NEED TO DET ERMINE THE VALUE BY MAKING REFERENCE TO THE VALUATION OFFICER FOR ASCERTAINING THE CORRECT VALUE. THE ASSESSING OFFIC ER HAS TO PRIMARILY EXAMINE THE REPORT GIVEN BY THE ASSESSEE BY THE WAY OF REGISTERED VALUER AND COME TO A SATISFACTION WHE THER A FURTHER REFERENCE IS REQUIRED OR NOT. IN THE INSTAN T CASE, WE FIND THAT THE AO HAS OBTAINED CIRCLE RATES NOTIFIED BY S TATE GOVERNMENT AS PROVIDED BY THE ADM FINANCE AND AFTER GOING THROUGH THE DIFFERENCE IN THE VALUES DETERMINED BY THE REGISTERED VALUER AND THE CIRCLE RATES, THE AO HAD COME TO CONCLUSION TO REFER THE PROPERTY TO DVO. THE GROUND S ON WHICH THE OPINION OF THE AO IS BASED ARE REFLECTED AT COL UMN 14 OF THE REFERENCE LETTER BY THE AO TO THE DVO. THUS, THE AO HAD FULFILLED THE PRIMARY CONDITION OF SATISFYING HIMSE LF FOR REFERENCE TO THE DVO. FROM THE RECORD, WE FIND THAT THE PROPE RTY WAS KNOWN AS PLOT NO. 3, MOHALLA RAMPURI, ROORKEE ROAD, MUZAFFARNAGAR AND THE SAME HAS BEEN INSPECTED BY TH E VALUATION OFFICER, MEERUT ON 07.10.2015 AND THE REP ORT HAS BEEN FINALIZED ON 15.12.2015. HENCE, THERE IS NO DI SPUTE ABOUT THE PROPERTY IN QUESTION THAT IS TO BE VALUED. THE DVO HAS IN HIS REPORT MENTIONED THAT THE PROPERTY IS AT MOHALL A RAMPURI, ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 44 ROORKEE ROAD, MUZAFFARNAGAR AND DETERMINED THE FMV OF THE LAND @ RS.100/- PER SQ. MTR. AND ADJUSTED WITH CONS TRUCTION AND DETERMINED AN AMOUNT OF RS.167.50 PER SQ. MTR. 49. HENCE, THE POINT OF ADJUDICATION NARROWS DOWN T O THE QUESTION IF THE VALUE AS DETERMINED BY THE REGISTER ED VALUER IS CORRECT OR THE VALUE DETERMINED BY THE DVO IS CORRE CT. 50. THE REGISTERED VALUER AND THE VALUATION OFFICER BOTH PERFORM THE SAME TASK ONE IN A PRIVATE CAPACITY AND THE OTHER IS APPOINTED BY THE DEPARTMENT. BOTH AUTHORITIES HAVE TO PREPARE THE REPORTS BASED ON THE CIRCLE RATE, CONSTRUCTION PARAMETERS, LOCATION, COST OF MATERIALS AND OTHER ESTABLISHED N ORMS. 51. WE FIND THAT THE DVO HAS TAKEN RS.100 PER SQ. M TR. BASED ON THE NOTIFIED LAND RATES FOR MOHALLA RAMPURI, ROO RKEE ROAD, MUZAFFARNAGAR WHICH IS THE PLACE OF SITUS OF THE PR OPERTY AND AFTER CONSIDERING THE CONSTRUCTION, THE DVO HAS DET ERMINED THE VALUE @ RS.167.50 PER SQ. MTR. THE ASSESSEE CONTEND ED THAT THE DEDUCTION @7.5% IS NOT JUSTIFIED AS THE CONSTRU CTION WORK WAS CARRIED THROUGH THE CONTRACTOR. SIMILARLY, THE ASSESSEE HAS DISPUTED THE CIVIL WORK AND THE COST OF STRUCTURE. THE ASSESSEE HAS ALSO DISPUTED AND SOUGHT EXTRA AMOUNT FOR HEIGH T @RS.125 FOR 0.30 MT.HT. THE ASSESSEE SUBMITTED THAT WHEN TH E PLOT WAS ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 45 PURCHASED IT WAS A VERY LOW LYING AREA AND TO BUILT THE SERVICE STATION AND PETROL PUMP EARTH FILLING WAS REQUIRED FOR WHICH NO BENEFIT HAS BEEN GIVEN BY THE DVO. SIMILARLY, IT WA S CONTENDED THAT AS THERE IS LOW OUT FLOW OF WATER BECAUSE OF T HE SERVICE STATION WHERE WASHING OF VEHICLES TAKES PLACE AND A FRONT NALA WAS REQUIRED TO BE CONSTRUCTED. NO BENEFIT HAS BEEN GIVEN FOR THE COST OF CONSTRUCTION OF THE BOUNDARY WALL. SIMI LARLY, THE TUBE WELL ROOM OF HT. 3.35 MT., SIZE: 11.15 SMT. HA S BEEN CONSTRUCTED AND THE BENEFIT OF THE BASIC RATES HAS BEEN DENIED. IT WAS ARGUED THAT THE LAND RATES SEGMENT HAS NOT B EEN PROPERLY APPLIED. 52. WE HAVE GONE THROUGH THE VALUATION REPORT IN DE TAIL AND THE OBJECTION OF THE ASSESSEE. FURTHER, WE HAVE ALS O GONE THROUGH THE REPORTS OF TAHSILDAR SADAR, ADM FINANCE REGARDING THE CIRCLE RATES. WHILE THE REPORT OF THE DVO IS BA SED ON THE PRICES GIVEN AS PER THE CIRCLE RATES NOTIFIED BY TH E ADM FINANCE, THE VALUE DETERMINED BY THE REGISTERED VALUER WAS B ASED ON THE REPORT OF THE TAHSILDAR WHICH WAS BASED ON THE LOCA L ENQUIRIES. THERE HAS BEEN A DISPUTE AS TO WHICH SEGMENT PRICE OF RAMPURI MOHALLA HAS TO BE TAKEN INTO CONSIDERATION. THE BEN EFIT OF CONSTRUCTION HAS NOT BEEN ADEQUATELY ALLOWED. ITA NO. 1532/DEL/2017 NARENDRA KUMAR GILL 46 53. HENCE, KEEPING IN VIEW THE ENTIRE FACTS OF THE CASE, WE HOLD THAT THE ENDS OF THE JUSTICE WOULD WELL SERVED BY REFERRING THE MATTER BACK TO THE FILE OF THE AO TO ACCORD FUR THER BENEFIT TO THE CONSTRUCTION OF NALA, BOUNDARY WALL, TUBE WELL, EARTH FILLING WORK AND TO DETERMINE THE PRICE TAKING INTO CONSIDE RATION THE VALUE OF MOHALLA RAMPURI SEGMENT. 54. BEFORE PARTING, WE WOULD LIKE TO KEEP ON RECORD , OUR APPRECIATIONS TO MS. PREMLATA BANSAL, SR. ADV. AND MS. RAKHI VIMAL, SR. DR FOR THEIR POWERFUL, PERSUASIVE ARGUME NTS. 55. IN THE RESULT, THE APPEAL OF THE ASSESSEE ON TH E GROUNDS OF REOPENING AND REFERENCE TO VALUATION OFFICER IS DIS MISSED. THE PROCESS AND METHOD OF DETERMINING THE FMV IS SET AS IDE WITH DIRECTIONS. ORDER PRONOUNCED IN THE OPEN COURT ON 22/12/2020. SD/- SD/- (KULDIP SINGH) (D R.B.R.R.KUMAR) JUDICIAL MEMBER ACCOUN TANT MEMBER DATED: 22/12/2020 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR