Nishi Kapoor, Faridabad V. ITO, Ward-2(1), Faridabad

ITA 1556/DEL/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 2883 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 26-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S L ANURAGI
• Assessee Lawyers: K C SINGHAL SHRI AMIT GUPTA
• Keywords: Assessment record; Reason to believe; Reassessment proceedings; Set aside
• Section: 142(1); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC NEW DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 1556/DEL/2019 ASSESSMENT YEAR: 2010-11 NISHI KAPOOR H.NO. 835, SECTOR-17, FARIDABAD, HARYANA. PAN NO. AFLPK2022C VS ITO WARD 2(1) FARIDABAD. APPELLANT RESPONDENT ASSESSEE BY SHRI K.C. SINGHAL, ADVOCATE SHRI AMIT GUPTA, ADVOCATE REVENUE BY SHRI S.L. ANURAGI, SR. DR ORDER THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST T HE ORDER OF LD. CIT(APPEALS)-FARIDABAD DATED 21.01.2019 FOR AY 2010-11. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE RETUR N OF INCOME WAS FILED BY ASSESSEE ON 29.07.2010 DECLARING TOTAL INC OME OF RS. 2,87,800/-. THERE WAS AN AIR INFORMATION THAT ASSE SSEE SOLD IMMOVABLE PROPERTY FOR RS. 78,51,000/- DURING ASSES SMENT YEAR UNDER APPEAL. ITO, WARD 2(3), NOIDA ISSUED A LETTE R REQUIRING TO VERIFY THE FINANCIAL TRANSACTION. HOWEVER, NO PLAU SIBLE EXPLANATION WAS FURNISHED BY THE ASSESSEE. AS PER INFORMATION PROVIDED BY SUB REGISTRAR THE ASSESSEE HAD SOLD PLOT NO. 230, B LOCK-B, SECTOR- DATE OF HEARING 21.08.2019 DATE OF PRONOUNCEMENT 02.09.2019 2 ITA NO . 1556/DEL/2019 71, NOIDA FOR RS. 75,21,000/-, VALUE FOR STAMP PURP OSES RS. 78,51,000/- ON 06.03.2010. THE AO INITIATED REASSE SSMENT PROCEEDINGS U/S 147 OF THE ACT TO ASSESS THE INCOME OF THE ASSESSEE IN THIS REGARD WHICH ESCAPED ASSESSMENT. THE ASSESSEE FILED A LETTER STATING THEREIN THAT RETURN FILED OR IGINALLY MAY BE TREATED AS RETURN FILED IN RESPONSE TO NOTICE U/S 1 48 OF THE ACT. THE AO NOTED THAT ON CHANGE OF INCUMBENT THE PROCEE DINGS HAVE BEEN CONTINUED FROM THE STAGE AS PER SECTION 129 OF THE ACT. THE AO COMPLETED THE ASSESSMENT AND COMPUTED THE LONG T ERM CAPITAL GAINS OF RS. 35,47,079/- AND MADE THE ADDITION OF T HIS AMOUNT ACCORDINGLY. THE REASSESSMENT ORDER U/S 143(3)/147 OF THE ACT WAS PASSED ON 22.12.2017 BY ITO, WARD 2(1), FARIDAB AD. THE ASSESSEE CHALLENGED THE REASSESSMENT PROCEEDINGS AN D THE ABOVE ADDITION BEFORE LD. CIT(A). THE LD. CIT(A), HOWEVE R, DISMISSED THE APPEAL OF ASSESSEE. 3. LD. COUNSEL FOR ASSESSEE REFERRED TO PB 4, WHICH ARE REASONS FOR REOPENING OF THE ASSESSMENT WHICH READS AS UNDE R: AN AIR INFORMATION REGARDING SALE OF IMMOVABLE PR OPERTY AMOUNTING TO RS. 78,51,000/- HAS BEEN RECEIVED FRO M CIB FOR EXAMINING OF NON-PAN FINANCIAL TRANSACTIONS. THEREFORE, TO ASCERTAIN THE ASSESSMENT PARTICULARS OF THE ASSESSEE AND TO VERIFY THE TRANSACTION, QUERY LETTE RS WERE ISSUED TO THE ASSESSEE TO FURNISH THE ASSESSMENT PARTICULARS OF THE ASSESSEE AND TO FURNISH THE COPY OF ITR FOR AY 2010-11 ALONG WITH COMPUTATION OF CAPITAL GA IN ON THIS TRANSACTION. SIMULTANEOUSLY THE INFORMATION W AS CALLED FOR FROM SUB-REGISTRAR. AS PER INFORMATION GIVEN BY SUB REGISTRAR THE ASSESSEE HAD SOLD PLOT NO. 230, B LOCK-B, SECTOR-71, NOIDA FOR RS. 75,21,000/- (VALUE FOR STAMP PURPOSE RS. 78,51,000/-) ON 06.03.2010. HOWEVER, I N 3 ITA NO . 1556/DEL/2019 RESPONSE TO THE QUERY LETTERS, NO PLAUSIBLE EXPLANA TION HAS BEEN FURNISHED BY THE ASSESSEE. THUS, THE CAPITAL GAIN ARISES ON THIS TRANSACTION ENTERED INTO BY ASSESSEE DURING THE FY 2009-10 I.E. RELEVANT TO AY 2010-11 HAS ESCA PED ASSESSMENT. IN VIEW OF ABOVE FACTS, ON THE BASIS OF INFORMATIO N IN MY POSSESSION, I HAVE REASON TO BELIEVE THAT THE IN COME UNDER HEAD CAPITAL GAIN ARISES ON OF RS. 78,51,000/ - CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE I.T. ACT, 1961. DATED: 10.03.2017 SD/- (R.K. SHARMA) INCOME TAX OFFICER, ITO, WARD 2(3), NOIDA 4. HE HAS SUBMITTED THAT THESE REASONS ARE RECORDED BY ITO, WARD 2(3), NOIDA AND THEREAFTER, HE HAS WRITTEN A L ETTER DATED 07.09.2017 PB 10 TO THE ASSESSING OFFICER (ITO, WAR D 2(1), FARIDABAD) STATING THEREIN THAT THE NOTICE U/S 148 OF THE ACT WAS ISSUED ON 30.03.2017. AS PER ACKNOWLEDGEMENT OF RE TURN FOR ASSESSMENT YEAR SUBMITTED BY THE ASSESSEE ON 07.09. 2017, ASSESSEE COMES UNDER THE JURISDICTION OF ITO, WARD 2(1), FARIDABAD. THE ITO, WARD 2(3), NOIDA THEREFORE, TR ANSFERRED THIS CASE TO ITO, WARD 2(1), FARIDABAD. LD. COUNSEL FOR ASSESSEE SUBMITTED THAT THE ITO, WARD 2(3), NOIDA WHO HAS RE CORDED REASONS FOR REOPENING OF THE ASSESSMENT WAS NOT HAV ING JURISDICTION OVER THE CASE OF ASSESSEE AND THAT THE ITO, WARD 2(1), FARIDABAD WHO HAS FURTHER ISSUED NOTICE U/S 148 AND 142(1) OF THE ACT AND COMPLETED THE REASSESSMENT ORDER WHO WA S HAVING JURISDICTION OVER THE CASE OF THE ASSESSEE DID NOT RECORD REASONS FOR THE REOPENING OF THE ASSESSMENT. THEREFORE, IN ITIATIONS OF 4 ITA NO . 1556/DEL/2019 REASSESSMENT PROCEEDINGS ARE ILLEGAL, BAD IN LAW AN D LIABLE TO BE QUASHED. IN SUPPORT OF WHICH CONTENTION HE HAS REL IED UPON ORDER OF ITAT AGRA BENCH IN THE CASE OF S.N. BHARGAWA VS. ITO 147 ITD 306 IN WHICH IT WAS HELD AS UNDER: IT: WHERE ASSESSING OFFICER, AGRA INITIATED REAS SESSMENT PROCEEDINGS AGAINST ASSESSEE AND SUBSEQUENTLY HE TRANSFERRED CASE TO ASSESSING OFFICER, MATHURA, WHO WAS HAVING JURISDICTION OVER ASSESSEE, AND THEREUPON ASSESSING OFFICER, MATHURA WITHOUT RECORDING FRESH REASONS AND ON THE BASIS OF REASONS RECORDED BY ASSESSING OFFICER, AGRA ISSUED ON ASSESSEE A FRESH NOTICE U/S 148. ASSESSING OFFICER, MATHURA HAD NOT VALIDI TY ASSUMED JURISDICTION TO INITIATE REASSESSMENT PROCE EDINGS AGAINST ASSESSEE. 5. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. VIDE ORDER SHEET DATED 26.08.20 19 LD. DR WAS DIRECTLY TO INTIMATE, IF ANY, OTHER REASONS U/S 148 HAVE BEEN RECORDED BY ITO, WARD 2(1), FARIDABAD. LD. DR PROD UCED THE ASSESSMENT RECORD AND SUBMITTED THAT NO SEPARATE RE ASONS U/S 148 HAVE BEEN RECORDED BY ITO, WARD 2(1), FARIDABAD . LD. DR, HOWEVER, SUBMITTED THAT AO WAS HAVING JURISDICTION TO PROCEED WITH THE MATTER ON TRANSFER OF THE CASE FROM ITO, N OIDA. 6. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. IT IS NOT IN DISPUTE THAT REASONS FOR REOPENING OF THE ASSESSMENT HAVE B EEN RECORDED IN THIS CASE BY ITO, WARD 2(3), NOIDA, WHO WAS HAVI NG NO JURISDICTION OVER THE CASE OF THE ASSESSEE. WHEN A SSESSEE FILED LETTER BEFORE ITO, WARD 2(3), NOIDA ON 07.09.2017 S TATING THEREIN THAT RETURN FILED ORIGINALLY MAY BE TREATED AS RETU RN HAVING FILED IN 5 ITA NO . 1556/DEL/2019 RESPONSE TO NOTICE U/S 148 OF THE ACT AND IS ALSO S UPPORTED BY COPY OF ACKNOWLEDGMENT OF RETURN FILED ORIGINALLY, THE ITO, WARD 2(3), NOIDA TRANSFERRED THIS CASE TO ITO, WARD 2(1) , FARIDABAD, VIDE LETTER DATED 07.09.2017 (PB 10). THE AO WHILE COMP LETING THE ASSESSMENT IN THIS CASE HAS TAKEN THE SHELTER OF PR OVISIONS OF SECTION 129 OF THE ACT. HOWEVER, THE SAID PROVISIO N IS NOT APPLICABLE BECAUSE IT IS A MATTER OF ASSUMPTION OF VALID JURISDICTION IN THE MATTER OR TO VALIDLY INITIATE T HE REASSESSMENT PROCEEDINGS AGAINST THE ASSESSEE. IT IS NOT A CASE OF SUCCESSION TO EXERCISE JURISDICTION BY ONE ITO TO ANOTHER ITO. S INCE, REASONS HAVE BEEN RECORDED FOR REOPENING OF THE ASSESSMENT BY ITO, NOIDA WHO WAS NOT AUTHORIZED TO DO SO, THEREFORE, MERE RE CORDING OF REASONS FOR REOPENING OF THE ASSESSMENT BY HIM IS O F NO CONSEQUENCE AND HAS NO VALUE UNDER THE LAW. THE AO WHO HAS JURISDICTION OVER THE CASE OF ASSESSEE I.E. ITO, FA RIDABAD ADMITTEDLY DID NOT RECORD ANY REASONS FOR REOPENING OF THE ASSESSMENT. THEREFORE, THE ISSUE IS COVERED IN FAV OUR OF THE ASSESSEE BY ORDER OF ITAT AGRA BENCH IN THE CASE OF S N BHARGAWA (SUPRA). IT IS, THEREFORE, CLEAR THAT ASSUMPTION O F JURISDICTION BY THE AO IS ILLEGAL AND BAD IN LAW. THE AO AT FARIDA BAD HAD NOT VALIDLY ASSUMED JURISDICTION TO INITIATE REASSESSME NT PROCEEDINGS AGAINST THE ASSESSEE. THIS VIEW IS FURTHER SUPPORT ED BY JUDGMENT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF HYNOUP FOOD & OIL INDUSTRIES LTD. VS. ACIT (2008) 307 ITR 115 IN WHIC H IT IS OBSERVED THAT AO RECORDED REASONS FOR REASSESSMENT AND AO IS SUED A NOTICE U/S 148 MUST BE THE SAME PERSON. SUCCESSOR AO CANN OT ISSUE 6 ITA NO . 1556/DEL/2019 NOTICE U/S 148 ON THE BASIS OF REASONS RECORDED BY PREDECESSOR AO. THE HONBLE GUJARAT HIGH COURT HELD AS UNDER: HELD, (I) THAT SO FAR AS THE ASSESSMENT YEARS 1990 -91 AND 1991-92 WERE CONCERNED, THE OFFICER WHO HAD ISSUED THE NOTICE UNDER SECTION 148 OF THE ACT, WAS DIFFERENT FROM THE OFFICER WHO HAD RECORDED THE REASONS AND HENCE, THE NOTICES FOR BOTH THESE YEARS WERE INVALID AND DESER VED TO BE QUASHED ON THIS GROUND ALONE. 7. IN VIEW OF THE ABOVE DISCUSSION, I AM OF THE VIE W THAT THE ASSUMPTION OF JURISDICTION U/S 147/148 OF THE ACT I S ILLEGAL AND BAD IN LAW AND, AS SUCH, LIABLE TO BE QUASHED. I, ACCORDINGLY, SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND QUASH THE REOPENING OF THE ASSESSMENT U/S 147/148 OF THE ACT. RESULTAN TLY THE ENTIRE ADDITION STANDS DELETED. 8. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED: 02/09/2019 *KAVITA ARORA 7 ITA NO . 1556/DEL/2019 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION 28.08.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 02.09.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER 02.09.2019 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P S/PS 02.09.2019 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 02.09.2019 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 02.09.2019 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT 02.09.2019 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 02.0 9.2019 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER