ITO, Faridabad V. Sh. Rajbir Singh, Faridabad

ITA 2386/DEL/2012

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4439 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 19-04-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 18-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Retrospective amendment; Reassessment proceedings
• Section: 143(3); 142(1); 147; 148; 12; 2; 11; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI C BENCH, NEW DELHI BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER. ITA NO. 2386 /DEL/2012 [A.Y. 200 8 - 0 9 ] INCOME TAX OFFICER VS. SHRI RAJBIR SINGH WARD 1 (5) S/O SHRI LAL SINGH, VILLAGE SIHI, FARIDABAD NEAR SARVODHYA SCHOOL, SECTOR 8, FARIDABAD PAN : A YLPR 8123 J ITA NO. 2387 /DEL/2012 [A.Y. 200 8 - 0 9 ] INCOME TAX OFFICER VS. SHRI KARAMVIR SINGH WARD 1 (5) S/O SHRI LAL SINGH, VILLAGE SIHI, FARIDABAD NEAR SARVODHYA SCHOOL, SECTOR 8, FARIDABAD PAN : BVNPK 5862 K ITA NO. 2388 /DEL/2012 [A.Y. 200 8 - 0 9 ] INCOME TAX OFFICER VS. SHRI OMBIR SINGH WARD 1 (5 ) S/O SHRI LAL SINGH, VILLAGE SIHI, FARIDABAD NEAR SARVODHYA SCHOOL, SECTOR 8, FARIDABAD PAN : AAXPO 2970 N ITA NO. 2389 /DEL/2012 [A.Y. 200 8 - 0 9 ] INCOME TAX OFFICER VS. SHRI HAR BIR SINGH WARD 1 (5) S/O SHRI LAL SINGH, VILLAGE SIHI, FARIDABAD NEAR SARVODHYA SCHOOL, SECTOR 8, FARIDABAD PAN : DBMPS 7116 B 2 ITA NO S . 2386 TO 2392 /DEL/2012 ITA NO. 2390/ DEL/2012 [A.Y. 200 8 - 0 9 ] INCOME TAX OFFICER VS. SHRI MAHAVIR SINGH WARD 1 (5) S/O SHRI LAL SINGH, VILLAGE SIHI, FARIDABAD NEAR SARVODHYA SCHOOL, SECTOR 8, FARIDABAD PAN : DBMPS 7304 M ITA NO. 2391/ DEL/2012 [A.Y. 200 8 - 0 9 ] INCOME TAX OFFICER VS. SHRI GIRIRAJ SINGH WARD 1 (5) S/O SHRI LAL SINGH, VILLAGE SIHI, FARIDABAD NEAR SARVODHYA SCHOOL, SECTOR 8, FARIDABAD PAN : DCGPS 0744 N ITA NO. 2392/ DEL/2012 [A.Y. 200 8 - 0 9 ] INCOME TAX OFFICER VS. SHRI KARAN SINGH WARD 1 (5) S/O SHRI LAL SINGH, VILLAGE SIHI, FARIDABAD NEAR SARVODHYA SCHOOL, SECTOR 8, FARIDABAD PAN : AIMPD 9533 F [APPELLANT] [ RESPONDENT] DATE OF HEARING : 2 9 .08.2017 DATE OF PRONOUNCEMENT : 1 8 .0 9 .2017 REVENUE BY : SHRI ARUN KUMAR YADAV, SR .DR ASSESSEE BY : SHRI SHYAM SUNDAR MANGLA, CA 3 ITA NO S . 2386 TO 2392 /DEL/2012 ORDER PER B.P. JAIN, ACCOUNTANT MEMBER: THE PRESENT BATCH OF SEVEN APPEALS FILED BY THE REVENUE PERTAINS TO A.Y. 2008 - 09. AS THE APPEALS PERTAIN TO SAME GROUP OF ASSESSEES, ISSUES RAISED ARE IDENTICAL AND WERE HEARD TOGETHER , THE SAME ARE DISPOSED OF BY TH IS COMMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 2. BRIEF FACTS OF THE CASE ARE THAT THE RESPONDENT - ASSESSE E S ARE FARMERS OF BALLABHGARH TEHSIL, FARIDABAD. THE AFORESAID ASSESSE E S TRANSFERRED THEIR LAND JOINTLY OWNED BY THEM TO M /S BPTP LTD. AND HAD RECEIVED SALE CONSIDERATION FOR THE TRANSFER. 3 . SINCE THE FACTS IN EACH OF THE APPEALS ARE IDENTICAL, THE FACTS PERTAINING TO ONE OF THE APPEAL I.E. ITA NO. 2391/DEL/2012 ARE REFERRED TO FOR THE PURPOSE OF ADJUDICATION. THE ASSESSEE ON 07.06.2007 RECEIVED RS. 1,05,23,215/ - AS SALE CONSIDERATION OF HIS LAND FROM M/S GREEN VALLEY HOUS ING & DEVELOPMENT PVT. LTD. M - II , MIDDLE CIRCLE , CONNAUGHT CIRCLE, NEW DELHI. IT WAS NOTICED THAT THE ASSESSEE HAD NOT FILED THE RETURN OF INCOME FOR THE S AID A.Y. THEREAFTER, THE AO 4 ITA NO S . 2386 TO 2392 /DEL/2012 ISSUED A NOTICE UNDER SECTION 142(1) OF THE INCOME - TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT' FOR SHORT] TO THE ASSESSEE. THE ORDER SHEET RELIED UPON BY THE PARTIES REVEAL THAT THE ENTRY BY WHICH THE SAID PROCEEDINGS WERE CLOSED ON ACCOUNT OF NO N ATTENDANCE WAS NOT SIGNED BY THE AO. 4 . PURSUANT THEREOF, A NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED TO THE ASSESSEE ON 16.03.2010 WHICH WAS FOLLOWED BY A NOTICE UNDER SECTION 142(1) OF THE ACT. THE ASSESSEE PARTICIPATE D IN THE SAID PROCEEDINGS AND THE AO VIDE ASSESSMENT ORDER DATED 30.11.2010 TREATED THE ENTIRE SALE CONSIDERATION OF RS. 1,05,23,215/ - AS LONG TERM CAPITAL GAIN OF THE ASSESSEE. 5 . AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED APPEAL BEFORE TH E CIT(A). THE CIT(A) , VIDE IMPUGNED ORDER DATED 27.02.2012, REMANDED THE MATTER TO THE FILE OF THE AO TO CARRY OUT THE REASSESSMENT PROCEEDINGS AGAIN , STRICTLY IN TERMS OF THE PROVISIONS OF LAW. IT WAS HELD BY THE CIT(A) THAT THE PROCEEDINGS UNDER SECTION 142(1) OF THE ACT WERE IN FORCE WHEN THE NOTICE UNDER SECTION 148 WAS ISSUED TO THE ASSESSEE AND THEREFORE THE REASSESSMENT PROCEEDINGS WERE NOT LEGALLY SUSTAINABLE. IT WAS FURTHER HELD THAT THE NOTICE UNDER 5 ITA NO S . 2386 TO 2392 /DEL/2012 SECTION 148 WAS NOT ISSUED BY THE SAME AO WHO RE CORDED REASONS FOR THE SAID PROCEEDINGS AND , THEREFORE , THE PROCEEDINGS WERE VOID AB INITIO. 6 . THE REVENUE IS IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING CONCISE GROUNDS OF APPEAL : 1. WHETHER NOTICE U/S 148 ISSUED WITHOUT DROPPING/DISPOSING OFF EXISTING PROCEEDINGS INITIATED BY THE ASSESSING OFFICER BY ISSUING NOTICE U/S 142(1) IS INVALID. 2. WHETHER THE LD. CIT(A) I S JUSTIFIED IN HOLDING THAT THE NOTICE U/S 148 ISSUED BY THE SUCCESSOR ASSESSING OFFICER ON THE BASIS OF REASONS RECORDED BY HIS P REDECESSOR ASSESSING OFFICER IS NOT VALID AND THE ASSESSMENT COMPLETED IN PURSUANCE AS SUCH NOTICE IS VOID AB INITIO AND THEREFORE, SUCH ASSESSMENT ORDER IS ANNULLED? 3. WHETHER THE LD. CIT( A) IS JUSTIFIED IN DIRECTING THE ASSESSING OFFICER TO INITIATE FRESH REASSESSMENT PROCEEDINGS. IN THIS REGARD, IT IS SUBMITTED THAT THE LD. CIT(A) HAS NO AUTHORITY TO DIRECT THE ASSESSING OFFICER TO INITIATE THE REASSESSMENT PROCEEDINGS AFRESH. 4. WHETHE R THE LD. CIT(A) IS JUSTIFIED IN NOT ADJUDICATING THE CASE ON MERIT. SINCE THE APPELLANT DID NOT COOPERATE DURING THE 6 ITA NO S . 2386 TO 2392 /DEL/2012 ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER WAS LEFT WITH NO OPTION EXCEPT PASSING THE BEST JUDGMENT ASSESSMENT ORDER ON THE BASIS OF MA TERIAL AVAILABLE ON RECORD. APPELLANTS DID NOT FILE THEIR RETURN OF INCOME DESPITE AMPLE OPPORTUNITIES AFFORDED BY THE ASSESSING OFFICER. IT APPEARS THAT THE APPELLANTS HAD NOTHING TO SAY ON THE MERIT OF THE CASE, THUS ADDITIONS MADE BY THE ASSESSING OFF ICER DESERVE TO BE UPHELD. 7 . GROUND NO. 1 PERTAINS TO THE ISSUE WHETHER THE NOTICE UNDER SECTION 148 OF THE ACT WAS INVALID AS THE SAME WAS ISSUED BEFORE COMPLETION OF THE PROCEEDINGS INITIATED UNDER SECTION 142(1) OF THE ACT. THE LD. DR SUBMITS THAT THE CHALLENGE TO THE NOTICE UNDER SECTION 148 IS NOT TAKEN SPECIFICALLY IN THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE BEFORE THE CIT(A). IT WAS FURTHER SUBMITTED THAT THE RELIANCE PLACED UPON THE DECISIONS OF ITAT BANGALORE IN THE CASE OF H. GOUTHAMCHAND VS. ACIT, 131 TTJ 2004 IS NOT APP LICABLE TO THE FACTS OF THE PRESENT CASE AS THE PURPOSE OF ISSUANCE OF NOTICE UNDER SECTION 142(1) OF THE ACT WAS TO ASK THE ASSESSEE TO FILE HIS RETURN OF INCOME FOR A.Y. 2008 - 09. IT WAS ARGUED THAT NON - SIGNING OF THE ORDER SHEET, DROPPING THE PROCEEDINGS UNDER SECTION 142(1) OF THE ACT, IS CURABLE DEFECT AND BONA - FIDE OMISSION ON THE PART OF THE AO. IT WAS SUBMITTED THAT THIS TRIBUNAL CAN TAKE ITS INDEPENDENT VIEW AND THE AFORESAID DECISION WAS NOT BINDING ON IT. THE LD. AR ON THE OTHER HAND, RELIED 7 ITA NO S . 2386 TO 2392 /DEL/2012 UPON THE ORDER PASSED BY THE CIT(A) AND THE AFORESAID DECISION PASSED BY ITAT BANGALORE. 8 . WE HAVE HEARD THE SUBMISSIONS AND PERUSED THE RECORD INCLUDING THE ORDER SHEET RELIED UPON BY THE PARTIES. ADMITTEDLY, NOTICE UNDER SECTION 142(1) OF THE ACT WAS ISSUED TO THE ASSESSEE ON 16.03.2009. THE SAID PROCEEDINGS WERE NOT TAKEN TO ITS LOGICAL CONCLUSION BY PASSING AN ORDER UNDER SECTION 143(3) OR 144 OF THE ACT. IT IS UNCLEAR AS TO WHEN AND WHY THE PROCEEDINGS WERE DROPPED BY THE DEPARTMENT. THE ORDER SHEET DOES NOT BEAR THE SIGNATURES OF THE OFFICER. AS THE ORDER SHEET IS NOT SIGNED, IT CANNOT BE HELD THAT THE PROCEEDINGS UNDER SECTION 142(1) WERE DROPPED BY THE REVENUE. 9 . THE NOTICE UNDER SECTION 148 OF THE ACT WAS THEREFORE, ISSUED DURING THE PENDENCY OF THE EARLIER PROCEEDINGS INITIATED THROUGH NOTICE ISSUED UNDER SECTION 142(1) OF THE ACT FOR THE SAME A.Y. 2008 - 09. THE SAID ISSUANCE OF NOTICE FOR REASSESSMENT OF INCOME IS LEGALLY UNTENABLE WITHOUT THE CONCLUSION OF THE EARLIER PROCEEDINGS. WE AGREE WITH THE REASONING GIVEN BY THE CIT(A). IN THE CASE OF H. GOUTHAMCHAND VS. ACIT(SUPRA), THE ITAT BANGALORE HELD AS UNDER: - 8 ITA NO S . 2386 TO 2392 /DEL/2012 4. IT IS AN UNDISPUTABLE FACT THAT THE AO HAS ISSUED A NOTICE UNDER S. 142(1). THE AO IN HIS ORDER HAS MENTIONED THAT THE ASSESSEE HAS ACKNOWLEDGED THE RECEIPT OF NOTICE UNDER S. 142(1) ON 25TH JAN., 2006. THUS, NOTICE HAS BEEN ISSUED FOR THE ASST. YR. 2005 - 06 DURING THE RELEVANT ASSESSMENT YEAR. AS PER PROVISO TO S. 142(1)(I ) INTRODUCED BY THE FINANCE ACT, 2006 WITH RETROSPECTIVE EFFECT FROM 1ST APRIL, 1990, NOTICE UNDER S. 142(1) ISSUED ON 25TH JAN., 2006 IS A VALID NOTICE, VIDE WHICH, THE AO COULD HAVE REQUIR ED THE ASSESSEE TO FILE THE RETURN OF INCOME. THE AO HAS MENTIONED THAT ANOTHER NOTICE WAS ISSUED ON 18TH OCT., 2006 VIDE WHICH THE AS SESSEE WA S ASKED TO FILE THE RETURN OF INCOME FOR THE ASST. YR. 2005 - 06 AND TO FILE CERTAIN DETAILS AND DOCUMENTS AS PER A NNEXURE TO THAT NOTICE. THE AO CAN ASK FOR FILING OF RETURN UNDER S. 142( 1)( I ) AND CAN AS ASK FOR DETAILS . TO BE FILE D UNDER S. 142( 7). POWER UNDER S. 142 WAS GIVEN TO THE AO FOR THE PURPOSE OF MAKING AN ASSESSMENT UNDER THE IT ACT. SEC. 14 2(1) STARTS WITH THE WORDINGS FOR THE PURPOSE OF MAKING AN ASSESSMENT UNDER THE ACT, THE AO MA Y SERVE ON ANY PERSON WHO HAS MADE A RETURN OR IN WHOSE CASE THE TIME ALLOWED U/SS (1) OF S. 139 FO R FURNISHING TH E RETURN HAS EXPIRED . THUS, THE PROCEEDINGS UNDER S. 142(1) WERE INITIATED FOR THE PURPOSE OF MAKING AN ASSESSMENT. THERE IS NOTHING ON RECORD TO SUGGEST THAT PROCEEDINGS SO INITIATED THROUGH NOTICE UNDER S. 142(1) WERE EITHER DROPPED OR CONCLUDED. DURING THE PENDENCY OF SUCH PROCEEDINGS, THE AO HAS ISSUED A NOTICE UNDER S. 148 ON 16TH FEB., 2007. BEFORE INITIATING PROCEEDINGS UNDER S. 148, THE AO HAS ALS O ISSUED A NOTICE UNDER S. 142( 1)( II ) VIDE WHICH THE AO CALLED FOR CERTAIN DETAILS. BASICALLY, SUCH DETAILS CAN BE ASKED 9 ITA NO S . 2386 TO 2392 /DEL/2012 ONLY FOR THE PURPOSE OF MAKING AN ASSESSMENT. BUT THE AO CANNOT HAVE JURISDICTION UNDER S. 142(1) TO CALL FOR THE DETAILS UNLESS THE ASSESSMENT PROCEEDINGS OR S OME OTHER PROCEEDINGS ARE PENDING . DURING THE PENDENCY OF SUCH ASSESSMENT PROCEEDINGS, THE AO HA S INITIATED PARALLEL PROCEEDINGS UNDER S. 148 BY ISSUING A NOTICE UNDER S. 148 ON 16TH FEB., 2007. COPY OF THIS NOTICE IS AVAILABLE AT P. 1 OF THE PAPER BOOK FILED BY THE LEARNED AUTHORISED REPRESENTATIVE. IN THE NOTICE, THE AO HAS MENTIONED THAT HE IS PRO POSING TO ASSESS THE ASSESSEE AND REQUIRE THE ASSESSEE TO FILE THE RETURN. HENCE, IT IS NOT A CASE OF REASSESSMENT BUT A CASE OF ASSESSMENT. THIS IMPLIEDLY SUGGESTS THAT PROCEEDINGS INITIATED UNDER S. 142 WERE NOT CONCLUDED BEFORE THE PROCEEDINGS UNDER S. 148 WERE INITIATE D - NOTICE UNDER S. 148 CAN BE ISSUED FOR MAKING AN ASSESSMENT, REASSESSMENT OR RECOMPUTATION. 10 . WE SEE NO REASON TO TAKE A CONTRARY VIEW FROM THE AFORESAID DECISION OF ITAT BANGALORE. THE POINTS OF DISTINCTION RAISED BY THE LD. DR ARE IN SIGNIFICANT AS THE TRIBUNAL HAS CLEARLY HELD THAT DURING THE PENDENCY OF THE NOTICE UNDER SECTION 142(1) OF THE ACT, NOTICE UNDER SECTION 148 COULD NOT HAVE BEEN ISSUED TO THE ASSESSEE. IN THE CASE OF SMT. NILOFER HAMEED AND AM. VS. ITO, 235 ITR 161, THE H ON'BLE KERALA HIGH COURT HELD AS UNDER: - ' IF AN ASSESSMENT IS PENDING EITHER BY WAY OF ORIGINAL ASSESSMENT OR BY WAY OF REASSESSMENT PROCEEDINGS, THE AO 10 ITA NO S . 2386 TO 2392 /DEL/2012 CANNOT ISSUE A NOTICE UNDER SECTION 148 BUT IF NO PROCEEDINGS ARE PENDING EITHER BY WAY OF ORIGINAL ASSESSMENT OR BY WAY OF REASSESSMENT, HE CAN ISSUE A NOTICE UNDER SECTION 148 WITHIN THE TIME MENTIONED IN THE SECTION.' 11. THE RATIO OF THE AFORESAID DECISIONS IS APPLICABLE TO THE FACTS OF THE PRESENT CASE. WE DO NOT AGREE WITH THE SUBMISSIONS MADE BY THE LD. DR THAT THE SAID ISSUE COULD NOT HAVE BEEN DECIDED BY THE CIT(A) AS IT WAS NOT SPECIFICALLY TAKEN BY THE ASSESSEE IN THE GROUNDS OF APPEAL. THE ASSESSEE HAD TAKEN A GROUND CHALLENGING THE ASSESSMENT FRAMED UNDER SECTION 147 OF THE ACT. MOREOVER, IN THE SUBMISSIONS FILED BEFORE THE CIT(A) THE AFORESAID ISSUE HAS BEEN ELABORATELY ARGUED. EVEN OTHERWISE, THE CIT(A) WAS NOT BARRED FROM ENTERTAINING A PURE LEGAL ISSUE GOING TO THE ROOT OF THE MATTER. WE , THEREFORE, UPHOLD THE VIEW TAKEN BY THE CIT(A) W.R .T. THIS ISSUE. GROUND NO. 1 RAISED BY THE REVENUE IN THE CONCISE GROUNDS OF APPEAL IS DISMISSED. 12. SINCE WE HAVE DISMISSED THE AFORESAID GROUND AND UPHELD THE VIEW OF THE CIT(A), THAT THE REASSESSMENT PROCEEDINGS INITIATED PURSUANT TO NOTICE UNDER S ECTION 148 OF THE ACT DURING THE PENDENCY OF EARLIER PROCEEDINGS UNDER SECTION 142(1) OF THE ACT, WERE BAD IN LAW, WE SHALL NOT ADJUDICATE THE REST OF THE GROUNDS RAISED BY THE REVENUE AND THE SAME ARE DISPOSED OF ACCORDINGLY. 11 ITA NO S . 2386 TO 2392 /DEL/2012 13. WE FURTHER HOLD THAT THE CIT(A) HAS CORRECTLY REMANDED THE MATTER TO THE FILE OF THE AO TO CARRY OUT FRESH REASSESSMENT PROCEEDINGS AND TO CORRECTLY DETERMINE THE LONG TERM CAPITAL GAIN IN THE HANDS OF THE ASSESSEE. ACCORDINGLY, THE APPEAL OF THE R EVENUE IS DISMISSED. 14. SINCE T HE ISSUES ARE IDENTICAL IN ALL OTHER APPEALS OF THE REVENUE, OUR ORDER HEREINABOVE IN ITA NO. 2391/DEL/2012 SHALL BE IDENTICALLY APPLICABLE TO ALL OTHER APPEALS AND, ACCORDINGLY, ALL OTHER APPEALS OF THE REVENUE ARE DISMISSED. 15. IN THE RESULT, ALL THE APPEALS OF THE REVENUE ARE DISMISSED. THE ORDER IS PRONOUN CED IN THE OPEN COURT ON 1 8 .0 9 .2017. S D / - S D / - [KULDIP SINGH] [B.P. JAIN] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 8 T H SEPTEMBER , 2017 VL/ 12 ITA NO S . 2386 TO 2392 /DEL/2012 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR ASST. REGISTRAR, ITAT, NEW DELHI