Smt. Rashmi Pahariya, Jabalpur V. Pr.Commissioner of Income Tax-1, Jabalpur

ITA 28/JAB/2019

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 2755 (ITAT-JABALPUR)
• Duration Of Justice: 3 year(s) 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-06-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 29-04-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHRAWAN KUMAR GOTRU
• Assessee Lawyers: L.L. SHARMA
• Keywords: Sale consideration of property below Jantri Value; Opportunity of being heard; Principle of natural justice; Set aside
• Section: 147; 148; 263; 2; 143(3); 50C

Judgement Text

1 | P a g e IN THE INCOME TAX APPELLATE TRIBUNAL JABALPUR BENCH, JABALPUR (Through web-based video conferencing platform) BEFORE SHRI SANJAY ARORA, HON‟BLE ACCOUNTANT MEMBER & SHRI MANOMOHAN DAS, HON'BLE JUDICIAL MEMBER I.T.A. No. 28/JAB/2019 (Asst. Year: 2009-10) Appellant by : Shri L.L. Sharma, Sr. Advocate Respondent by : Shri Shrawan Kumar Gotru, CIT-DR Date of hearing : 22/06/2022 Date of pronouncement : 27/06/2022 O R D E R Per Sanjay Arora, AM: This is an Appeal by the Assessee agitating the revision of her assessment under section 143(3) read with section 147 of the Income Tax Act, 1961 („the Act‟ hereinafter) dated 14/07/2016 for Assessment Year (AY) 2009-10 by the Principal Commissioner of Income Tax (Pr. CIT) vide his order u/s. 263, dated 27/02/2019. 2. The only issue arising per the instant appeal is the maintainability of the impugned order, whereby the impugned assessment has been held as erroneous and prejudicial to the interests of the Revenue, and set aside to the file of the AO with certain directions. 3. The brief facts of the case leading to the instant appeal are that the assessment in the assessee‟s, an individual, case was in the first instance completed Rashmi Pahariya, 3271, Anand Nagar, Adhartal, Jabalpur (MP). [PAN: AEPPP 9033 F] vs. Principal CIT-1, Jabalpur. (Appellant) (Respondent) ITA No. 28/JAB/2019 (A.Y. 2009-10) Rashmi Pahariya vs. Pr. CIT 2 | P a g e u/s. 143(3) at the returned income of Rs. 5,10,900 and agricultural income of Rs. 1,67,200. Subsequently, it was found by the Revenue that the assessee had during the relevant previous year sold land valued at Rs. 30 lacs or more. Notice u/s. 148 was accordingly issued and served on the assessee on 31/03/2016. The assessee responded by stating that the return filed earlier (on 03/11/2009) be treated as the return of income in compliance to the notice u/s. 148. The AO found that assessee had disclosed the said transaction, reporting it‟s purchase (on 20/03/2006) and sale (05/06/2008) at Rs. 19.60 lacs and Rs. 23 lacs respectively, so that capital gain arising had been duly returned by the assessee. The assessment was accordingly closed, accepting the returned income. The Pr. CIT, on an examination of the record, found that the AO had in the assessment proceedings failed to examine the applicability of sec.50C or made any enquiry in its respect. He, accordingly, invoking clauses (a) & (b) of Explanation 2 to sub-section (1) of s. 263, set aside the impugned assessment, observing as under:- “7. It is clear that the Assessing Officer has not verified or examined the applicability of provisions of section 50C of the Act in this case, particularly so, when the case was reopened for the reason that capital gain arising out of the sale of immovable property chargeable u/s 50C has escaped assessment. In such circumstances, when the case was specifically reopened to examine the applicability of section 50C of the Act on sale of immovable property, passing assessment order without examining and verifying the same has rendered the assessment order passed u/s 147 r.w.s. 143(3) dated 14.7.2016 as erroneous in so far as it was prejudicial to the interest of revenue, in term of clause (a) & (b) of Explanation 2 to sub section (1) of Section 263 of the Act. Accordingly, the same is set-aside. The AO is directed to re-examine the applicability of section 50C of the Act and pass a speaking order in accordance, with the provisions of the Act, after allowing reasonable opportunity of being heard to the assessee.” 4. We have heard the parties, and perused the material on record. 4.1 It is an admitted fact that there has been no enquiry during the assessment proceedings in respect of the applicability of sec. 50C even as the sole basis for reopening of the assessee‟s case was the sale of land by her in view of the information as to it‟s market value at the relevant time being at Rs.30 lacs or more. The Apex Court has in Malabar Indl. Co. Ltd. vs. CIT [2000] 243 ITR 83 (SC) laid ITA No. 28/JAB/2019 (A.Y. 2009-10) Rashmi Pahariya vs. Pr. CIT 3 | P a g e down a four-way test for the applicability of sec. 263, i.e., which makes an order vulnerable to revision on the ground of it being erroneous and prejudicial to the interests of the Revenue, i.e., - wrong assumption of facts; - incorrect application of law; - no proper application of mind; and - an omission to observe the principles of natural justice (also see: CIT vs. Jawahar Bhattacharjee [2012] 341 ITR 434 (Gau)(FB)). It is trite law that an absence of enquiry or lack of proper enquiry, i.e., where and to the extent due or warranted under the circumstances, would make an order per se erroneous and prejudicial to the Revenue liable for revision u/s. 263. Case law in the matter, even by the Apex Court, is legion, even as we may, if only for the sake of completeness of this order, make a reference to some decisions by the Hon'ble jurisdictional High Court, viz. CIT vs. Deepak K. Garg [2008] 299 ITR 435 (MP); CIT v. Mahavar Traders [1996] 220 ITR 167 (MP); H.H. Maharaja Raja Pawar Dewas v. CIT [1982] 138 ITR 518 (MP). 4.2 Section 50C provides for deeming the stamp valuation as the deemed sale consideration for the purpose of computation of capital gains u/s. 48, also providing for a mechanism where the adoption thereof is disputed by the assessee. No inquiry in the matter was made by the AO in framing the assessment. In that view of the matter; the facts being undisputed, the action of set aside for proper inquiry in exercise of the revisionary power cannot be faulted with. 4.3 On the Bench expressing so, Shri Sharma, the ld. counsel for the assessee, would plead that the approval u/s. 151 for reopening the assessment was granted by the sanctioning authority by stating: „Yes, it is a fit case for issue of notice u/s. 148‟. The same, he, relying on the decision by the Hon'ble jurisdictional High Court in Arjun Singh vs. Asst. Director of Income Tax [2000] 246 ITR 363 (MP), would submit, was not proper, rendering the impugned assessment itself as bad in ITA No. 28/JAB/2019 (A.Y. 2009-10) Rashmi Pahariya vs. Pr. CIT 4 | P a g e law. We do not think so. The said order, being not challenged, has since attained finality and, therefore, cannot be agitated in the instant, collateral proceedings (refer: CIT v. Mtt. Ar. S. Ar. Arunachalam Chettiar [1953] 23 ITR 180 (SC); Hindustan Coca Cola Beverage (P.) Ltd. v. CIT [2007] 293 ITR 226 (SC); CIT vs. D & H Secheron Electrodes Ltd. [2008] 301 ITR 20 (MP)). In fact, there is nothing on record to substantiate what is being stated by Shri Sharma. The argument, thus, is no more than a bogey. In fact, lack of application of mind, which vitiates a judicial action, includes an approval u/s. 151, is a matter of fact, to be discerned on the basis of the entirety of facts and circumstances of the case, as well as the law in the matter. Shri Sharma would then raise another objection, stating that Explanation 2 to sec. 263, inserted on the statute w.e.f. 01/06/2015, shall therefore have no application for AY 2009-10. He was, however, unable to tell as to from which year the said amendment would hold. Even as observed by the Bench during hearing, the revision is in respect of an order, irrespective of the year to which it relates. Explanation 2 deems an order as liable to revision u/s. 263 under certain circumstances, which therefore could be invoked by the revisionary authority on or after 01/06/2015, and has nothing to do with the assessment year to which the order subject to revision relates. Rather, as would be apparent from the foregoing, clause (a) of the said Explanation, which deems an order erroneous in the absence of inquiry which should have been made, only statutorily mandates what the law has always been understood to be, explained and elucidated by the higher courts of law time and again, with some of the earlier decisions by the Apex Court in the matter being Geeta Devi Aggarwal v. CIT [1970] 76 ITR 496 (SC); Tara Devi Aggarwal vs. CIT [1973] 88 ITR 323 (SC). 4.3 We, in view of the fore-going, find no reason for interference with the impugned order and, accordingly, decline to. We decide accordingly. ITA No. 28/JAB/2019 (A.Y. 2009-10) Rashmi Pahariya vs. Pr. CIT 5 | P a g e 5. In the result, the assessee‟s appeal is dismissed. Order pronounced in open Court on June 27, 2022 Sd/- sd/- (Manomohan Das) (Sanjay Arora) Judicial Member Accountant Member Dated: 27/06/2022 vr/- Copy to: 1. The Appellant: Smt. Rashmi Pahariya, 3271, Anand Nagar, Adhartal, Jabalpur (MP). 2. The Respondent: The Principal CI T-1, Jabalpur. 3. The CI T-D.R., I TAT, Jabalpur. 4. Guard File. By order (VUKKEM RAMBABU) Sr. Private Secretary, ITAT, Jabalpur.