Kanwar Lal, Gurgaon V. ITO, Gurgaon

ITA 3026/DEL/2017

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 6988 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2010-2011
• Appeal Filed On: 14-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHIVANI BANSAL
• Keywords: Capital asset converted into stock in trade; Sale consideration of property below Jantri Value; Capital asset; Business income; Salary income; Cost of acquisition; Reasonable cause; Competent authority; Reassessment proceedings; TDS; Capital Gains; FORM 26AS
• Section: 147; 148; 271(1)(c); 45(2); 143(3); 54B; 50C; 54F; 142(1); 234B; 143(2); 192; 64; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH ‘F’ : NEW DELHI) BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER and DR. B.R.R. KUMAR, ACCOUNTANT MEMBER (THROUGH VIDEO CONFERENCE) ITA No.3025/Del./2017 (ASSESSMENT YEAR : 2010-11) Shri Ram Kishan, vs. ITO, Ward 3 (4), S/o Late Shri Ram Singh, Gurgaon. Village & P.O. Nakhrola, Tehsil Manesar, Distt. Gurgaon – 122 001. (PAN : AQAPK7840G) ITA No.3026/Del./2017 (ASSESSMENT YEAR : 2010-11) Shri Kanwar Lal, vs. ITO, Ward 2 (2), S/o Late Shri Ram Singh, Gurgaon. Village & P.O. Nakhrola, Tehsil Manesar, Distt. Gurgaon – 122 001. (PAN : AECPL6421N) ITA No.3027/Del./2017 (ASSESSMENT YEAR : 2010-11) Shri Ram Avtar, vs. ITO, Ward 3 (4), S/o Late Shri Ram Singh, Gurgaon. Village & P.O. Nakhrola, Tehsil Manesar, Distt. Gurgaon – 122 001. (PAN : APLPR4350L) 2 ITA NOS. 3025 to 3028/Del/2018 ITA No.3028/Del./2017 (ASSESSMENT YEAR : 2010-11) Shri Manphool Ram Singh, vs. ITO, Ward 2 (4), S/o Late Shri Ram Singh, Gurgaon. Village & P.O. Nakhrola, Tehsil Manesar, Distt. Gurgaon – 122 001. (PAN : AMKPS2596R) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri K. Sampath, Advocate Shri V. Rajakumar, Advocate REVENUE BY : Ms. Shivani Bansal, Sr. DR Date of Hearing : 03.02.2022 Date of Order : 10.03.2022 O R D E R PER AMIT SHUKLA, JM : The aforesaid appeals have been filed by the above named assessees and are directed against the common appellate order dated 30.03.2017, passed by the Commissioner of Income-tax (Appeals), Gurugram for the quantum of assessment passed u/s 147/143(3) for the assessment year 2010-11. Since issues involved in the appeal are similar, they are disposed off through the present order. 2. We will first take up ITA No. 3025/Del/17 in the case of Sri Ram Kishan. The facts as culled out from the reassessment order are that Information was received by the Assessing Officer (AO) that the 3 ITA NOS. 3025 to 3028/Del/2018 assessee along with his brothers Sh. Kanwar Lal, Sh. Manphool, Sh. Ram Avtar and several others (in total 21 persons called ‘Owners’ hereafter) had entered into a collaboration agreement on 14.12.2006 with “Bestech India Pvt. Ltd., Gurugram” (hereinafter called as ‘Developer’) for the acquisition of 253 kanals, 01 marla of land in the revenue village Nakhrola, Gurugram. That collaboration agreement, though not registered, stated that all the 21 Owners were not fully equipped to execute and complete the proposed work of group housing complex and so they had entered into the agreement with the Developer after due consideration of its reputation / experience / expertise and capability to obtain permission for the change of land use (CLU) and a license from the government for the development / construction of the housing complex. As per the collaboration agreement, it was agreed between the Developer and Owners as under:- (i) The developer will construct / develop the said project over the said piece of land at his own cost. (ii) The owner shall be entitled to 35% of the total saleable area along with proportionate right in land, open areas, parking, terrace, roof and other undivided areas. The developer shall be entitled balance 65% of the total saleable area. (Clause 1 of the collaboration agreement) (iii) The developer will pay the interest free refundable security deposit of Rs. 8 lacs per acre and non-refundable security of Rs. 27 lacs per acre to the owners. (Clause 2 of the collaboration agreement) (iv) If Letter of Intent (LOI) for the above land is not obtained from the Government of Haryana within six months, developer will pay 4 ITA NOS. 3025 to 3028/Del/2018 compensation of Rs. 6 lacs per month for the delayed period. If LOI is not obtained in 12 months the owners at their discretion can increase the time period to obtain LOI or if they don’t want to continue with the agreement they can terminate the agreement and forfeit the security amount at the rate Rs. 20 lacs per acre. (Clause 3 of the collaboration agreement) (v) The owners will make the said land free from all incumbencies to the developer for the speedy development / completion of the project. For this purpose the Owners have delivered the possession of the land for obtaining the license, permission, sanction, approval for the development, construction, completion of the proposed group housing project. For this purpose owner shall execute an irrevocable GPA in favour of the developer for obtaining permission for CLU, procurement of license, for getting sanction of the site plans and other approval as may be required from the Authorities for the purpose of construction of the project. (Clause 7 and 11 of the collaboration agreement) (vi) The developer agrees to complete the project within 36 months after the receipt of LOI. If he fails he will compensate the penalty at the rate of Rs. 10 per square feet for the delayed period till the completion of the project. (Clause 12 of the collaboration agreement) (vii) After the receipt of license and sanctioned plans of the project from the competent authority, the developer shall offer allotment of apartments to the extent of 35% of the saleable area to the owners. (Clause 13 of the collaboration agreement)” 3. The impugned reassessment order further states that subsequently in 2006, the Owners issued a Special Power of Attorney in favour of Sh. D. Bhandari, Director of M/s Bestech India Pvt Ltd. and a nominee of the Developer for the purpose of representing before 5 ITA NOS. 3025 to 3028/Del/2018 the Government Authorities to obtain sanction and permission for construction / development of the housing project on the said land for building and carrying out construction as per the other legal requirements. 4. The Owners through the Developer made an application on 04/01/2007 to the Government of Haryana to grant permission to construct a residential Project over the said land. The Government of Haryana through the Director, Town & Country Planning, had issued LOI and subsequently the license on 31/5/2008 to construct the Group complex on the said land. The license was granted in the names of the Owners who were in collaboration with the Developer subject to the condition that the licensee would not give any advertisement for the sale of space before the approval of layout/building plan. 5. On going through the copy of account of the assessee with the Developer the Assessing Officer noticed that the assessee has received a total payment of Rs. 2,41,70,000/-. Subsequently the assessee along with his brothers Sh. Kanwar Lal, Sh. Manphool & Sh. Ram Avtar had executed / registered sale deed in respect of 3 Acre 2 Kanals, 17 Marlas (out of the above land) on 18.11.2009 in favour of M/s Bestech India Pvt. Ltd. for a total consideration of Rs. 9,66,80,000/- (out of which the assessee has got one fourth share). The said sale deed of 18.11.2009, refers to the collaboration agreement dated 14 Dec. 2006 vide which the owners were having share of 35% out of the saleable area. The Sale Deed also mentions that the Owners were not interested in obtaining duly constructed space of 35% and wanted the Developer to purchase the above land along with all rights (accrued to them by 6 ITA NOS. 3025 to 3028/Del/2018 virtue of above collaboration). As per the above sale deed, the sale amount has been paid to this assessee through different cheques as per the following details:- Vendor Ch. No. Dated Amount Bank Name Ram Kishan 351179 28.12.2006 35,00,000 Corporation Bank, Gurugram 539912 18.11.2009 37,51,000 OBC Sushant Lok-I, Gurugram 539917 17.02.2010 24,17,000 OBC Sushant Lok-I, Gurugram 539921 17.05.2010 36,25,500 OBC Sushant Lok-I, Gurugram 539925 17.11.2010 1,08,76,500 OBC Sushant Lok-I, Gurugram TOTAL 2,41,70,000 6. Finding that no income from the transaction of land sale had been shown by the assessee, proceedings u/s 148 of the Act was initiated and accordingly notices were issued on 30.03.2015 by the Income Tax Officer, Ward-3(5), Gurugram for all the above named assessees. The assessee was required to file his return of income on or before 30.04.2015. A notice u/s 142(1) of the Act dated 04.06.2015 followed. On 19.06.2015, and in response a written reply was filed by the assessee. The assessee also filed a return of income for the A.Y. 2010-11 declaring income of Rs. 1,91,500/-. 7 ITA NOS. 3025 to 3028/Del/2018 7. The AO further states that the case was transferred to the ITO, Ward 3(4) Gurugram as the assessee had obtained PAN. Notices u/s 142(1)/143(2) was issued on 05.10.2015 and in the reply it was contended by the assessee that there was no transfer of any capital asset anytime and that there was no capital gain in AY 2010-11. The reply was accompanied by the copy of sale deed, collaboration agreement and distance certificate. 8. The Assessing Officer analysed the facts of the case and the submissions made on behalf of the assessee alongwith the rules of the Town and Country Planning of the Department of Haryana for Gurugram District, the collaboration agreement, the factum of commencement of construction in FY 2010-11, and the provisions of Section 2(47) of the Act governing transfers as also the alteration in the initial agreement to receive 35% of the built-up area and the ratio of the cases in Alapati Venkataramaiah v. CIT (1965) 57 ITR 185 (SC), CIT v. Podar Cements Pvt. Ltd. (1997) 226 ITR 625 (SC) and CIT v. Vishnu Trading & Investment Co (2003) 259 ITR 724 (Raj.), CIT vs. Geetadevi Pasari (2009) 17 DTC 2001(Bom). He thereupon concluded that the provisions of Section 45(2) were applicable to the sale of lands by the assessee and computed the total income inclusive of the capital gains and business profits thereon with the following observations:- “4. In view of these facts the assessee was asked to explain vide order sheet entry dated 12.10.2015 as to why income accrued/earned on this transaction should not be assessed as income under the head business/profession. In response to the same, there AR of the assessee has filed written submissions vide his letter dated 27.10.2015 as discussed above. In view of the detailed facts and reason as above, it is clear that the land owners including the assessee converted their land 8 ITA NOS. 3025 to 3028/Del/2018 holding collectively with the help of developer to develop the same as constructed space (Units/Apartments) where the cost/market of each unit depends on various parameters as discussed above. The land owners were facing the risk and rewards involved w.r.t. the market condition in respect of potential sale consideration of the units (reward in case of appreciation and risk if there is depression in the rates of apartments depending upon market conditions). The owners including the assessee have taken a series of activities like: • Entering into collaboration with a reputed builder. • Putting the sale consideration in terms of 35% share in the space. • Getting license in their names for CLU to construct/develop a residential housing project on the said land. • Intent of maximization of profit by intention of selling the space as units. • By putting various condition in the collaboration agreement upon the developer for speedy/efficient execution of the project to get the constructed space. • The developer was used due to his brand, experience, expertise (as mentioned on page 2 of the collaboration agreement). • The developer was used for assisting the owners to get the license from the Government construction of project at the cost of the developer. • All three factors have helped the assessee / owners to maximise their sale proceeds. Further, the provision of section 45(2) for the purpose of calculation of capital gain in respect of conversion of capital asset in to stock- in-trade is reproduced as under:- “Up to assessment year 1984-85, conversion of capital asset by the assessee into stock-in-trade of his business was not treated as a transfer and no capital gain was taxable. However, from the assessment year 1985-86 onward the conversion of capital asset into stock-in-trade is treated as a ‘transfer’ within the meaning of section 2(47). However, section 45(2) provides that although such a conversion of capital asset into stock-in-trade will be a transfer of the previous year in which the asset is so converted, but the 9 ITA NOS. 3025 to 3028/Del/2018 capital gain will not arise in the previous year in which the asset is converted, it will arise in the previous year in which such converted asset is sold or otherwise transferred. Indexation of cost of acquisition and improvement, if required, will be done till the previous year in which such conversion, shall be deemed to be full value of the consideration of the asset. The sale price minus market value as on the date of conversion shall be treated as business income and taxed under the head ‘profit and gain’ of business and profession.” Therefore, on the composite analysis of the facts it is clear that the assessee has entered into the transaction of converting his individual land parcel along with other owners collectibly into stock in trade to be developed/constructed as residential housing project to be sold in different units (as stock in trade) which is an adventure in the nature of trade. Therefore, income of the assessee on the transaction as accrued is assessed as income under the head income from capital gain and under the head income from business/profession. It is also worthwhile mentioning here that as per the report of Sub- Registrar, Manesar, the said land is situated at a distance of mere 3 km from the notified distance from the MC limits of Gurgaon.” In view of the above the income from capital gain and income from business / profession is calculated as under:- Area of Land of the assessee = 134.25 Marlas i.e. 1/4 th share of the assessee (Total area of land is 26 Kanals and 17 Marlas i.e. total 537 Marlas) (1 Kanal = 20 Marlas) Sales consideration u/s 50C as on 31.05.2008 = Rs. 50,34,375/- (Sales conversion @ Rs. 60,00,000/- per acre in view of the verbal Field enquiries) 10 ITA NOS. 3025 to 3028/Del/2018 Less:- Indexed cost of acquisition @ Rs. 25,000/- Per acre = Rs. 20,977/- X 582/100 = Rs. 1,22,086/- (In the absence of complete details, the land is assumed to be belonging to the assessee due to inheritance and the cost as on 1/4/81 is taken @ Rs. 25,000/- per acre) Accrued Long Term Capital Gain on account of change the asset in to stock-in-trade =Rs. 49,12,289/- (5034375-122086) Total sales consideration of share of assessee =Rs. 2,41,70,000/- Less: Cost of stock-in-trade =Rs. 50,34,375/- Income under the head business & profession =Rs. 1,91,35,625/- Keeping in view the above discussion, total addition of Rs. 2,40,47,914/- (Rs. 49,12,289/- LTCG + Rs. 1,91,35,625/- income under the head business & Profession) has been made. Thus, I have reasons to believe that the assessee has concealed his income and filed inaccurate particulars of his income to the extent of Rs. 2,42,39,414/- (returned income of Rs. 1,91,500/- + addition of Rs. 2,40,47,914/- so penalty proceedings u/s 271(1)(c) are being initiated separately. In view of the above discussion, the total income of the assessee is computed as under: Income as per return filed =Rs. 1,91,500/- Add: Income as discussed above =Rs. 49,12,289/- LTCG =Rs. 1,91,35,625/- Income 11 ITA NOS. 3025 to 3028/Del/2018 under the head Business & Profession Total Income =Rs. 2,42,39,414/- Or say Rs. 2,42,39,410/- 9. Aggrieved against the assessment order the assessee filed an appeal before the Ld. CIT(A)-1, Gurugram. The Ld. CIT (A) partly allowed the appeal by altering the assessment of business income from sale of land to long term capital gain. On all other issues the Ld. CIT (A) confirmed the order of the AO. 10.1 Aggrieved against the order of the Ld. CIT (A) the Appellant has filed the subject appeal with the following grounds of appeal:- “That on the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in confirming the following actions of the Assessing Officer: 1. initiating proceedings u/s 147/148 of the Income-tax Act, 1961 against the Appellant without any reasonable cause; 2. in sustaining and maintaining the proceedings u/s 147/148 of the Act in the subject year; 3. in completing the assessment on the basis of such wrong action u/s 143(3) of the Act; 4. in computing the income u/s 143(30 of the Act at Rs. 2,42,39,410/- against the returned income of Rs. 1,91,500/-; 5. in computing Long Term Capital Gain on transfer of agricultural land done in an earlier year but charged during the year by assuming the cost of acquisition and indexation cost without any material before him; 6. confirming the computation of Long Term Capital gain and additions made to the returned income to the extent of Rs. 2,40,47,914/-; 12 ITA NOS. 3025 to 3028/Del/2018 7. not allowing claim for deduction u/s 54B and 54F of the I.T. Act, 1961; 8. charging interest u/s 234A and 234B of the Income-tax Act, 1961. All the above actions being arbitrary, erroneous and unlawful must be quashed with directions for appropriate relief.” 10.2 During the hearing of the appeal the Appellant has moved application for admission of additional grounds of appeal as under:- “Permission is respectfully sought for raising the following grounds as additional grounds of appeal: 1. in assuming jurisdiction over the case without any authority of law and in derogation of the jurisdiction as originally vested with the Assessing Officer, Salary Circle, Jaipur; 2. in the proceedings u/s 147/148 being endorsed and approved by the prescribed authorities without application of mind and in contravention of the conditionality as applicable thereto; 3. without prejudice in computing the long term capital gain as per circle rate prevailing during subject year instead of the actual sale consideration as received in terms of the collaboration agreement of a preceding year with the vendees. The above grounds were not taken up originally in the memo of Appeal because of an inadvertent omission. No extensive enquiry of a factual nature is necessary, and it is, therefore, submitted that additional grounds supra may kindly be admitted and adjudicated upon.” 11. Firstly, we will take up the issue regarding admission of additional grounds. The three additional grounds as raised are stated to be arising directly out of the impugned order of the CIT(A). Before us, Ld. Counsel Sri Sampath submitted that they were not taken up 13 ITA NOS. 3025 to 3028/Del/2018 originally in the memo of appeal filed before the Tribunal due to inadvertence. It was further stated that no extensive inquiry of facts is necessary for their consideration or adjudication. The first additional ground as taken, concerns jurisdiction of the AO, Gurugram to assume authority over the assessee. The second additional ground pertains to the proceedings u/s 147/148 of the Act being endorsed and approved by the prescribed authorities without application of mind and in contravention of the applicable conditions and the last of them concerns the quantification of the capital gains in accordance with the applicable circle rates for the year. It was further pleaded that these grounds as now taken up as additional were part of the main grounds of appeal as Ground Nos. 1, 2 and 3 therein. It has been stated that the additional grounds as raised are only for bringing the issues in controversy as originally raised in the grounds of appeal specifically and in sharp focus. It is also stated that the issues as taken up in the additional grounds form part of the discussion in the impugned order of the Ld. CIT(A). Lastly, it was pleaded that the facts pertaining to these three additional grounds being available in the impugned orders merit to be admitted for adjudication and orders. 12. Per contra the Ld. Sr. DR vehemently objected to the entertainment of the additional grounds filed at this late stage by the Appellant. According to her these grounds were not taken in appeal before the Ld. CIT (A) and so since they would involve fresh investigation into facts they should ought not be entertained at this late stage. 13. We have considered the rival contentions and have also gone through the material on record. As urged on behalf of the Appellant we 14 ITA NOS. 3025 to 3028/Del/2018 find that the additional grounds as taken and canvassed for admission have been generally stated vide Ground Nos. 1 and 2 of the grounds of appeal as originally taken in the appeal. We also find that the issues regarding jurisdiction and the approval of the satisfaction note by the prescribed authority are dealt with by the Ld. CIT(A) in the Appellate order. Being so and as the additional grounds go to the root of the controversy we admit the same. 14. Since the question of jurisdiction has been raised through the additional ground No. 1, therefore, same is considered first. It has been brought on record that the Appellant was at the relevant time a salaried employee with the Army with address 423, Field Ambulance, C/o 56 APO and with PAN AQAPK7840G in the jurisdiction of the salary AO In-charge of Pay & Accounts Office (OR), Army Medical Core as per material placed on record as Form 26AS for the AY 2010-11 at page 4 of the paper book dated 15.09.2021. The notice dated 30.03.2015 for reassessment u/s 148 of the Act has been issued by the Income-tax Officer, Ward 3(5), Gurugram which is placed at page 56 of the paper book dated 30.10.2019. The reasons recorded for the reopening of the case are appearing at pages 57 and 57A of the same paper book dated 30.12.2019. Ld. Counsel for the assessee submitted that for AY 2010-11 the jurisdiction of Appellant’s case was vested with the Army Medical Core AO who alone had the authority and power to issue notice u/s 148 of the Act. It was further urged that jurisdiction had not been transferred to the AO at Gurugram. In such circumstances the assumption of jurisdiction by the Gurugram AO on the assessee was wholly without jurisdiction, irregular and void. It was reiterated that any valid notice for reassessment of the individual 15 ITA NOS. 3025 to 3028/Del/2018 could have been issued only by the ITO of the Army Salary Circle. It is further submitted on behalf of the Appellant that in similar circumstances the Delhi Bench A of the Tribunal in ITA No. 2682/Del/2018 & Others dated 08.08.2019 quashed the reassessment notice which was manifested with similar deficiencies. 14.1 It was further submitted by the Ld. Counsel that the notice for reassessment therefor has mentioned the status of the assessee as an individual for the year in respect of capital gains earned from sale of agricultural lands. The true fact of the case, however, is that the sale of agricultural lands giving rise to the capital gain was ancestral, which is stated in the certificates issued on the basis of revenue records copies have been placed at pages 89 to 102 of the paper book. Interestingly this fact has also been conceded by the AO while computing the income from capital gains in the assessment order. The AO has assumed the land sold as ancestral. In such circumstances the correct status in which the income from capital gains could have arisen was of the joint family of the assessee and not that of the individual. It was urged that the notice for reassessment issued in a wrong status is ab initio illegal and invalid as has been held by several Courts. The decisions in CIT vs. B.Ranga Reddy (1929) 118 ITR 897(AP), CIT vs. Ram Das Deoki Nandan Prasad (2005) 277 ITR 197(All) were cited in this context. 14.2 It was further submitted that the relevant assessment year for consideration of transfer could not be AY 2010-11. The transfer was occasioned due to the handing over of the possession of the agricultural lands on receipt of the partial sale consideration qua the Collaboration Agreement dated December 2006 to the Developer. With 16 ITA NOS. 3025 to 3028/Del/2018 the registration of the sale deed for that act and deed which was carried out in November 2009, the transaction related back to AY 2007-08 as per Section 47 of the Registration Act, 1908 and so the reassessment as carried out for AY 2010-11 was per se erroneous and untenable. 14.3 Lastly, it was submitted that the agricultural lands as transferred were not capital assets because post 06.01.1994 no notification for urbanisation of those areas had been issued till November 2009. The lands were beyond 8 kms from Gurugram, and being agricultural lands did not fall in the lap of sub-section (14) of Section 2 of the Act. 14.4 Arguing additional ground No. 2, Ld. Counsel for the Appellant submitted that the notice issued to the assessee u/s 148 of the Act after recording the satisfaction 9as appearing on pages 57 & 57A of the paper book) was improper and invalid. The satisfaction as recorded was based on scanty and insufficient material. Requisite inquiries of pertinent facts before the issuance of notice were not made by the Gurugram ITO. The said ITO had simply listed the basic facts pertaining to the collaboration agreement of December 2006, the sale deed of November 2009, the CLU issued by the Haryana Government, etc. After doing so, he concluded escapement of business income merely on the ground of the Appellant not having filed any return of income of the year. The ITO omitted to consider who the actual Owner of the land was, whether or not he had intended to do a business deal, or as to whether such Owner was obliged to file a return for the transaction. The mere failure to file a return could not always inevitably lead to the conclusion of escapement of income. The Ld. 17 ITA NOS. 3025 to 3028/Del/2018 Counsel further stated that, from a bare perusal of the reasons as recorded by the ITO would reveal the conspicuous absence of any enquiry having been made even as to the exact ownership of the land. The fact of the sale of the agricultural lands constituting a transfer in terms of the applicable provisions of the Income-tax Act was never gone into by the ITO. In point of fact, the vague satisfaction recorded as late as on 30.03.2015 was also approved u/s 151 of the Act by the prescribed authority apparently post haste and mechanically at the point of expiry of limitation. The casual and mechanical approach of the authorities below without any proper application of mind, and without adducing plausible reasons leading to the belief of escapement of income was fatal to the task of reassessment itself. That according to the Ld. Counsel renders the proposal to reopen the case invalid in law. 15. According to the Ld. Sr. DR it was not essential that the initiation of the reassessment proceeding should be based on infallible data and precise particulars. In a case where the assessee did not even have a PAN the assumption of jurisdiction by the area ITO at Gurugram where the assessee was residing was the only available recourse to the ITO which could not be faulted. It was urged that since the assessee had never asserted his joint family status anytime before the issue of notice in his individual capacity. That was however subject to correction. Ld. Sr. DR cited the provisions of Section 124 of the Act in this regard governing transfer of cases from one AO to another. she submitted that after having participated in the assessment proceedings, the appellant could not now assail the assumption of jurisdiction by the ITO, Ward-3(5), Gurgaon. On the point of the 18 ITA NOS. 3025 to 3028/Del/2018 reassessment having been completed for an incorrect assessment year, the Ld. Sr. DR urged that in view of the apex Court decision in Balbir Singh HUF (2017) 398 ITR 531(SC) it was the registration of the transfer documents that was material and with registration done in the subject year so AY 2010-11 that was the correct year for reassessment. As to the argument of the assessee of the agricultural land being located 8 km away from the nearest municipality Ld. Sr. DR stated that was not factually correct for as per the Registrar’s finding that it was within 3 km of the municipal limits. She urged that the authorities had issued the reassessment notice after the due deliberation and proper verification which was valid in law. On the assessee’s basic argument on the point of jurisdiction the Ld. Sr. DR also filed the following written submissions: “Appeal in the cases of I. Ram Kishan, Gurgaon in ITA No. 3025/Del/17, for the A.Y. 2010- 11 (PAN: AQAPK7840G) II. Kanwar Lal, Gurgaon in ITA No. 3026/Del/17, for the A.Y. 2010- 11 (PAN: AECPL6421N) III. Ram Avatar, Gurgaon in ITA No. 3027/Del/17, for the A.Y. 2010- 11 (PAN: APLPR4350L) iv. Manphool Ram Singh, Gurgaon in ITA No. 3028/Del/17, for the A.Y. 2010-11 (PAN: AMKPS2596R) Please refer to the above said appeals in four cases. May it please your honours: 1. It is humbly submitted that in the last meeting the Hon’ble bench asked the Department to submit clarification with respect to assumption of jurisdiction by the present AO(s) for completion of assessment in Dec 2015 in the above mentioned cases. It is humbly submitted that the Appellant has raised this issue of jurisdiction in only 2 cases, namely, Sh. Manphool Ram Singh and Sh. Ram Kishan. In this regard, query was raised in the field and 19 ITA NOS. 3025 to 3028/Del/2018 the relevant part of the replies received from the concerned Jurisdictional charge is quoted as under: A. Manphool Singh Assessment proceedings in this case were initiated u/s 147/148 on 30/03/2015 as a Non PAN case and the reason behind the same was that the information in the possession of the AO at the time of initiation of proceedings under consideration did not contain the PAN of the assessee anywhere. Hence the first notice u/s 148 was issued to the assessee as per his address available in the information i.e. “Sh. Manphool S/o Late Sh. Ram Singh VPO Nakhrola, Tehsil & Distt Gurgaon, Haryana” and the said address was lying under the territorial jurisdiction of the AO. PAN of the assessee was identified only during the assessment proceedings under consideration. At the time of assessment proceedings, the assessee was mentioned address and this gets established by the fact that notice was issued to the assessee on 30/03/2015 and served at his Gurgaon address and the assessee himself attended the proceedings on 08/04/2015. Also, in his ITR filed by the assessee on 15/08/2015 for the AY 2015-16, the address mentioned by the assessee was “S-34, GROUND FLOOR, UPPAL SOUTH END, SECTOR-49, GURGAON, HARYANA” and the address the assessee has not hanged even till the filing of latest ITR as per the information available on system. In the right of facts mentioned above, the notice u/s 148 of the Income Tax Act, 1961 dated 30.03.2015 was issued by the then AO well within his jurisdiction as he had the complete authority of law to assume charge over the case. It is also pertinent to mention that the assessee participated in the assessment proceedings till its completion but never challenged the jurisdiction for issuance of notice u/s 148 under consideration. B. Ram Kishan Assessment proceedings in the case were initiated u/s 147/148 on 30/03/2015 as a Non PAN case by the then AO i.e. Income Tax Officer, Ward-3(5), Gurgaon (now merged into Ward-3(1), Gurgaon) on the basis of certain information in his possession at that time of 20 ITA NOS. 3025 to 3028/Del/2018 initiation of proceedings under consideration which did not contain the PAN of the assessee anywhere. Hence, the first notice u/s 148 was issued to the assessee as per his address available in the information i.e. “Sh. Ram Kishan S/o Sh. Late Sh. Ram Singh, VPO Nakhrola, Tehsil & Distt. Gurgaon, Haryana” and the said address was lying under the territorial jurisdiction of erstwhile Income Tax Officer, Ward-3(5), Gurgaon. PAN of the assessee was identified only during the assessment proceedings under consideration. At the time of assessment proceedings, the assessee was residing at the above mentioned address and this gets established by the fact that notice was issued to the assessee on 30/03/2015 and served at his Gurgaon address. Also, as per ITR’s filed by the assessee for the AY 2010-11 to 2012-13, the assessee has declared his residential address as VPO Nakhrola, Gurgaon. In the light of facts mentioned above, the notice u/s 148 of the Income Tax Act, 1961 dated 30/03/2015 was issued by the then AO well within his jurisdiction as he had the complete authority of law to assume charge over the case. It is also pertinent to mention that the assessee participated in the assessment proceedings till its completion but never challenged the jurisdiction for issuance of notice u/s 148 under consideration. Copy of replies enclosed as Annexure A. It is to be noted that for the other two cases namely Sh. Kanwar Lal and Sh. Ram Avataar, the jurisdiction of AO is not challenged by the Appellant. Arguments: Accordingly, it is humbly submitted as under: 1. With respect to Manphool Ramsingh’s case: a. The case was reopened u/s 148 on the basis of concrete information in possession of AO at that time which didn’t contain PAN. So the case was reopened without PAN on the address of Gurgaon which comes in jurisdiction of the AO passing the Assessment Order. 21 ITA NOS. 3025 to 3028/Del/2018 b. Notice u/s 148 was duly served on the assessee at Gurgaon address and he himself attended the proceedings on 08.04.2015 without any objections. c. It was only during the assessment proceedings, the AO came to know of PAN of the assessee. On verification of records, it is observed that for the AY 2010-11, the Assessee filed his ROI from Pune address. However, during the assessment proceedings ROI was filed for AY 2015-16 in Aug 2015 (before present assessment was concluded) from Gurgaon address only which he is continuing till date. (Copy enclosed as Annexure B). Further, the Assessment was duly completed after considering the replies submitted by assessee in Dec. 2015. d. In the light of above facts, I place my reliance on Sec 124(1)(b) and 124(3) of the Income Tax Act, 1961. As per sec 124(1)(b), the AO (who completed the assessment) has jurisdiction over any other person residing within the area of Assessing Officer. Considering the facts that the assessee is accepting notices on jurisdictional address of Gurgaon, he is filing his ROI due in that year from Gurgaon address & he is not objection to the jurisdiction during assessment clearly shows that he is residing in the area of jurisdiction of Assessing Officer and thus AO has rightly assumed the jurisdiction. Further, as per 124(3)(a), the assessee can object with respect to jurisdiction of Assessing officer within one month of receipt of notice u/s 142(1) or 143(2) or before completion of assessment whichever is earlier. In the present case, the assessee never objected to jurisdiction during assessment nor at the first appellate stage. So, he is barred from taking this objection at this stage as per Sec 124(3) of the IT Act 1961. The appellant raised this objection for the first time before the Hon’ble bench after five and half years. 2. With respect to Ram Kishan’s case: a. The case was reopened u/s 148 on the basis of concrete information in possession of AO at that time which didn’t contain 22 ITA NOS. 3025 to 3028/Del/2018 PAN. So the case was reopened without PAN on the address of Gurgaon which comes in jurisdiction of the AO passing the Assessment order. b. Notice u/s 148 was duly served on the assessee at Gurgaon address. In fact in the present case assessee’s PAN residence address is same on which notice u/s 148 was issued (copy of PAN jurisdiction is enclosed as Annexure C). c. Further, in the present case as per ROI for AY 2010-11 (year in consideration) to AY 2012-13, the address was of Gurgaon only (copy enclosed as Annexure D). d. Now, at second appellate stage when the case was already decided against the assessee on merits in first appeal, the assessee is stating that his jurisdiction pertains to Salary Circle, Jaipur for which no proof is filed with additional grounds of appeal. e. In the light of above facts, I place my reliance on Sec 124(1)(b) and 124(3) of the Income Tax Act, 1961. As per sec 124(1)(b), the AO (who completed the assessment) has jurisdiction over any other person residing within the area of Assessing Officer. Considering the facts that the assessee is accepting notices on jurisdictional address of Gurgaon, he is filing his ROI for AY 2010- 11 from Gurgaon address & he is not objection to the jurisdiction during assessment clearly shows that he is residing in the area of jurisdiction of Assessing Officer and thus AO has rightly assumed the jurisdiction. Further, as per 124(3)(a), the assessee can object with respect to jurisdiction of Assessing Officer within one month of receipt of notice u/s 142(1) or 143(2) or before completion of assessment whichever is earlier. In the present case, the assessee never objected to jurisdiction during assessment nor at the first appellate stage. So, he is barred from taking this objection at this stage as per Sec 124(3) of the IT 23 ITA NOS. 3025 to 3028/Del/2018 Act 1961. The appellant raised this objection for the first time before the Hon’ble bench after five and half years. 3.Further, the appellant has relied upon the case law of Attar Singh and others, in which Hon’ble bench has decided the issue in favour of appellant. However, the said case doesn’t apply to the facts of our cases. The differences are as under: a) In that case, the assessee was challenging the jurisdiction from very beginning with AO which is not so in present case. b) Again in that case, the assessee challenged that AO was aware that the jurisdiction pertains to Delhi before issue of notice u/s 148 which is again not so in present case, as reopening of case was without PAN. c) Further, in that case, the assessee raised objections to notice u/s 148 and claimed that the AO had examined the ITR while disposing off the objections and thus had knowledge of lack of jurisdiction. In present case, no such objections were ever raised at any stage and thus the present case is not covered by the judgment of Hon’ble bench. 2. In the proceedings u/s 147/148 being endorsed and approved by the prescribed authorities without application of mind and in contravention as applicable thereto: The reasons in the case under consideration were recorded in detail by the AO after analyzing all the information / facts available with him at time of considering the case for initiation of proceedings u/s 147/148 of the Act and the facts had been mentioned in the reasons itself. Therefore, assessee’s plea regarding “application of mind” is not acceptable at all. In this regard, I place my reliance on Ld. CIT(A)’s order. 3. Without prejudice in computing the long term capital gain as per circle rate prevailing during subject year instead of the actual sale consideration as received in terms of the collaboration agreement of a preceding year with the vendees: In this regard, it is submitted that the sale consideration mentioned in the sale deed no. 1005 dated 18/11/2009 was paid 24 ITA NOS. 3025 to 3028/Del/2018 to the assessee and the other owners, against the land and their right as mentioned in the collaboration agreement dated 14/12/2006 by the vendee and no bifurcation in respect of consideration paid for the land and the consideration paid for their surrendered rights on property was mentioned in the sale deed. Therefore the AO had no option but to take the Market value prevailing at that time for the purpose of computing the long term capital gain. Accordingly, it is requested that the appeals of the appellants should be rejected and order of Ld. CIT(A) be upheld wherein the case was decided on merits against assessee after detailed reasoning by Ld. CIT(A). Sd/-12/10/21 Sr. Departmental Representative F bench, ITAT, New Delhi.” 16. In the rejoinder Ld. Counsel for the assessee contended that the submissions as made by the Ld. Sr. DR were at variance with facts. It was pointed out that similar grounds of appeal with identical objections had been taken in the case of all the four brothers in the face of the facts being identical in all the cases. The Ld. AR has filed response to Sr. DR’s written submission on October 21, 2021 as under:- “REPLY TO THE WRITTEN SUBMISSIONS FILED BY THE DEPARTMENT PURSUANT TO HON’BLE BENCH DIRECTIONS MAY IT PLEASE YOUR HONOURS: The Ld. Senior Departmental Representative, “F” Bench, ITAT, New Delhi has provided us with a copy of the written submissions as has been filed before your Honours in the above appeals. Our answers to the various points dealt with by the Sr. DR in respect of two of the four Appellants namely, Manphool Ram Singh and Ram Kishan are stated hereinafter. 25 ITA NOS. 3025 to 3028/Del/2018 1. As to the Appellant Manphool Ram Singh, it needs due notice that he was an assessee with the ITO vested with the jurisdiction over Naval staff. The Form 26AS issued by the Department as of Naval Store Depot, Ghatkopar, Maharashtra PAN as recorded therein is AMKPS2576R. That appears in the annexure w/s at page 9. For the AY 2010-11 he had submitted his return for assessment to the ITO, Naval Ward 26(1)-4 at Pune on 13.03.20121. That is where he was always being assessed. Also none other than the Pune ITO had authority or jurisdiction over him. 2. In the Ld. Sr. DR’s submission under reply it is conceded that the reassessment proceedings which were initiated on 30.03.2015 by the ITO, Ward 2(5) Gurugram was as a non-PAN case on the basis of information in his possession. The notice is dated 30.03.2015 which is for the subject AY 2010-11. The notice does not define the status of the assessee as that of a family. It imputes escapement of income to the assessee individual where it says that after naming the individual as son of Late Sh. Ram Singh that “the income in respect of which you are assessable / chargeable to tax”. This, therefore, is a clear case of wrongful imputation of income and also wrongful assumption of jurisdiction by the AO in Gurgaon on an assessee who was otherwise being assessed in a different state by another AO as a salaried employee. There is no provision in law which would permit or give leave to an AOs to issue notice for reassessment at his ipse dixit wherever he found that a particular assessee does not possess a PAN. The need for an enquiry, examination and verification before issuing such notice for reassessment is insisted and provided for only for this reason that the notices ought to be served for a definite cause on an appropriate person. Thus the assertion of the Ld. Sr. DR that the notice was served in the manner in which it was done due to the absence of PAN is basically erroneous and totally untenable and which could not give rise to any valid reassessment action. That apart the Ld. Sr. DR has conceded that the factum of the assessee holding a PAN was identified only during the assessment proceedings clearly shows that the concerned AO had put the “cart before the horse” while issuing the reassessment notice. No enquiry or verification of any sort of the information was attempted by the AO before issuing the impugned notice. It is noteworthy that the AO doing the reassessment did not pause to obtain an order for himself so as to be cloaked with the proper authority over the case by following the procedure concerning transfer of cases from 26 ITA NOS. 3025 to 3028/Del/2018 one AO to another as provided in law. In this way the jurisdiction was admittedly assumed and enforced by the Gurgaon AO without any authority of law and against the established norms and procedure. Even after getting to know that the assessee Manphool Ram Singh was under the jurisdiction of some other authority, the AO doing the reassessment did not take the requisite corrective steps at the appropriate time which was crucial for the assumption and sustenance of jurisdiction for the reassessment proposed by a non-jurisdictional ITO. That is not to undermine or belittle the factum of the notice not having been served on the proper assessee in the correct status by the AO. It is also necessary at this stage to rebut the Ld. Sr. DRs assertion that the assessee had participated in the proceedings and had also not challenged the jurisdiction for issuance of notice at the stage of reassessment and so the objections raised in that behalf could not be entertained. That again is a misconceived and incorrect observation, in as much as, the aspect of jurisdiction being a fundamental issue can always be taken up at any stage of the proceedings whenever that defect is noticed by the assessee. Further jurisdiction cannot be conferred even by consent. 3. As to the averments regarding Ram Kishan it needs notice that Sh. Ram Kishan was under the jurisdiction of the AO assessing the Army personnel and was having a PAN number as allotted to him for the salary income as derived by him from the Army. The Ld. DR has provided a copy of the acknowledgement of the return for AY 2011-12 filed on 31.07.2012 by Sh. Ram Kishan with the AO designated as Ward Circle R2-W4-Ranchi-W2(4). This acknowledgement is dated 31.07.2012 whereas the notice u/s 148 is issued on 30.03.2015. This clearly shows that despite being aware of the fact that Ram Kishan was being assessed by the AO at Ranchi, the Gurgaon AO arbitrarily assumed jurisdiction in the case to issue notice u/s 148 of the Act. In that circumstance, whatever is submitted above with regard to Manphool Ram Singh applies equally to Ram Kishan as well. 4. It is noteworthy that the objections as taken to the assumption of jurisdiction by the Gurgaon AO in the case of Kanwar Lal and Ram Avtar remain un-rebutted. So the delay in these two cases, on the basis of the fact situation that the Gurgaon AO had unauthorisedly assumed jurisdiction over the case. The cited decision in the case of Attar Singh & Ors. applies so as to invalidate the notices issued 27 ITA NOS. 3025 to 3028/Del/2018 by the respective AOs. The Ld. Sr. DR, in the note dated 12.10.021, has raised almost common arguments with regard to facts of the cases of Manphool Ram Singh and Ram Kishan. Reply to those arguments are rendered point-wise as under: (a) The Gurgaon AO had reopened the case casually and mechanically without abiding by the set norms on the subject. The information as used by him was apparently unvouched and unverified. The basic step of verifying the information for its authenticity and correctness was not taken. It is because of this omission that the Gurgaon AO wrongly superimposed his jurisdiction and authority over the Appellant despite the fact that the Appellant was under the regular jurisdiction of the AO’s assessing military personnel. (b) The fact of the assessee attending the proceedings cannot detract from the fact of the wrongful assumption of jurisdiction by the Gurgaon AO. Attendance in the proceedings by the Appellants cannot be equated to a valid conferment of authority and jurisdiction on the Gurgaon AO by the Appellants. Jurisdiction is conferred under law by the designated Authority. No assessee can confer jurisdiction on an AO. (c) For the fact that the return of income for AY 2010-11 contains Gurgaon address that by itself cannot in any way confer jurisdiction on the Gurgaon AO of a person deriving income from salary and that too form military services. It is an established practice with the Department that salaried assessees are always assessed by designated AOs irrespective of the factum of their territorial locations. With military personnel the situation in this regard is even more strict. (d) At the first appeals stage objection to jurisdiction had indeed been taken. At no point of time and before any authority, the appellant had ever asserted or stated salary circle jurisdiction to be at Jaipur. The Sr. DR’s argument is at once wrong. (e) Section 124 (1)(b) provides for assumption of jurisdiction in cases where the persons is a non-assessee. It does not provide for either overlapping or the authorised assumption of jurisdiction. 28 ITA NOS. 3025 to 3028/Del/2018 As to section 124(3)(a) as cited, such would apply to a case where the authority and jurisdiction of the AO over an assessee is not the subject matter of dispute. Reading the above two provisions in the manner as done in the note under reply would only cause avoidable jeopardy and virtual anarchy in the administrative system. 5. The attempt in the note to distinguish the case of Attar Singh &Ors. is misconceived and misdirected. The Hon’ble Tribunal after an elaborate consideration of the facts of that case and the law bearing on the subject and the case laws as applicable had quashed the notices under section 148 and the consequents 147/143(3) re-assessments with the following observations. “32. In view of the above discussion and considering the fact that the assessee was employed with Delhi Police and was regularly filing his return of income at Delhi under ITO, Ward 64(3) {earlier ITO, Ward 40(3) and since this fact was known to the ITO at Gurgaon, therefore, in absence of any transfer of jurisdiction u/s 127, we hold that the ITO, Gurgaon has no jurisdiction over the assessee. Therefore, respectfully following the decision of the Hon’ble Punjab & Haryana High Court, which is the jurisdictional High Court in view of the assessment order being passed by the ITO at Gurgaon, we hold that the Assessing Officer, Gurgaon had no jurisdiction over the assessee to issue notice u/s 148 and consequently pass the order u/s 147/143(3). Therefore, the notice issued u/s 148 is quashed. Since the reopening is quashed the subsequent orders passed on account of such reopening are also quashed”. This ruling applies with equal force to the facts of the cases of these four Appellants. More particularly the differences on facts as cited in the note are point wise rebutted as under: a. Jurisdiction need not always be challenged at the beginning for the jurisdiction is fundamental and can be challenged at any stage of the proceedings b. Had only the Gurgaon AO made the requisite enquiries he would learnt about the four Appellants being under the charge of other ITOs in different salary jurisdictions. The problem has arisen in the 29 ITA NOS. 3025 to 3028/Del/2018 subject case because neither the Gurgaon AO nor the sanctioning authority ever attempted to verify or enquire into the authenticity and correctness of the information as received by them. c. Had only the Gurgaon AO made rudimentary enquiries he would have learnt that he could not have assumed jurisdiction over these assessees as individuals for they were already being assessed at other locations for their salary income. That apart the transactions by themselves were not of the individuals. 6. As to the Ld. CIT(A)’s ruling regarding application of mind by the AO the same has been argued on behalf of the Appellants to be erroneous and untenable in terms of the points explained during the previous hearing before the Hon’ble Bench. 7. The Ld. CIT(A) committed an error in not construing the agricultural land as a capital asset not exigible to tax because of its being an exempted asset. 8. In this case the collaboration agreement was entered into the year 2006 and registration of the modified agreement was carried out in 2010. The principle of law is the registration wherever made relates back to the date of transfer. That is in this case is the year 2006. The Ld. CIT(A) has missed this basic point and held the transfer to constitute capital gains notwithstanding the fact that the land in question was outside the prescribed municipal limits. 9. The Gurgaon AO quite well knew that the transferred land was ancestral. Despite so knowing he never attempted to verify the fact of the land belonging to which particular entity. The endorsement at the bottom of the re-assessment orders of the land being ancestral as made by the Gurgaon AO brings out this stark omission in the re-assessment. 10. Further to the submissions made above. It is reiterated that the Gurgaon AO issuing the notice u/s 148 of the Act erred in so doing without making even a semblance of an enquiry as to the correctness of the information or even applying his mind to the facts of the case as to its authenticity and applicability to the Appellants as was conveyed to him by the stated source. The notices were issued to the above Appellants who were definitely not within his jurisdiction even as individuals. Besides the notices 30 ITA NOS. 3025 to 3028/Del/2018 were issued in respect of transactions and the resultant incomes which did not belong to these individuals at all. No appropriate verification of the details of the case and the facts pertaining to the transaction was ever attempted before issuing the impugned notices. The impugned notices were issued mechanically and casually without adherence to the statutory norms and applicable standard verification procedures. The prescribed authority seemingly granted the Section 151 sanction just as mechanically and casually as the Gurgaon AO had initiated. Further, the factum of escapement of any income out of the sale transactions by the Appellants assessable in which entity’s hand was not examined. Also the basic fact that the properties which were the subject matter of transactions were not capital assets at the time of their transfer so as to result in any capital gain exigible to tax was not gone into at all. Further the need for an assessment in the year of the agreement i.e. 2006 was not even visualised as a possibility. 11. The Appellants had relied upon the Coordinate Bench decision in the case of Attar Singh & Ors. in ITA Nos. 2682, 2913, 2683, 3112, 2684, 2700/Del/2018 other assessees similarly placed had been quashed where notices u/s 148 to the Delhi Tribunal on the ground that the AO issuing those notices could not have assumed jurisdiction for so doing for such persons were assessed by different AO’s. The distractions as pointed out on behalf of the Department are erroneous and untenable as per averments made in para 5 supra. Drawing a parallel with that ruling it was submitted on behalf of the present Appellants that the facts and circumstances being identical, therefore, following that precedent, the Appellants may please be provided relief as sought by quashing the reassessment notices and the consequent re- assessment. DECISION 17. We have heard the rival contentions and have gone through the impugned orders and the other material to which our attention was drawn. We find that the Appellant was employed in the Army as a consequence of which he was being assessed by the Salary Circle AO holding jurisdiction over OR’s (Other Ranks) of the Army Medical 31 ITA NOS. 3025 to 3028/Del/2018 Core with PAN No. AQAPK7840G. A perusal of Form 26-AS as filed on behalf of the Appellant shows that he was subjected to TDS on salary u/s 192 of the Act. Accordingly the Appellant was under the jurisdiction and authority of the Salary Circle, AO, In-charge of Other Ranks of the Army Personnel. If at all any action had to be taken against the Appellant for any alleged escapement of income then it was for the Army Salary Circle AO holding authority over the Appellant who could have done so. Clearly the Income-tax Officer, Ward 3(5) Gurugram could not have interfered in the matter with a section 148 notice unless the case had been duly transferred to him. It is now well settled that it is only the AO holding charge over an assessee for assessment purposes who could issue a notice for reassessment. In other words, no AO, other than the assessee’s own AO, could issue a notice for reassessment. The ITO Ward 3(5), Gurugram has issued the notice u/s 148 of the Act to the Appellant on 30.03.2015 after having recorded a satisfaction as to the alleged escapement of income of the Appellant. The ITO Ward 3(5) Gurugram does not seem to have made any inquiry on the relevant issues before issuing a notice u/s 148 of the Act to the Appellant. No material in this behalf has been brought before us by the Department. The High Court of Punjab & Haryana in Lt. Col. Paramjeet Singh vs. CIT (1996) 220 ITR 446 has ruled that if the assessment proceedings of an assessee is to be reopened or if the income for the relevant assessment year is to be reassessed, it is the Income-tax Officer who could assess the same in the first instance who has jurisdiction to proceed in the matter u/s 147 read with Section 148 of the Act, unless of course the case had been transferred by a competent authority to another AO u/s 127 of the Act. No such transfer order u/s 127 of the Act has been produced before us to 32 ITA NOS. 3025 to 3028/Del/2018 validate the jurisdiction as assumed by the ITO, Ward 3(5), Gurugram. It is thus clear that the assumption of jurisdiction to reassess the Appellant by the Gurugram AO is irregular and fallacious. In a similar situation the Delhi Bench of the Income-tax Appellate Tribunal in the case of Attar Singh & Ors. ITA No. 2682/Del/2018 dated 08.08.2019 has held that the assumption of jurisdiction by a different AO at Gurugram who was other than the AO holding jurisdiction over the assessee for the relevant year was invalid. Respectfully following that order and with facts being similar we hold that the assumption of jurisdiction by the ITO, Ward 3(5), Gurugram in the case of the Appellant is erroneous, illegal and void. 18. On the question of the status of Appellant selling the agricultural lands, it has been vehemently urged that the revenue authorities before issuing notice under section 148, had made no enquiry on this point whether the property is an HUF property or individual and had mechanically issued notice to the individuals to report the capital gains and business income which in AO’s view, had allegedly escaped assessment to tax. Ld. Counsel further pointed out that the land revenue records of the agricultural land as filed by the Appellant clearly show that the land in question was received from his father, late Shri Ram Singh and who in turn had inherited the lands from his great grandfather late Shri Laxman. The land records placed at pages 89 to 102 of the Paper Book confirm these facts. Ld. Counsel for the appellant further pointed out that the Ld. AO while computing the income from sale of the land was aware of the land coming to the possession of the assessee from his ancestors which he has flagged in the assessment order as through inheritance. Since the property in question devolved upon the assessee’s from over three generations, it 33 ITA NOS. 3025 to 3028/Del/2018 could not be definitely said to belong to the assessees individually. It is now well settled that the notice for re-assessment must be issued in the correct status of the assessee. Failure to do so is fatal to the initiation of the re-assessment proceedings. He then relied upon the judgment of Hon’ble Andhra Pradesh High Court in CIT vs. B. Ranga Reddy (supra) which has ruled as under :- “When the income escaped in the hands of the HUF is sought to be taxed the notice issued under s. 148 of the Act should be specifically in the name of the HUF. As the notice under s. 148 has not even made a reference to the HUF, the assessment made on the HUF pursuant to such a notice is invalid.” In a similar situation the Allahabad High Court ruled in CIT vs. Ram Das Deokinandan Prasad (HUF) supra as under:- “that notice was issued to the assessee in his individual capacity and the income sought to be reassessed was that of the Hindu undivided family of which the assessee was the karts. The notice to reassess the income of the Hindu undivided family was invalid”. 19. On a perusal of the facts and the aforesaid judicial pronouncement, though we may agree with the aforesaid argument of the Ld. Counsel, however, there is nothing on record brought before us, whether, the above named assessees (4 brothers) have applied for any PAN for HUF or whether any account was opened in the name of HUF or earlier there was any existing PAN. Neither there is any mentioned in the deed that all the individuals had entered into the agreement as HUF or jointly representing HUF. At the time of issuance of notice, the AO could not have created HUF by allotting separate PAN or create any entity without any information provided by the assessees. Even the sale consideration was received individually. The 34 ITA NOS. 3025 to 3028/Del/2018 action of the assessee also does not indicate that the transaction was entered in the capacity of HUF, albeit it was entered in the individual capacity collectively. In these circumstances, it is difficult to uphold the contention of the assessee and accordingly we reject the same. 20. As to the proceedings pertaining to AY 2010-11, it has been contended on behalf of Appellant that the registration of the sale deed on 17.11.2009 restored the incident of transfer to the date of the collaboration agreement of 14.12.2006. Our attention was drawn to section 47 of the Registration Act, 1908, which reads as under: “47. Time from which registered document operates. – A registered document shall operate from the time it would have commenced to operate if no registration thereof had been required or made, and not from the time of its registration.” Adverting to the said provision, the Ld. Counsel contended that the date of the collaboration agreement would be the material date to construe the transfer, since the Registration Act itself emphasises that the actual date of registration is not conclusive, rather, it is the date at which the initial agreement which is relevant. It was vehemently argued that even if the factum of transfer is assumed though not conceded, yet the transaction fell for consideration in AY 2006-07 and not AY 2010-11. 21. The Ld. CIT DR relying upon the ruling of decision of the Punjab & Haryana High Court in C.S. Atwal vs. CIT (2015) 378 ITR 244 has rejected the contention of appellant on the ground that the unregistered collaboration agreement of December, 2006 did not result in any valid transfer. The Apex Court in the case of CIT vs. Balbir Singh Maini (2017) 398 ITR 531 (SC) which confirmed the decision in 35 ITA NOS. 3025 to 3028/Del/2018 C.S. Atwal has also been cited in this context by the Ld. CIT (A). Ld. Counsel for the appellant contended that the facts of the subject case are different and distinguishable from the ones relied upon by Ld. CIT (A). He submitted that the apex court in the case of Balbir Singh Maini (supra) found that several stake holders in that case had granted a simple licence to the Developer to enter the property to engage in developmental activities with further conditions to restore the property back to the owners after completing the development. The grant of possession to the developer was for the limited purpose of development as envisaged by the joint development agreement. In that case the Supreme Court did not have the need to consider the effect and consequence of the registration of a transfer deed on a subsequent date on the initial agreement due to the collapse of the agreement. In the subject case, the Developer has initially been vested with the irrevocable possession of agricultural land on payment of significant refundable and non-refundable security deposits plus 35% share in the projected multi-story complex. By so doing, and acting on it, the conditions of part performance of a contract u/s 53A of the Transfer of Property Act as envisaged u/s 2(47)(v) of the Act stood fulfilled, causing a valid transfer. The Sale Deed confirms the factum of the Appellant giving the possession of the agricultural lands to the Developer soon after receipt of the partial sale consideration as defined in the Collaboration Agreement. Such a transfer got legally ratified on the registration of the sale deed in November 2009. The facts in the subject case are, therefore, quite unlike the facts of Balbir Singh Maini. In the said case the transaction of transfer did not take place due to joint development agreement getting aborted in between. Ld. Counsel further stated that the agreement of Collaboration and the 36 ITA NOS. 3025 to 3028/Del/2018 Sale Deed had to be read together and not to the exclusion of one another. The two agreements together ratified the transfer of the land to the year 2006, i.e., the year of execution of collaboration agreement. 22. On a careful consideration of the facts of the case and the argument of the Ld. Counsel, prima facie we are in tandem with the contention of the Ld. Counsel that after the implementation of the collaboration agreement dated 14.12.2006 and its subsequent registration through a regular sale deed dated on 17.11.2009, the transfer, if any, should have been relatable to the AY 2007-08. However, we are not going into this aspect and whether the judgement of the Hon’ble Apex Court in the case of CIT vs. Balbir Singh Maini (2017) 398 ITR 531 (SC) is distinguishable or not in so far as the ratio laid down by the Hon’ble Court. Since we have already quashed the proceedings u/s 148 and the reassessment order, therefore this issue has been rendered purely academic. 23. Another contention of the Appellant that the demised agricultural lands was beyond 8 kms from any municipal limit has been negated by the Ld. AO, as according to him, the Sub-Registrar Manesar’s report stated the distance to be mere 3 kms from the limits of Gurugram. The submissions made on behalf of the Appellant that his demised lands had not been notified by the income-tax authorities for urbanization after 06.01.1994 has not been rebutted by the Ld. CIT(A). We do not think it necessary for us at this stage to go into this ground and adjudicate the same for we have already held that the notice issued for re-assessment as issued to the Appellant was devoid of jurisdiction and having been issued in the wrong status and for the wrong assessment year was ab initio, illegal and invalid. 37 ITA NOS. 3025 to 3028/Del/2018 24. In the result, the appeal of the assessee is hereby allowed. ITA No. 3026/Del/17 Sri Kanwar Lal vs. ITO, Ward 2(2), Gurugram: 25. The Appellant Kanwar Lal is the brother of Ram Kishan, Ram Avtar and Manphool Ram Singh. He was an employee of the Delhi Water Services Division, 3 Shamnath Marg, Delhi-110054. Appellant’s Form No. 26-AS for the AY 2010-11 shows his PAN as AECPL6421N (page 5 of the 15.09.2021). Accordingly, he was under the jurisdiction of Salary Circle ITO In-charge of Delhi Water Services Division. On page 6 of the same paper book the copy of the identity card of the Appellant issued by the Delhi Water Services Division is placed which describes him as a pensioner. He too, like his brother Ram Kishan, was the subject matter of a notice issued u/s 148 of the Act dated 30.03.2015 by the ITO, Ward 2(5), Gurugram. The copy of the notice as issued by the said ITO is placed at page 59 of the paper book filed in his case. That marks the status of the Appellant as individual. The satisfaction note of the AO is annexed at pages 60 to 62. Therein too, the AO refers to the collaboration agreement of December 2006 with Bestech India Private Ltd. for the development and construction of multi-storied complexes on the agricultural land of the Appellant and his brothers. For the reason that the records of the office of ITO, Ward 2(4), Gurugram did not show that the Appellant was filing any income- tax return in his Ward at Gurugram. Income-tax Officer has simply opined that the amount of Rs. 2,41,69,500/- received by the Appellant constituted his business income which he had not been returned for assessment by the Appellant and so the notice for reassessment was issued. Pursuant to the above notice the Income-tax Officer, Ward 2(2), 38 ITA NOS. 3025 to 3028/Del/2018 Gurugram completed the assessment of the Appellant u/s 147/143(3) of the Act on 21.11.2015 determining the taxable income at Rs. 3,23,77,807/-. Like in the case of Ram Kishan the assessment order contains an endorsement to the effect that the agricultural land as sold vested in the Appellant due to inheritance. 26. Aggrieved by this assessment order the Appellant had filed an appeal before the CIT(A)-1, Gurugram who vide the common order in the case of four brothers of 30.03.2017 held that the income as assessed as of business by the ITO was actually from capital gains and not business. The other observations as made by the ITO in assessment were confirmed by the Ld. CIT(A). 27. Against the order of the Ld. CIT (A) the Appellant has filed this appeal before the Tribunal. At the time of the hearing of appeal additional grounds of appeal have been filed. The grounds as taken originally and the additional grounds as taken later are identical to those as are there in the case of Ram Kishan case. 28. We have carefully considered the facts of the case and the rival contentions and also the material placed for our consideration including the written submissions. We find that the facts in this case are identical to that of Ram Kishan dealt with by us herein above. The Appellant herein was not under the charge or authority of the ITO, Ward 2(5), Gurugram at the time of the notice issued u/s 148 of the Act. His jurisdiction lay with the ITO, Salary Circle, In-charge of cases of the employees of Delhi Water Services Division. The capital gains giving rise to the reassessment are out of the same tracts of agricultural land which were provided for development to Bestech 39 ITA NOS. 3025 to 3028/Del/2018 India Private Ltd. through a Collaboration Agreement to which this Appellant is a signatory alongwith Ram Kishan and his other brothers. Likewise this Appellant is also a signatory alongwith Ram Kishan and his other brothers to the Sale Deed dated 17.11.2009. With facts being common and identical to those of Ram Kishan we decide this appeal similar to as done in the case of Ram Kishan above. Consequently the notice for reassessment issued u/s 148 is quashed for the reasons as stated more elaborately in the case of Ram Kishan. Accordingly, appeal of the appellant is allowed. ITA No. 3027/Del/17 Sri Ram Avtar vs. ITO, Ward 3(4), Gurugram: 29. The Appellant Ram Avtar is the brother of Ram Kishan, Kanwar Lal and Manphool Ram Singh. He was an employee of the Panchayati Raj Department of the Haryana Government. Form No. 26-AS pertaining to him for AY 2010-11 placed at page 8 of the 15.09.2021 paper book shows his PAN as APLPR4350L. He was subjected to deduction of TDS on salary u/s 192 of the Act. Accordingly he was under the jurisdiction of Salary Circle ITO In-charge of the Panchayati Raj Department, Gurugram of the Government of Haryana. He too like his brothers Ram Kishan, Kanwar Lal and Manphool Ram Singh was issued a notice issued u/s 148 of the Act 30.03.2015 by the ITO, Ward 3(5), Gurugram. That is placed at page 6 of the paper book filed in his case. Placed on pages 61 and 62 of the paper book is the copy of the reasons for reopening of the case u/s 147 of the I.T. Act as recorded by the ITO. That stands in the name of the individual and refers to the Collaboration Agreement with Bestech India Private Ltd. and to the Sale Deed of 18.11.2009 and of the assessee earning business income as provided under Section 45(2) of the Act. For the fact that the 40 ITA NOS. 3025 to 3028/Del/2018 assessee had allegedly failed to file true particulars of his income the reasons u/s 147 were recorded culminating in a notice u/s 148 of the Act. 30. Pursuant to the above notice ITO, Ward 3(4), Gurugram completed the assessment at an income of Rs.2,44,07,850/- in the case of Sri Ram Kishan and Sri Kanwar Lal the assessment order contains an endorsement of the fact that the agricultural land as sold vested in the Appellant due to inheritance. 31. Aggrieved by this assessment order the Appellant had filed an appeal before the CIT(A)-1, Gurugram who vide the common order in the case of four brothers of 30.03.2017 ruled that the income as assessed as of business by the ITO was actually from capital gains and not business. The other observations as made by the ITO in assessment were confirmed by the Ld. CIT(A). 32. At the time of the hearing of appeal additional grounds of appeal have been filed. The grounds as taken originally and the additional grounds as taken later are identical to those as are there in the case of Ram Kishan case. 33. We have carefully considered the facts of the case and the rival contentions and also the material placed for our consideration including the written submissions. We find that the facts in this case are identical to that of Ram Kishan dealt by us herein above. The Appellant herein was not under the charge or authority of the ITO, Ward 2(5), Gurugram at the time of the notice issued u/s 148 of the Act. His jurisdiction lay with the ITO, Salary Circle, Incharge of cases 41 ITA NOS. 3025 to 3028/Del/2018 of the employees of Panchayati Raj, Govt. of Haryana. The capital gains giving rise to the reassessment are out of the same tracts of agricultural land which were provided for development to Bestech India Private Ltd. through a Collaboration Agreement to which this Appellant is a signatory alongwith Ram Kishan and others. This Appellant is also a signatory alongwith Ram Kishan and other brothers to the Sale Deed dated 17.11.2009. With facts being common and identical to those of Ram Kishan we decide this appeal similar to as done in the case of Ram Kishan above. Consequently the notice for reassessment issued u/s 148 is quashed for the reasons as stated more elaborately in the case of Ram Kishan. Thus, the appeal is allowed. ITA No. 3028/Del/17 Sri Manphool Ram Singh vs. ITO, Gurugram: 34. The Appellant Manphool Ram Singh is the brother of Ram Kishan, Kanwar Lal and Ram Avtar. He was an employee of the Indian Navy. Form No. 26-AS as filed shows up his PAN AMKPS2596R. That is placed at page 9 of the paper book of 15.09.2021. Also placed at the same paper book page 10 is a copy of the acknowledgement of the return filed by the Appellant for the subject year with address: INS Shivaji, Lonavala, Pune. This return was filed on 13.03.2012 with ITO, Ward 26(1)-4 (NAVY). With this material on record his assessment with the ITO, Salary Circle, Navy is established. The Appellant, like his brothers Sri Ram Kishan, Sri Kanwar Lal and Sri Ram Avtar was visited with a notice u/s 148 dated 30.03.2015 issued by the Income- tax Officer, Ward 2(5), Gurugram a copy of which is placed at page 62 of the paper book. The reasons for initiating the proceedings u/s 147 are filed at pages 63 and 64 of the paper book. The notice is issued to 42 ITA NOS. 3025 to 3028/Del/2018 the individual assessee it refers to the Collaboration Agreement of December 2006 with Bestech India Private Ltd. to which the Appellant was a party. The note also refers to the Sale Deed dated 17.11.2009. For the reason that as per the records of the Office of the ITO, Ward 2(5), Gurugram, there was no return of income of the assessee. The AO concluded that as provided u/s 45(2) of the Act a sum of Rs. 2,41,69,500/- had to be brought to tax which had escaped assessment due to the alleged failure of the assessee to declare the true particulars of income. Pursuant to the aforesaid notice the ITO, Ward 2(4), Gurugram completed the assessment at an income of Rs. 2,47,31,297/-. 35. In the first appeal before the CIT(A)-1, vide common order in the case of four brothers of 30.03.2017 ruled that the income as assessed as of business by the ITO was actually from capital gains and not business. The other observations as made by the ITO in assessment were confirmed by the Ld. CIT(A). 36. The grounds as taken originally and the additional grounds as taken later are identical to those as are there in the case of Ram Kishan case. 37. We have carefully considered the facts of the case the rival contentions and also the material placed for our consideration including the written submissions. We find that the facts in this case are identical to that of Ram Kishan dealt with by us herein above. The Appellant herein was not under the charge or authority of the ITO, Ward 2(5), Gurugram at the time of the notice issued u/s 148 of the Act. The jurisdiction lay with the ITO, Salary Circle, In-charge of cases 43 ITA NOS. 3025 to 3028/Del/2018 of the Indian Navy Soldiers. The capital gains giving rise to the reassessment are out of the same tracts of agricultural land which were provided for development to Bestech India Private Ltd. through a Collaboration Agreement to which this Appellant is a signatory alongwith Ram Kishan and other brothers. This Appellant is also a signatory alongwith Ram Kishan and other brothers to the Sale Deed dated 17.11.2009. With facts being common and identical to those of Ram Kishan we decide this appeal as done in the case of Ram Kishan above. Consequently the notice for reassessment issued u/s 148 is quashed for the reasons as stated more elaborately in the case of Ram Kishan. 38. Accordingly, all the appeals of the aforesaid assessee are allowed. Order was pronounced in open court on 10 th day of March, 2022. Sd/- sd/- (DR. B.R.R. KUMAR) (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 10.03.2022 TS Copy forwarded to: 1.Appellant 2.Respondent 3.CIT 4.CIT(A)-29, New Delhi. 5.CIT(ITAT), New Delhi. AR, ITAT NEW DELHI.