Late Sh. Shiv Raj Singh through Legal Heir Smt. Kamlesh Chaudhary, Sirmour V. Income Tax Officer, Nahan

ITA 380/CHANDI/2022

• Counselvise Citation: [2022] 103 COUNSELVISE.COM (IT) 9714 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 17-10-2022
• Assessment Year: 2012-2013
• Appeal Filed On: 25-04-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Revision of order; Reason to believe
• Section: 147; 148; 263; 63; 28; 10; 2; 143(3); 50C; 2(14); 22

Judgement Text

आयकर अपील य अ धकरण,च डीगढ़ यायपीठ, च डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, “B” CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER & SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.380/CHD/2022 नधा रण वष / Assessment Year : 2012-13 Late Shri Shiv Raj Singh Through L/H Smt. Kamlesh Chaudhary, Old House No.120/1, Ogli, Nahan, Distt. Sirmour (HP). Vs The ITO, Nahan. थायीलेखासं./PAN NO: CILPS6949D अपीलाथ /Appellant यथ /Respondent नधा रती क ओर से/Assessee by: Shri Rohit Kapoor, CA and Shri Virsain Aggarwal, CA राज व क ओर से/ Revenue by : Shri Rohit Sharma, CIT- DR स ु नवाई क तार"ख/Date of Hearing : 18.10.2022 उदघोषणा क तार"ख/Date of Pronouncement : 27.10.2022 आदेश/Order Per Sanjay Garg, Judicial Member: The pre sent a pp ea l ha s been pre fe rre d by the a sse ssee a ga inst the or der da te d 23.03. 2022 pa ssed by the ld. PCI T exercising the Re visi ona ry j uri sdi ction u/s 26 3 of t he I n c o m e Ta x A c t , 1 9 6 1 ( h e r e i na f te r r e f e r r e d t o a s ‘ t he A c t ’ ) . 2 . A t t h e o u t se t , t h e l d . c o u n se l f o r t h e a s se ss e e ha s s u b m i t t e d t ha t th e l d . P C I T h a s w r o n g l y a n d i l le ga ll y se t a s i d e t h e o r d e r o f t h e A O e x e r c i s i n g h i s j u r i s d i c t i o n u / s 2 6 3 o f t h e ITA No. 380/CHD/2022 A.Y. 2012-13 Page 2 of 9 I n c o m e Ta x A c t w h e r e a s t he o r d e r o f t h e A s s e s s i n g Of f i c e r ( h e r e i na f te r r e f e r r e d t o a s ‘ t he A O ’ ) p a s se d u / s 147 r e a d w i t h S e c t i o n 1 4 3 ( 3 ) o f t h e A c t w a s n e i th e r e r r o n e o u s n o r p r e j u d i c i a l t o t h e i n te r e s t s o f t h e Re v e n u e . 3 . T h e l d . c o u n s e l h a s b r o u g h t o u r a t te n t i o n t o p a ra 2 o f t he i m p u g n e d o r de r o f t h e l d . P C I T s t a t i n g t he r e a s o ns , b e ca u s e o f w h i c h l d . P C I T w a s o f t he v i e w t h a t t he o r d e r o f t he A O w a s e r r o ne o u s a n d p r e j u d i c i a l t o t h e i n t e r e s t s o f t h e Re ve n ue a s u n d e r : 2. A perusal of the relevant assessment records revealed that the proceedings u/s 148 of the Act were initiated on the basis of an information that the assesses had sold an immovable property at Village Gulavali, Pargana Dankaur, Dist: Gautum Budh Nagar vide sale deed dated 18.10.2011 for a consideration of Rs, 23,00.000/-. For the purpose of Stamp value, the said property was valued at Rs. 1,24,75,000/- by the Stamp Valuation Authority. During the course of assessment proceedings, the Assessing Officer not conducted the requisite enquiries in respect of the reason for which the proceedings u/s 148 of the Act were initiated. Therefore, the order passed u/s 143(3).r.w.s 147 of the I.T.Act. 1961 appeared to be erroneous, and thus prejudicial to the interest of revenue. Accordingly, a notice u/s 263 was issued to the assessee vide letter ITBA/REV/F/REV1/2021-22/1040648731 (1) on 12.03.2022. elaborating the omissions on the part of AO. The assessee was requested to show cause as to why the assessment order dated 30.09.2019 for assessment year 2012-1 3 u/s 143(3) r.w.s, 147 of the Act should not be cancelled by invoking the provisions of section 263 of the Act. 4 . A p e r u sa l o f t h e a b o v e o b s e r va t i o n s m a d e b y t he l d . P C I T r e ve a l t ha t t he l d . P C I T n o t e d t ha t t h e A O h a d fa i le d t o c o n d u c t n e ce s sa r y e n q u i r i e s i n re s p e c t o f t h e r e a s o n s fo r wh i c h t h e a s s e s s m e n t w a s r e o p e ne d b y t h e A O u / s 1 4 7 r e a d w i t h S e c t i o n 1 4 8 o f t h e A c t . Th e l d . c o u n s e l ha s f u r t h e r i n v i t ed o u r ITA No. 380/CHD/2022 A.Y. 2012-13 Page 3 of 9 a t te n t i o n t o t he f o l l o w i n g r e a s o n s r e c o r d e d f o r r e -o p e n i n g o f t h e a s s e s s me n t : “The assessee has not filed his Income Tax Return for the relevant period. As per assessee, he is an agriculturist and does not have any taxable income. 2. Information has been received from the office of Director of Income Tax (I & CI), vide letter F.No. DIT(I & C.I)/Chd/2016-17/582 dated 30.1 1.2016 that the assessee has sold his immovable property at Village Gulawali, Pargana- Dankaur, Distt. Gautam Budh Nagar (UP) vide Sale Deed No. 19818 of 2011 dated 18.01.2011. He has sold 2.4949 hectares of land for a total sale consideration of Rs.23,00,000/-. As per the value adopted by the Stamp Valuation Authority, the property has been valued at Rs. 1,24,75,000/- It has been further informed that the said property comes within the municipal limits of Noida and is thus covered u/s 2(14) of Income Tax Act, being capital asset 3. Information available on record further reveal that the assessee, during query raised in this regard has vide letter dated 01.05.20 17 stated that the said land is rural agricultural land. The relevant portion of the letter is reproduced here under: 1. "I am a agriculturist and have no taxable income and have not filed any income tax return. 2 1 had disposed off my ancestral rural agricultural land situated at Village Gulawali, Pargana Dankaur, and District Gautam Dudha Nagar(UP) in 2011-12. 3. Further the aforementioned land is located at a distance of approximately 22 Kilometers from municipal limits (Nagar Panchayat, Dankaur). A copy of the certificate issued by Tehsildar, Sadar, Gautam Budh Nagar (UP) dated 24.04.2014 is also enclosed for ready reference. This land is rural agricultural land sale proceeds of the same are not taxable under Income Tax Act 1961, not being a capital asset u/s 2(l4| of the Act." 4. 1 have analyzed the case and have also considered the information available on record. The issue involved is whether the land sold by assessee is capital asset or not. Letters issued by the undersigned to the Tehsildar. Gautam Budh Nagar have not been responded. However independent enquiries have revealed that the said property comes under notified area of NOIDA "(New Okhla Industrial Development Authority), and is Sector 162 of NOIDA. The official website http://www.noidaauthorityonline.com has been explored in this regard and it has been revealed that vide Special Board meeting held on 09.09.2005, the master plan of notified area was approved which includes Sector 162 under the said notified area. Apparently the property sold by assessee is a capital asset, being under the notified area. ITA No. 380/CHD/2022 A.Y. 2012-13 Page 4 of 9 5. From the records available, it is seen that the sale consideration of said capital asset works out at Rs. 1,24,75,000/-, being value as per the Section 50C of Income Tax Act. The land is stated to be ancestral land and therefore value for cost indexation is to be adopted for the year 1981, As on date, there is no such data of value of land available as on 01.04.1981. 1 presume the value of land at Rs. 10,00,000/-, for the purpose of capital gain, subject to verification of it, at the time of assessment. Accordingly the Long Term Capital Gain works out at Rs.46,25,000/-. I therefore prima facie have reasons to believe that income of Rs.46,25,000/- have escaped assessment. 6. In this case no return of income was filed for the year under consideration accordingly, in this case, no assessment was made and the only requirement to initiate proceeding u/s 147 is reason to believe which has been recorded above. 7 . It is pertinent to mention here that in his case the assessee has chosen not to file return of income for the year under consideration although the total income of the assessee has exceeded the maximum amount which is not chargeable to tax as discussed in paragraph 5 above and the assessee was assessable under the Act. In view of the above, the provisions of clause [a) of Explanation 2 to section 147 are applicable to facts of this case and the assessment year under consideration is deemed to be a case where income chargeable to tax has escaped assessment . 8. In this case more than four years have lapsed from the end of assessment year under consideration. Hence necessary sanction to issue notice u/s 148 has been obtained separately from Pr CIT as per the provisions of Section 151 of the Act.” 5 . A p e r u s a l o f th e a b o ve r e a s o n s r e c o r d e d s ho w s th a t e a r l ie r t h e o f f i ce o f D I T( I ) h a d i s s u e d S h o w C a u se N o t i c e t o t he a s s e s se e s ta t i n g t h a t t he l a n d s o l d b y t h e a s se s se e wa s w i t h i n t h e m u n i c i p a l l i m i t s a n d t h u s w a s a ca p i ta l a s se t as p e r t he p r o v i s i o n s o f S e ct i o n 2 ( 1 4 ) o f t h e I n c o m e Ta x A c t . H o w e v e r , t he a s s e s se e r e p l i e d t o t h e s a i d n o t i c e o f t h e I n ve s ti ga t i o n W i n g t h a t t h i s l a n d i n q u e s t i o n w a s a r u r a l l a n d w h i c h wa s l o c a te d a t a d i s ta n ce o f a p p r o x i m a te l y 2 2 k m s . f r o m th e m u ni c i p a l l i m i t s o f N a ga r P a n c ha ya t , D a n k a u r . Th e a s s e s se e al s o f u r n i s h e d a c o p y o f c e r t i f i c a te i s s u e d b y Te h s i l d a r, Ga u t a m B u d h N a g a r ( U P ) d a t e d 2 4 . 0 4 . 2 0 1 4 i n t h i s r e s p e c t. Th e r e a f te r , ITA No. 380/CHD/2022 A.Y. 2012-13 Page 5 of 9 t h e I n v e s t i ga t i o n W i n g d i d n o t p r o c e e d w i t h t h e f u rt he r e n q u i r i e s . 5 . 1 H o w e ve r , la te r o n t h e A O r e o p e ne d t h e a s se s s m e nt o b s e r v i n g t ha t f ro m t h e i n d e p e n d e n t e n q u i r i e s , i t re ve a l e d t ha t t h e p r o pe r t y i n q u e s t i o n c o m e s un d e r t h e N o t i f i e d Ar e a o f N o i da ( n e w O k h l a I n d u s t r i a l De v e l o p m e n t A u t h o r i ty ) . Th e A O , t h e r e f o r e , r e o p e n e d t h e a s se s sm e n t a n d s h o w c a u s e d t he a s s e s se e a s t o w h y t h e l a n d i n q ue s t i o n b e n o t t r e ate d a s c a p i t a l a s s e t a n d w h y t h e ca p i t a l g a i n s o n t he s a le o f t h e la n d m a y n o t b e t a xe d . H o w e v e r , t he a s se s se e i n t h e r e -a s se s s m e n t p r o c e e d i n g s f u r n i s h e d t he n e c e s sa r y de ta i l s n o t o n ly r e l a t i n g t o t h e d i s ta n ce o f t h e p r o p e r t y f r o m t h e l i m i t s o f t h e m u n i c i p a l l i m i t s b u t a l s o r e ga r d i n g t h e fa c t t h a t t h e p o p u l a ti o n o f t he v i l l a ge G u l a va l i , w h e r e t he l a n d w a s s i t u a t e d , w a s 1 8 2 8 o n l y a n d t ha t a s p e r p r o v i s i o n s o f S e c t i o n 2 ( 1 4 ) o f t h e I n c o m e Ta x A c t , s i n c e t h e p o p u l a t i o n i n a n a re a w h i c h i s c o m p ri s e d w i t h i n t h e j u r i s d i c t i o n o f a m u n i c i p a l i ty o r N o t i f i e d A r e a C o m m i t te e w a s le s s t ha n 1 0 0 0 0 , t h e l a n d i n q ue s t i o n w i l l n o t b e c o n s i d e re d a s c a p i t a l a s s e t u / s 2 ( 1 4 ) o f t h e A c t . 6 . T h e l d . c o u n s e l f o r t h e a s s e s se e h a s f u r t h e r i n vi t e d o u r a t te n t i o n t o t h e a p p l i c a ti o n m o v e d b y t h e a s se s se e t o t he Te h s i l d a r , G a u ta m B u d h N a ga r r e q u e s t i n g h i m t o i s s ue h i m a c e r t i f i ca te re ga r di n g t h e d i s ta n ce o f h i s l a n d f r o m t h e l i m i t s o f ITA No. 380/CHD/2022 A.Y. 2012-13 Page 6 of 9 t h e Mu n i c i p a l C o u n c i l w h e r e u p o n , t h e Te h s i l d a r c a ll e d r e p o r t f r o m t h e L a n d Re v e n u e o f f i c i a l s , w h o a f te r v e r i f i c at io n , r e p o r te d t h a t t he la n d w a s s i t u a te d a t a d i s t a n c e o f 2 2 k m s . f r o m N a g a r P a n c h a ya t . Th e r e p o r t w a s d u l y si g n e d b y t h e Te h s i ld a r u n de r h i s s e a l / s ta m p . Th e l d . c o u n s e l f o r t he a s se s se e ha s f u r t he r i n v i t e d o u r a tt e n t i o n t o t h e a s se s s m e n t o r d e r da te d 3 0 . 0 9 . 2 0 1 2 , w h e r e i n , t h e A O ha s a l s o n o te d t h a t i n fo r m a t i o n w a s a l s o o b t a i ne d u / s 1 3 3 ( 6 ) o f t h e A c t f r o m t h e Teh s i l d a r , G a u ta m B u d h N a ga r ( U P ) w h i c h w a s p l a ce d o n r e c o r d . A f t e r e xa m i n i n g t he i n f o r m a t i o n / d o c u m e n t s p la c e d o n re c o rd , t h e A O a c c e p t e d t he r e tu r n e d i n c o m e . H o w e v e r , t h e l d . P C IT i n p a r a 3 o f t h e S h o w C a u se N o t i c e o b se r v e d a s u n de r : “3. A perusal of the relevant assessment records reveals that the assessee had sold 2.4949 hectares of land at Village Gulavali Dankaur, Distt. Gautam Budh Nagar vide sale deed no. 199818 of 2011 dated 18.10.2011 for a consideration of Rs. 23,00,000/-, but the value of the given land was determined at Rs. 1,24,75.000/- by the Stamp Valuation Authority for the stamp valuation purpose. From the perusal of the assessment record, it is further noted that, during the course of assessment proceedings, the AO had not made any enquiry or verification regarding the distance of the said land from the notified area. The distance certificate submitted by the assessee that the land was situated more than 23 Kms from the limits of the Municipal Corporation Dankaur is found contrary to the facts of the case, as the assessee himself had admitted that some parts of the Gautam Budh Nagar where the land was situated had been notified. The assessee had further stated simply that the said land was never a part of such notified land, but had failed to furnish any documentary evidence to prove that the distance of the said land was more than 8 Kms form the notified area.” 6 . 1 F u r t h e r , t h e l d . P C I T i n p a r a 4 o f t h e i m p u g ne d o r de r p a s se d u / s 2 6 3 h a s o b se r ve d u nd e r : ITA No. 380/CHD/2022 A.Y. 2012-13 Page 7 of 9 “4. A perusal of the relevant assessment records reveals that the assessee had sold 4949 hectares of land at VHlag© Gulavali Dankaur, Dist: Gautarn Budh Nagar vide sale deed no.199818 of 2011 dated 18.10.2011 for a consideration of Rs. 23,00,000/- but value of the given land was determined at Rs.1,24,75,000/- by the Stamp Valuation uthority for the stamp valuation purpose. From the perusal o1 the assessment record, it is further noted that, during the course of assessment proceedings, the AO had not made any enquiry or verification regarding the distance of the said land from the notified area. The distance certificate submitted by the assessee that the land was situated more than 23 Kms from the limits of the Municipal Corporation Dankaur is found contrary to the facts of the case, as the assessee himself had admitted that some parts of the Gautam Budh Nagar where the land was situated had been notified. The assessee had further stated simply that the said land was never a part of such notified land, but had failed to furnish any documentary evidence to prove that the distance of the said land was more than 8 Kms form the notified area. 7 . A p e r u sa l o f t h e a b o v e re p r o d u ce d o b s e r va t i o n s of t h e l d . P C I T c o u p l e d w i t h t h e S h o w C a u s e N o t i ce w o u l d r e v e al t ha t t he m a i n c o n ce r n o f t h e l d . P C I T f o r m i n g t h e b e l ie f t h at o r d e r o f t h e A O w a s e r r o n e o u s a n d p r e j u d i c i a l t o t he i n te r e st s o f t he R e v e n u e wa s t h a t t he A O ha s n o t m a d e p r o p e r e nq u i r ie s . H o w e ve r , t h e o r d e r o f t h e l d . P C I T i s s i l e n t a s t o w h a t f u r t he r e n q u i r i e s t he A O w a s r e q u i r e d t o m a k e . I t se e m s t ha t t he P C I T h a s f o r m e d h i s b e l ie f t h a t t h e o r d e r o f t h e A O w a s e r r o n e o us o n l y a f te r pe r u sa l o f t he a s s e s sm e n t o r d e r w i t ho u t c o n s u l t i n g t h e a s se s s m e n t r e c o r d s . Th e d o c u m e n t s f u r n i s h e d b y t he a s s e s se e r e ve a l th a t i n i t i a l l y t h e e n q u i r y wa s c o ndu c t e d b y t he O f f i c e o f t h e D I T ( I ) i n t h i s r e s p e c t w he r e u p o n , t he a s se s se e f u r n i s h e d a r e p ly a n d c e r t i f i ca te t o t h e Te h s i l d a r t h a t t he la n d i n q ue s t i o n w a s s i t u a te d a t a d i s t a n c e o f 2 2 k m s f ro m G r a m P a n c h a ya t . Th e r e a f te r , t he o f f i c e o f D I T( I ) d i d n ot p r o c e e d w i t h ITA No. 380/CHD/2022 A.Y. 2012-13 Page 8 of 9 f u r t h e r e n q u i r i e s. Th e r e a f t e r t h e a s s e s s m e n t w a s re o pe ne d o n t h e sa m e i s s u e w h e r e u p o n t h e a s se s se e f u r n i s h e d t he n e ce s sa r y d o c u m e n t s n o t o n l y i n r e s pe c t o f t he fa c t t ha t t he l a n d w a s s i t u a te d a t a d i s ta nc e o f 2 2 k m s . f r o m G r am P a n c h a ya t b u t a l s o i n r e s p e c t o f t he fa c t th a t t he t o ta l p o p u l a t i o n o f t h e a r e a wa s l e s s t h a n 1 0 0 0 0 a n d t h e re f o r e , t he l a n d d i d n o t fa l l w i t h i n t h e d e f i ni t i o n o f ‘ c a p i ta l a s se t ’ a s pe r t h e p r o v i s i o n s o f S e c t i o n 2 ( 1 4 ) o f I n c o m e Ta x A c t . A p a r t f r o m t h a t, t h e A O m a d e i n d e pe n d e n t e n q u i r y by s e e k i n g i n f o r m a ti o n u / s 1 3 3 ( 6 ) o f t h e A c t f r o m t he Te h s i l d a r o f G a u ta m B u d h N a ga r a n d a f te r p e r u s a l o f t he i n fo r m a ti o n a n d e v i d e n ce s f u r n i sh e d b y t h e a s se s s e e , t he A O ha d a c ce p te d t he c l a i m o f t he a s se s s e e . 7 . 1 T h e o r d e r o f t h e l d . P C I T d o e s n o t s p e a k o f t h e a f o r e sa i d e v i d e n ce s n o r a ny d i s c u s s i o n h a s b e e n m a d e b y th e ld . P C I T a s t o h o w t h e A O w a s n o t j u s t i f i e d i n r e l y i n g u p o n t h e a f o r e sa i d e v i d e n ce s . Th e l d . P C I T h a s p a s se d t he i m p ug n e d r ev i s i o n o r d e r w i t h o u t c o n s u l t i n g t h e a s se s s m e n t r e c o r d s a n d w i t h o u t p o i n t i n g o u t t h e e r r o r o r o m i s s i o n i n t h e e v i d e n c e s f u r n i s he d b y t h e a s se s se e b a se d u p o n w h i ch t h e l d . A O ha d a c ce p t e d t he c l a i m o f t he a s s e s s e e . F o r e xe r ci s e o f j u r i s d i c t i on u / s 2 6 3 o f t h e I . T. A c t , t h e tw i n c o n d i t i o n m u s t b e s a t i s f i e d th a t t h e o r de r i s e r r o ne o u s a n d p r e j u d i c i a l t o t he i n te r e s t o f Re ve n u e . I n t h i s ITA No. 380/CHD/2022 A.Y. 2012-13 Page 9 of 9 c a s e , t he f i r s t a nd f o r e m o s t c o n d i t i o n t h a t t h e “ o rd e r o f t h e A O s h o u l d b e e r r o n e o u s ” h a s n o t b e e n s a t i s f i e d . I n v ie w o f t h i s , w e h o l d t h a t t h e l d . P C I T w a s n o t j u s t i f i e d i n e xe rc i s i n g h i s j u r i s d i c t i o n u / s 2 6 3 o f t h e A c t a n d t h e r e b y s e t t i n g a s i d e t he a s s e s s m e n t o r de r . Th e i m p u g n e d R e v i s i o n a r y O r d e r pa s s e d b y t h e l d . P C I T i s , t h e r e f o re , n o t s u s t a i na b l e a n d t h e sa m e i s h e r e b y q ua s h e d . T h e a p p e a l o f t h e a s se s se e s ta n d s al l o w e d . 8 . I n t h e re s u l t , t h e a p p e a l o f t he a ss e s se e i s a l lo w e d . O r d e r p r o n o u n c e d o n 2 7 t h O c t o b e r , 2 0 2 2 . S d / - S d / - (VIKRAM SINGH YADAV) (SANJAY GARG) लेखा लेखालेखा लेखा सद瀡य सद瀡यसद瀡य सद瀡य/ Accountant Member 瀈याियक 瀈याियक瀈याियक 瀈याियक सद瀡य सद瀡यसद瀡य सद瀡य/ Judicial Member “Poonam.” आदेश क त)ल*प अ+े*षत/ Copy of the order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent 3. आयकरआय ु ,त/ CIT 4. आयकरआय ु ,त (अपील)/ The CIT(A) 5. *वभागीय त न/ध, आयकर अपील"य आ/धकरण, च1डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड फाईल/ Guard File आदेशान ु सार/ By order, सहायक पंजीकार/ Assistant Registrar