Income Tax Officer -5(4), Kanpur V. Shri Mahendra Singh Tyagi, Kanpur

ITA 446/LKW/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100460 (ITAT-LUCKNOW)
• Duration Of Justice: 2 year(s) 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 16-10-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 14-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Salary income; Cost of acquisition; Non compliance
• Section: 143(3); 142(1); 147; 148; 263; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI. A. K. GARODIA, ACCOUNTANT MEMBER ITA NO.446/LKW/2013 ASSESSMENT YEAR:2009-10 INCOME TAX OFFICER 5(4) KANPUR V. SHRI. MAHENDRA SINGH TYAGI KANPUR TAN/PAN:ABCPT7849P (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI. AMIT NIGAM, D.R. RESPONDENT BY: SHRI. RAKESH GARG, ADVOCATE DATE OF HEARING: 16 10 2015 DATE OF PRONOUNCEMENT: 06 11 2015 O R D E R PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A), INTER ALIA, ON THE FOLLOWING GROUNDS:- 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN ANNULLING THE ASSESSMENT WITHOUT APPRECIATING THE FACT THAT THE REASON OF BELIEVE FOR ESCAPEMENT OF INCOME WAS BASED ON SALE OF LAND AT MAKANPUR, LONI WHICH SALE WAS DETECTED DURING THE COURSE OF ASSESSMENT PROCEEDING U/S 143(3) FOR A.Y. 2008-09. 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN ANNULLING THE ASSESSMENT WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE DELIBERATELY FILED HIS RETURN OF INCOME IN TERRITORIAL JURISDICTION WHEREAS DIE JURISDICTIONS/AS WITH THE ITO-5(4), KANPUR AND THE ASSESSMENT FOR A.Y. 2008-09 WAS COMPLETED BY THE ITO-5(4), KANPUR. :- 2 -: 3. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN ANNULLING THE ASSESSMENT WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE DID NOT RAISE ANY OBJECTION REGARDING THE JURISDICTION OF CASE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 4. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN ANNULLING THE ASSESSMENT ON THE GROUND THAT THE NOTICE U/S 148 WAS ISSUED DURING THE PENDENCY OF REGULAR ASSESSMENT PROCEEDINGS AND ONLY NOTICE U/S 143(2) COULD HAVE BEEN ISSUED AND NOTICE U/S 148 IS WITHOUT JURISDICTION IGNORING THE FACT THAT THE ACT DOES NOT DEBAR THE AO FROM TAKING RECOURSE TO PROVISIONS OF S. 147 OF THE ACT EVEN-WHEN TIME TO ISSUE NOTICE U/S 143(2) IS AVAILABLE. 5. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN ANNULLING THE ASSESSMENT WITHOUT APPRECIATING THE JUDGMENTS OF THE SUPREME COURT IN ASSTT. CIT VS. RAJESH JHAVERI STOCK BROKERS (P.) LTD. (291 ITR 500) AND OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. SHRI JORA SINGH, PROPRIETOR M/S KHAIRA FILLING STATION IN ITA NO. 418 OF 2010, WHEREIN IT HAS BEEN HELD THAT SECTION 143(3) DOES NOT DEBAR AO TO TAKE ACTION UNDER SECTION 147 OF THE I. T. ACT, 1961. 6. THE ORDER OF THE CIT(A). KANPUR BEING ERRONEOUS, UNJUST AND BAD IN LAW BE VACATED AND THE ORDER OF THE AO BE RESTORED. 2. DURING THE COURSE OF HEARING OF THE APPEAL, THE LD. COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE FACTS THAT THE ASSESSMENT FOR ASSESSMENT YEAR 2008-09 WAS FRAMED UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER CALLED IN SHORT THE ACT') BY INCOME TAX OFFICER - 5(4), KANPUR. AT THAT TIME, THE ASSESSEE WAS ONLY A SALARIED EMPLOYEE, BUT LATER ON WHEN THE ASSESSEE HAD SOME OTHER :- 3 -: INCOME FROM DIFFERENT SOURCES, THE RETURNS WERE FILED FOR ASSESSMENT YEARS 2009-10 AND 2010-11 WITH INCOME TAX OFFICER - 3(2), KANPUR, AS THE INCOME TAX OFFICER - 5(4), KANPUR HAVING JURISDICTION OVER THE SALARY CASES, DECLINED TO ACCEPT THE RETURNS. IT WAS FURTHER CONTENDED THAT DURING THE COURSE OF ASSESSMENT FOR ASSESSMENT YEAR 2008-09, THE ASSESSING OFFICER RAISED A SPECIFIC QUERY REGARDING DEPOSITS MADE BY THE ASSESSEE IN ITS BANK ACCOUNT, TO WHICH THE ASSESSEE REPLIED THAT THE DEPOSIT OF RS.4 LAKHS IN BANK REPRESENTS THE ADVANCE RECEIVED TOWARDS SALE OF AGRICULTURAL LAND SITUATED AT GRAM MAKANPUR, PARGANA LONI, TAHSIL GHAZIABAD. SINCE THE RETURN WAS NOT FILED WITH INCOME TAX OFFICER - 5(4), KANPUR, THE INCOME TAX OFFICER - 5(4), KANPUR REOPENED THE ASSESSMENT AND ISSUED NOTICE UNDER SECTION 148 OF THE ACT HAVING FORMED A BELIEF THAT THE INCOME OF THE ASSESSEE OF RS.31,77,511/- HAS ESCAPED ASSESSMENT FOR ASSESSMENT YEAR 2009-10. THE ASSESSING OFFICER ACCORDINGLY COMPLETED THE ASSESSMENT UNDER SECTION 143(3)/147 OF THE ACT VIDE ORDER DATED 29.12.2011. 3. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WITH THE SUBMISSION THAT THE INCOME TAX OFFICER - 5(4), KANPUR WAS NOT HAVING JURISDICTION OVER THE ASSESSEE DURING ASSESSMENT YEARS 2009-10 AND 2010-11, THEREFORE, THE REOPENING BY AN OFFICER, HAVING NO JURISDICTION OVER THE ASSESSEE, IS BAD IN LAW AND, THEREFORE, NOTICE ISSUED BY THE ASSESSING OFFICER DESERVES TO BE QUASHED. THE LD. CIT(A) RE-EXAMINED THE CLAIM OF THE ASSESSEE AND BEING CONVINCED WITH IT, HE WAS OF THE VIEW THAT REOPENING WAS DONE BY AN OFFICER HAVING NO JURISDICTION OVER THE ASSESSEE, THEREFORE, THE REOPENING WAS NOT VALID AND HE ACCORDINGLY ANNULLED THE ASSESSMENT FRAMED CONSEQUENT TO THE BAD REOPENING. 4. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AND PLACED HEAVY RELIANCE UPON THE ORDER OF THE ASSESSING OFFICER; WHEREAS :- 4 -: THE LD. COUNSEL FOR THE ASSESSEE, BESIDES PLACING RELIANCE UPON THE ORDER OF THE LD. CIT(A), HAS CONTENDED THAT SO LONG AS THE ASSESSEE HAD ONLY SALARY INCOME, THE JURISDICTION OVER THE ASSESSEE LIES WITH INCOME TAX OFFICER - 5(4), KANPUR AND ONCE HE WAS RETIRED AND HE WAS HAVING INCOME FROM OTHER SOURCES IN ADDITION TO SALARY INCOME, THE JURISDICTION WAS SHIFTED TO INCOME TAX OFFICER - 3(2), KANPUR AND THE ASSESSEE ACCORDINGLY FILED THE RETURN OF INCOME WITH INCOME TAX OFFICER - 3(2), KANPUR, AS INCOME TAX OFFICER - 5(4), KANPUR REFUSED TO ACCEPT THE SAME. THE ASSESSEE HAS DISCLOSED COMPLETE FACTS WITH INCOME TAX OFFICER-3(2), KANPUR, THEREFORE, THE REOPENING MADE BY AN INCOMPETENT OFFICER IS BAD IN LAW AND DESERVES TO BE QUASHED. 5. HAVING CAREFULLY EXAMINED THE ORDERS OF THE LOWER AUTHORITIES IN THE LIGHT OF THE RIVAL SUBMISSIONS, WE FIND THAT UNDISPUTEDLY IN ASSESSMENT YEAR 2008-09, THE RETURN WAS FILED WITH INCOME TAX OFFICER - 5(4), KANPUR, AS THE ASSESSEE WAS HAVING ONLY SALARY INCOME, BUT THEREAFTER W.E.F. 2009-10 THE ASSESSEE STARTED FILING RETURN OF INCOME WITH INCOME TAX OFFICER - 3(2), KANPUR. DURING THE COURSE OF HEARING, A SPECIFIC QUERY WAS RAISED WITH REGARD TO THE JURISDICTION OVER THE ASSESSEE AND THE REVENUE HAS CANDIDLY ADMITTED THAT ON ACCOUNT OF ADDITIONAL INCOME BESIDES SALARY, THE JURISDICTION OVER THE ASSESSEE SHIFTED TO INCOME TAX OFFICER - 3(2), KANPUR AND HE HAS FILED THE RETURN OF INCOME WITH THE CORRECT ASSESSING OFFICER HAVING JURISDICTION OVER THE ASSESSEE. DURING THE COURSE OF HEARING, IT WAS ALSO SPECIFICALLY ASKED FROM THE LD. D.R. WHETHER THE ASSESSEE WAS UNDER ANY OBLIGATION TO INFORM THE OLD ASSESSING OFFICER WITH WHOM HE HAD BEEN FILING THE RETURN OF INCOME, WHEN ON ACCOUNT OF CHANGE IN CIRCUMSTANCES, THE ASSESSEE WAS REQUIRED TO FILE THE RETURN OF INCOME WITH SOME OTHER ASSESSING OFFICER. DESPITE AFFORDING VARIOUS OPPORTUNITIES, THE LD. D.R. COULD NOT :- 5 -: FURNISH A SATISFACTORY EXPLANATION; WHEREAS THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THE ASSESSEE WAS NOT UNDER ANY OBLIGATION TO INFORM THE EARLIER ASSESSING OFFICER WITH REGARD TO THE FILING OF THE RETURN OF INCOME WITH DIFFERENT ASSESSING OFFICER ON ACCOUNT OF CHANGE OF JURISDICTION. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, HAS CONTENDED THAT THE ASSESSEE IS REQUIRED TO FILE THE RETURN OF INCOME WITH THE ASSESSING OFFICER OF THE DEPARTMENT AND IT IS THE DUTY OF THE ASSESSING OFFICER TO SEND THE RETURN OF INCOME TO THE CORRECT ASSESSING OFFICER IF IT IS FILED WITH THE WRONG ASSESSING OFFICER. SINCE THE ASSESSEE HAS FILED THE RETURN OF INCOME WITH THE CORRECT ASSESSING OFFICER ON ACCOUNT OF CHANGE OF JURISDICTION, THE ASSESSEE CANNOT BE HELD RESPONSIBLE FOR ANY MISTAKE OR ERROR ON THE PART OF THE DEPARTMENT. IT IS ALSO UNDISPUTED FACT THAT AT THE RELEVANT POINT OF TIME WHEN THE NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED BY INCOME TAX OFFICER - 5(4), KANPUR, THE JURISDICTION OVER THE ASSESSEE WAS CHANGED AND IT WAS WITH INCOME TAX OFFICER - 3(2), KANPUR, THEREFORE, NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED BY AN OFFICER HAVING NO JURISDICTION OVER THE ASSESSEE. THE LD. CIT(A) HAS EXAMINED THIS ASPECT IN DETAIL IN THE LIGHT OF THE DETAILED FACTS PLACED BEFORE HIM. WE, THEREFORE, REPRODUCE THE FINDINGS OF THE LD. CIT(A) AS UNDER:- I HAVE CONSIDERED THE FACTS AND CIRCUMSTANCES OF THE CASE AND HAVE GONE THRU THE WRITTEN SUBMISSIONS AS FILED BY THE AR. THE UNDISPUTED FACTS ARE THAT THE ASSESSMENT FOR A.Y. 2008-09 WAS FRAMED U/S.143(3) ON 12.08.2010 BY ITO-5(4), KANPUR BY WHICH TIME, THE INCOME TAX RETURNS FOR THE A.Y. 2009-10 AND 2010-11 HAD ALREADY BEEN FILED ON 30-09-2009 AND 30-09-2010 WITH ITO-3(2), KANPUR, THESE RETURNS CAME TO BE FILED WITH ITO- 3(2) FOR THE REASON THAT THE RETURNS CONTAINED INCOME FROM OTHER SOURCES IN EXCESS OF INCOME FROM SALARY. ON THE BASIS OF THIS FACTUAL ASPECT, THE ITO-5(4), HAVING JURISDICTION OVER SALARY CASES :- 6 -: DECLINED TO ACCEPT THE RETURNS AND HENCE THE SAME WAS FILED WITH THE ITO-3(2) HAVING TERRITORIAL JURISDICTION. IT IS ALSO TRUE THAT WHILE THE ASSESSMENT FOR A.Y. 2008-09 WAS BEING; FRAMED U/S.143(3), THE AO RAISED A SPECIFIC QUERY REGARDING THE DEPOSITS MADE BY THE ASSESSEE IN HIS BANK ACCOUNT TO WHICH THE ASSESSEE REPLIED THAT THE DEPOSIT OF RS.4 LAKHS IN BANK REPRESENTS ADVANCE RECEIVED TOWARDS SALE OF AGRICULTURAL LAND AT VILLAGE MAKANPUR, LONI, GHAZIABAD. THE RELEVANT PORTION OF THE LETTER DATED 12.05.2010 FILED IS AS UNDER: 'WITH REFERENCE TO THE ABOVE AND IN CONTINUATION OF PREVIOUS HEARING I AM ENCLOSING HEREWITH FALLOWING FOR YOUR KIND CONSIDERATION: 1. COPY OF PART OF SALE DEED DURING FINANCIAL YEAR 2008-09 RELEVANT TO ASSESSMENT YEAR 2009-10 IS ENCLOSED, IN WHICH THE PAYMENT FOR RS.4,00,000.00 AND RS.2,00,000.00 AS ADVANCE IN MY BANK ACCOUNT IS CONFIRM. 2. COPY OF BANK ACCOUNT OF STATE BANK OF INDIA, GHAZIABAD BRANCH. 3. COPY OF BANK ACCOUNT OF ALLAHABAD BANK, MEERUT BRANCH. 4. REPLY IN RESPECT OF YOUR NOTICE U/S. 271(1)(B) OF THE INCOME TAX ACT AGAINST NON COMPLIANCE ON 11.03.2010. I HOPE THAT THE ABOVE INFORMATION IS AS PER YOUR REQUIREMENTS.' THIS INFORMATION IS AVAILABLE ON THE FILE OF THE AO FOR A.Y.2008-09. THUS TWO THINGS ARE CLEAR, THAT THE INFORMATION REGARDING SALE OF AGRICULTURAL LAND AT MAKANPUR, LONI, SHAZIABAD BY THE ASSESSEE AND RECEIPT OF ADVANCE OF RS.4 LAKHS HAD BEEN DULY CONSIDERED BY THE AO WHILE FRAMING THE ASSESSMENT FOR A.Y. 2008-09. AS PER THE REASONS, RECORDED BY THE ITO-5(4), IT IS CLEAR THAT THE ITO-5(4) HAD THE KNOWLEDGE THAT THE RETURNS FOR A.Y. :- 7 -: 2009-10 AND A.Y. 2010-11 HAD BEEN FILED WITH TO ITO-3(2), KANPUR. THE WORDINGS OF THE REASONS ALSO SUGGEST SO. THE AO HAD RECORDED THAT THE RETURN OF INCOME FOR A.Y. 2009-10 WAS NOT FILED IN THE OFFICE HAVING JURISDICTION OVER THE SAME AND ON FAILURE TO FILE THE RETURN IN THE RESPECTIVE JURISDICTION, IN THIS CASE WARD 5(4), THE RETURN FILED IN WARD 3(2), WOULD BE NONEST AND INVALID. IN THE PRESENT CASE NOT ONLY THE ASSESSEE FILED HIS RETURN .IN WARD 3(2), KANPUR BUT THE ITO-3(2) ALSO KNOWING WELL THAT THE: JURISDICTION OVER THE SAID CASE WAS WITH ITO-5(4), KANPUR PROCESSED THE RETURN U/S.143(1) OF THE ACT 1961 AND CREATED A DEMAND OF RS.34,140/-. BY PROCESSING THE RETURNS U/S.143(1). THE ITO-3(2) ACCEPTED THE RETURN AS FILED BY THE ASSESSEE 'AS A VALID RETURN'. THE ITO-5(4) WHILE COMPLETING THE ASSESSMENT U/S.143(3) FOR A.Y. 2008-09 ON 12.08.2010 WAS WELL AWARE OF THE FACT THAT THE RETURNS FOR A.Y. 2009-10 AND 2010-11 HAD BEEN FILED WITH ITO-3(2). EVEN THEN THE TIO-5(4) DID NOT RAISE ANY OBJECTION TO THE PROCESSING OF THE RETURN BY ITO-3(2) BY CALLING FOR THE SAME FROM THE ITO-3(2) OR REQUESTING THE CIT TO CANCEL THE PROCESSING OF THE RETURN UNDER SECTION 263 OF THE ACT 1961. PROCESSING OF THE RETURN BY ITO-3(2), U/S 143(1) HAS THE EFFECT OF VALIDATING THE RETURN FILED. IT IS WELL ACCEPTED A PROPOSITION THAT EVEN IF A RETURN HAS BEEN FILED WITH AN ITO WHO DOES NOT HAVE JURISDICTION OVER THE ASSESSEE, BUT AT THE SAME TIME PROCESS THE RETURN SO FILED, THEN IT CANNOT BE SAID THAT THE RETURN FILED IS INVALID (THOUGH IN THIS CASE THE ITO-3(2) HAD THE TERRITORIAL JURISDICTION. THE ITO- 3(2) ON RECEIPT OF THE RETURN SHOULD NOT HAVE ACTED UPON THE SAME BY PROCESSING BUT SHOULD HAVE TRANSFERRED THE SAME TO ITO- 5(4) HAVING JURISDICTION OVER THE SAME AND THE ITO-5(4) KNOWING THE RETURN HAD BEEN FILED WITH ITO-3(2) SHOULD HAVE IMMEDIATELY CALLED FOR THE SAME. IN SUCH CIRCUMSTANCES WHEN AN ASSESSEE HAS FILED HIS RETURN, EVEN IN A WRONG JURISDICTION AND THE RETURN HAS BEEN PROCESSED, DEMAND HAS BEEN RAISED NO FAULT CAN BE FASTENED :- 8 -: TO THE ASSESSEE. SINCE THE RETURN HAS BEEN PROCESSED, IT CANNOT BE SAID THAT NO RETURN HAS BEEN FILED AT ALL. I HAVE GONE THROUGH THE DECISION OF THE HON'BLE INCOME TAX APPELLATE TRIBUNAL, LUCKNOW, IN THE CASE OF PAINT TRADE LINKERS VS. ITO AS CITED BY THE LD. AR AND AS REPORTED IN 471 TAXMAN 30 (MAG) WHEREIN IT HAS-BEEN HELD THAT ONCE A RETURN OF INCOME HAS BEEN FILED EVEN IN WRONG JURISDICTION, PROCEEDINGS U/S.147 CANNOT BE INITIATED AND NOTICE U/S.148 CANNOT BE ISSUED FOR NON FILING OF THE RETURN WITH THE AO HOLDING CORRECT JURISDICTION. IT IS OBVIOUS FROM THE REASONS AS RECORDED BY THE AO THAT THE NOTICE U/S.148 HAS BEEN ISSUED FOR THE SOLE REASON THAT THOUGH THE RETURN HAS BEEN FILED WITH THE ITO-3(2), THE RETURN HAS NOT BEEN FILED WITH THE OFFICER HAVING JURISDICTION OVER THE ASSESSEE (IN THIS CASE ITO-5(4) AND ON FAILURE TO FILE THE RETURN WITH THE OFFICER HAVING JURISDICTION, THERE IS ESCAPEMENT OF INCOME. AS ALREADY HELD BY HON'BLE TRIBUNAL (SUPRA) THAT MERE NON FILING OF THE RETURN WITH THE JURISDICTIONAL OFFICER WOULD NOT BE A VALID REASON TO INITIATE PROCEEDINGS U/S.148. ON THIS GROUND ALONE THE NOTICE ISSUED BY THE AO IS WITHOUT JURISDICTION AND THE REASSESSMENT IS ANNULLED. THE SECOND LIMB OF THE ARGUMENT THAT NOTICE U/S.142(1) SHOULD HAVE BEEN ISSUED INSTEAD OF NOTICE U/S.148 ALSO APPEARS TO BE LOGICAL; THERE IS NO SPECIFIC BAR TO THE SAME, BUT AT THE SAME TIME THE PROCEDURE AS LAID DOWN HAS TO BE STRICTLY FOLLOWED. BOTH THE PROVISIONS CALL FOR FILING OF THE RETURN. SECTION 142(1) SEEKS TO CALL FOR THE RETURN WHEN THE SAME HAS NOT BEEN FILED WITHIN THE TIME ALLOWED AS PER SECTION 139(1) WHEREAS SECTION 148 IS INVOKED WHEN THE INCOME HAS ESCAPED ASSESSMENT. EARLIER THERE REMAINED A CONTROVERSY THAT THE PROVISIONS OF SECTIONS 142(1) AND SECTION 148 WERE IN CONFLICT WITH EACH OTHER. DELHI SPECIAL BENCH IN THE CASE OF MOTOROLA INC. VS. DCIT (95 ITD 269) (DEL) (SB), HELD THAT NOTICE UNDER SECTION 142(1) COULD BE ISSUED ANY TIME BEFORE THE END OF THE ASSESSMENT YEAR. IN OTHER WORDS SECTION 147/148 :- 9 -: WOULD COME INTO PLAY AS SOON AS THE RELEVANT ASSESSMENT YEAR ENDED. TO RESOLVE THIS CONTROVERSY THE FINANCE BILL 2006 MADE IT SPECIFICALLY CLEAR THAT THE NOTICE UNDER SECTION 142(1) COULD BE ISSUED ANY TIME UP TO THE DATE OF LIMITATION FOR COMPLETION OF ASSESSMENT AS LAID DOWN IN SECTION 153 OF THE ACT. NOTICE UNDER SECTION 148 CAN BE ISSUED ANY TIME WITHIN FOUR/SIX YEARS FROM THE END OF THE ASSESSMENT YEAR IN WHICH THE INCOME ESCAPED ASSESSMENT. IN CASES WHERE THE AO IS SIMPLY OF THE BELIEF THAT THE RETURN AS CONTEMPLATED UNDER SECTION 139(1) HAS NOT BEEN FILED, NOTICE UNDER SECTION 142(1) WOULD BE THE CORRECT COURSE TO CALL FOR THE RETURN. IF THE AO ISSUES NOTICE UNDER SECTION 148 INSTEAD OF 142(1) THERE WOULD BE VIOLATION OF THE PROVISIONS, FOR IN SUCH CIRCUMSTANCES THE PROVISIONS OF SECTION 142(1) WOULD BECOME REDUNDANT. THERE IS NO NECESSITY TO ISSUE NOTICE UNDER SECTION 148. NOTICE U/S.148 IS ISSUED WHEN THERE IS ANY ESCAPEMENT OF INCOME. FURTHER, NOTICE U/S 142(1) CAN BE ISSUED FOR TWO PURPOSES, ONE FOR THE CALLING OF THE RETURN WHEN NOT FILED U/S.139(1) AND THE OTHER CALLING FOR INFORMATION TO VERIFY THE CONTENTS OF THE RETURN FILED. THE PRESENT CASE IS NOT OF ESCAPEMENT OF INCOME, IT IS FOR NOT FILING OF THE RETURN IN THE RESPECTIVE WARD, ON THIS COUNT ALSO THE NOTICE ISSUED UNDER SECTION 148 IS WITHOUT JURISDICTION. ALTHOUGH BOTH SECTION 142(1) ARID 148 OPERATE INDEPENDENTLY AND THEY BEING REPUGNANT TO EACH OTHER DOES ARISE ESPECIALLY IN VIEW OF THE AMENDMENT BY FINANCE BILL 2006, STILL, THERE HAS TO BE A HARMONIOUS INTERPRETATION OF THE PROVISIONS OF LAW SO THAT THE PURPOSE OF INSERTING A PARTICULAR PROVISION DOES, NOT FALL FLAT. REFERENCE IN THIS CONNECTION BE MADE TO THE DECISION OF UNIVERSITY OF ALLAHABAD VS AMRIT CHAND TRIPATHI AIR 1987(SC) 57 WHEREIN IT HAS BEEN HELD 'THUS A CONSTRUCTION THAT REDUCES ONE OF THE PROVISIONS TO A USELESS LUMBER OR DEAD LETTER, IS NOT A HARMONIOUS CONSTRUCTION (AIR 1961 SC 1044)'. THEREFORE EVEN ON :- 10 -: A HARMONIOUS CONSTRUCTION OF THE PROVISIONS, SECTION 142(1) AND 147/148, THERE ARISES NO CONFLICT BETWEEN THE SECTIONS INTERSE. AS FAR AS THE MERITS OF THE REASONS RECORDED ARE CONCERNED THE FACTS MENTIONED THERE IN ARE MERE STATEMENT, ONLY GIVING A PRESUMPTION OF THERE MAY BE A LIABILITY FOR PAYMENT OF CAPITAL GAINS TAX, BUT NOT NECESSARILY, THERE BEING AN ESCAPEMENT OF INCOME, THAT ALONE CANNOT BE A REASON TO INITIATE ACTION U/S.147 OF THE ACT. MOREOVER IN THE REASONS THE AO HAS MENTIONED THAT THE LAND IN QUESTION HAS BEEN SOLD TO S/SHRI G.K. SHARMA AND SOHAN PAL. THIS AGAIN IS FACTUALLY INCORRECT. THE LAND IN QUESTION HAS BEEN SOLD TO ULTRAHOME CONSTRUCTION PVT. LTD. AND NOT TO SHRI G.K. SHARMA OR SOHAN PAL. BESIDES THERE CANNOT BE ESCAPEMENT OF INCOME MERELY BECAUSE THERE IS A DIFFERENCE BETWEEN THE STAMP DUTY VALUE AS ASSESSED BY THE STAMP DUTY AUTHORITY (SVA) AND THE CONSIDERATION AS RECEIVED BY THE ASSESSEE. THE COST OF ACQUISITION AND IMPROVEMENT, IF ANY HAS TO BE CONSIDERED AND DEDUCTED FROM THE ESTIMATED VALUE/ACTUAL CONSIDERATION RECEIVED. THE AO HAS TAKEN THE DIFFERENCE BETWEEN THE TWO I.E. STAMP DUTY VALUE AND THE ACTUAL CONSIDERATION RECEIVED AS THE INCOME ESCAPED, WITHOUT CONSIDERING THE INITIAL COST OF ACQUISITION AND ALSO THE COST OF ACQUISITION AS PER COST INFLATED INDEX. THE ESCAPEMENT OF INCOME CAN BE SAID TO HAVE TAKEN PLACE ONLY WHEN THE ABOVE EXERCISE HAS BEEN UNDERTAKEN. THEN AGAIN WHEN THE ITO-5(4) HAS NOT SEEN THE RETURN OF INCOME FILED BY THE ASSESSEE, THE RETURN WAS WITH ITO-3(2)} HOW CAN HE CONCLUDE THAT THE ASSESSEE HAS FAILED TO DISCLOSE INCOME FROM CAPITAL GAINS ON SALE OF AGRICULTURAL LAND. IN ABSENCE OF THE RETURN BEFORE THE ITO-5(4), THERE COULD BE NO OCCASION FOR THE AO TO BELIEVE OR FORM REASONS FOR ANY INCOME ESCAPING ASSESSMENT. THE REASONS RECORDED LACK BELIEF AS CONTEMPLATED IN SECTION 147 AND CANNOT BE TERMED AS VALID REASONS TO INITIATE ACTION UNDER 147/148 OF THE ACT. :- 11 -: AGAIN WHEN THE ITO-3(2) HAS ISSUED NOTICE DATED 05.12.2012 U/S.221 TO RECOVER THE OUTSTANDING DEMAND FOR A.Y. 2009-10. ITSELF, MAKES IT CLEAR THAT THE JURISDICTION STILL VESTS WITH AO-3(2) AND NOT WITH AO-5(4). THIS ALSO GOES AGAINST REOPENING. AS SUBMITTED BY THE AR SINCE THE RETURN FILED WITH ITO-3(2) IS A VALID RETURN, NOTICE U/S.148 CANNOT BE ISSUED FOR THE REASON THAT THE PROCEEDINGS TO FRAME THE ASSESSMENT U/S.143(3) WOULD BE PENDING. ONCE THE RETURN FILED IN A WRONG JURISDICTION HAS BEEN ACTED UPON BY PROCESSING THE SAME, THE RETURN CEASES TO BE AN INVALID RETURN. IN SUCH CIRCUMSTANCES THE PROCEEDINGS WOULD BE PENDING AND HAS TO BE CONTINUED BY ISSUE OF NOTICE U/S.143(2) CULMINATING INTO A REGULAR ASSESSMENT U/S.143(3). IT IS A TRITE LAW THAT WHEN REGULAR PROCEEDINGS ARE PENDING, NO NOTICE U/S.148 CAN BE ISSUED AND IF ANY NOTICE U/S.148 IS ISSUED THE SAME WOULD BE WITHOUT JURISDICTION. IN THE PRESENT CASE REGULAR ASSESSMENT PROCEEDINGS WERE PENDING BEFORE ITO-3(2) AND THE ITO-5(4) WAS FULLY AWARE OF THE SAME, THEN NOTICE U/S.143(2) SHOULD HAVE ALONE BEEN ISSUED AND NOT NOTICE U/S. 148. ISSUE OF NOTICE U/S.!48;IS THEREFORE AGAIN WITHOUT JURISDICTION. THE DECISIONS AS RELIED UPON BY THE AR ARE FULLY APPLICABLE. IN VIEW OF THE ABOVE FACTS, KEEPING THE LEGAL PROVISIONS IN MIND, I AM OF THE CONSIDERED VIEW THAT MERELY BECAUSE THE ASSESSEE DID NOT FILE THE RETURN WITH ITO-5(4), THE RETURN FILED WITH ITO-3(2) HAVING BEING PROCESSED U/S.143(1) OF THE ACT CANNOT BE SAID TO BE AN INVALID OR A NONEST RETURN, THERE CAN BE NO CASE FOR ISSUE OF NOTICE U/S.148 OF THE ACT. THE ABOVE PROPOSITION IS FULLY SUPPORTED BY THE DECISION OF THE LUCKNOW ITAT IN THE CASE OF PAINT TRADE LINKERS (SUPRA) AND ALSO; THE ITO-3(2) HAS ISSUED NOTICE U/S.221 DATED 21.5.2012 TO RECOVER THE OUTSTANDING DEMAND, ITSELF COMMUNICATES THAT ITO-5(4) NEVER HAD ANY JURISDICTION OVER THE ASSESSEE'S CASE TILL 21.05.2012, FAR LESS EVEN TO ISSUE NOTICE U/S.148. :- 12 -: IN LIGHT OF THE ABOVE DISCUSSION, I HOLD THAT THE NOTICE ISSUED UNDER SECTION 148 IS WITHOUT JURISDICTION AND CONSEQUENTLY THE REASSESSMENT FRAMED UNDER SECTION 147/143(3) IS BAD IN LAW, WITHOUT JURISDICTION AND THE SAME IS HEREBY ANNULLED. 6. SINCE IT HAS BEEN ESTABLISHED THAT NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED BY THE ASSESSING OFFICER HAVING NO JURISDICTION OVER THE ASSESSEE, THE REOPENING IS BAD IN LAW AND, THEREFORE, THE ASSESSMENT FRAMED CONSEQUENT THERETO IS NOT SUSTAINABLE IN THE EYES OF LAW. WE ACCORDINGLY SUBSCRIBE THE VIEW OF THE LD. CIT(A) WHO HAS RIGHTLY ANNULLED THE ASSESSMENT. 7. IN THE RESULT, APPEAL OF THE REVENUE STANDS DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTIONED PAGE. SD/- SD/- [A. K. GARODIA] [SUNIL KUMAR YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 6 TH NOVEMBER, 2015 JJ:2710 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR