Sunil Kumar, Saharanpur V. ITO, Ward 3(3)(5), Saharanpur

ITA 565/DEL/2022

AI Insights

The case involves an appeal by Sunil Kumar against the order of the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, which pertained to the assessment year 2012-13. The primary contention was regarding the legality of the notice issued under section 148 and the subsequent reassessment order under section 147 read with section 144 of the Income Tax Act, 1961. The assessee argued that there was no proper application of mind by the assessing officer and that the additions made were arbitrary and unjustified. The Tribunal dismissed the appeal, agreeing with the lower authorities that the assessee had not adequately responded to the queries and failed to substantiate his claims with credible evidence.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 108641 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 22-05-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 31-03-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: FILING ANY CREDIBLE PIECE OF EVIDENCE
• Keywords: Sale consideration of property below Jantri Value; Capital asset
• Section: 147; 148; 143(3); 50C; 244A; 133(6); 143(2)

Judgement Text

1 ITA No. 565/Del/2022 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC”: NEW DELHI BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER ITA No. 565/DEL/2022 Assessment Year: 2012-13 Sunil Kumar, S/o Shri Hairchand, Panjora, Malhipur Road, Saharanpur. PAN- JHBPK6430F Vs Income-tax Officer, Ward-3(3)(5), Saharanpur. APPELLANT RESPONDENT Assessee represented by None Department represented by Shri Om Parkash, Sr. DR Date of hearing 23.05.2023 Date of pronouncement 23.05.2023 O R D E R PER KUL BHARAT, JM: This appeal, by the assessee, is directed against the order of the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated 12.10.2021, pertaining to the assessment year 2012-13. The assessee has raised following grounds of appeal: “1) That the notice issued u/s 148 and reassessment order passed u/s 147 r.w.s. 144 are illegal, bad in law and without jurisdiction 2) That, in view of the facts and circumstances, no satisfaction is recorded by the assessing officer as required u/s 147/148 of the Act prior issuing the notice under section 147 of the Income Tax Act, 1961 3) That, no application of mind by the assessing officer while recording the 2 ITA No. 565/Del/2022 alleged satisfaction, merely reproducing the AIR information on account of Sale of Property of Rs.26,00,000.00 against value of Circle rate at Rs. 1,55,36,000.00 and failed to establish the live nexus between tangible material and income escaped assessment, which is vague, incorrect and baseless, hence the proceedings initiated is illegal, bad in law and without jurisdiction. The NFAC has erred in upholding the validity of the proceedings initiated U/s 147 read with section 148. 4) The addition/ disallowances made by the assessing officer are illegal, unjust, highly excessive and are not based on any material on record by the assessing officer. The total income of the appellant has been wrongly and illegally computed by the assessing officer at Rs.39,05,270.00 as against declared income of Rs.21,270.00. The CIT (A) has erred in confirming the addition to Rs.38,84,000.00. which is highly arbitrary and unjustified. 5) That, the NFAC has erred in dismissing the appeal of the assessee appellant in ex-party manner, without appreciating that the hearing was fixed between the period, when the Income Tax Filing Portal was not proper, therefore, the opportunity given cannot be held as proper opportunity' of hearing in the interest of justice 6) That the Assessing Officer/NFAC, in view of the facts and circumstances of the case erred on facts and in making the audition of Rs.38,84,000.00 on account of 50C, which is unjust, arbitrary, unlawful, highly excessive, based on surmises and conjectures and cannot be justified by any material on record 7) That, the assessing officer as well as NFAC has erred in ignoring the fact that, the Sale Deed relied by the assessing officer for making the addition U/s 50C has already been held as invalid and void ab initio by the district court, therefore, the addition made by the assessing officer and uphold by the NFAC is highly arbitrary, unjustified and tenable. 8) The assessing officer and NFAC has failed to appreciate the documentary evidences filed by the assessee and made the addition/ disallowances without any basis and reasons, which is highly presumptive, arbitrary, excessive and unjust. 9) The assessing officer and NFAC has erred in making the several observations, in the impugned order and assessment orders, which are purely based on presumption, surmises and conjectures and against the material available on records. 10) That the explanation given and evidence produced, material placed and available on record have not been property considered and judicially interpreted 3 ITA No. 565/Del/2022 and the same do not justify the additions/ allowances made. The observations made by the assessing officer on different issues are either not relevant or are purely based on presumptions. 11) That the interest u/s 234A, 234B, 234C, 234D and 244A have been wrongly and illegally charged as the appellant could not have foreseen the disallowances/additions made and could not have included the same in current income for payment of Advance tax. The interest charged under various sections is also wrongly worked out 12) That the Assessing Officer and NFAC has erred in issuing the notice U/s 271(1)(c) and initiating the penalty proceedings when the assessee appellant has not concealed the particular of any income or furnished inaccurate particulars of such income. 13) The Appellant craves leave to add, amend, alter and or modify the grounds of appeal of the said appeal.” 2. No one appeared on behalf of the assessee at the hearing despite service of notice for hearing. The assessee has not cared even to apply for adjournment of hearing. Under these facts the appeal is taken up for hearing in the absence of the assessee and is being decided after hearing the learned DR and on the basis of material available on record. 3. The only effective ground raised in this appeal relates to the addition of Rs. 38,84,070/- on account of long term capital gain. Facts of the case, as recorded by the Assessing Officer, are as under: “The assessee acquires 1 /4 th share in the urban land admeasuring 8176 square meters at Panjora, Saharanpur which was sold away on 19.07.2011 as per sale deed executed by the assessee and three others in favour of Shri Sahi Ram of Saharanpur for 1/4 th share and 3/4 th share to Shri Manjeet Singh s/o Shri Jasvani Singh of Yamuna Nagar (Hariyana). The said land was transferred for a consideration of Rs. 2600000/- as against the stamp duty value of Rs. 1,55,36,000/-. The case of the assessee was reported on 4 ITA No. 565/Del/2022 AIR altogether three other co-owners namely Shri Vijay Pal Singh, Shri Suresh Kumar and Shri Isam Singh. 2. The assessee’s 1 /4 th share in the sold out property comes to Rs. 650000/- as per actual entire consideration and Rs. 3884000/- as per value u/s 50C. Element of long term capital gain was involved in the said transaction, the assessee was under legal obligation to file his ITR and pay the due tax. Consequently, enquiries u/s 133(6) second proviso were initiated after seeking permission of the learned Pr. CIT, Muzaffarnagar. The same were not plausibly responded by the assessee. Transfer deed taken on 19.07.2011 was stated to be a distress sale without assigning any reasons. However, with the prior approval of learned Pr Commissioner of Income Tax, Muzaffarnagar, notice u/s 148 was issued on 19.03.2019. 3. Compliance thereto was made by filing the return on 18.04.2019, showing income of Rs. 21270/- only. Simultaneously, reasons recorded u/s 148(2) were requested for by the assesssee vide his application dated 22.04.2013. The same were duly made available vide this office letter dated 23.04.2019. Thereafter, no objections have so far been received in the office. Pushing forward the proceedings, detailed questionnaire within the meaning of section 142(1)(ii) was issued on 13.11.2013 followed by its reminders on 03.12.2019 and 20.12.2019, raising queries relevant on the issue of escapement involved. Notice u/s 143(2) was also issued on 20.12.2019 in the wake of the ITR. 4. The assessee in his replies has asserted that the land so transferred by way of sale deed executed on 19.07.2011. did not give rise to any capital gain tax liability as he was not in possession of the land which had already been transferred to Shri Nihal Chand Khatri pursuant to a registered agreement made on 24.10.1991 and full payment of Rs. Rs. 2165000/- was received on 26.10.1991 and Rs 456000/- received on 30.10.1991 at the time of writing power of attorney in favour of Shri Anoop Kumar s/o of Shri Nihal Chand Khatri. The reply dated 20.12.2013 states further that Shri Anoop Kumar, power of attorney holder, later on transferred the said property to Shri Nihal Chand, Tripta Kumari w/o Shri Nihal Chand and others. The authenticity of the sale deed executed on 19.07.2011 giving rise to long term capital gain and also reported on AIR was termed as bogus and fake document got signed by force. 5 ITA No. 565/Del/2022 5. The assessee in his reply further argued that in the light of section 2(47)(v) of Income Tax Act, 1961, the assessee had already effected the transfer of his share of land under consideration in the year 1991 in pursuance of an agreement dated 24.10.1991 and power of attorney in favour of Shri Anoop Kumar s/o Shri Nihai Chand Khatri on 30.10.1991 by handing over the possession, to the above parties and thus no capital gain arises during the year under consideration. But in what way, the sale deed executed on 19.07.2011 was fake and bogus and got signed by force has not been established by the assessee by filing any credible piece of evidence. 6. Having carefully considered the facts of the case, argument of the assessee and also the litigations persisting amongst rival parties, a notice u/s 142(1 )(ii) was issued on 20.12.2019, specifically asking the assessee to explain as to how the sale deed in respect of the same land was executed on 19.07.2011 by him and three others in favour of Shri Sahi Ram for 1/4 th share and Shri Manjit Singh s/o Shri Jasvant Singh for 3/4 th share for a consideration of Rs. 26,00,000/- as against the value of Rs. 1,55,36,000/-. No cogent explanation has been given to this query. There is a history of disputes and litigations amongst the rival parties. This fact may not be denied. But under what circumstances, the assessee and three others managed to execute a transfer deed on 19.07.2011 in favour of other parties i.e. Shri Sahi Ram and Shri Manjit Singh, from whom the sellers received consideration of Rs. 2600000/- as against the circle value of the property at Rs. 1,55,36,000/-, is the moot question that has not been addressed by the assessee. 7. The assessee has not so far been able to furnish proper reply addressing the central issue involved. Even cost of the land so transferred as on 19.07.2011 has not been informed. 1/4 th share of the assessee i.e. Rs. 3884000/- as per value u/s 50C out of aggregate value of Rs. 1,55,36,000/- is considered as long term capital gain, which has escaped assessment. Thus an assessment u/s 143(3) read with section 147 is being completed on total income of Rs. 3905270/-, inclusive of returned income of Rs. 21270/-.Assessed accordingly.” 4. Aggrieved, the assessee preferred appeal before the learned CIT(Appeals), who vide impugned order dated 12.10.2021, affirmed the action of the learned 6 ITA No. 565/Del/2022 AO, inter alia, by observing as under: “5.2 I have carefully considered the AO’s viewpoint contained in the Assessment Order, grounds of appeal and the statements of facts made by the appellant in the matter. 5.3 During the year consideration, AIR reported that the Appellant sold its share (1 /4 th of the land) of urban land at Panjora, Saharanpur on 19.11.2011. Land was co-owned by Sh. Vijay Pal Singh, Sh. Suresh Kumar and Shri Isam Singh, as per the sale deed executed by the appellant 1 /4 th of the land was sold to Sh. Sahi Ram and other 3/4 tn land was sold to Sh. Manjeet Singh s/o Sh. Jasvani Singh of Yamuna Nagar. The said land was transferred for a consideration of Rs. 26,00,000/- as against the stamp duty value of Rs. 1,55,36,000/-. The appellant’s share after selling its share{1/4 th of the land) came to Rs. 6,50,000/- as per actual entire consideration and Rs. 38,84,000/- as per value u/s 50C of the Act. 5.4 Long term capital gain is involved in the said transaction so the appellant was under legal obligation to file its ITR and pay the taxes due. Enquiry u/s 133(6) was initiated by the PR CIT, Muzaffarnagar and the same was not responded by the appellant. Then, a notice u/s 148 was issued to the appellant on 19.03.2019,and the appellant made compliance by filing the return showing income only of Rs. 21,270/-. A detailed questionnaire raising queries on the relevant issue was issued on 13.11.2019 u/s 142(1)(iii) of the Act and its reminders on 03.12 2019 and 20.12.2019. 5.5 Appellant replied that the sale deed executed on 19.07.2011 did not give rise to any tax liability under the head capital gains as the land sold was not in his possession and was already transferred to Sh. Nihal Ghana Khairi pursuant to registered agreement made on 24.10.1991 and full payment of Rs. 21,65,000/- was received by the appellant on 26.10.1991 and Rs. 4,56,000/- received by the appellant at the time of writing power of attorney in favour of Sh. Anoop Kumar s/o Sh. Nihal Chand Khatri. Later on, Sh. Nihal Chand transferred the property to Tripta Kumari w/o Sh. Nihal Chand and others The authenticity of the sale deed executed on 19.07.2011 was termed as fake, bogus and got signed by force and has not been 7 ITA No. 565/Del/2022 established by the appellant. Appellant was not able to give a satisfactory explanation to the Assessing Officer and as well as appellant was not able to submit documents supporting its claim. Therefore, Assessing Officer added Rs. 39,00,270/- in appellant’s income. 5.6 Appellant has not filed appeal against the AO’s assessment order in the stipulated time given and no explanation was given by the appellant for the delay of filing of appeal in Form 35. A deficiency letter was also issued and no reply of that letter was received in this office till date explaining the delay in filing of appeal. Various notices for hearing of the case were issued to the appellant but appellant did not file any reply of the same although on one instance (reply dated 02.04.2021) appellant sought time for 2-3 weeks for filing necessary documents in support of his grounds of appeal and submission and adjournment was given to the appellant. Thereafter that no reply was received from the appellant for the notices issued on 05/04/2021 and 21/06/2021 Appellant replied to the notice vide dated01/09/2021 and said that he is enclosing facts and other relevant documents for consideration but no records were added by the appellant for compliance by 06/07/2021, 13/09/2021 & 07/10/2021. After giving ample opportunities to the appellant, appellant did not respond. 5.7 Appellant was not able to satisfy AO with the explanation made by the appellant during the course of assessment and appellant did not respond to the CIT (AU). No documentary evidences in support of the claim were filed by the appellant even after giving sufficient opportunity to him. The claim therefore remains unsubstantiated and cannot be allowed. It seems that the appellant has filed an appeal but is not interested in pursuing it. 6. In the result, appeal is dismissed.” 5. Feeling aggrieved by the order of the learned CIT(Appeals), the assessee is in appeal before this Tribunal. 6. The learned DR supported the orders of the authorities below. 8 ITA No. 565/Del/2022 7. I have heard the learned DR and perused the material available on record. Apropos to the grounds of appeal, the assessee has not placed any material to rebut the findings of the authorities below. The Assessing Officer in the assessment order has given detailed reasons for making the impugned addition. The learned CIT(Appeals) has also passed detailed order in affirming the order of learned AO. In the absence of any material contrary to the conclusion arrived at by the authorities below on the issue under consideration, I see no reason to disturb their findings. Hence, grounds raised by the assessee are dismissed. 7. Appeal of the assessee stands dismissed. Order pronounced in open court on 23.05.2023. Sd/- (KUL BHARAT) JUDICIAL MEMBER *MP* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI