SH. PARAMBIR SINGH, AMRITSAR V. INCOME TAX OFFICER, WARD 4(4), AMRITSAR

ITA 705/ASR/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3407 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 19-02-2019
• Assessment Year: 2009-2010
• Appeal Filed On: 17-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAT INDER KAUR LD
• Assessee Lawyers: K R JAIN LD
• Keywords: Depreciation; Cost of acquisition; Difference of opinion; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 54B; 147; 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. N.S.SAINI, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER ITA NO.705(ASR)/2017 ASSESSMENT YEAR:2009- 2010 SH. PARAMBIR SINGH, VPO VALLAH, AMRITSAR. [PAN:ADDPS 1611H] VS. INCOME TAX OFFICER, WARD-4(4), AMRITSAR (APPELLANT) (RESPONDENT) APPELLANT BY: SH. K. R. JAIN (LD. ADV.) RESPONDENT BY: SMT. RAT INDER KAUR (LD. DR) DATE OF HEARING: 19.02.2019 DATE OF PRONOUNCEMENT: 22.02.2019 ORDER PER N.K.CHOUDHRY, JM: THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE/APPELLAN T AGAINST THE ORDER DATED 30.08.2017 IMPUGNED HEREIN, PASSED BY THE LD. CIT(A)-2, AMRITSAR U/S.250(6) OF THE INCOME TA X ACT, 1961 (HEREINAFTER CALLED AS THE ACT). 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL. 1. THAT THE ORDER OF THE LEARNED INCOME TAX OFFICER IS WRONG, ILLEGAL AND AGAINST FACTS. LIKEWISE CIT(A) IS NOT J USTIFIED WHILE CONFIRMING THE SAME. 2. THAT THE LD. AO HAS ERRED IN LAW AND ON FACTS WHILE REOPENING THE ASSESSMENT AND LD. CIT(A) IS NOT JUST IFIED WHILE CONFIRMING THE SAME. 3. THAT THE AO HAS INITIATED PROCEEDINGS ON THE BASIS OF BORROWED INFORMATION AND HAS NOT APPLIED HIS MIND A ND AS SUCH PROCEEDINGS INITIATED ARE ILLEGAL, INVALID AND VOID -AB-INITIO. ITA NO.705 /ASR/2017 SH. PARAMBIR SINGH, A MRITSAR VS. ITO 2 4. THAT THE LD. CIT(A) HAS NOT APPRECIATED THE FACT THAT ASSETS BEING ANCESTRAL BELONG TO HUF AND AS SUCH AO IS NOT JUSTIFIED WHILE ASSESSING CAPITAL GAIN IN INDIVIDUAL HAND. 5. THAT THE CIT(A) HAS NOT APPRECIATED THE FACT, AFFIDAVIT FILED TO SUPPORT THE FACTS & PROCEEDED TO REJECT THE SUBM ISSIONS ARBITRARILY. 6. THAT THE CIT(A) AND AO HAS ERRED IN NOT FOLLOW ING THE INSTRUCTIONS OF THE CBDT. ACCORDINGLY IT IS PRAYED THAT ADDITIONS CONFIRMED B Y THE CIT(A) MAY KINDLY BE DELETED OR SUCH OTHER RELIEF A S MAY BE PERMISSIBLE MAY KINDLY BE GRANTED. 3. THE CASE WAS REOPENED U/S 147 OF THE ACT FOR THE YEAR UNDER CONSIDERATION AND ADDITION OF RS.66,11,250/- WAS MADE AFTER ALLOWING THE DEDUCTION OF RS.24,37,340/- U/S 54 OF THE ACT BEING LONG TERM CAPITAL GAIN BY THE ASSESSING OFFICER, WH ICH WAS CHALLENGED BEFORE THE LD. CIT(A) WHO VIDE IMPUGNED O RDER AFFIRMED THE ADDITION. NOW THE ASSESSEE BEING AGGRIEVE D BEFORE US . 4. AT THE OUTSET, THE ASSESSEE DRAWN OUR ATTENTION TO THE REASONS RECORDED BY THE ASSESSING OFFICER WHICH FOR THE SAKE OF CONVENIENCE AND BREVITY ARE REPRODUCED HEREIN BELOW . THE ASSESSEE HAS FILED HIS RETURN OF INCOME OF RS.1,31,751/- FOR THE ASSESSMENT YEAR 2009-10 VIDE ACK NO.4009677 DATED 30.07.2009. THE SAME WAS ASSESSED U/S 143(3) OF THE I.T. ACT, 1961 VIDE ORDER DATED 30.12 .2011 AT AN INCOME OF RS.10,79,750/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT HAS BEEN NOTICED THAT THE ASSESSEE HAS SOLD 1 /3 RD SHARE OF AGRICULTURE LAND WHICH WAS WORKED OUT BY THE ASSESSEE AND SHOWN AT RS.91,22,045/- VIDE HIS LETTER DATED 26.12.2011 AND THE NET LONG TERM CAPITAL LOSS WORKS OUT TO RS.13,55,625/-. PERUSAL OF DETAIL OF COMPUTATION GIVEN BY THE ASSESSEE REVEALS THAT THE ASSESEE HAS CLAIMED PURCHASE COST PRICE OF LAND AS ON 01.04.1981 AT RS.13,81,500/- AND FURTHER WITH THE I NDEXATION COST PRICE OF THE SAID LAND AT RS.80,40,330/-. THE CALCULATION OF LONG TERM CAPITAL LOSS CALCULAT ED BY THE ASSESSEE IS AS UNDER: BY SALE PRICE OF 1/3 RD SHARE OF AGRICULTURE LAND: RS.91,22,045/- ITA NO.705 /ASR/2017 SH. PARAMBIR SINGH, A MRITSAR VS. ITO 3 LESS: COST PRICE AS ON 01.04.1981 RS.13,81,500/- COST AS PER COST INFLATION INDEX (RS.1381500 * 582/100 = RS. 8040330/-) LONG TERM CAPITAL GAIN RS.10,81,715/- LESS: PURCHASE OF AGRICULTURE LAND U/S 54B RS.24,37,340/ LONG TERM CAPITAL LOSS RS.13,55,625/- AS PER MATERIAL AVAILABLE ON RECORD THE PURCHASE O F THE SAID LAND IS RS.816/- PER KANAL AND AFTER INDEXATIO N THE VALUE OF THE SAID LAND COMES TO RS.72,900/-. AFTER CAREFULLY EXAMINING THE FACTS OF THE CASE AN D ALL MATERIAL AVAILABLE ON RECORD, I AM OF THE CONSIDERED VIEW AND HAVE REA SON TO BELIEVE THAT THERE IS FAILURE ON THE PART OF THE AS SESSEE TO DISCLOSE FULLY AND TRULY THE COST PRICE OF THE ALLE GED AGRICULTURE LAND AND THAT THE TAXABLE INCOME TO THE EXTENT OF RS.66,11,805/- HAS ESCAPED ASSESSMENT FOR THE ASSES SMENT YEAR 2009-10 WITHIN THE MEANING OF SECTION 147 OF T HE INCOME TAX ACT, 1961 AND ALSO OTHER INCOME CHARGEABLE TO T AX IN RESPECT OF WHICH ASSESSEE IS ASSESSABLE, WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO NOTICE SUBSEQUENTLY I N THE COURSE OF THE PROCEEDINGS UNDER THIS SECTION FOR TH E ASSESSMENT YEAR 2009-10. SO ISSUE NOTICE U/S 148 OF THE INCOME TAX AC T, 1961 FOR A.Y 2009-10. 5. FROM THE REASONS RECORDED, IT REFLECTS THAT THE ASSESSING OFFICER WITHOUT DISCLOSING THE EXACT MATERIAL, RELIED U PON THE MATERIAL AVAILABLE ON RECORD I.E. THE PURCHASE OF THE LAND UNDER DISPUTE @ 816 PER KANAL AND AFTER INDEXATION THE VA LUE OF THE SAID LAND COMES TO RS.72,900/-. IN THE LAST PARA, THE ASSE SSING OFFICER OBSERVED THAT AFTER CAREFULLY EXAMINING THE FA CTS OF THE CASE AND ALL MATERIAL AVAILABLE ON RECORD. I AM OF THE CONSIDERED VIEW AND HAVE REASON TO BELIEVE THAT THERE IS FAILUR E ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY THE COSTS PRICE OF THE ALLEGED AGRICULTURE LAND AND THE TAXABLE INCOME TO TH E EXTENT OF RS.66,11,805/- HAD ESCAPED ASSESSMENT FOR THE AY:2009-10 WITHIN THE MEANING OF SECTION 147 OF THE ACT, 1961 AND ALSO OTHER INCOME CHARGEABLE TO TAX IN RESPECT OF WHICH THE ASSESSEE ITA NO.705 /ASR/2017 SH. PARAMBIR SINGH, A MRITSAR VS. ITO 4 IS ASSESSABLE, WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS U NDER THIS SECTION FOR THE ASST. YEAR 2009-10. 5.1 LET US TO PERUSE THE RELEVANT PROVISIONS OF LAW: '147. IF THE AO HAS REASON TO BELIEVE THAT ANY INCOME CH ARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY A.Y., HE MAY, SUBJECT TO THE PROVISIONS OF SECTIONS 148 TO 153, ASSESS OR REASSESS SUCH INCOME AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF PROCEEDINGS UN DER THIS SECTION, OR RECOMPUTE THE LOSS OR THE DEPRECIATION ALLOWANCE OR ANY OTHER ALLOWANCE, AS THE CASE MAY BE, FOR THE A.Y. CONCERNED (HEREAFTER IN THIS SECTION AND IN SECTION S 148 TO 153 REFERRED TO AS THE RELEVANT ASSESSMENT YEAR). PROVIDED THAT WHERE AN ASSESSMENT UNDER SUBSECTION (3) OF SECTION 143 OR THIS SECTION HAS BEEN MADE FO R THE RELEVANT ASSESSMENT YEAR, NO ACTION SHALL BE TAKEN UNDER THIS SECTION AFTER THE EXPIRY OF FOUR YEARS FROM TH E END OF THE RELEVANT ASSESSMENT YEAR, UNLESS ANY INCOME CHARGEA BLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF THE FAILURE ON THE PART OF THE ASSESSEE T O MAKE A RETURN UNDER SECTION 139 OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB SECTION (1) OF SECTION 142 OR SECTION 148 OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSA RY FOR HIS ASSESSMENT FOR THAT ASSESSMENT YEAR. EXPLANATION 1.- PRODUCTION BEFORE THE ASSESSING OF FICER OF ACCOUNT BOOKS OR OTHER EVIDENCE FROM WHICH MATERIAL EVIDENCE COULD WITH DUE DILIGENCE HAVE BEEN DISCOVERED BY THE AO WILL NOT NECESSARILY AMOUNT TO DISCLOSURE WITHIN THE MEANING OF THE FOREGOING PROVISO. EXPLANATION 2- FOR THE PURPOSES OF THIS SECTION, T HE FOLLOWING SHALL ALSO BE DEEMED TO BE CASES WHERE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT NAMELY:- (A) WHERE NO RETURN OF INCOME HAS BEEN FURNISHED BY THE ASSESSEE ALTHOUGH HIS TOTAL INCOME OR THE TOTAL INCOME OF ANY OTHER PERSON IN RESPECT OF WHICH HE IS ASSESSABLE UNDER THIS ACT DURING THE PREVIOUS YEAR EXCEEDED THE MAXIMUM AMOUNT WHICH IS NOT CHARGEABLE TO INCOME TAX. ITA NO.705 /ASR/2017 SH. PARAMBIR SINGH, A MRITSAR VS. ITO 5 (B) WHERE A RETURN OF INCOME HAS BEEN FURNISHED BY THE ASSESSEE BUT NO ASSESSMENT HAS BEEN MADE AND IT IS NOTICED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS UNDERSTATED THE INCOME OR HAS CLAIMED EXCESSIVE LOSS, DEDUCTION, ALLOWANCE OR RELIEF IN THE RETURN. (C) WHERE AN ASSESSMENT HAS BEEN MADE, BUT- (I) INCOME CHARGEABLE TO TAX HAS BEEN UNDER ASSESSED; OR (II) SUCH INCOME HAS BEEN ASSESSED AT TOO LOW A RATE; OR (III) SUCH INCOME HAS BEEN MADE THE SUBJECT OF EXCESSIVE RELIEF UNDER THIS ACT; OR (IV) EXCESSIVE LOSS OR DEPRECIATION ALLOWANCE O R ANY OTHER ALLOWANCE UNDER THIS ACT HAS BEEN COMPUTED.' 5.2 THE LAW ON THE PROVISIONS OF SECTION 147 IS VERY CLEAR. SECTION 147 AUTHORIZES THE ASSESSING OFFICER TO ASSESS OR RE- ASSESS THE INCOME CHARGEABLE TO TAX IF HE HAS REASON TO BEL IEVE THAT THE INCOME FOR ANY ASSESSMENT ORDER HAS ESCAPED ASSESSMENT AND HAS DULY RECORDED THESE REASONS, HOWEVER AS IT WELL SETTLED THAT THE REASONS TO BELIEVE MUST BE BONA F IDE AND MUST BE BASED UPON RELEVANT MATERIAL ON WHICH A REASON ABLE PERSON COULD HAVE FORM THE REQUISITE BELIEF. 5.3 IN THE INSTANT CASE, THE ASSESSING OFFICER OPENED THE PROCEEDINGS ON THE BASIS OF SAME FACTS WHICH HAVE ALREADY B EEN CONSIDERED BY THE ASSESSING OFFICER WHILE PASSING THE ORIGIN AL ASSESSMENT ORDER U/S 143(3) OF THE ACT. THEREFORE QUESTION AROSE AS TO WHETHER THE ASSESSING OFFICER CAN REASSESS THE FACTS AND MATERIALS WHICH WERE THE SUBJECT MATTER OF THE OR IGINAL ASSESSMENT. THE HON'BLE SUPREME COURT C.I.T. VS. KELVINA TOR (I) LTD. (320 ITR 651) WHILE DEALING WITH IDENTICAL ISSUE HAS HELD THAT THE ASSESSMENT CANNOT BE RE-OPENED U/S.147 OF THE I. T. ACT, 1961, ON THE BASIS OF SAME FACTS AND MATERIALS (AND NO ITA NO.705 /ASR/2017 SH. PARAMBIR SINGH, A MRITSAR VS. ITO 6 MORE) DISCLOSED AT THE TIME OF ORIGINAL ASSESSMENT MADE UN DER SECTION 143(3) OF THE I. T. ACT, BY MERE CHANGE OF OPIN ION. 5.4. IN CIT VS. KELVINATOR OF INDIA LTD. 256 ITR 1 THE FU LL BENCH OF THE DELHI HIGH COURT WAS CONSIDERING A CASE OF REOPEN ING U/S 147 WITHIN 4 YEARS FROM THE END OF THE ASSESSMENT YEAR. THE COURT HELD THAT WHEN A REGULAR ORDER OF ASSESSMENT IS PA SSED IN TERMS OF SECTION 143 (3) OF THE ACT, A PRESUMPTION CAN BE RAISED THAT SUCH AN ORDER HAS BEEN PASSED ON APPLICATION OF MIND . IT WAS HELD THAT IF IT BE HELD THAT AN ORDER WHICH HAS BE EN PASSED PURPORTEDLY WITHOUT APPLICATION OF MIND WOULD ITSELF CONFER JURISDICTION UPON THE ASSESSING OFFICER TO REOPEN THE PROCE EDING WITHOUT ANYTHING FURTHER, THE SAME WOULD AMOUNT TO G IVING PREMIUM TO AN AUTHORITY EXERCISING QUASI- JUDICIAL FUNCT ION TO TAKE BENEFIT OF ITS OWN WRONG. IT WAS HELD THAT SECT ION 147 OF THE ACT DOES NOT POSTULATE CONFERMENT OF POWER UPON THE ASSE SSING OFFICER TO INITIATE REASSESSMENT PROCEEDINGS UPON A MERE CH ANGE OF OPINION. 5.5. ON THE AFORESAID ANALYZATION AND IN VIEW OF DICTUM O F APEX COURT IN CIT VS. KELVINATOR OF INDIA LTD (SUPRA), AS THE OPENING OF ASSESSMENT IS BASED UPON MERE CHANGE OF OPINION, HENCE T HE ASSESSMENT ORDER IS LIABLE TO BE QUASHED ON THIS GROUND AL ONE, THEREFORE WE DO NOT HAVE ANY HESITATION TO QUASH THE ASSESSMENT ORDER AND CONSEQUENTLY THE IMPUGNED ORDER IS SET ASIDE. 6. AS WE HAVE ALREADY QUASHED THE ASSESSMENT ORDER ON THE AFORESAID LEGAL GROUND ITSELF, THEREFORE WE ARE NOT A DVERTING TO OTHER GROUNDS RAISED BY THE ASSESSEE AS NO USEFUL PURPOSE WO ULD BE SERVED BY DECIDING OTHER GROUNDS. ITA NO.705 /ASR/2017 SH. PARAMBIR SINGH, A MRITSAR VS. ITO 7 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22.02.2019. SD/- SD/- (N.S.SAINI) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDI CIAL MEMBER DATED: 22.02.2019 /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) SH. PARAMBIR SINGH, VPO VALLAH, AMRITSAR (2) THE ITO, WARD-4(4), AMRITSAR (3) THE CIT(A)-2, AMRITSAR (4) THE CIT CONCERNED (5) THE SR DR, I.T.A.T., AMRITSAR TRUE COPY BY ORDER FILENAME: PARAMBIR SINGH 705-17 DIRECTORY: D:\DOCUMENT\NKC ORDERS 2018\NS SAINI & N KC TEMPLATE: C:\USERS\ETC PARMOD\APPDATA\ROAMING\MICROSOFT\TEMPLATES\NORMAL.D OT TITLE: IN THE INCOME TAX APPELLATE TRIBU NAL SUBJECT: AUTHOR: RAHUL PRABHAKAR KEYWORDS: COMMENTS: CREATION DATE: 2/19/2019 5:22:00 PM CHANGE NUMBER: 133 LAST SAVED ON: 2/26/2019 12:49:00 PM LAST SAVED BY: ETC PARMOD TOTAL EDITING TIME: 211 MINUTES LAST PRINTED ON: 2/26/2019 1:29:00 PM AS OF LAST COMPLETE PRINTING NUMBER OF PAGES: 8 NUMBER OF WORDS: 1,972 (APPROX.) NUMBER OF CHARACTERS: 11,244 (APPROX.)