PARTH JAGDISH DESAI,SURAT V. ITO, INTERNATIONAL TAXATION, SURAT

ITITA 4/SRT/2024

AI Insights

The case involves Parth Jagdish Desai, the appellant, who did not file his income tax return for the assessment year 2013-14. The Assessing Officer (AO) reopened the case based on information that the appellant had sold an immovable property, and there was a significant difference between the sale consideration and the stamp duty valuation. The AO issued a notice under section 148, which was later contested by the appellant on grounds of jurisdiction and limitation. The Tribunal focused on the procedural validity of the notice under section 148, particularly its issuance beyond the statutory deadline, leading to the quashing of the reassessment order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 787241 (ITAT-SURAT)
• Duration Of Justice: 1 year(s) 6 month(s) 16 day(s)
• Appeal Type: Income Tax (International Taxation) Appeal
• Pronouncement Date: 17-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 01-05-2024
• Other Referred Cases: Union of India and Others vs. Shri Ashish Agarwal, Union of India vs. Rajeev Bansal, Saroj Predhiman Kaw vs. DCIT, Mayurkumar Babubhai Patel vs. ACIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJAY UKE
• Assessee Lawyers: RASESH SHAH
• Keywords: Sale consideration of property below Jantri Value; Cost of acquisition; Period of limitation; Time period of passing order
• Section: 147; 148; 50C

Judgement Text

" IN THE INCOME-TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE MS. SCHITRA RAGHUNATH KAMBLE, JUDICIAL MEMBER & SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER IT(IT)A No.4/SRT/2024 Assessment Year: 2013-14 (Hybrid hearing) Parth Jagdish Desai 90, Vairav Faliya AT & PO Kathodra, Tal. Kamrej, Surat-394 326 बनाम/ Vs. Income-tax Officer, International Taxation, Surat, 107, First Floor, Income Tax Office, Anavil Business Centre, Adajan, Surat-395 007 èथायीलेखासं./जीआइआरसं./PAN/GIR No: AKCPD 6884 H (अपीलाथŎ/Appellant) (ŮȑथŎ /Respondent) िनधाŊįरती की ओर से /Appellant by Shri Rasesh Shah, CA राजˢ की ओर से /Respondent by Shri Ajay Uke, Sr-DR सुनवाई की तारीख/Date of Hearing 21/08/2025 उद ्घोषणा की तारीख/Date of Pronouncement 17/11/2025 आदेश / O R D E R PER BIJAYANANDA PRUSETH, AM: This appeal by the assessee emanates from order passed under section 147 r.w.s 144C(13) of the Income-tax Act, 1961 (in short, ‘the Act’) dated 11.03.2024 by the Assessing Officer (in short, “AO”) for assessment year (AY) 2013-14. 2. Ground of appeal raised by the assessee for the appeal are as under: i. On the facts and in the circumstances of the case as well as law on the subject, the learned Dispute Resolution Panel (DRP) has erred in confirming the action of Assessing Officer in assuming jurisdiction u/s 148 by passing order u/s 148A(d) of the Act. ii. On the facts and in the circumstances of the case as well as law on the subject, the learned DRP has erred in confirming the action of Assessing Office in proposing to tax the income from capital gain on the sale of the property in the year relevant to A.Y 2013-14 when it is chargeable to tax in the year relevant to A.Y 2012-13. Printed from counselvise.com 2 IT(IT)A No.4/Srt/2024 A.Y231-14 Parth J. Desai iii. On the facts and in the circumstances of the case as well as law on the subject, the learned DRP has erred in confirming the action of Assessing Office in proposing to make addition of Rs.19,39992/- as deemed sales consideration received u/s 50C of the Act. iv. On the facts and in the circumstances of the case as well as law on the subject, the learned DRP has erred in confirming the action of Assessing Officer in allowing indexed cost of acquisition of Rs.95,508/- instead of Rs.3,02,613/- allowable as per the stamp duty valuation as on 01.04.2001. v. The ld. Assessing Office has erred in passing the order u/s 147 which is void ab-initio. vi. The Ld. Assessing Office has erred in making various addition & disallowance as per ground no. iii & iv. vii. It is therefore prayed that the assessment framed u/s 147 r.w.s.144C(13) may please be quashed and/or addition made by the Assessing Office may please be deleted. viii. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.” 3. Facts of the case in brief are that assessee did not file his return of income for AY 2013-14. As per the information received from ITO Ward- 3(3)(2), Surat, the assessee had sold an immovable property along with six co- owners for Rs.4,46,73,320/- but the value as per the stamp valuation authority was at Rs.6,21,35,000/-. Thus, there was difference of Rs.1,74,61,680/- between the sale consideration and market value. The share of assessee was of Rs.88,76,428/-. Since the assessee had not filed his return of income, the AO reopened the case by issuing notice u/s 148 under the old regime on 10.06.2021. Following the decision of Hon’ble Supreme Court in Civil Appeal No.3005/2022 dated 04.05.2022 in case of Union of India and Others vs. Shri Ashish Agarwal, the AO provided the information along with reasons for reopening and assessee was issued show cause notice u/s 148A(b) on Printed from counselvise.com 3 IT(IT)A No.4/Srt/2024 A.Y231-14 Parth J. Desai 20.05.2022. Thereafter, the objection of the assessee was rejected and order u/s 148A(d) and notice u/s 148 were issued on 27.07.2022. Subsequently, the assessee was heard and order u/s 147 r.w.s. 144C(13) was passed on 11.03.2024 as per the direction of the Ld. DPR u/s 144C(5) of the Act dated 29.02.2024 by making addition of Rs.68,07,690/- u/s 50C of the Act. 4. Aggrieved by the order of AO, assessee has filed appeal before the Tribunal. The Ld. AR filed two paper books containing copies of various details filed before the AO and also compilation of case laws. The Ld. AR submitted that the AO was not right in law in assuming jurisdiction u/s 148 by passing order u/s 148A(d) of the Act on 27.07.2022. The primary grievance of the Ld. AR is that notice issued u/s 148 dated 27.07.2022 is barred by limitation and hence, the entire assessment framed pursuant to such notice is without jurisdiction. The Ld. AR relied on the decision of Hon’ble Supreme Court in case of Union of India vs. Rajeev Bansal 167 taxmann.com 70 (SC) and decision of Hon’ble jurisdictional High Court in case of Saroj Predhiman Kaw vs. DCIT (2025) 176 taxmann.com 76 (Guj) and submitted that the notice u/s 148 of the Act was issued beyond the surviving period after excluding the period granted by the AO and hence the notice u/s 148 of the Act is invalid. As a result, the re- assessment order u/s 147 of the Act is also bad in law. 5. On the other hand, Ld. Sr-DR for the revenue supported the order of the AO/Ld.DRP. He submitted that there is no invalid assumption of jurisdiction by the AO. He has duly followed the procedure and issued the notice u/s 148 of Printed from counselvise.com 4 IT(IT)A No.4/Srt/2024 A.Y231-14 Parth J. Desai the Act. Correspondingly, the order passed u/s 147 r.w.s. 144C(13) of the Act is valid and is not liable to be disturbed. 6. We have heard both the parties and perused the materials available on record. We have also deliberated the decisions relied upon by the Ld. AR of the appellant. We have also gone through the relevant provisions of the Act in respect of the jurisdictional issue raised before us. The facts relevant for adjudication of the legal grounds are as under: Sr. No. Particulars Date 1 Issuance of notice u/s 148 under old regime 10.06.2021 2 Last date to issue notice u/s 148 as per TOLA 30.06.2021 3 Surviving period [(2)-(1)] 21 4 Issuance of notice u/s 148A(b) 26.05.2022 5 Reply filed in response to notice u/s 148A(b) 07.06.2022 6 Last date to file reply in response to notice u/s 148A(b) 09.06.2022 7. Limitation period to pass order u/s 148A(d) and issue notice u/s 148 as per 3rd proviso to section 149 [(6)+(3)] 30.06.2022 8. Passing of order u/s 148A(d) and issuance of notice u/s 148 27.07.2022 6.1 It is clear from the facts mentioned in the above table that the notice u/s 148 was issued on 27.07.2022 whereas the last date to issue such notice was 30.06.2022. Therefore, the notice u/s 148 of the Act was issued after expiry of limitation period prescribed u/s 149 of the Act. Once the notice itself is time barred, the consequential re-assessment proceedings u/s 147 r.w.s 144C(13) of the Act is without jurisdiction and invalid. Consequently, the re- assessment order made by the AO is liable to be quashed. Useful reference may be made to the decisions in cases of Rajeev Bansal (supra), Saroj Predhiman Kaw (supra) and Mayurkumar Babubhai Patel vs. ACIT 176 Printed from counselvise.com 5 IT(IT)A No.4/Srt/2024 A.Y231-14 Parth J. Desai taxmann.com 25 (Guj). Accordingly, the jurisdictional grounds raised by the appellant are allowed and the order of AO is quashed. 7. Since we have allowed the appeal on jurisdictional issue, we are not adjudicating other grounds raised on merits. 8. In the result, appeal of the assessee is allowed. Order pronounced in accordance with Rule 34 of ITAT Rules, 1963 on 17/11/2025 in the open court. Sd/- Sd/- (SUCHITRA R. KAMBLE) (BIJAYANANDA PRUSETH) Æयाियक सदÖय/JUDICIAL MEMBER लेखा सदÖय/ ACCOUNTANT MEMBER सूरत /Surat Ǒदनांक/ Date: 17/11/2025 Dkp Outsourcing Sr.P.S* आदेश कì ÿितिलिप अúेिषत/ Copy of the order forwarded to :  अपीलाथê/ The Appellant  ÿÂयथê/ The Respondent  आयकर आयुĉ/ CIT  आयकर आयुĉ (अपील)/ The CIT(A)  िवभागीय ÿितिनिध, आयकर अपीलीय आिधकरण, सूरत/ DR, ITAT, SURAT  गाडª फाईल/ Guard File By order/आदेश से, // True Copy // सहायक पंजीकार आयकर अपीलȣय अͬधकरण, सूरत Printed from counselvise.com "