SH. GURJIT SINGH,AMBALA CITY V. PR. CIT, PANCHKULA

ITA 98/CHANDI/2022

AI Insights

The case involves appeals by Gurjit Singh and Jagdeep Singh against the orders of the Commissioner of Income Tax (CIT) which were passed under section 263 of the Income Tax Act, 1961. The CIT had set aside the assessment orders for the assessment year 2012-13, which were initially passed by the AOs. The primary issue was the reopening of the assessments based on the purchase of agricultural land by the assessees, which was later transferred back to their uncle, Tejinder Singh, under a family settlement. The ITAT examined whether the CIT was justified in invoking section 263, considering the previous assessments and the specific circumstances of the land transfer.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 652918 (ITAT-CHANDIGARH)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Other Referred Cases: Smt. Amarjit Kaur vs. ITO, Berger Paints India Ltd., Leader Valves Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANAV BANSAL
• Assessee Lawyers: SUDHIR SEHGAL
• Keywords: Set aside; Rule of consistency; Tax effect; Revision of order
• Section: 147; 143(3); 263

Judgement Text

"आयकर अपीलȣय अͬधकरण,चÖडीगढ़ Ûयायपीठ, चÖडीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, ‘A’ CHANDIGARH BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI KRINWANT SAHAY, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No. 98/CHD/2022 Ǔनधा[रण वष[ / Assessment Year: 2012-13 Shri Gurjit Singh, #286, Jatt Mohalla, Panjokhra, Ambala City. Vs The PCIT, Aayakar Bhawan, Sector 2, Panchkula. èथायी लेखा सं./PAN NO: FTPPS2607A अपीलाथȸ/Appellant Ĥ×यथȸ/Respondent & आयकर अपील सं./ ITA No. 377/CHD/2022 Ǔनधा[रण वष[ / Assessment Year: 2012-13 Shri Jagdeep Singh, Village – Raipur, Tehsil-Rajpura, Distt. Patiala. Vs The PCIT, Patiala. èथायी लेखा सं./PAN NO: FSUPS4290F अपीलाथȸ/Appellant Ĥ×यथȸ/Respondent Assessee by : Shri Sudhir Sehgal, Advocate Revenue by : Shri Manav Bansal, CIT, DR Date of Hearing : 22.05.2025 Date of Pronouncement : 19.06.2025 PHYSICAL HEARING O R D E R PER RAJ PAL YADAV, VP The present appeals are directed at the instance of the assessees against separate orders of ld. Commissioner of ITA No.98/CHD/2022 & ITA 377/CHD/2022 A.Y.2012-13 2 Income Tax ( in short ‘the CIT’) dated 27.01.2022 and 27.03.2022 passed u/s 263 of the Income Tax Act, 1961 in assessment year 2012-13 in the case of Gurjit Singh and Jagdeep Singh respectively. Since common issue is involved in both the appeals, therefore, we deem it appropriate to dec ide both the appeals by this common order. 2. The solitary grievance of the assessee is that ld. CIT has erred in taking cognizance u/s 263 of the Income Tax Act and thereby setting aside the assessment orders dated 25.12.2019 and 27.09.2019 passed u/s 147 read with Section 143(3) in assessment year 2012-13 in the case of Gurjit Singh and Jagdeep Singh respectively. 3. The brief facts of the case are that assessees are agriculturist during the accounting period relevant to this assessment year. The AO got information that an agriculture land was purchased by three persons for consideration of Rs.3.78 Cr in which share of the assessee was 1/3rd each i.e. Rs.1.26 Cr. per person. Therefore, he reopened the assessment because assessees have not filed any return of income u/s ITA No.98/CHD/2022 & ITA 377/CHD/2022 A.Y.2012-13 3 139(1) of the Income Tax Act. In response to the queries of the AO raised u/s 142(1), it was contended by the assessees that land was owned by their uncle Shri Tejinder Singh and due to some matrimonial dispute between him and his wife in the District of Frauenfeld which was decided on 14.01.2015, he has transferred this land to three cousins of the assessee and which was taken back by him subsequently. 3.1 The ld. counsel for the assessee has placed on record a Note which would exhibit the family-tree as to how this transaction has been materialized. This Note reads as under: ITA No.98/CHD/2022 & ITA 377/CHD/2022 A.Y.2012-13 4 3.2 A perusal of the above Note would reveal that Shri Tejinder Singh has transferred the land to Shri Gurjeet Singh, Shri Baljeet Singh and Shri Jagdeep Singh, under a family settlement. According to the evidence available on record, the vendees have not paid anything to Shri Tejinder Singh, rather Stamp Duty was also paid by Shri Tejinder Singh. Subsequently, in 2014, Government of Haryana has issued a Notification bearing No.JYST 26, 1936 SAR.A dated 16.06.2014 whereby it was held that on transfer of immovable property within the family by an owner, during his life time to any of the blood relations, namely parents, children, grand- children, brothers, sisters and between spouse, no Stamp Duty will be charged. This Notification was issued u/s 9(1)(a) of Indian Stamp Act, 1899. Thus, the land was transferred to three nephews which was re-transferred to Shri Tejinder Singh and his sons. The assessments of all three alleged vendees have been reopened. The AO’s of two assessees, namely Shri Gurjeet Singh and Shri Jagdeep Singh did not make additions, however, in the case of Shri Baljeet Singh, addition was made. ITA No.98/CHD/2022 & ITA 377/CHD/2022 A.Y.2012-13 5 3.3 A reference was made by the Assessing Officers of two assessees, namely Shri Gurjeet Singh and Shri Jagdeep Singh for remedial action u/s 263 of the Act and on the basis of which, ld. CIT perused the record and took action u/s 263 against Shri Gurjeet Singh and Shri Jagdeep Singh, whose orders are being impugned herein. It is pertinent to note that in the case of Shri Baljeet Singh, dispute travelled upto the Tribunal in ITA 12/CHD/2010 whereby ITAT has deleted the addition. The Department took a stand that remedial action is being explored in the cases of two other assessees u/s 263. The ITAT took specific cognizance of this fact in its order in the case of Shri Baljeet Singh, which read as under : “13. Further, the copies of assessment orders dated 25.12.2019 & 27.09.2019 passed by the concerned AOs u/s 147 read with section 143(3) in the case of the co-purchasers Sh. Gurjit Singh and Sh. Jagdeep Singh respectively, available at pages 45 to 53, show that the concerned AOs have accepted the identical contention raised by the assessee during assessment proceedings and accepted their nil returns. But in the case of the assessee the AO rejecting the same contention made addition of l/3rd amount of the total sale consideration. So far as the contention of the Ld. DR that proceedings u/s 263 of the Act are being contemplated in the cases of Gurjit Singh and Jagdeep Singh is concerned, it is clear from the copies of official correspondences placed on record that the Ld. ACIT Patiala Range and the Ld. JCIT Panchkula have sent proposals for initiating proceedings u/s 263 of the Act in the case of Jagdeep Singh and Sh. Gurjit ITA No.98/CHD/2022 & ITA 377/CHD/2022 A.Y.2012-13 6 Singh to the concerned Principal Commissioners on 28.12.2020 and 31.12.2020 respectively. As pointed out by the Ld. counsel, these proposals have been moved by the concerned officers during arguments of the present appeal before the Tribunal. Under these circumstances, the action of the Ld. CIT(A) cannot be justified. In the case of Smt. Amarjit Kaur vs. ITO (supra), the SMC Bench of the Jurisdictional Tribunal following the ratio laid down by the Hon'ble Supreme Court in case of Berger Paints India Ltd. and the Hon'ble Punjab and Haryana High Court the case of Leader Valves Ltd. (supra) has deleted the addition sustained by the Ld. CIT(A) in violation of the principle of consistency. 14. In our considered view, the Ld. CIT(A) has passed the impugned order without taking into consideration the direct and circumstantial evidence placed on record by the assessee to substantiate his contention. Further, since the Ld. CIT(A) has passed the impugned order without taking into consideration the view taken by the department in the cases of co-purchasers, the impugned order passed in violation of principle of consistency is also bad in law. Hence, in view of the discussions made on facts, evidence on record and the cases discussed in the foregoing paras, we allow the appeal of the assessee and set aside the impugned order passed by the Ld. CIT(A). Accordingly, we direct the AO to delete the addition. In the result, the appeal filed by the assessee is allowed.” 4. On an analysis of the complete evidence including the plea of the Revenue that Section 263 is being explored in the case of rest of the vendees, the ITAT has deleted the addition. Therefore, on merit, whether addition would be there in the case of appellants before us, the issue is covered in favour of ITA No.98/CHD/2022 & ITA 377/CHD/2022 A.Y.2012-13 7 the assessees. It is pertinent to note that action u/s 263 can only be taken if twin conditions are fulfilled i.e. the impugned order is erroneous and has caused prejudice to the interests of the Revenue. In the present case, if addition is not going to be sustained by looking into the Co-ordinate Bench decision and it would not be further challenged for want of tax effect before the Hon'ble High Court, then, atleast there is no prejudice to the interests of Revenue because ultimately even if 263 is being upheld, addition on merit would be deleted. Apart from that, we find that there was no investment made by the assessee out of unexplained sources and it was an agriculture land of his uncle who has just transferred it to their name without charging any sale consideration and assessee has already relinquished the rights achieved under this Sale Deed in favour of their uncle/his children. Thus, we are of the firm view that AO has conducted a proper enquiry and took prima-facie opinion permissible under the law and no action u/s 263 ought to have been carried out. The issue is otherwise covered in favour of the assessee. Accordingly, we quash the impugned orders dated 27.01.2022 and ITA No.98/CHD/2022 & ITA 377/CHD/2022 A.Y.2012-13 8 27.03.2022 passed u/s 263 of the Income Tax Act in the case of each appellants respectively. 5. In result, the appeals of the assessees are allowed. Order pronounced on 19.06.2025. Sd/- Sd/- (KRINWANT SAHAY) (RAJPAL YADAV) ACCOUNTANT MEMBER VICE PRESIDENT “Poonam” आदेश कȧ ĤǓतͧलͪप अĒेͪषत/ Copy of the order forwarded to : 1. अपीलाथȸ/ The Appellant 2. Ĥ×यथȸ/ The Respondent 3. आयकर आयुÈत/ CIT 4. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय आͬधकरण, चÖडीगढ़/ DR, ITAT, CHANDIGARH 5. गाड[ फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar "