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Income Tax Appellate Tribunal, JODHPUR BENCH, JODHPUR
Before: DR. M. L. MEENA & SH. ANIKESH BANERJEE
This captioned appeal has been filed by the assessee against the order of the ld.CIT(A) National Faceless Appeal Centre (NFAC), Delhi dated 13.03.2023 in respect of Assessment Year 2012-13.
Preeti Singhvi v. ACIT 2. The assessee has raised the following grounds of appeal:
“1. The CIT(A) has grossly erred in confirming the reassessment order passed by the AO as AO’s order was totally illegal, parvas, without jurisdiction, arbitrary and in violation of principles of natural justice.
The CIT(A) has grossly erred in confirming issuance of notice by AO u/s 148 issued after death of the assessee for which he has no jurisdiction as notice can be issue into the dead person.
In this case first time assessment was made u/s 143(1) thereafter under section 143(3), thereafter on the same facts, it was reopened by issuance of notice u/s 148 which was finalized, again notice u/s 148 is issued on the same facts and without any new material and finalized the reassessment which is for adjudication before this Hon’ble Tribunal. Now, this Hon’ble Tribunal is to decide the how prolong this litigation will continue. After all there should be an end of litigation.
4. The appellants may be allowed to raise other grounds of appeal based on legal and factual aspects. He may also be allowed to amend, alter or modify Jodhpur.”
3. The assessee has raised sole issue through multiple grounds of appeal challenging therein the validity of jurisdiction on account of notice being issued u/s 148 of the Act after death of the assessee.
Briefly, the facts as per record are that the assessee’s case completed under scrutiny u/s 143(3) on 10.03.2015, assessing income at Rs. 1,88,25,960/-. The case was re-opened, by way of notice issued u/s 148 to the assessee on 26.10.2015. However, the Assessing Officer (in
Preeti Singhvi v. ACIT short “the AO”) that the appellant assessee was expired on 18.03.2015, he has dropped the said reassessment proceedings against the deceased persons, namely late Smt. Preeti Singhvi. Subsequently, the AO has issued a fresh notice u/s 148 of the Act on 23.08.2016 in the name of Sh. Ajay Singhvi legal heirs of Ms. Preeti Singhvi, the appellant and completed the assessment as per mandate u/s 143(3)/147 of the Act, on the legal heirs of the assessee on 23.08.2016 with a valid service on the legal heirs (pg. no. 17 of appeal memo).
The ld. CIT(A) has upheld the validity of the reopening of the assessment u/s 147 vide para 6.4 of the impugned order as under:
6.4 There is only on effective ground of appeal i.e. appellant has challenges the action of the AO in passing the order u/s 147/143(3) of the Income Tax Act, 1961. Reopening the assessment u/s 147 is illegal and that too on the basis of audit objection. 6.4.1 Validity of reassessment proceedings u/s 147 r.w.s. 148 of the Act. Vide this ground of appeal, the appellant has challenged the validity of reassessment proceedings u/s 147 r.w.s. 148 of the Act. The appellant has contended that the initiation of proceedings was based on audit objection and reopening the assessment u/s 147 is illegal. The appellant has further stated that the reasons recorded for the initiations of the proceedings u/s 147 may not appear to be factually correct. The Assessing Officer has not applied his mind in issuance of notice u/s 148 and whatever, objected by the audit, added/disallowed. Therefore, reopening of assessment u/s 148/147 is illegal. 6.4.2 As per reassessment order, revenue audit objection party has raised the objection that assessee incurred expenditure on repair and maintenance
Preeti Singhvi v. ACIT &photography and payment made in cash. As per ledger, details of payments made in cash exceed 20,000/- to a person in a day are as under:
S. No. Dated Amount (i) 23.03.2012 34,890 (18,000+10,890) (ii) 28.03.2012 38,800 (18,000+20,000) Total 72,890
6.4.3 It is noticed from the reassessment order, the assessee has made cash payment exceeding Rs.20,000/- as per above table to a person in any single day which is in contravention of sec. 40A(3). Therefore, assessee claimed and was allowed payment of Rs.72,890/- of Rs.72,890/- in cash for more than Rs.20,000/- which was not allowable by virtue of sec. 40A(3) of IT Act, 1961. Further, it is observed that assessee has also made payment of Rs.42,894/- to Kanstiya & Co. but TDS was not deducted on above payment. Above payment is in the nature of professional and technical fee on which TDS should have been deducted as per section 194J, but the assessee has failed to deduct TDS. Hence, this expense is not allowable as per provision u/s 40(a)(ia). 6.4.5 I have examined the issue so raised. The Assessing Officer initiated reassessment proceedings only after properly after properly appreciating and analyzing the evidences. The information on the foundation of which Assessing Officer had initiated proceedings under section 147, was certain and constitutes sufficient and relevant material on the basis of which a reasonable person could have formed a belief that income of the appellant company had escaped assessment on account of failure on the part of the appellant to disclose fully and truly all material facts/particulars of its income necessary for its assessment. 6.4.6 In Peass Industrial Engineers (P) Ltd. Vs. Deputy Commissioner of Income-Tax [2016] 73 taxmann.com 185 (Gujarat), it was held that what is required at stage of issuing notice under section 148 is a reason to believe and not established fact of escapement of income and, therefore, looking to the scope of section 147 as also sections 148 to 152 even if scrutiny assessment has been undertaken, if substantial new material is found in form of information on basis of which assessing authority can form a belief that income of petitioner
Preeti Singhvi v. ACIT has escaped assessment, it is always open for assessing authority to reopen assessment. 6.5 The Assessing Officer should have reason to believe that the income of the assessee had escaped assessment and this belief should be of an honest and reasonable person based on reasonable grounds. Taking the totality of the facts and circumstances of this case into consideration, I reject the contentions of the AR and uphold the validity of the notice u/s 148 issued and subsequent assessment made. The ground of appeal in this regard is accordingly dismissed.
The ld. counsel for the assessee reiterated the submissions made before the ld. CIT(A) by way of a written submission field on record. The relevant part of the submission is reproduced as under:
“SYNOPIS AND ISSUES FOR ADJUDICATION This appeal is related to the A.Y. 2012-13 against the order passed by the AO under section 147/143(3) on 29.12.2017. Notice u/s 148 and subsequent proceedings were completed after death of the assessee (Assessee Smt. Preeti Singhvi died on 18.03.2015). This is second time when AO has framed reassessment u/s 147/143(3) as prior to this the reassessment was completed on 09.08.2016 u/s 147/143(3). On bare reading of both the assessment orders it reveals that both reassessments are made as a remedial action to meet out the audit objection. First reassessment was framed in the name Smt. Preeti Singhvi who died on 18.03.2015. To correct a non correctable mistake notice u/s 148 was again issued on 23.08.2016, just after 14 days of the first reassessment order. Second reassessment order was passed on 29.12.2017. The reassessment order is illegal, arbitrary and without jurisdiction'. The humble appellant may be allowed to raise the following legal issues which are to be adjudicated by Your Honour to impart justice to the appellant:
A. Looking to the facts and circumstances of the case whether the AO was correct and justify in initiating reassessment proceeding by issuance of notice u/s 148 after death of the assessee in contravention of section Preeti Singhvi v. ACIT 159(2)(a) of the income tax Act and in completing assessment u/s 147/143(3) ? B. Looking to the facts and circumstances of the case whether the AO was justified in second time issuance of notice u/s 148 on 23.08.2016 particularly when assessment u/s 147/143(3) was completed on 09.08.2016. Whether this act of the AO was in contravention of sub clause (2) of Article 20 of the Constitution of India (double jeopardy)? C. Looking to the facts and circumstances of the present case whether the AO was justified in reopening the assessment on the basis of audit objection? D. Looking to the facts and circumstances of the case whether the AO justified in reopening the reassessment when there is no escapement or concealment on the part of the assessee particularly when no new fact or material which shows escapement has been brought on record. Looking to the facts and circumstances of the case whether AO was E. justified in reviewing his own order in the grebe of section 148/147? Whether such act of the AO is without jurisdiction as power to review is vested with Commissioner of Income Tax? Looking to the facts and circumstances of the case whether AO was F. justified in rejecting the objections raised by the assessee (on 28.12.2017) without speaking order and reasoning? Whether his rejection was not in contravention to the guideline laid down by the Hon'ble Supreme Court in GKN case and also against the principles of natural justice?
Per Contra, the learned additional CIT (DR) has vehemently supported the impugned order.
We have heard the Ld. DR, perused the record, impugned order and considered the written submission of the appellant assessee. It is admitted fact on record that the case was firstly, re-opened, by way of notice issued u/s 148 to the assessee on 26.10.2015. However, the AO noticed that the Preeti Singhvi v. ACIT appellant assessee was expired on 18.03.2015, and consequently, he has dropped the said reassessment proceedings against the deceased persons, namely late Smt. Preeti Singhvi. Subsequently, the AO has issued a fresh notice u/s 148 of the Act on 23.08.2016 in the name of Sh. Ajay Singhvi legal heirs of Ms. Preeti Singhvi, the appellant and completed the assessment as per mandate u/s 143(3)/147 of the Act, on the legal heirs of the assessee on 23.08.2016 with a valid service on the legal heirs (pg. no. 17 of appeal memo). Thus, the appellant’s allegation that first reassessment was framed in the name Smt. Preeti Singhvi who died on 18.03.2015 is factually incorrect and so the objection of the assessee that to correct a non-correctable mistake, notice u/s 148 was again issued on 23.08.2016, just after 14 days of the first reassessment order has no basis, in the absence of any corroborative evidence on record. In view of that matter, we find no merit in the grounds and the written submission filed by the appellant in support of the grounds of appeal. Further, the issue raised by the assessee does not arise out of the impugned order and hence, the appellant was required to raise the legal issue by way of additional ground which he failed to do so. Thus, the appeal filed by the appellant is neither maintainable legally or on merits of the case. Accordingly, the grounds of appeal are rejected.
Preeti Singhvi v. ACIT 9. In the result, the appeal of the assessee is dismissed.
Order pronounced in the open court on 13.10.2023