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Income Tax Appellate Tribunal, DEHRADUN BENCH, DEHRADUN
Before: Sh. Amit ShuklaDr. B. R. R. Kumar
Per Dr. B. R. R. Kumar, Accountant Member:
The present appeal has been filed by the revenue against the order of the ld. CIT(A), Dehradun dated 08.03.2018 and the appeal of the assessee against the order of ld. PCIT, Dehradun dated 27.03.2021.
Heard the arguments of both the parties and perused the material available on record.
ITA No. 3489/DDN/2018 2 Tosh Kumar Jain 3. We have gone through the order of the ld. CIT (A) passed against the order u/s 148/143(3) of the AO in detail and find that the Id. CIT (A) has meticulously examined the issue in toto and concluded that the assessee is not liable to capital gains with regard to the property sold.
The petit issue involved in the case is that Sh. Tosh Kumar Jain being the holder of the Power of Attorney has sold the property belonging to Sh. Mahant Dayal Das and also passed on the receipt to Sh. Mahant Dayal Das. The revenue misguidedly held the Power of Attorney holder is the owner of the property and accordingly fastened the liability of the capital gains computed instead of the legal heir of the assessee. Hence, we hereby decline to interfere with the well reasoned and aptly outlined order of the ld. CIT(A).
Further, the Id. PCIT passed an order u/s 263 of the Income Tax Act, 1961 dated 27.03.2021 revising the order passed u/s 148 dated 29.12.2017. From the reasons for reopening mentioned in the notice u/s 142(1) of the IT Act dated 09.11.2017, we find that the case has been reopened to examine the sale of the property by the assessee as a Power of Attorney holder of Sh. Mahant Dayal Das. For the sake of ready reference, the relevant para of the Assessing Officer is reproduced hereunder:
"3. That the then AO has clearly mentioned in the office note in the A.Y. 2011-12. "During the assessment proceedings, it is found that assessee as a power of attorney holder of Mahant Dayal Dass R/o Mittiwala, Tehsil-Muktsar, Distt. Hanumangarh, Rajsthan has sold on 08.09.2009 immovable properties two residential plots of value
ITA No. 3489/DDN/2018 3 Tosh Kumar Jain Rs.3,83,15,000/- to his wife Smt. Monika Jain for Rs. 20,00,000/-. One residential plots have area 29060 Sq. Mts. Khasra No. 427 and another plot of 3137 sq. mt. khasra no. 48/28 are situated at village-Bhuparwala Kalan, Pargana-Jwalapur Teshil & Distt.-Haridwar. Proceedings u/s 147 are to be initiated for charging LTCG for A.Y. 2010-11."
Thus, the after considering the office note and also the records of this office. AO has reason to belief that income to the extent of Rs.37,83,15,000/- has escaped assessment within the meaning of section 147 of the I.T. Act. Hence, action u/s 147 has been initiated after getting approval from the Higher Authority and stand correct."
The Assessment has been completed u/s 148 vide order dated 29.12.2017 making the addition of Rs.32.93 crores as mentioned in the reasons of reopening.
On the short point of the issue, since the reasons of reopening have been duly considered and the amount has been brought to tax in the Assessment Order, it cannot be said the order passed u/s 148 by the AO is erroneous and prejudicial to the interest of the revenue.
Having said that, the real issue in the case of order u/s 263 is that the assessment u/s 148 has been passed wrongly in the name of the assessee "Tosh Kumar Jain" whereas the assessment has to be rightly passed in the hands of Sh. Mahant Dayal Das as duly held by the Id. CIT (A) in his estimable order, which has been affirmed by this Tribunal. Hence, we hold that the proceedings in the case of the u/s 263 against the order passed u/s 148 which itself has been wrongly invoked cannot
ITA No. 3489/DDN/2018 4 Tosh Kumar Jain withstand the test of legality even on the primary jurisdictional issue.
In the result, the appeal of the revenue is dismissed and that of the assessee is allowed. Order Pronounced in the Open Court on 29/09/2021.