ACIT, CENTRAL CIRCLE-2, PATNA vs. M/S PATLIPUTRA BUILDERS PVT LTD, PATNA

The Revenue has taken four grounds of appeal, out of which Grounds no. 3 & 4 are general grounds, which do not call for recording of any specific finding.

In Grounds No. 1 & 2, the Revenue has pleaded that ld. CIT(Appeals) has erred in deleting the addition of Rs.1,86,64,000/-, which was added by the ld. Assessing Officer.

Brief facts of the case are that a search and seizure operation was carried out upon the assessee on 29th July, 2011. The assessee filed an application for A.Y. 2014-15 before the Hon’ble Settlement Commission, Kolkata, who has passed an order under section 245D(4) on 31.12.2015. The ld. Assessing Officer sought to reopen assessment year 2014-15. He was of the view that assessee has sold the flat for a consideration of Rs.1,02,40,000/-, whereas stamp duty valuation of the flat was Rs.2,89,04,000/-. He was of the view that under section 43CA, the difference between the sale consideration disclosed by the assessee, vis-à-vis determined by the stamp duty valuer deserves to be added in the hands of the assessee. He accordingly reopened the assessment. In a very brief summary assessment order, he made the addition.

On appeal, ld. CIT(Appeals) deleted the addition by observing as under:- “3.1 Finding and decision: In the instant case a search and seizure operation was conducted on 29.07.201 in the case of the assessee and its related entities and other group companies, the assessee filed settlement application before the Hon’ble ITSC, Kolkata on 05.06.2014 which was not allowed to be proceeded with due to short payment of tax and interest. Subsequently the assessee filed fresh application on 26.06.2014 for the A.Ys. which include A.Y. 2014-15. Subsequently the Hon’ble ITSC, Kolkata passed order u/s 245D(4) on 31.12.2015. However, the assessee did not pay the entire demand as determined by the Hon’ble ITSC and accordingly the same was intimated to the Hon’ble ITSC and the Hon’ble ITSC had withdrawn the immunity granted to the assessee on 17th January 2018. The income determined by the Hon’ble ITSC for the AY under consideration had been Rs.4,11,78,751/-. There was no returned income as the assessee did not file any return. Hence, ITSC Kolkata Bench, Kolkata passed order u/s 245D(4) of the Act on 31.12.2015 for the A. Yrs. 2006-07 to 2014-15 and in the case of the Appellant computed the total income after determination of income as Annexure “A-1”. Assessing Officer passed order u/s 147 of the IT Act on 24.12.2018 for the A.Y. 2014-15 which was already included in the settlement period of the Hon’ble ITSC. In view of the above, it is clear that Hon’ble Settlement Commission has settled the I case of the Appellant for the A.Y. 2014-15. Assessing Officer in this case was not Authorized to interfere since the A.Y. 2014-15 comes under settled period by the Hon’ble ITSC. Assessing Officer in the assessment order mentioned about the withdrawal of immunity granted to the Appellant by the Hon’ble ITSC. Hon’ble ITSC withdrew the immunity granted against the imposition of penalty and prosecution due to non- payment of taxes, not for the re-assessment or assessment for the settled period. 3

The ld. CIT(DR) contended that the order of the Hon’ble Settlement Commission is qua the issues taken up therein. Section does not talk of assessment year, if on a particular item no opinion was expressed by the Settlement Commission, then ld. Assessing Officer will be in his rights to reopen the assessment.

On the other hand, ld. Counsel for the assessee relied upon the order of ld. CIT(Appeals). He also made relied upon the judgment of Hon’ble Gujrat High Court in the case of Komalkant Fakirchand Sharma -vs.- DCIT (2022), copy of this judgment has been placed on the record. It is passed in Civil Application No. 14883 of 2018.

On due consideration of the above facts and circumstances, we are of the view that once determination of tax liability is being settled before the Hon’ble Settlement Commission, then ld. Assessing Officer has no jurisdiction to disturb that determination. The Department has participated the proceeding before the Hon’ble Settlement Commission and if any grievance was