DHOOT STONO CRAFTS PVT. LTD.,JAIPUR vs. ACIT, CIRCLE-6, JAIPUR

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES ‘A’ JAIPUR Jh lanhi xkslkbZ] U;kf;d lnL; ,oa Jh foØe flag ;kno] ys[kk lnL; ds le{k BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 243/JP/2020 fu/kZkj.k o"kZ@Assessment Year :2009-10 cuke M/s Dhoot Stono Crafts Private Ltd., ACIT, Vs. B-8, Industrial Estate, Bais Godown, Circle-06, Jaipur Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No. AABCD6662M vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Sh. Pramod Patni (CA) jktLo dh vksj ls@ Revenue by : Sh. A. S. Nehra (Addl. CIT) lquokbZ dh rkjh[k@ Date of Hearing : 11/06/2021 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 15/06/2021 vkns'k@ ORDER PER: VIKRAM SINGH YADAV, A.M. This is an appeal filed by the assessee against the order of ld. CIT(A), Ajmer dated 17.10.2018 wherein the assessee has raised the following grounds of appeal: “1. The learned CIT(A), has grossly erred in fact as well as in law in upholding the action of reopening assessment u/s. 148 of IT Act, 1961 on the basis of incomplete information and unconcluded proceedings under some other law and which action on prime facie basis itself was bad in law and beyond jurisdiction.

2. The learned CIT(A) has grossly erred in fact as well as in law in endorsing the AO considering the Value of Land Sold at Rs.90,19,200/- u/s 50C, as against the Stamp Authorities own Certified Value of Rs. 75,06,000 at the time of actual Registration

2 M/s Dhoot Stono Crafts Pvt. Ltd., Jaipur Vs. ACIT, Jaipur of Conveyance of property and its sale transaction. The CIT(A) has further erred in holding the action of the AO in adopting such higher Sale value of Land at Rs. 90,19,200/- on arbitrary basis based on an internal departmental communication and incomplete proceedings under the Stamp Law and based on same making addition of Rs. 14,19,200/- under the Income head "Income from Capital Gains". Such higher replaced Value of Land for Stamp Duty purposes having neither been conveyed to the Parties to the transaction nor any additional stamp duty on such incremental value of land having been recovered from the parties to the transaction in the 12 year period after such date of actual registration of Document on 28/30.05.2008. Further, while doing so, the CIT(A), overlooking a specific clarification on the issue sought by the company under RTI Act from the Dy. Inspector General of Stamps dt. 5th Feb.,2018 who outrightly denied of any such Revisional proceedings which were relied upon by the AO for re-opening the case after 8-9 years and in reassessing the total income.”

3 M/s Dhoot Stono Crafts Pvt. Ltd., Jaipur Vs. ACIT, Jaipur transaction value of Rs. 76,00,000/-. It was submitted that during the appellate proceedings, the assessee in response to it’s RTI application for the clarification from Deputy Director. Stamps, Govt of Rajasthan dated 5th Feb, 2018 that there is no reference dated 20.01.2009 was ever made for revision in the stamp duty value. Further, no such order against such reference has been made. It was submitted that the said critical communication was brought to the notice of the ld. CIT(A), Jaipur who had earlier heard the matter and subsequently, also brought to the notice of the ld. CIT(A), Ajmer who has passed the impugned order and inspite of fact that the said critical communication found mentioned in the impugned order passed by the ld. CIT(A), Ajmer, the same has escaped the attention of the ld. CIT(A). Being a mistake apparent from records, the assessee pursued the matter with ld. CIT(A), Ajmer and also filed the rectification application however, in spite of its best efforts, the rectification application has not been disposed off till date. Therefore, the assessee was of the reasonable belief that where the said rectification application is disposed off by the ld. CIT(A), Ajmer, the assessee would get necessary relief however in spite of the best efforts, the application has not been disposed off and therefore, left with no option for grant of justice, the assessee has failed the present appeal though with a delay. It was submitted that the delay in filing the present appeal deserves favorable consideration in the interest of justice and the same may be admitted and adjudicated on merits.

4 M/s Dhoot Stono Crafts Pvt. Ltd., Jaipur Vs. ACIT, Jaipur 4. Heard both the parties and purused the material available on record including the affidavit filed by the assessee in support of its condonation application. In the instant case, we find that there has been a change in the jurisdiction of the Commissioner Appeals during the pendency of the appeal where the matter was heard initially by ld CIT(A) Jaipur and thereafter, by ld CIT(A), Ajmer who has finally passed the impugned order and during such appellate proceedings, the assessee has filed certain clarification regarding reference/revaluation of the value of the property which it has obtained and received in response to its RTI application and which has apparently skipped the attention of the ld CIT(A) and thereafter, the assessee has been pursuing the matter seeking rectification which is pending adjudication till date. We therefore find that where the assessee claims that such a clarification which has been issued by a competent regulatory authority is critical for determining the issue at hand and the matter was regularly pursued by the assessee before the ld CIT(A), and the assessee was hopeful that where the same is taken into consideration and appropriate order is passed by the ld CIT(A), the whole of the addition would have been deleted and due to certain administrative exigencies or otherwise, the same couldn’t be considered by the ld CIT(A) while passing the impugned order and even appropriate rectification order is not passed till date, we find that the assessee is diligent in pursuing its matters and the explanation so offered for the delay in filing the present appeal is found to be reasonable and acceptable in interest of substantial justice and the delay is hereby condoned and the appeal is admitted for necessary adjudication.

1. The learned Assessing Officer has grossly erred in fact as well as in law in reopening assessment u/s. 148 of IT Act, 1961 on the basis of incomplete information and proceedings under some other law and which action on prime facie basis itself is bad in law and beyond jurisdiction.

Submissions: 1.1 In the Original Return of Income for Ass. Yr. 2009-10 on 30.09.2009 Income from Long Term Capital Gains was offered as per the Transaction value of Sale of Lands which was marginally more then the Stamp Duty Value determined by the Sub Registrar of Stamps & Registration for payment of Stamp Duty & Registration Fees as is evident from the Stamp Departments Advise on top of the Registered Conveyance Deed placed at page 60 of the Paper Book. The Transaction Value [ Rs. 76,00,000/-] being more then the assessed Stamp Duty Value [ Rs. 75,06,000/-], Stamp Duty collected on such Transaction Value as per said authorities endorsement on the copy/s of the Registered Documents [attached as Pages 60-68 with ITAT paper Book]. The Higher of the two values viz., Rs. 76,00,000 offered for Tax Calculation in the ITR and hence to this extent there was no failure on the part of the Assessee Co. in disclosing fully and truly all material facts necessary for its assessment for the assessment year under consideration.

1.2 The Assessee company thus offered its income from Long term Capital Gains on the basis of the actual Transaction Value of the Property which was above the estimated and assessed Stamp Duty Value by the Stamps & Registrations Authorities, which action in any manner cannot be considered to be:

6 M/s Dhoot Stono Crafts Pvt. Ltd., Jaipur Vs. ACIT, Jaipur a. A failure on part of the Assessee in disclosing fully and truly all material facts necessary for its assessment for that A/s Yr. [First Proviso to Sec.147] or b. Understatement by the Assessee of its Income or claiming excessive Loss/ deduction/ allowance/ relief in the return.[Explanation 2 (b)to Sec.147] OR c. the Assessee fulfilling any of the other conditions prescribed under the Sec.147 for justifying the action of reopening/ reassessment.

1.3 Pursuant to the Notice u/s 148 issued to the company, the Co. demanded copy of ‘Reasons Recorded’ alleging escapement of assessment/ income and in response to which, the AO, vide its Letter No. 180 dt. 24.04.2016 furnished the following reasons for issuance of Notice U/s 148 for Reassessment :

During the year the assessee company sold a property for Rs. 76,00,000/- on 28.05.2008. As per information received from sub-registrar of Jaipur district. The sub registrar has valued the property at Rs. 90,19,200/- against the value of Rs. 76,00,000/- shown as sale consideration by the assessee, in the ITR for the A. Y. 2009-10, it is seen that assessee has calculated LTCG by taking value at Rs. 76,00,000/-. as per the provision of section 50C, value of property should have been taken at Rs. 90,19,200/- for calculating LTCG.

In view of above facts, Therefore, I have reasons to believe that income to the extent of Rs. 14,19,200/- chargeable to tax, has escaped assessment.

1.4 The above Notice remained to be replied within time since such Notice not reach the assessee Co. on a/c of some technical reasons and later when a copy of said Notice / letter dt. 24.04.2016 was collected in 7 M/s Dhoot Stono Crafts Pvt. Ltd., Jaipur Vs. ACIT, Jaipur person by the AR of the “A” Company, same was Replied to vide AR’s Reply dt. 09.11.2016 drawing attention of the AO towards the basis of declaring Income on Sale of the Two lands on the basis of Value of the Registered Documents which contained as endorsements u/s 54 of the Rajasthan Stamp Act certifying the Value of the Document for Registration at Rs. 76.00 lacs which was more then the Stamp Duty assessment of Rs. 75,06,000 /- [Page 60 of Paper Book carrying Page 1 of the Registered Sale Deed dt. 29.05.2008] 1.5 Post the above submissions, the AO issued a Show Cause dt. 16.11.2016 (Page 16-17 of paper Book ) demanding an explanation to the difference in the Sale Value of Land as per Sec. 50C and as to why same should not be added back in the total income as per provision of Sec.50C of the ITA. The said letter of Sub Registrar Stamps informed that the Value of property as initially taken at Rs. 76.00 lacs on 30.05.2008 to have been later Revalued at Rs. 90,19,200/- and reference of which made to appropriate superior authority in the said dept. and copy of letter dt. 15.11.16 addressed to AO in the case in response to information sought u/s 133(6) dt. 15.11.16 attached. Copy of any such reference made for revaluation to appropriate authorities was however not attached with such reply from Stamp dept. to the AO.

1.6 A detailed Objection to above was furnished by Assessee on 21.11.2016 (pages 18-20 of Paper Book) emphasizing and drawing attention towards various technical deficiencies in the unconcluded reference made by Dy Registrar Stamps which is summarized as under: i. Documents executed were at value certified by the Stamp Duty authorities u/s 54 of the Rajasthan Stamp Act, 1998

8 M/s Dhoot Stono Crafts Pvt. Ltd., Jaipur Vs. ACIT, Jaipur ii. No revisions of reference can be made without affording the parties and opportunities to provide their objections, which was never done in the 7 year period since such alleged reference. iii. No Notices received for any such proposed revision alleged either by the Purchaser or Seller parties nor any remain pending as per parties confirmation. iv. The above Notice neither mentions the area of property or the basis for its Proposed revision or even the date of such subsequent visit for reassessment etc. v. Alleged reference so made remains unconcluded till date in absence of any reference to the date of any such approval having been given.

Thus any reliance on an unconcluded reference/ proposal for revision in value of properties is bad in law and against the provisions of natural justice and hence to be dropped.

1.7 Further, without prejudice to the aforesaid, even the Provisions of Sec. 50C of ITA do not permit any such Reassessment on Revision of Stamp Duty Value of the Property. The reference in the section is to the “value adopted or assessed (or assessable) by any authorities of the state govt. (Stamp Valuation Authorities)” and on simple reading of same, it is evident that situations such as the present case as that of “revision” or “reassessment” in value is neither envisaged nor permitted under the section (Sec.50) to carry out any revision in the value and consequentially in the income of the Assessee. Here the terms have to be interpreted in the context they are used and unless such term “reassessment” or “revision” in value was included in the said section or any of its Proviso or sub sections, carrying out any rectification/ revision on the basis of any 9 M/s Dhoot Stono Crafts Pvt. Ltd., Jaipur Vs. ACIT, Jaipur such revision in value by the Stamp Valuation Authorities would be against the provisions of the act and thus illegal and bad in law.

1.8 The Objections raised in the above detailed submissions dt. 21.11.2016 were summarily dealt in brief by the AO at page 4 of his Assessment Order [pages 24 of Paper Book] including w.r.t. the Objection as to unconcluded proceedings for enhancement / revaluation of property being not final but after which, the conclusion drawn by AO without actually dealing with/ controverting the said reasoning as well as the legality of the submissions in concluding Arbitrarily that the Revised value should be adopted by the assessee.

1.9 In view of above entirety of proceedings and the stated facts, this is not a fit case for reopening of assessment after more than four years from the end of assessment year on the pretext of failure of the Assessee in disclosing fully and truly all material facts necessary for his assessment as conditions precedent for reassessment under First Proviso to sec 147 of ITA and therefore the entire proceedings of reassessment should be held as null and void being beyond jurisdiction.

Ground No. 2:

2. The learned Assessing Officer has grossly erred in fact as well as in law in considering the Value of Land sold at Rs. 90,19,200/- u/s 50C, as against the Stamp Authorities own Certified Value of Rs. 75,06,000 at the time of actual registration of property sale transaction. The AO has made additions adopting such higher value of Land at Rs. 90,19,200/- on arbitrary basis of certain internal departmental communication and incomplete proceedings under Stamp Law and accordingly making addition

10 M/s Dhoot Stono Crafts Pvt. Ltd., Jaipur Vs. ACIT, Jaipur of Rs. 14,19,200/- under the Income head “Income from Capital Gains”. Such higher replaced Value of Land for Stamp Duty purposes has neither been conveyed to the Parties to the transaction nor any additional stamp duty on such incremental value of land has been deposited by the parties to the transaction in the 8 year period after such date of actual registration of Document on 28/30.05.2008. Thus adoption of such arbitrary value of Rs. 90,19,200/- under provisions of Section 50C in place of the actual Transaction / Registration value of Rs. 76,00,000 and accordingly making addition to Total Income is thus bad in law.

Submissions:

2.1. It is more then clear from a simple reading of Sec.50C of ITA that “ the value adopted or assessed by any authority of a State Government (hereafter in this section referred to as the "stamp valuation authority") for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed shall, for the purposes of section 48, be deemed to be the full value of the consideration received. ”

2.3. The Assessee company offered its income for taxation on the basis of a duly registered Sale Deed considering its value by the then Stamp Authorities at Rs. Rs. 76,00,000 and thus its such action cannot be deemed to be a failure in disclosing fully and truly all material facts necessary for its assessment, which is an essential condition precedent/ to exist for reassessment under first proviso to sec 147 of ITA.

2.4. Attention was also drawn to the alleged arbitrary proceedings by the Stamp Authorities in terms of making the reference by the Sub Registrar- IV, Jaipur viz., to his superior way back on 21.01.2009 and which 11 M/s Dhoot Stono Crafts Pvt. Ltd., Jaipur Vs. ACIT, Jaipur remained unconcluded more then 7 years, both from the date of registration of the document as well as from the date of such reference and that also without any details and opportunities to the parties concerned which were mandatory even under the Provisions of the Rajasthan Stamp Act, 1998. Attention towards Sec.54 of the Raj Stamp Act. 1998 is also drawn. Neither the Letter dt. 15.11.2016 of the Sub Registrar-IV, Jaipur to the AO referred to in the Order of the AO conveying any details wrt. Date of revisit to the property, basis of such revaluation/ revision or outcome of such reference as also w.r.t. extending any opportunity to the parties concerned to render their objection to the proposed revision in value of property and thus all this conveyed illegality of the proceedings under the stamp laws, which too remain unconcluded and hence cannot form the basis of a Reassessment proceedings under another Central Statute such as IT Act.

2.5. The company, the seller of Land as well as the Buyer of said land, both confirm that neither of them had received any Notice or Demand for such Revision in the Value of the Property already registered nor has æany of them deposited and additional stamp duty on the alleged differential value of the Property and no such demand remains pending against them. That being so, any action u/s 147 read with Sec. 50 of ITA is illegal and against the provisions of the act and also against equity as well.

2.6 The Provisions of Sec. 50C of ITA do not permit any such reassessment or revision of Stamp Duty Value of the Property and thus the present Proceedings should be quashed holding the same to be null and void and out of jurisdiction of the AO.

12 M/s Dhoot Stono Crafts Pvt. Ltd., Jaipur Vs. ACIT, Jaipur 2.7 Attention is also drawn to the fact that despite the “A” company raising objections w.r.t. the fact of basis of such allegedly proposed revision/ reassessment proceedings and sharing of reasons to be recorded for initiation of such proceedings, the AO has not shared any document / intimation from the Stamp Authority for imitation of such proceedings and the correspondence dt. 15.11.2016 as shared were only subsequent clarification sought which too was inadequate since not referring to any conclusion by the Superior Authorities to the alleged reference made by the Stamp Authorities in the matter. Further under any rule of Law, such revisions or alleged revisions after such long time gaps of 7-8 years without even any opportunity being afforded to the effected parties is against the Rule of Law and is objected to.

2.8 The assessee company through its advocate Mr. Ajay Kumar Bhargava, who also assisted the company in the process of Registration of Sale Deeds in 2008, also made an enquiry in the matter of any such reference made by the Sub Registrar-IV, Jaipur vide communication dt. 21.01.2009 to his Superior Officer but despite a reasonable effort of his at the office of the Collector Stamps to ascertain the outcome of such Reference on 21.01.2009 made in the matter of revaluation / reassessment of the property sold but despite all the efforts, could not arrive at any trail of such Reference or of its revision/ revaluation. Nor any pendency to such reference is on record of such department. Mr. Ajay Kumar Bhargava, Advocate accordingly based on his research issued a confirmatory Certificate in support of above factual position viz., that there was No such Reference or Revision in the valuation of such Property after its Registration on the records of the Stamp Dept. nor any such Reference remaining Pending in the Computer Records of such Stamp & Registration Department.

13 M/s Dhoot Stono Crafts Pvt. Ltd., Jaipur Vs. ACIT, Jaipur 2.09 In view of aforesaid factual position viz., no Revision in the value of property as alleged was made or was in the process of being made and no disposal of reference , if at all any, by the Collector Stamps was there till date, the entire reassessment proceedings which being without any basis was appealed to be deserving to be quashed and held as null and void.

2.10 Without prejudice to the aforesaid submissions, attention was also drawn to the fact that the assessee company had also filed an Application under the RTI Act (Right to Information Act) with the Stamp and Registration Department for ascertaining the final outcome of any such reference made by the Sub-Registrar-IV on 21.01.2009 to Collector Stamps / Superiors as conveyed in Sub Registrar IV Letter dt. 15.11.2016 on 20th December, 2017. Copy of such Application dt. 11th Dec.,2017 with copy of its Acknowledgement Receipt in the office of the Sub Registrar Office, was attached for reference and record of the CIT(A) then hearing the appeal. If for any reasons, appellants aforesaid request to quash the reassessment proceedings under given facts of the case did not bear a favorable consideration by the CIT(A), it was requested to keep the Proceedings in Appeal pending for some time say 2 months for disposal and suitable reply / outcome to such application under the RTI Act was received by the appellant company or a factual position of the reference made is ascertained from the said department.

2.11 The CIT(A)-2 Jaipur, then hearing the Appeal accordingly adjourned the hearing and with efforts, an appropriate Clarificatory Reply dt. Feb.5th, 2018 was issued by the Dy. Director, Stamps, Govt of Rajasthan in response to Co’s application against the RTI application and which Clarificatory Reply dt. Feb.5th, 2018 categorically denied as under:

14 M/s Dhoot Stono Crafts Pvt. Ltd., Jaipur Vs. ACIT, Jaipur i. No such Reference from Sub Registrar 4 , Jaipur vide Letter No.57 dt. 21.01.2009 was received by the said Dept. of Dy. Director Stamps . and ii. Nor any such Order passed in any such reference. 2.12. The above Clarificatory Reply dt. Feb.5th, 2018 of the Dy. Director, Stamps, Govt of Rajasthan, as shared with the AR by the assessee company was accordingly furnished to the then CIT(A)-2, Jaipur with “ Supplementary Written Submissions” on 20th July, 2018 who heard and closed the Appeal hearing on said date. The Appeal No. then being E- 308/16-17 with CIT(A)-2, Jaipur.

2.13. Unfortunately thereafter, the Order in said Appeal remained to be passed by the learned CIT(A)-2, Jaipur despite the hearing having been concluded by her and the case got transferred under certain administrative powers of the CCIT or equivalent, and for which no formal intimation/advise in the matter was issued to the Assessee company.

2.14. Later on 13.10.2018, the AR of the Assessee company received a Notice of hearing dt. 10.10.18 for the very same A/s Yr. in case of the Assessee but with different Appeal No. viz., 92/2016-17 from CIT(A), Ajmer for hearing on 17.10.2018 camping at Jaipur at ITAT building. On which date (17.10.2018), the AR of the Assessee, Mr. Pramod Patni a Sr. Partner in the CA Firm M/s Shah Patni & Co. while leaving for the hearing in Appeal at around 10.30 am or so received a Phone call which informed him of Demise of his Father in law, Dr. S.K. Jain, residing at Jaipur and was then admitted in a Hospital in immediate vicinity of AR’s office. Due to which news, Pramod Patni left the Appeal file as it is in his office and rushed to the Hospital for needful further actions in the said matter. Thus, Mr. Patni could not attend to the Appeal Hearing. Further at such time non

15 M/s Dhoot Stono Crafts Pvt. Ltd., Jaipur Vs. ACIT, Jaipur of his Jr.Partners had reached the office who could have been briefed about the case and seeking an adjournment in the matter. Copy of Death Certificate of Dr. S.K. Jain attached.

2.15. After Mr. Patni informed one of his Jr. Partners of his inability to attend to an Appeal before CIT(A), Ajmer, directions were issued to him for seeking a. Adjournment of hearing in the case after 7 days stating said peculiar event having occurred and accordingly Mr. Kailash T. , Jr. partner visited the CIT(A), Ajmer, camping at ITAT Bldg. at Jaipur and attempted to submit the Application for Adjournment, which the CIT(A), Ajmer declined to accept and grant on a/c of his own reasons and while also expressing that he is also not accepting the Adjournment application since did not have the Appeal File Folder readily with him since not carried from Ajmer as also since Mr. Kailash could not submit a POA or copy of POA when asked for since he readily did not carry any of the same since same was filed earlier at the time of filing of Appeal with CIT(A)-2, Jaipur. However still, before the Jr. partner Kailash T. left CIT(A)’s Chamber, he was made to sign on a freshly made Proceeding Sheet by the CITA), Ajmer. Mr. Kailash was also informed by CIT(A), Ajmer to send copies of Appeal Memo as also all submissions made by E.Mail on his mail id, which he shared with the Jr. Partner.

2.16. Accordingly, our AR, Mr. Kailash Thathera, Jr. Partner of M/s Shah Patni & Co. Chartered Accountants, a firm with 60-65 years experience made the following submissions by the following e. mails as under: a. By e.mail dt. 17.10.2018 at 12.46 a.m. with which filed…. i. Form No. 35 as uploaded on 11/01/2017 w.r.t. online filing with CIT(A)-2, Jaipur. ii. Copy of Assessment Order for A.Y. 2009-10

16 M/s Dhoot Stono Crafts Pvt. Ltd., Jaipur Vs. ACIT, Jaipur Written Submission before CIT (A) in Reass. Procd. Dec., 17 – 1st iii. Resubmission Supplementary Submission on 16.2.18 – 2nd Resubmission iv. v. Reply from Registration and Stamp Dept., Govt. of Rajasthan again RTI dt. 5.2.18 By 2nd e.mail dt. 18.10.2018 at 16.20 pm with which filed…. b.

1. Power of Attorney in favour of AR Firm and its Partners/ Associates. By 3rd e.mail dt. 22.10.2018 at 12.18 pm with which filed…. c.

2.18. However, surprisingly the Assessee Co. received by Post on 16.11.18 the Order in Appeal by the CIT(A), Ajmer, dt. 17th Oct.,2018 and on reading of which observed the following: i. The Order in Appeal passed in the date of 17.10.2018 itself, while the POA favoring the sender of email and submissions itself sent on 18.10.2018.

The Conclusion Para in the Order in Appeal based only on 1st Set of ii. Written Submissions as evident from Para 2.1. to Para 4.3. at Pages 8-9- 10 of Order placed at page. Nos. 57 to 59 of the 1st Paper Book before the ITAT. The said “Written Submission before CIT (A) in Reass. Procd. “ to CIT(A), Ajmer with email dt. 17.10.18 as Item at Sr. No. 3. iii. The Conclusion drawn and the Order so passed and the Conclusion drawn outrightly ignoring Submissions attached as item nos. 4 and 5 in the very same mail to CIT(A), Ajmer containing the ‘Supplementary Submission– 2nd Resubmission’ and the ‘Reply from Registration and Stamp Dept., Govt. of Rajasthan again RTI Application dt. 5.2.18’, which were submitted as attachment with the very same mail dt. 17.10.18.

2.19. Factually stating, the ‘Supplementary Written Submission’ or the ‘2nd Resubmission’ with Clarificatory Letter from Dy. Director Stamps dt. 5th Feb.,2018 were also already filed with the CIT(A)-2, Jaipur in the course of concluded Appeal Hearing on July 20,2018 who had heard and closed the Hearing prior to the case getting transferred to the CIT(A), Ajmer.

2.20. Since the aforesaid Mistake of non consideration of vital correspondence from a Govt. dept. itself nor giving any finding on or w.r.t. the same despite narrating / referring to the same w.r.t. the Supplementary Written Submissions by the AR which were made more then once at Para 4.2.(4 &5) of CIT(A), Ajmer Order [ at page 52 of paper Book] , and such mistake being of a nature which was apparent from records, it was a fit case to call for a Rectification of Order in Appeal u/s 154 of ITA and accordingly the AR of the assessee company followed

18 M/s Dhoot Stono Crafts Pvt. Ltd., Jaipur Vs. ACIT, Jaipur up the matter personally with the CIT(A), Ajmer on his subsequent Camping visits at Jaipur in following given manner and further actions for justice in the case : a. Meeting the CIT(A), Ajmer personally during a subsequent Camping Bench at ITAT office, Jaipur on 14th Nov.,2018 explaining the entire matter and drawing attention to the fact that it was a clear case of Mistake Apparent from Records and hence Rectifiable by him based on all the submissions made by mail before him on 17th Oct.,2018 itself. b. Though unusual for the CIT(A), Ajmer but with minor persuasion, sought his explicit consent to the Assessee filing a Rectification Application to set right the anomaly in the Order and accordingly submitting a Rectification Application with all Attachments relied on by e. mail by the AR, on 16.11.2018 itself. c. The above Rectification Application with all Supporting Documents relied upon, further sent by the CA office by Regd. Post to CIT(A)- Ajmer as per Copy of Regd. AD Receipt dt. 17th Nov.,2019 attached.

2.21 Here attention is also drawn to yet another Notice dt. 14.11.18 for Hearing in Appeal on 22.11.18 for the same Year as A/s Yr. 2009-10 in the case of the above Assessee company under reference of Appeal No. E- 308/2016-17 received, which too was carried by the AR to meet the Learned CIT(A)- Ajmer on 14.11.18 itself along with the Copy of the Order in Appeal dt. 17.10.18 which was received vide Email from CIT(A)_Jaipur dt. 09.11.2018.

19 M/s Dhoot Stono Crafts Pvt. Ltd., Jaipur Vs. ACIT, Jaipur Attention to this fresh Notice, even after having passed Order in Appeal was shown to CIT(A)- Ajmer, Mr. Anil Singh, who even then showing dismay towards the working of his office, assured that since he having agreed to the company filing a Rectification Application for carrying out necessary amends, if required, in the Appeal Order, necessary justice would be done in the case.

2.22 In view of all the aforesaid developments in the case, the AR of the Assessee Co., feeling confident of a favorable outcome in the case at the level of the CIT(A), Ajmer itself, advised the Co. for not file a case at the ITAT, keeping the time and effort of the Bench in mind. However, when despite repeated reminders, no disposal of the Application for Rectification of Appeal Order coming forth, the Company deciding to file a belated Appeal before the ITAT, Jaipur Bench with an appropriate request for Condonation of Delay in filing such Appeal.

2.23. Both sub para 3.4. of Assessment Order at page 5 (page 25 of Paper Book) as also the 1st Sub Para to Para 4.3. of the CIT(A)- Ajmer Order at its page 10 (Page 59 of the Paper Book) refer to Sec.50C of ITA as also to the Value determined for purpose of Stamp Duty and while factually such Value so determined and remaining so till this date to be at Rs. 76,00,000/- as per Page 60 and Page 67 of Paper Book, same has been wrongly concluded to be considered at Rs. 90,19,200/- merely based on an unconcluded alleged reference, of which neither any details shared either by such authorities or by the AO also nor same getting concluded by the superior authorities in the Stamp Dept. itself and further in respect to which there is a even specific Denial by such alleged superior authority as to there being any such reference for Revision being pending and/ or having been concluded in the past.

2.24 Further, neither the Provisions of Sec. 50C of ITA or Sec.48 for income calculation provide for or permit any such reassessment or revision of Stamp Duty Value of the Property and thus the present Proceedings should be quashed holding the same to be null and void and out of jurisdiction of the AO.”

21 M/s Dhoot Stono Crafts Pvt. Ltd., Jaipur Vs. ACIT, Jaipur proceedings can be initiated basis the information and material in possession of the Assessing officer and where on review and examination thereof, he forms a reasonable belief that the income has escaped assessment and pursuant thereto, he records his reasons for reopening the assessment, seek appropriate approval from the competent authority and issue notice u/s 148 of the Act. In the instant case, we find that there is nothing on record which can demonstrate that the AO was in receipt of any information or having any material in his possession prior to recording of the reasons and issuance of notice u/s 148 of the Act. It is only on receipt of objections by the assessee during the course of reassessment proceedings that the AO has sought information from the Sub-Registrar wherein the latter has stated vide letter dated 15.11. 2016 that value of the property was revised after spot verification and enhanced from Rs 76,00,000/- to Rs 90,19,200/- as evident from para 3.4 of the reassessment order and contents thereof reads as under: “3.4 Considering assessee’s objection vide this office letter No. 1569 dated 15.11.2016, information was called for u/s 133(6) from the Sub-Registrar to provide valuation/revaluation report of the said sold property. The Sub-Registrar vide his office letter no. 1223 dated 15.11.2016 informed that value of the property was revised after spot verification and value of property was enhanced from Rs. 76,00,000/- to Rs. 90,19,200/-. Therefore, vide show cause letter dated 16.11.2016, the assessee was asked to explain as to why the difference of Rs. 14,19,200/- (Rs.90,19,200 – Rs. 76,00,000/-) be not added back in its total income. Copy of letter no. 1223 dated 15.11.2016 received from the Sub-Registrar was also provided to the assessee.”

22 M/s Dhoot Stono Crafts Pvt. Ltd., Jaipur Vs. ACIT, Jaipur 8. We therefore find that very foundation in terms of material and information in possession of the AO, prior to recording of the reasons and issuance of notice u/s 148, for formation of reasonable belief that income has escaped assessment and reopening the assessment proceedings is conspicuously absent in the instant case. It is not a question of sufficiency or materiality of information in possession of the AO rather the question is as to how the AO has arrived at a reasonable belief that income has escaped assessment in absence of any information or material in his possession. It is a case of complete absence of any information or material in possession of the AO prior to recording of reasons and issuance of notice u/s 148 and in light of the same, the reassessment proceedings deserve to be quashed and set-aside.

23 M/s Dhoot Stono Crafts Pvt. Ltd., Jaipur Vs. ACIT, Jaipur such examination, the advocate has issued a confirmation certificate that there was no such reference or revision in the valuation of the property after its registration on the records of the stamp duty authority. It has been further submitted that Deputy Director of Stamps vide reply dated 5.02.2018 in response to RTI application dated 11.12.2017 has also confirmed that no such reference from Sub-Registrar 4 Jaipur vide letter no. 57 dated 21.01.2009 was received by the said office and no such order has been passed in any such reference. It was further submitted that the assessee has filed this confirmation in response to RTI application before the ld CIT(A) and is therefore part of records and which is mistakenly not been considered by the ld CIT(A) while passing the impugned order.

24 M/s Dhoot Stono Crafts Pvt. Ltd., Jaipur Vs. ACIT, Jaipur We therefore find that even on merits, the case of the Revenue has no legs to stand in absence of any material in support of any revaluation/enhancement in value of the property by the stamp duty authority and the addition so made is hereby directed to be deleted.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open Court on 15/06/2021.