SHRI CHAND KHAN PHADAN,JAIPUR vs. INCOME TAX OFFICER, WARD -3(5), JAIPUR

The assessee is an Individual and engaged in the real estate business of purchase and sale of land. The assessee has filed his return of income on 30th March, 2010 declaring total income of Rs. 1,60,660/-. Subsequently, as per the information received from Sub Registrar showing the sale of property by the assessee on 15.12.2008 having stamp duty valuation of Rs. 21,17,340/-, the ITO Ward 3(1), Jaipur reopened the assessment by issuing notice under section 148 on 23rd March, 2016. Since the original return of income was filed by the assessee with the ITO Ward 3(5), Jaipur, the case was subsequently transferred vide order of the Principal CIT-1, Jaipur under section 127 dated 7th June, 2016 to ITO Ward 3(5), Jaipur. The assessee then filed his return of income in response to the notice under section 148 on 20th July, 2016 declaring total income of Rs. 1,49,400/-. The reassessment was completed on 01.12.2016 whereby the AO made addition of the differential amount of sale consideration shown by the assessee of Rs. 4,90,000/- as against the stamp duty valuation of Rs. 21,17,340/- which was also shown by the assessee in respect of the other adjoining plot of land sold in the same month of November, 2008. The assessee challenged the action of the AO before the ld. CIT (Appeals) against the addition made on account of suppression of sale consideration in respect of plot no. 367 in comparison to the sale consideration in respect of plot no. 366, Loha Mandi, Machera, Amer, Jaipur. Since the assessee has not raised this legal issue before the ld. CIT (A), therefore, there is no finding of the ld. CIT (A) on this issue.

Before the Tribunal, the ld. A/R of the assessee has submitted that undisputedly the assessee filed his return of income with the ITO Ward 3(5), Jaipur whereas the ITO Ward 2(1), Jaipur issued the notice under section 148 without having any jurisdiction and hence the reasons recorded by the ITO Ward 2(1) for reopening of the assessment are without jurisdiction and consequently the order passed by the AO Ward 2(1) is not valid for want of invalid initiation of proceedings under section 147/148 of the Act. In support of his contention, he has relied upon the decision of Hon’ble Delhi High Court in case of Dushyant Kumar Jain vs. DCIT, 288 CTR 124 (Del.) as well as the decision of Hon’ble Gujarat High Court in case of Shirishbhai Hargovandas Sanjanwala vs. ACIT, 396 ITR 167 (Guj.). The ld. A/R has thus pleaded that the impugned reassessment order is void ab initio and liable to be quashed.

On the other hand, the ld. D/R has submitted that the ITO Ward 2(1) has initiated the proceedings under section 147/148 on the basis of the information received from the Sub Registrar regarding sale of property by the assessee wherein the assessee has not disclosed his PAN but filed Form No. 60. In the system of the department, it was found that the assessee was having another PAN being CQVPK 7792 J and, therefore, the ITO Ward 2(1), Jaipur issued the notice under section 148 on 29th March, 2016, only when the assessee explained the fact that the assessee has already filed the return of income under a different PAN being AHGPP 8238 E. Therefore, the ld. Principal CIT has passed an order under section 127 transferring the case from ITO Ward 2(1), Jaipur to ITO Ward 3(5), Jaipur. Thus the ld. D/R has contended that it is a case of holding two PANs by the assessee and, therefore, the ITO Ward 2(1) was having jurisdiction over one PAN of the assessee and initiated the proceedings under section 147/148 of the Act. Since the assessee filed the return of income under a different PAN, therefore, to avoid the parallel proceedings the case was transferred to the ITO Ward 3(5) Jaipur. Hence the ld. D/R has submitted that the ITO Ward 2(1) Jaipur was having a valid jurisdiction over the assessee in respect of PAN CQVPK 7792 J. The ld. D/R has further contended that the assessee has not raised this issue before the authorities below and, therefore, the same cannot be raised at this stage without seeking the leave of the court.

I have considered the rival submissions as well as the relevant material on record. There is no dispute that the assessee has not raised this issue of jurisdiction either before the AO or before the ld. CIT (A). However, the facts remain that the ITO Ward 2(1) Jaipur himself accepted the fact and an order under section 127 was passed by the ld. Principal CIT transferring the case from ITO Ward 2(1) Jaipur to ITO Ward 3(5) Jaipur. This development of transferring the case from one ITO to another ITO was due to the reason that the proceedings under section 147/148 were initiated on the basis of the PAN : CQVPK 7792 J whereas the assessee filed his original return of income under PAN : AHGPP 8238 E. Thus, in case the assessee is holding two PANs though the assessee has denied having two PANs, then the assessee cannot be allowed to raise this objection of jurisdiction of ITO Ward 2(1)

The other issues raised on merit of the addition are kept open.

In the result, the appeal of the assessee is allowed for statistical purpose. Order is pronounced in the open court on 24/09/2019.