VAISHALI KESHAV KULKARNI,PUNE vs. ITO WARD 13(2), PUNE

In the facts of the case and under the circumstances and in law, the Ld. CIT (A) has erred in upholding the conduct of proceeding under section 148A of the Act and issuance of notice under section 148 of the Act by the Juri ictional Assessing Officer (JAO) as against the Ld. AO in faceless manner as required by e- Assessment of Income Escaping Assessment Scheme, 2022 and Faceless Juri iction of Income-tax Authorities Scheme, 2022. The notices issued and the consequent order is tainted with procedural lapses, hence void and therefore, deserves to be quashed.

In the facts of the case and under the circumstances and in law, the Ld. CIT(A) has erred upholding the conduct of the proceedings under section 148A of the Act, issuing notice under section 148 of the Act by the JAO and passing order by the Ld. AO under section 147 of the Act. The information obtained and relied upon is misleading and incorrect and therefore, the very initiation of the proceeding stands vitiated and the reassessment order passed in case of the appellant is bad in law.

In the facts of the case and under the circumstances and in law, the Ld. CIT(A) has erred in upholding the Ld. AO's action in relying upon the information obtained by the JAO and the Ld. CIT has failed to appreciate the fact that information on the basis of which the entire reassessment proceedings are initiated was an incorrect information. There was no such sale transaction of Rs. 3.60 Crs took place in the name of the assessee during AY 2015-16. The information received from the Verification Unit that the sale document was of Rs. 1.20 Crs, was during the course of assessment. It therefore, appears that there was no Evidence or Relied Upon Document available with the JA O at the time of issuing notice u/s 148. Hence the Notice u/s 148 and the consequent assessment u/s 147 is bad in law.

In the facts of the case and under the circumstances and in law, the Ld. CIT(A) has erred in upholding the Id. Assessing Officer's action of making addition of Rs.24.00 Lakhs to the total Income of the assessee beyond the limitation period of 3 years from the end of the relevant A Y 2015-16, as it is below Rs.50.00 Lakhs as per section 149 of the Income Tax Act, 1961. Hence, the Notice issued by the JAO and the assessment

In the facts of the case and under the circumstances and in law, the Ld. CIT(A) has erred in upholding the Id. Assessing Officer's action of denying the fact that the alleged sale transaction of the property was done by Mr. Dilipkumar Agarwal during AY 2015-16. The assessee was merely a consenting party as a family member along with her mother, brother & sister. The property belonged to the assessee's father Mr. Dilipkumar Agarwal. He has already disclosed the said transaction of sale of property of Rs.1.20 Crs in his Return of Income for A Y 2015-16 filed by him. Further entire consideration of Rs.1.20 Crs was received by Mr. Dilipkumar Agarwal in his bank account (Axis Bank A/c No.913010039357849). Therefore, the addition of Rs.24.00 Lakhs in the total income of the assessee, as 1/5thshare in the sale value of the property, is not justified and the order passed need to be quashed.

In the facts of the case and under the circumstances and in law, the Ld. CIT(A) has erred in upholding the Id. Assessing Officer's action of charging interest under Sections 234A, 234B and 234C of the Act.

Your appellant craves leave to add, amend, modify alter and / or delete any of the above grounds of appeal on or before the date of hearing.”

1 There is a delay of 16 days in filing appeal before this Tribunal. We have perused the submission and found that there is sufficient and reasonable cause for the delay. Accordingly, the delay is condoned.

Ld.AR for the assessee submitted that CIT(A) has failed to appreciate the submission of the assessee. Ld.AR submitted Affidavit of the assessee.

1 Ld.AR pleaded that the Notice u/s.148 dated 13/04/2022 and the order is bad in Law.Ld.AR relied on the order of Hon’ble Supreme Court in the case of Rajeev Bansal and Hon’ble High Court.

2 Ld.AR’s written submission on merits of the addition is as under : “Even as per the income-tax Department's information, I did not have any taxable income besides the alleged sale of impugned immovable property-only Rs. 11k interest income [Page 11 of Paperbook, Para 1, Page 1 of Reassessment Order]

3 Ld.AR also submitted that the Assessing Officer has not provided copy of the reasons recorded for reopening. Ld.AR submitted that Assessee had asked for the same. Ld.AR also submitted that though assessee had asked for copy of the approvals issued u/s.151 of the Act, the AO did not provide the copies. Ld.AR relied on the decision of Hon’ble Bombay High Court.

Ld.DR for the Revenue relied on the order of Assessing Officer and ld.CIT(A). Ld.DR submitted that assessee’s name

We have heard both the parties and perused the records.Assessee is an individual and has not filed Return of Income for A.Y.2015-16 u/s.139(1) of the Act.

1 It is a fact that Assessing Officer issued notice u/s 148 based on the information regarding sale of immovable property. It is noted from the Assessment Order that the Assessing Officer was having copy of the impugned ‘Deed of Sale’ dated 25 July 2014, which the Assessing Officer obtained after the Order u/s 148A(d) was passed and Notice u/s.148 dated 13/04/2022 was issued. The sale consideration mentioned in the said ‘Deed of Sale’ is Rs.1,20,00,000/- only. Following persons are referred as vendors in the impugned Deed of Sale :

2 We have studied the impugned Sale deed and noted that the copies of Demand Drafts issued by Purchasers to the seller are part of the Registered Deed of Sale duly numbered as page number 21 and 22. On perusal of these Demand Drafts it is noted that all the drafts are in the name of Mr. Dilipkumar Hiralal Saraf. Thus, it is clear from the registered deed of sale that the entire sale consideration was received by Dilipkumar Saraf. These facts were on the record of the Assessing Officer.

3 The impugned immovable property was Gifted by Hiralal Saraf (Grandfather of the Assessee) vide a Gift Deed dated 17/04/1964. The Assessee is Born much after the Gift Deed. This explains that the impugned immovable property was received as Gift by Dilip Kumar Saraf and not assessee as Assessee was not born when gift was executed.

4 The Assessing Officer has passed an Assessment Order u/s.147 r.w.s. 144 of the Act on 05/03/2024. The Assessing Officer taxed 1/5th share as Short Term Capital Gain at Rs.24,00,000/-. The relevant paragraph of the Assessment Order is reproduced here as under : “Taking into consideration the relevant material available on records and facts and circumstances of the case, Rs.24,00,000/- is added to the total income on account of on account of short-term Capital Gain.”

5 Thus, though the Assessing Officer was having copy of the impugned Deed of Sale, which gives entire narration and history of the impugned immovable property, inspite of that AO held it as Short term Capital Gain. We have already mentioned that the Vendor received property vide Gift Deed dated 17/04/1964 much before the Birth of the assessee. Assessee as per PAN Card is born in 1974. The Assessing Officer has not considered this fact. The Assessing Officer has not bothered to reduce Cost of Acquisition. Assessing officer could have referred the impugned property to DVO to determine cost of acquisition.

5.1 Be it as it may be, the Assessing Officer has applied incorrect section by taxing it as Short term capital Gain, when the impugned property is a Long Term Asset.

The Assessee filed appeal before the Commissioner of Income Tax(Appeal). The ld.CIT(A) has reproduced the submission of the assessee which we are reproducing here as under : “1 On March 31, 2022, the Income-tax Officer, Ward 13(2), Pune (Juri ictional Assessing Officer or JAO) issued a notice under section 148A(b) of the Income-tax Act, 1961 (the Act) for the AY 2015-16 (Notice No-ITBA/AST/F/148A(SCN)/2021-22/104220928 4(1)), requesting for certain details from the appellant, in connection to the information obtained by the JAO from the Insight Portal. The information mentioned that the appellant has sold an immovable property during the financial year (FY) 2015-16 amounting to Rs.3,60,00,000/- No details of such transaction such as date of document, document number etc, were provided to the assessee.

The fact was that, during the FY 2014-15, the assessees father Mr. Dilipkumar Agarwal having PAN. AELPA1854K has sold immovable property for Rs. 1,20,00,000/- vide document no. 4859/2014 registered at the Sub