SH. JAGDEEP SINGH,PATIALA vs. PR. C.I.T., PATIALA

The solitary grievance of the assessee is that ld. CIT has erred in taking cognizance u/s 263 of the Income Tax Act and thereby setting aside the assessment orders dated 25.12.2019 and 27.09.2019 passed u/s 147 read with Section 143(3) in assessment year 2012-13 in the case of Gurjit Singh and Jagdeep Singh respectively.

The brief facts of the case are that assessees are agriculturist during the accounting period relevant to this assessment year. The AO got information that an agriculture land was purchased by three persons for consideration of Rs.3.78 Cr in which share of the assessee was 1/3rd each i.e. Rs.1.26 Cr. per person. Therefore, he reopened the assessment because assessees have not filed any return of income u/s & ITA 377/CHD/2022 A.Y.2012-13 3 139(1) of the Income Tax Act. In response to the queries of the AO raised u/s 142(1), it was contended by the assessees that land was owned by their uncle Shri Tejinder Singh and due to some matrimonial dispute between him and his wife in the District of Frauenfeld which was decided on 14.01.2015, he has transferred this land to three cousins of the assessee and which was taken back by him subsequently. 3.1 The ld. counsel for the assessee has placed on record a Note which would exhibit the family-tree as to how this transaction has been materialized. This Note reads as under: & ITA 377/CHD/2022 A.Y.2012-13 4 3.2 A perusal of the above Note would reveal that Shri Tejinder Singh has transferred the land to Shri Gurjeet Singh, Shri Baljeet Singh and Shri Jagdeep Singh, under a family settlement. According to the evidence available on record, the vendees have not paid anything to Shri Tejinder Singh, rather Stamp Duty was also paid by Shri Tejinder Singh. Subsequently, in 2014, Government of Haryana has issued a Notification bearing No.JYST 26, 1936 SAR.A dated 16.06.2014 whereby it was held that on transfer of immovable property within the family by an owner, during his life time to any of the blood relations, namely parents, children, grand- children, brothers, sisters and between spouse, no Stamp Duty will be charged. This Notification was issued u/s 9(1)(a) of Indian Stamp Act, 1899. Thus, the land was transferred to three nephews which was re-transferred to Shri Tejinder Singh and his sons. The assessments of all three alleged vendees have been reopened. The AO’s of two assessees, namely Shri Gurjeet Singh and Shri Jagdeep Singh did not make additions, however, in the case of Shri Baljeet Singh, addition was made. & ITA 377/CHD/2022 A.Y.2012-13 5 3.3 A reference was made by the Assessing Officers of two assessees, namely Shri Gurjeet Singh and Shri Jagdeep Singh for remedial action u/s 263 of the Act and on the basis of which, ld. CIT perused the record and took action u/s 263 against Shri Gurjeet Singh and Shri Jagdeep Singh, whose orders are being impugned herein. It is pertinent to note that in the case of Shri Baljeet Singh, dispute travelled upto the Tribunal in ITA 12/CHD/2010 whereby ITAT has deleted the addition. The Department took a stand that remedial action is being explored in the cases of two other assessees u/s 263. The ITAT took specific cognizance of this fact in its order in the case of Shri Baljeet Singh, which read as under : “13. Further, the copies of assessment orders dated 25.12.2019 & 27.09.2019 passed by the concerned AOs u/s 147 read with section 143(3) in the case of the co-purchasers Sh. Gurjit Singh and Sh. Jagdeep Singh respectively, available at pages 45 to 53, show that the concerned AOs have accepted the identical contention raised by the assessee during assessment proceedings and accepted their nil returns. But in the case of the assessee the AO rejecting the same contention made addition of l/3rd amount of the total sale consideration. So far as the contention of the Ld. DR that proceedings u/s 263 of the Act are being contemplated in the cases of Gurjit Singh and Jagdeep Singh is concerned, it is clear from the copies of official correspondences placed on record that the Ld. ACIT Patiala Range and the Ld. JCIT Panchkula have sent proposals for initiating proceedings u/s 263 of the Act in the case of Jagdeep Singh and Sh. Gurjit & ITA 377/CHD/2022 A.Y.2012-13 6 Singh to the concerned Principal Commissioners on 28.12.2020 and 31.12.2020 respectively. As pointed out by the Ld. counsel, these proposals have been moved by the concerned officers during arguments of the present appeal before the Tribunal. Under these circumstances, the action of the Ld. CIT(A) cannot be justified. In the case of Smt. Amarjit Kaur vs. ITO (supra), the SMC Bench of the Jurisdictional Tribunal following the ratio laid down by the Hon'ble Supreme Court in case of Berger Paints India Ltd. and the Hon'ble Punjab and Haryana High Court the case of Leader Valves Ltd. (supra) has deleted the addition sustained by the Ld. CIT(A) in violation of the principle of consistency. 14. In our considered view, the Ld. CIT(A) has passed the impugned order without taking into consideration the direct and circumstantial evidence placed on record by the assessee to substantiate his contention. Further, since the Ld. CIT(A) has passed the impugned order without taking into consideration the view taken by the department in the cases of co-purchasers, the impugned order passed in violation of principle of consistency is also bad in law. Hence, in view of the discussions made on facts, evidence on record and the cases discussed in the foregoing paras, we allow the appeal of the assessee and set aside the impugned order passed by the Ld. CIT(A). Accordingly, we direct the AO to delete the addition. In the result, the appeal filed by the assessee is allowed.”