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Income Tax Appellate Tribunal, AHMEDABAD “C” BENCH
Before: Shri Waseem Ahmed & Shri Siddhartha Nautiyal
THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “C” BENCH Before: Shri Waseem Ahmed, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member
ITA No. 2626/Ahd/2016 Assessment Year 2012-13
Rupal Bhupendrasingh The ITO, Sandhu, A-8, Himandri Ward-3(3)(1), Flats, Nr. Judges Bunglow Vs Ahmedabad Road, Vastrapur, (Respondent) Ahmedabad PAN: BOOPS5329P (Appellant)
ITA No. 2953/Ahd/2016 Assessment Year 2012-13
The ITO, Rupal Bhupendrasingh Ward-3(3)(1), Sandhu, Ahmedabad Vs A-8, Himandri Flats, (Appellant) Nr. Judges Bunglow Road, Vastrapur, Ahmedabad PAN: BOOPS5329P (Respondent)
Assessee by: Shri Hem Chhajed, A.R. Revenue by: Shri N.J. Vyas, Sr. D.R.
I.T.A Nos. 2626 & 2953/Ahd/2016 A.Y. 2012-13 Page No. 2 Rupal Bhupendrasingh Sandhu vs. ITO & ITO vs. Rupal Bhupendrasingh Sandhu
Date of hearing : 06-06-2022 Date of pronouncement : 08-06-2022 आदेश/ORDER PER : SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER:-
These two appeals filed by assessee and Revenue against the order of the ld. CIT(A)-3, Ahmedabad in ITA Nos. CIT(A)-3/Wd.3(3)(11)/507/2015- 16 vide order dated 07/09/2016 passed for the assessment year 2012-13.
ITA No. 2626/Ahd/2016 filed by assessee
The assessee has taken the following grounds of appeal:-
“1. In law, on facts and in the circumstances of the case, the learned CIT(A) has grossly erred in not holding the impugned assessment order passed by the Income Tax Officer, Ward-3(3)(11) is against natural justice, bad in law and deserves to be cancelled.
On facts and in the circumstances of the case, the Ld. CIT(A) is not justified in confirming the addition on account of so-called difference of Jantri Value of the agricultural land and sale value shown by the appellant in the return of income when the agricultural land is falling within the meaning of Section 2(14) (iii) and therefore, the addition made Rs.45,62,304/- is not sustainable. It is ought to have deleted.
The appellant craves leave to add, alter, modify or withdraw any grounds of appeal on or before hearing of an appeal.”
The assessee has also taken additional grounds of appeal before us on 23-05-2022, which is reproduced below:
I.T.A Nos. 2626 & 2953/Ahd/2016 A.Y. 2012-13 Page No. 3 Rupal Bhupendrasingh Sandhu vs. ITO & ITO vs. Rupal Bhupendrasingh Sandhu
“1. Notice issued U/S 148 of the Act for the reopening of assessment by the Ld. A.O. is bad & illegal as same has been issued before the time limit to issue notice U/S 143(2) for the year was expired.”
ITA No. 2953/Ahd/2016 filed by Revenue
The Revenue has taken the following grounds of appeal:-
“1. In law, on facts and in the circumstances of the case, the impugned assessment order passed by the Income Tax Officer, Ward- 3(3)(11) is against natural justice, bad in law and deserves to be cancelled.
On facts and in the circumstances of the case, the Ld. AO is not justified in making addition on account of so-called difference of Jantri Value of the agricultural land and sale value shown by the appellant in the return of income. Actually the agricultural land is falling within the meaning of Section 2(14) (iii) and therefore, the addition made on that account of Rs.45,62,304/- may kindly be deleted.
On facts and in the circumstances of the case, the Ld. AO is not justified in making addition of Rs.2,69,08,062/- for alleged difference between the Jantri Value and price shown in the sale deed. He may be directed to delete the addition.
On facts and in the circumstances of the case, the Ld. AO is not justified in initiating penalty proceedings u/s.271(l)(c) of the IT Act. He may be directed to withdraw the same.
On facts and in the circumstances of the case, the Ld. AO is not justified in charging interest u/s.234A, 234B and 234C of the IT Act. He may be directed to withdraw the same.
The appellant craves leave to add, alter, modify or withdraw any grounds of appeal on or before hearing of an appeal.”
I.T.A Nos. 2626 & 2953/Ahd/2016 A.Y. 2012-13 Page No. 4 Rupal Bhupendrasingh Sandhu vs. ITO & ITO vs. Rupal Bhupendrasingh Sandhu
Before us, before going into the merits of the case, the counsel for the assessee argued on the additional ground of appeal mentioned above. The counsel for the assessee submitted that the above additional grounds of appeal is a purely legal ground which goes into the jurisdiction of re- assessment proceedings and if the same is adjudicated in favour of the assessee, then the case may not be required to be heard on merits. We shall therefore, before adjudicating on the merits of the case discuss the additional grounds of appeal argued before us.
The brief facts in relation to this ground of appeal are that the counsel for the assessee has challenged the issuance of notice under section 148 of the Act on the ground that the same was issued before the expiry of time- limit of issuance of notice of regular assessment under section 143(2) of the Act. Therefore, while there was still time for issuance of notice of regular assessment under section 143(2) of the Act, the Ld. Assessing Officer instead issued notice under section 148 of the Act and initiated re- assessment proceedings. The assessee placed before us a table giving the various dates for issuance of notice for initiation of assessment/reassessment proceedings. The table is reproduced below for ready reference:
Table
Sr. No. Particulars Date
1 Assessment Year 2012-13
2 Date till which return of income can be filed 31.03.2014
I.T.A Nos. 2626 & 2953/Ahd/2016 A.Y. 2012-13 Page No. 5 Rupal Bhupendrasingh Sandhu vs. ITO & ITO vs. Rupal Bhupendrasingh Sandhu
3 Date of Filing of Return u/s. 139(4) 17.09.2013
4 Date upto which notice u/s. 143(2) could be 30.09.2014 issued
5 Due date of passing order u/s. 143(3) 31.03.2015
6 Notice u/s. 148 of the Act issued on: 14.09.2014
The assessee submitted that for the impugned assessment year 2012-13, the due date up to which notice of regular assessment under section 143(2) could be issued was 30-09-2014, whereas the revenue proceeded to initiate reassessment proceedings by way of issuance of notice under section 148 of the Act on 14-09-2014, which is impermissible in law. The counsel for the assessee placed reliance on the case of CIT v Qatalys Software Technologies Ltd 308 ITR 249 (Madras) and on the case of CIT v. KM Panchayappan 304 ITR 264 (Madras), in which it has been held that the assessing officer was barred from initiating proceedings under section 148 of the Act where time-limit for issuance of notice under section 143(2) of the Act has not expired. In response, the Ld. DR has submitted that even though the above judicial precedents were before the assessee during the course of assessment/proceedings before Ld. CIT(Appeals), the assessee did not place reliance on these judicial precedents/ did not take this technical plea before the authorities at any prior stage and hence is debarred now from taking this fresh plea for the first time before ITAT.
We have heard the rival contentions and perused the material on record. We are of the view that since this is a purely legal ground, this can
I.T.A Nos. 2626 & 2953/Ahd/2016 A.Y. 2012-13 Page No. 6 Rupal Bhupendrasingh Sandhu vs. ITO & ITO vs. Rupal Bhupendrasingh Sandhu
be raised for the first time before us. The Ld. DR has not challenged the table of dates produced by the counsel for the assessee before us. Accordingly, we shall decide the issue of jurisdiction on the basis of judgements placed before us for our consideration. In our view, the courts have taken a consistent view that the assessing officer was barred from initiating proceedings under section 148 of the Act where time-limit for issuance of notice under section 143(2) of the Act has not expired. In the case of the case of Trustees of H.E.H. the Nizam’s Supplemental Family Trust v. CIT[2000] 109 Taxman 193 (SC)/[2000] 242 ITR 381 (SC), the Supreme Court held that it is settled law that unless the return of income already filed is disposed of, notice for reassessments under section 148 could not be issued, i.e., no reassessment proceedings could be initiated so long as the assessment proceedings pending on the basis of the return already filed are not terminated. While passing the order, Hon'ble Supreme Court observed as under:
The mere glance at this note would show that it could not be said that the ITO gave finality to the refund since no refund is granted either in the hands of the trust or in the hands of the beneficiaries. It is an inconclusive note where the ITO left the matter at the stage of consideration even with regard to refund in the hands of the beneficiaries. This note was also not communicated to the trustees. When we examine the note dated 10-11-1965, on the file of 1963-64, nothing flows from that as well. In any case if it is an order, it would be appealable under section 249. Since period of limitation starts from the date of intimation of such an order, it was imperative that
I.T.A Nos. 2626 & 2953/Ahd/2016 A.Y. 2012-13 Page No. 7 Rupal Bhupendrasingh Sandhu vs. ITO & ITO vs. Rupal Bhupendrasingh Sandhu
such an order be communicated to the assessee. Had the ITO passed any final order, it would have been communicated to the assessee within a reasonable period. In any case, what we find is that the note dated 10-11-1965 is merely an internal endorsement on the file without there being an indication if the refund application has been finally rejected. By merely recording that in his opinion no credit for tax deducted at source is to be allowed, the ITO cannot be said to have closed the proceedings finally. Decisions referred to by the revenue are of no help in the present case. We are, thus, of the opinion that during the pendency of the return filed under section 139 along with refund application under section 237, action could not have been taken under section 147/148. Our answer to the question, therefore, is in the negative, i.e., against the revenue.
Respectfully following the decision of the honourable Supreme Court in the case of Trustees of H.E.H. the Nizam’s Supplemental Family Trust v. CIT [2000] 109 Taxman 193 (SC)/[2000] 242 ITR 381 (SC)and the decisions in the case of Qatalysis Software Technologies Ltd 308 ITR 249 (Madras) and KM Pachayappan 304 ITR 264 (Madras), we are of the considered view that the initiation of reassessment proceedings under section 147 of the Act were invalid in law so long as they time-limit for issuance of notice under section 143(2) of the Act had not yet expired. The Ld. DR has not disputed the veracity of dates in the table placed before us. Accordingly, we are hereby allowing this additional ground challenging the jurisdiction of issuance of notice under section 147 of the Act in favour of the assessee.
I.T.A Nos. 2626 & 2953/Ahd/2016 A.Y. 2012-13 Page No. 8 Rupal Bhupendrasingh Sandhu vs. ITO & ITO vs. Rupal Bhupendrasingh Sandhu
Having decided the case on the issue of jurisdiction of initiation of re- assessment proceedings in favour of the assessee, we are not adjudicating on the grounds of appeal on merits of the case.
In the result, the appeal of the assessee is allowed for ITA 2626/Ahd/2016 and the Revenue’s appeal is dismissed for ITA 2953/Ahd/2016.
Order pronounced in the open court on 08-06-2022
Sd/- Sd/- (WASEEM AHMED) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad : Dated 08/06/2022 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से,
उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद