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Income Tax Appellate Tribunal, ‘A’ BENCH
आदेश / O R D E R PER AMIT SHUKLA (J.M):
The aforesaid appeal has been filed by the assessee against order dated 22/10/2023 passed by NFAC, Delhi for the quantum of assessment passed u/s.147 r.w.s.144B for the A.Y.2017-18.
2 ITA NO. 4137/MUM/2023 Arvind Dada Kolekar A.Y. 2017-18 2. In the grounds of appeal assessee has challenged the validity of reopening u/s. 148 and also addition of Rs.18,05,500/- being difference between sale consideration stamp duty value u/s.56(2)(vii)(b). The grounds of appeal reads as under:- “1. In the facts circumstances of the case and in law, the Ld. Assessing officer, National Faceless Assessment Centre has erred in initiating reassessment without obtaining sanction from the specified authority under section 151 (ii) of the Act, thereby vitiating the consequential assessment proceedings. 2. In the facts and circumstances of the case and in law, the Ld. Assessing officer, National Faceless Assessment Centre has erred in initiating reassessment beyond 3 years, since the alleged taxable income escaping assessment does not exceed the threshold of Rs. 50,00,000/- as per section 149(1)(b) of the Act, thereby rendering the reopening time barred. 3. In the facts and circumstances of the case and in law, the Ld. Assessing Officer has erred in initiating reassessment proceedings u/s. 148 since the notice dated 27.07.2022 u/s. 148 was issued by the Jurisdictional Assessing Officer which is in clear violation of section 151A and the notification dated 29.03.2022 issued by the CBDT. 4. In the facts and circumstances of the case and in law, the learned National Faceless Appeal Centre (NFAC), CIT (Appeals), has erred in passing an order without allowing the Condonation delay in filing an appeal before CIT(A). 5. In the facts and circumstances of the case and in law, the learned National Faceless Appeal Centre (NFAC), CIT (Appeals), has erred in passing an order not considering on merit the documents submitted by the appellant thereby grossly violating the principles of Natural Justice. 6. In the facts and circumstances of the case and in law, the Learned National Faceless Appeal Centre (NFAC), CIT (Appeals), Mumbai has erred in not providing personal hearing to the
3 ITA NO. 4137/MUM/2023 Arvind Dada Kolekar A.Y. 2017-18 appellant thereby grossly violating the principles of Natural Justice. 7. In the facts and circumstances of the case and in law, the Learned National Faceless Appeal Centre (NFAC), CIT (Appeals) has erred in making addition of Differential amount of Rs. 18,05,500/ being difference between Sale Consideration and Stamp Duty Value under section 56(2)(vii)(b)(ii) of the Income Tax Act, 1961.”
At the outset, ld. Counsel submitted that ld. CIT(A) has dismissed the appeal on the ground that the appeal filed by the assessee was barred by limitation by 89 days and there was no good and sufficient reasons for the condonation, has dismissed the appeal as inadmissible. 4. Before us ld. Counsel submitted that before the ld. CIT(A) assessee has submitted that the delay in filing of appeal was unintentional and following reasons were given before him:- “1. I being Medical Practitioner not aware about time period and procedure of filing Income Tax Appeal with your honour. 2. The order against which appeal is to be file were updated in my income tax efiling portal only and physical copy of order was not received by post or hand delivery. I am not regularly checking my efiling portal. 3. I came to know about assessment dues after receipt of call from Income Тах officer and there after I have started process to file Appeal against Income Tax assessement order Issued U/s 147 read with section 144B of The Income Tax Act 1961. 4. I was also following up with builder, M/s Shree sati Builder and Developer, to issue me letter clarifying reason for taking average rate in Agreement for sale of both flats. As Market value for duplex flat is higher compare with other flat. I have received
4 ITA NO. 4137/MUM/2023 Arvind Dada Kolekar A.Y. 2017-18 letter from builder on 28/08/2023 and thereafter immediately I have filed appeal on 30/08/2023. “
The ld. CIT (A) found that such reasons are not sufficient and accordingly, has dismissed the appeal as un-admitted. 6. Further, Ld. Counsel pointed out that, here in this case the proceedings u/s.148 is itself invalid for the reason that the income alleged to escaping assessment was much less than Rs. 50,00,000/- as per the condition precedent in Section 149(1)(b), whereas in the reasons recorded the ld. AO has alleged the amount escaping assessment was for sum of Rs.18,05,500/-. This fact was also brought to the notice of the ld. AO in response to the notice u/s.148 dated 27/07/2022. Despite such objection, ld. AO based on information / evidence collected on that assessee had shown agreement value for purchase of property at Rs.2,59,42,000/- as against value determined by the stamp valuation authority at Rs.2,77,47,500/- has added u/s.56(2)(vii)(b) as income from other sources despite the fact that difference was less than 10%/ Thus, the very jurisdiction and foundation of u/s.148 notice itself was invalid. 7. On the other hand ld. DR submitted that assessee had failed to respond before the ld. AO in response to the show-cause notice issued by him and even the reason for condonation of delay before the ld. CIT (A) was not sufficient. Therefore, appeal has rightly been dismissed by the ld. CIT (A).
After hearing both the parties and on perusal of the impugned order and material on record, we find that assessee
5 ITA NO. 4137/MUM/2023 Arvind Dada Kolekar A.Y. 2017-18 had filed the original return of income for A.Y.2017-18 on 05/11/2017 declaring total income of Rs.1,01,31,100/-. On the basis of information received from Director of Income Tax DIT (I&CI) Mumbai sharing the information collected from SRO offices that assessee had entered into having transaction with regard to purchase of immovable property on 05/07/2016 for a total consideration of Rs.2,59,42,000/- whereas stamp valuation of the property was Rs.2,77,47,500/- and accordingly, proceedings of Section 56(2)(vii)(b) are attracted with respect to difference amount of Rs.18,05,500/-. Thus, based on this information, the ld. AO has issued a notice u/s.148. Admittedly, the notice u/s.148 has been issued on 27/07/2022 for the A.Y.2017-18 which is beyond the period of three years from the end of the relevant assessment year. The condition provided for reopening the assessment u/s.147 and issuance of notice u/s.148 has been provided in Section 149(1)(b) (prior to its substitution w.e.f.01/04/2022 by the Finance Act 2022), wherein following conditions were provided:- “(b) if three years, but not more than ten years, have elapsed from the end of the relevant assessment year unless the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income chargeable to tax, represented in the form of asset, which has escaped assessment, amounts to or is likely to amount to fifty lakh rupees or more for that year:"
Thus, condition precedent for issue of notice u/s.148, is that income chargeable to tax escaped assessment must amount to or
6 ITA NO. 4137/MUM/2023 Arvind Dada Kolekar A.Y. 2017-18 is likely to amount to fifty lakh rupees or more for that year. Admittedly, the alleged escapement of income was only Rs.18,05,500/- which is much less than Rs.50,00,000/-. This fact was brought to the notice of the ld. AO by the assessee in he following manner:- 1. As per the above provisions of Section 149(1)(b), the re- assessment proceedings pertaining to Assessment Year 2017-18 got time-barred on 31s March, 2021, in all cases where the Income chargeable to tax escaping assessment amounts to less than Rs. 50 Lakhs. Since you have issued the above refereed notice U/s 148 and intimation letter for notice U/s148 on 27/07/2022 and since the alleged amount escaping assessment is a sum of Rs. 18,05,000/- only which is less than Rs.50 Lakhs hence the said Notice is time-barred, bad in law and therefore, needs to be quashed. Therefore, this inquiry u/s.148A(a) and notice U/s 148 pertaining to Assessment Year 2017-18, issued in July, 2022 by you is completely illegal and in violation of the provisions of the Income Tax Act 1961 and hence, the same needs to be dropped. 2. Further to above Jurisdictional Requirements under substituted Section 149 as per Finance Act, 2022 is also violated. It is further submitted that you have no jurisdiction to issue Notice u/s 148A(a) and 148 and pass order u/s148A(d) as after 29/3/2022 as same can be done in a faceless manner as provided u/s 144B i.e. by Faceless Assessing Officer in view of Notification S.O. 1466(E) (NO. 18/2022/F. NO. 370142/16/2022-TPL(Part 1)]. Dated 29-3-2022 titled E Assessment Of Income Escaping Assessment Scheme, 2022" passed /s.151A of the Act. Thus, even on this ground the Notice u/s 148(b) is bad in law and needs to be quashed.
7 ITA NO. 4137/MUM/2023 Arvind Dada Kolekar A.Y. 2017-18 9. When this fact was brought on record and specific objection was raised before the ld. AO, then he could not have proceeded u/s.148 and to complete the assessment. Thus, AO lack very jurisdiction u/s 148 where income chargeable to tax escaping the assessment is much less than Rs.50,00,000/-. Consequently, the entire proceedings get invalid. Accordingly, on the issue of jurisdiction itself, we quashed the assessment order passed by the ld. AO u/s.147 r.w.s. 144B on the ground that it does not satisfies the limit prescribed u/s.149(1) (b). Accordingly, the entire assessment order is quashed. 10. In so far as inadmissibility of the appeal by the ld. CIT(A), we find that once assessee had stated that the order was updated in Income Tax e-filing portal and he has not received any physical copy of the order and he was not aware of such assessment order being passed and came to know only when he received a call from Income Tax Officer, then only he took assistance of professional to file the appeal. If assessee was not aware or was ignorant of the order being passed, then it cannot be held that there were latches on the part or assessee and he is not entitled to file the appeal. Thus, delay of 89 days on this ground should have been condoned. Any way we have already quashed the assessment order on jurisdiction therefore, no point remanding the case back to the file of CIT (A) to decide afresh.
8 ITA NO. 4137/MUM/2023 Arvind Dada Kolekar A.Y. 2017-18
In the result, appeal of the assessee is allowed.
Order pronounced on 23rd April, 2024.
Sd/- Sd/- (RENU JAUHARI) (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated 23/04/2024 KARUNA, sr.ps Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// BY ORDER,
(Asstt. Registrar) ITAT, Mumbai