MS. USHA GOEL,SAHARANPUR vs. ITO, NEW DELHI

ORDER The present appeal has been filed by the assessee assailing the correctness of the order dated 16.05.2016 of CIT(A)-21, New Delhi pertaining to 2008–09 assessment year on the following grounds:-

“On the facts and in the circumstances of the case and in law the Ld.CIT(A erred in confirming the following actions of the Assessing Officer:-

1. 1. Initiating proceedings u/s 147/148 of the Income Tax Act, 1961 (the Act); 2. Construing the agriculture land as capital asset u/s 2(14)(iii) of the Act and subjecting the sale thereof to capital gain tax; 3. Construing the sale consideration of the agriculture land on the basis of circle rate by invoking section 50C of the Act without confronting the Appellant. All the above actions being arbitrary, erroneous, misconceived and unjust must be quashed with directions for relief.”

2. However, the Ld.AR at the time of hearing submitted that the jurisdictional issue has not been decided by the CIT(A). For the said purposes, attention was invited to page 7 para 8 of the impugned order which is reproduced hereunder:-

“Ground No.1: Vide this ground of appeal the appellant has challenged the validity of initiating proceeding u/s 147. In this regard the AO has given his findings in the remand report to establish the fact that the proceedings u/s 147 was initiated after due recording the reasons of income escaping assessment. Moreover, during the assessment proceeding the assessee never objected to AO initiating proceedings u/s 147. In the light of the above, I do not find any merit in appellant’s above contention and hence same is rejected.” 2.1. Referring to the above, it was his submission that jurisdictional issue may be first decided. The said prayer was not objected to by the Ld.Sr.DR.

I.T.A .No.-3759/Del/2016 Usha Goel vs ITO

Page 2 of 3 3. The relevant facts of the case are that the assessee in response to notice u/s 148 stated that the return already filed on 25.07.2008 that ITO, Ward-4 may be treated to have been filed in response to notice u/s 148. Considering the facts that the assessee had shown sale consideration below the circle rate and relying upon section 50C, addition of Rs.12,08,000/- was made in the hands of the assessee. Aggrieved the assessee challenged the said order on merit as well as on the jurisdictional issue before the CIT(A). A perusal of the impugned order shows that tax evasion petition (TEP) was received by the Department on the basis of which the assessment was re-opened. The assessee is shown to be an individual declaring income from salary. A specific piece of land was stated to have devolved upon the assessee on the basis of WILL of her father and the same was sold to 8 persons through separate sale deeds. The land was stated to be agricultural land on which there was a mango grove. As per the assessment order para 2 it was being used for cultivating crops like cherry, wheat and presently sugarcane was grown thereon. Considering the sale deeds, the AO concluded in the order u/s 143(3)/148 that it was a commercial land. The Ld. AR has argued that when the reasons recorded for re-opening the assessment are considered it would show that no reasonable person could have come to the conclusion that income has escaped assessment. It was his limited prayer that the jurisdictional issue be decided first and even though on merits also the assessee has a good case the settled legal position of first deciding the lack of jurisdiction be addressed. Considering that the said prayer was not objected to by the Ld.Sr.DR, the impugned order is set aside and the issues are restored back to the CIT(A). The CIT(A) is directed to first decide the jurisdictional issue and thereafter to proceed on merit if so warranted. While so directing, it is made clear that the mere fact that the assessee did not challenge the jurisdictional issue before the AO the Ld.CIT(A) cannot abdicate his responsibility to consider the ground and this fact cannot be the basis for non- adjudication of the jurisdictional issue. It goes without saying that a reasonable opportunity of being heard be provided to the assessee before the passing of an order.

I.T.A .No.-3759/Del/2016 Usha Goel vs ITO