BADIREDDY ASHA LATHA,VISAKHAPATNAM vs. ASSISTANT COMMISSIONER OF INCOME-TAX (INTL. TAX), VISAKHAPATNAM

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ITA 298/VIZ/2023Status: DisposedITAT Visakhapatnam14 August 2024AY 2013-14Bench: SHRI DUVVURU RL REDDY, HON’BLE (Judicial Member), SHRI S BALAKRISHNAN, HON’BLE (Accountant Member)9 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessment order passed under section 143(3) r.w.s. 147 of the Act is valid. The primary contention of the assessee was the absence of a Document Identification Number (DIN) in the assessment order, citing CBDT Circular No. 19/2019. The Tribunal noted that while the DIN was not embedded in the order itself, an online DIN and document number was generated on the same day (30.03.2022) as the assessment order and intimated to the assessee. The Tribunal found that no manual communication was issued, and therefore, the exceptional circumstances requiring prior approval of the Chief Commissioner/Director General of Income-tax, as outlined in the circular, were not applicable. The Tribunal distinguished the case of Hexaware Technologies Limited v. ACIT, stating that the issue there was a wrong date in the notice, unlike the present case where DIN was generated electronically on the same day. The Tribunal also noted that the assessee's representative did not argue the case on merits or other grounds raised in the appeal. Consequently, the Tribunal dismissed the appeal. The issue regarding the justification of invoking section 50C was not decided on merits as the assessee's appeal was dismissed on the preliminary ground of the validity of the assessment order.

What were the facts?

The assessee, BADIREDDY ASHA LATHA, a Non-Resident Indian, sold an immovable property in Assessment Year 2013-14 for Rs. 19,50,000. The Stamp Registration Office (SRO) determined the market value at Rs. 49,19,000, which was later revised to Rs. 37,75,200 by the District Registrar. The Assessing Officer (AO) reopened the assessment under section 147 of the Income Tax Act, 1961, based on a reference under section 47A of the Indian Stamp Act. The assessee filed a return declaring a total income of Rs. 14,00,840, including long-term capital gains calculated on a net sale consideration of Rs. 19,95,000 and indexed cost of acquisition of Rs. 5,99,513. The AO accepted the return. The Commissioner of Income Tax (IT & TP) invoked section 263, deeming the AO's order erroneous and prejudicial to revenue. The CIT set aside the assessment order, directing the AO to adopt the full sale consideration of Rs. 37,75,200 and re-do the assessment.

What were the issues?

1. Whether the order passed under section 147 r.w.s. 143(3) of the Act is null and void ab initio due to non-compliance with the provisions of new sections for reopening inserted by the Finance Act, 2021, non-communication of reasons for reopening within a reasonable time, absence of DIN in the assessment order as mandated by CBDT Circular No. 19/2019, and lack of application of mind by the sanctioning authority under section 151. Assessee's Contention: The assessment order is void because the notice under section 148 was issued after 01.04.2021 without complying with new reopening provisions, reasons were not communicated promptly, the order lacked a DIN and justification for its absence, and the approval under section 151 was not applied with due mind. The assessee relied on CIT v. Brandix Mauritius Holdings Ltd. (Delhi High Court) and Hexaware Technologies Limited v. ACIT (Bombay High Court). Revenue's Contention: The Hon'ble Supreme Court has stayed the SLP in CIT v. Brandix Mauritius Holdings Ltd., making the Delhi High Court judgment non-applicable. The revenue did not present arguments on other grounds. 2. Whether the CIT was justified in invoking section 50C of the Act when the AO had already considered and taken a possible view on its applicability during reassessment proceedings. Assessee's Contention: The CIT was not justified in invoking section 50C as the AO had already examined the issue and taken a possible view. Revenue's Contention: Not recorded.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 148,Section 151,Section 263,Section 50C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM

Before: SHRI DUVVURU RL REDDY, HON’BLE

For Appellant: Shri I. Kama Sastry, AR
For Respondent: Dr. Satyasai Rath, CIT(DR)
Pronounced: 14.08.2024

सुिवाई समाप्त होिे की ततति/ Date of Conclusion of Hearing : 06.08.2024 घोर्णध की तधरीख/Date of Pronouncement : 14.08.2024 आदेश /O R D E R

PER SHRI S BALAKRISHNAN, ACCOUNTANT MEMBER:

1.

This appeal is filed by the assessee against the order of Learned Commissioner of Income Tax (IT &TP), Hyderabad [hereinafter in short BADIREDDY ASHA LATHA “Ld. CIT(IT & TP)”] passed under section 263 of Income Tax Act, 1961 (in short ‘Act’) for the A.Y. 2013-14 vide DIN & Order No. ITBA/REV/F/REV5/2023-24/1056671531(1) dated 29.09.2023 arising out of the order passed under section 143(3) r.w.s. 147 of the Act dated 30.03.2022.

2.

Brief facts of the case are that, assessee is a Non-Resident Indian and sold her Immovable Property during the assessment year 2013-14 vide document no.5503/2012 dated 04.09.2012 for a sale consideration of Rs.19,50,000/-. The market value determined by the SRO for the purpose of stamp duty is Rs.49,19,000/-. Subsequently, on reference received under section 47A of Indian Stamp Act, the District Registrar, Visakhapatnam vide proceedings no. 3372/G2/47-A/2012 dated 12.12.2012 determined / revised the market value of the property at Rs.37,75,200/-. Accordingly, the case was reopened by issuing notice under section 148 of the Act dated 29.03.2021. In response, assessee filed return of income declaring total income at Rs.14,00,840/- which includes long term capital gains on sale of subject property. From the computation statement it was observed by the Assessing Officer that the assessee has disclosed net sale consideration at Rs.19,95,000/- and after claiming indexed cost of acquisition at Rs.5,99,513/- determined

Page No. 2 BADIREDDY ASHA LATHA the longterm capital gains at Rs.13,95,487/-. The Ld. Assessing Officer considering the submissions of the assessee completed the assessment by accepting the return of income filed by the assessee.

3.

The Ld. CIT (IT & TP) observed that the order passed under section 143(3) r.w.s. 147 of the Act by the Assessing Officer is erroneous and prejudicial to the interest of the revenue and issued notice under section 263 of the Act on 15.06.2023 requiring the assessee to file the objections, if any, for revising the order passed under section 143(3) r.w.s. 147 of the Act. The Ld. CIT (IT & TP) considering the submissions made by the assessee set-aside the assessment order and directed the Assessing Officer to adopt the full value of sale consideration of Rs. 37,75,200/- and redo the assessment in accordance with law after giving opportunity of being heard to the assessee.

4.

Aggrieved by the order of the Ld. CIT (IT & TP), assessee is in appeal before us by raising following grounds of appeal: - “1. The order under section 263 dated 29.09.2023 is null and void as the order under section 147 r.w.s.143(3) which is sought to be revised by the Ld.Commissioner of Income-tax (IT & TP),Hyderabad is null and void ab initio for the reason that: i. The notice under section 148 dated29.03.2021 is issued on or after 01.04.2021 without complying with Page No. 3 BADIREDDY ASHA LATHA the provisions of new sections for reopening inserted by the Finance Act, 2021 w.e.f. 01.04.2022. ii. The reasons recorded for reopening the assessment have not been communicated to the assessee within a reasonable time from the date of issue of notice under section 148. iii. The order passed under section 147 r.w.s. 143(3) is not having any DIN and there is no mention in the body of the order as to why DIN is not generated as mandated by CBDT Circular No. 19/2019 dated14.08.2019. iv. The approval/sanction accorded by the specified authority under section 151 is without application of mind. v. The order has been passed without disposGround 2. The Ld. Commissioner of Income-tax, (IT & TP), Hyderabad is not justified in invoking the provisions of section 50C of the Income-tax Act,1961 though the Ld. Assessing Officer has enquired into the applicability of the provisions of section 50C during the course of the reassessment proceedings and has taken a possible view.

3. All the above grounds of appeal

are mutually exclusive and without prejudice to one another.

4. The appellant craves leave to add to; alter; amend; modify or delete all or any of the above grounds of appeal.”

5.

At the outset, Ld. Authorised Representative [hereinafter “Ld.AR”] strongly objected to the validity of the assessment order stating that the order passed under section 143(3) r.w.s. 147 of the Act is not having any Document Identification Number (in short “DIN”) and there is no mention in the body of the order as to why the DIN is not generated as mandated by CBDT Circular No. 19 / 2019 dated 14.08.2019. In this Page No. 4 BADIREDDY ASHA LATHA connection, the Ld. AR relied on the case of Hon’ble Delhi High Court in the case of CIT v. Brandix Mauritius Holdings Ltd., [456 ITR 34]. He further submitted that the Hon’ble Supreme Court has stayed the SLP with reference to the above order, however, this stay cannot be applied to the instant case. He reiterated that the order of the Hon’ble Delhi High Court be followed. Further, he argued that Hon’ble Bombay High Court in Writ Petion No. 1778 of 2023 in the case of Hexaware Technologies Limited v. ACIT on similar circumstances has held that the notice is clearly invalid and bad in law. He therefore, pleaded that the Ld. Assessing Officer has not generated DIN while uploading the assessment order but has generated the DIN separately by without following the procedure as prescribed in CBDT Circular No. 19 / 2019 dated 14.08.2019. He therefore pleaded that the order of the Assessing Officer is null and void and accordingly subsequent order passed by the Ld. CIT (IT & TP) is also bad in law.

6.

Per contra, the Ld. Departmental Representative [hereinafter in short “Ld. DR”] relied on the SLP filed before the Hon’ble Supreme Court in CIT v. Brandix Mauritius Holdings Ltd., wherein the order of the Hon’ble Delhi High Court dated 20.03.2023 as well as the order of the ITAT has been stayed until further orders. Therefore, he pleaded that Page No. 5

7.

We have heard both the sides, and perused the material available on record. It is an admitted fact that the Document Identification Number (DIN) was not generated by the Ld. Assessing Officer while uploading the assessment order under section 143(3) r.w.s. 147 of the Act on 30.03.2022. However, the Ld. Assessing Officer on the same day has generated following DIN & Document Number ITBA/AST/S/91/2021- 22/1042189753(1) for the impugned order passed under section 143(3) r.w.s. 147 of the Act on 30.03.2022 and intimated the same to the assessee. The main contention of the Ld.AR is that the procedure laid down in CBDT Circular No. 19 / 2019 dated 14.08.2019 was not followed by the Assessing Officer while generating the DIN separately. In this context it is necessary to extract the relevant portion of the CBDT Circular No. 19 / 2019 dated 14.08.2019 which has laid down the following exceptional circumstances: - “3. In exceptional circumstances such as, (i) when there are technical difficulties in generating/allotting/quoting the DIN and issuance of communication electronically: or Page No. 6 BADIREDDY ASHA LATHA (ii) when communication regarding enquiry, verification etc. is required to be issued by an income-tax authority, who is outside the office, for discharging his official duties; or (iii) when due 10 delay in PAN migration, PAN is lying with non- jurisdictional Assessing Officer; or (iv) when PAN of assessee is not available and where a proceeding under the Act (other than verification under section 131 or section 133 of the Act) is sought to be initiated; or (v) When the functionality to issue communication is not available in the system, 8. In the above exceptional circumstances, the communication may be issued “MANUALLY” but only after recording reasons in writing and with prior approval of the Chief Commissioner / Director General of Income-tax. However, in the instant case, no such manual communication was communicated by the Assessing Officer. However, an online DIN & Document Number was generated and intimated to the assessee, on the same day, hence the argument of the Ld.AR that the prior approval of the Chief Commissioner / Director General of Income- tax in our opinion is not required.

9.

In the instant case, we find that Ld. Assessing Officer has generated DIN on the system on the same day of the uploading the assessment order i.e., 30.03.2022. Ld. Assessing Officer has not issued any manual communication and hence the procedure laid down in CBDT Circular No. 19 / 2019 dated 14.08.2019 is of no support to the Ld.AR.

Page No. 7 BADIREDDY ASHA LATHA The Ld.AR also did not argue the case on merits. In these circumstances, we are of the considered view that the Ld. Assessing Officer has followed the procedure and has generated the DIN on the same date and therefore the assessment order passed under section 143(3) r.w.s. 147 of the Act is valid in law. The case law relied on by the Ld.AR in the case of Hexaware Technologies Limited v. ACIT (supra) is distinguishable on the fact that the notice under section 148 issued in that case was having a wrong date and hence the Hon’ble Bombay High Court has held thatthe impugned notice is clearly bad in law. However, in the instant case, the Assessing Officer has generated DIN electronically through the system on the same day and hence in our opinion the assessment order passed by the Ld. Assessing Officer is valid in law. Since the other grounds raised by the assessee are not argued by the Ld.AR, we are inclined to dismiss the same.

10.

In the result, appeal of the assessee is dismissed.

Order pronounced in the open court on 14th August, 2024.

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