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Income Tax Appellate Tribunal, NAGPUR BENCH, NAGPUR
Before: SHRI V. DURGA RAO & SHRI K.M. ROY, ACCOUNTANT, MEMBER
Date of Hearing – 08/08/2024 Date of Order – 14/08/2024
O R D E R PER K.M. ROY, A.M.
The present appeal has been filed by the assessee challenging the impugned order dated 12/03/2020, passed by the learned Commissioner of Income Tax (Appeals)–2, Nagpur, [“learned CIT(A)”], for the assessment year 2010–11.
During the course of hearing, the Registry has pointed out that there is a delay of 601 days in filing the present appeal. The assessee has filed application dated nil, with a prayer for condoning of delay in filing the appeal. The contents of the application for condonation of delay are reproduced below:–
Shri Jasvindarsingh Gurubaxsingh Jolly ITA no.12/Nag./2022 “Delay of approx 596 days in respect of order received on dt. 20-03-2020, passed by Ld. CIT (A)-2, Nagpur. ii. Delay of approx six days in respect of order u/s 250 passed by Ld. A.O. to give appeal affect to the order shown in (i) above. There are mainly 3 major reasons for delay in filing of appeal - Ld. CIT (A) passed the order u/s 250 on 12-03-2020, in which relief was provided to the appellant in respect of addition of Rs. 54.59.190/-, thus demand was reduced to a negligible amount. However, order u/s 143 (3) r.w.s 147 was passed by the A.O., subject to receipt of valuation report from D.V.O., Thane, which was not received till the passing of order u/s 250 by Ld. CIT (A)-2, Nagpur. Now valuation report has been received by the A.O. and he has passed the order u/s 250 adopting the value of the property as on 01-04- 1981 as valued by D.V.O., Thane, disregarding his own reasonable belief of adopting the value submitted by Registered valuer, for reopening the case u/s 147. Now a huge demand of Rs. 48,45,920/- has been raised. Thus, Appellant is compelled to file this appeal before Honourable ITAT. There is a delay of approx 596 days due to this reason.
2. Appellant is a senior citizen, aged approx 70 years and is hardly in a position to walk. He has been hospitalized several times. In fact, appellant had no sons and after marriage of his daughters long ago, he & his wife are living alone. Appellant is not in a good financial & physical condition to contact and follow-up his counsel for filing of appeal. However, somehow he has managed to file this appeal. There is a delay of approx 596 days in respect of Ld. CIT (A) order & only approx 6 days from receipt of A.O.'s order u/s 250. Details of documents relating to appellant's medical condition would be submitted at the time of hearing.
3. One more major reason for delay is that the order dt. 12- 03-2020 of CIT (A)-2 was received just 3/4 days before a nationwide lockdown due to worsening position of covid- 19. This lockdown was continued for several months. Appellant is not only a very old person but also in a second wave and again there was a very strict lockdown in Nagpur. Thus, it can be seen that the appellant had valid reasons which prevented him from acting in time. Most of time he was ill. Prayer Appellant very humbly prays to your honour to condone the delay in filing of appeal of approx 596 days & 6 days in interest of justice and if approved by your honour.”
The learned Authorised Representative (“learned AR”) submitted that due to the pandemic situation and the lockdown implemented in the State of Maharashtra, the assessee could not file the present appeal within 60 days from the date of receipt of the impugned order. We find that the Hon’ble
Shri Jasvindarsingh Gurubaxsingh Jolly ITA no.12/Nag./2022 Supreme Court, vide judgment dated 10/01/2022, passed in M.A. no.21 of 2022, in M.A. no.665 of 2021, in Suo-Motu Writ Petition (Civil) no.3 of 2020, the limitation period for filing the appeal was extended upto 29/05/2022. In view of the above, since the present appeal has been filed within the extended time granted by the Hon’ble Supreme Court during the COVID period, there is no delay in filing the present appeal and we proceed to decide the same on merits.
4. In the present appeal, the assessee has raised following grounds:
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1. On the facts and circumstances of the case & in law, Ld. CIT (A) was not justified in not quashing the assessment order as the case was reopened without A.O. having any reasonable belief for reopening the case and A.O, merely reopened the case on information received.
2. On the facts and circumstances of the case & in law, Ld.CIT (A) was not justified in not annulling the assessment order as the reopening was bad in law as A.O. did not follow Hon'ble Supreme Court order & Hon'ble jurisdictional High Court decision in respect of reopening u/s 147.
3. On the facts and circumstances of the case & in law Ld. CIT(A) was not justified-in not staying revaluation proceedings which was illegal as A.O. changed his own opinion formed at the time of reopening.
Ld. A.O. passed the assessment order in utter disregard of legal system and order passed u/s 250 dt. 12-03-2020 to give appeal effect is illegal as it raised huge demand arbitrarily report by DVO, though throughout the assessment proceeding and reopening proceedings, A.O. adopted the value supplied by the Registered valuer, thus changing his own reasonable belief.
6. Ld. CIT(A) erred in not appreciating the facts that the value as on 01- 04- 1981 was adopted on the basis of registered valuers report in the assessment order and in appellate order of co-owners of the property while in appellants case a different approach was adopted by sending the case for revaluation.
7. The assessee craves leave to add, alter, vary, omit, amend or delete one or more of the above grounds of appeal before, or at the time of, hearing of the appeal, so as to enable Hon'ble ITAT, Nagpur to decide this appeal according to law.”
During the course of hearing, the learned Authorised Representative had vociferously submitted that in the case of mother co–owner, the learned Page | 3
Shri Jasvindarsingh Gurubaxsingh Jolly ITA no.12/Nag./2022 CIT(A) had given relief, which is placed at Page Book Page–57 to 16. He requested that the ratio of the judgment be followed.
On the contrary, the learned Departmental Representative vehemently averted that in the instant case valuation under section 55A of the Act was carried out which was never done in the case of his co–owner. Thus, the case relied upon is distinguishable.
We have given a thoughtful consideration to the rival arguments made and perused the material available on record. Reference to the DVO is a judicial process. Since the Assessing Officers are different, they can form their own independent view in this regard. They need not be at ad idem. However, the valuation report can be independently challenged. Hence, we are not impressed with the argument of the learned Authorised Representative.
The issue arising out of grounds no.1 and 2, relates to re–opening of assessment by the Assessing Officer.
In this case, the assessee is an individual who filed his return of income on 02/08/2010, disclosing total income of ` 1,41,490. The assessee’s case was re–opened under section 147 of the Income Tax Act, 1961 ("the Act") for the reasons recorded as under:–
“Information was received from ITO, Ward-1(3), Nashik, vide letter F.No. Nsk/ITO/Ward 1(3)/147-forwarding/2016-17 dated 24.03.2017, gist of which is as under: During the course of assessment proceedings in the case of Satvindersingh Jolly for the A.Y. 2010-11, it was noticed that a property consisting of open land and residential bungalow was sold by the above party jointly with other family members for a consideration of Rs.5,35,31,600/- on 05.10.2009. As per valuation report the value of the property as on 01/04/1981 was computed at Page | 4
Shri Jasvindarsingh Gurubaxsingh Jolly ITA no.12/Nag./2022
Rs.83,02,500/- and LTCG was computed at Rs.54,59,140/-. Shri Jaswindersingh Gurubaxsingh Jolly, who is assessed in this ward, is one of the family members and his share of sale consideration of the property sold is Rs.1,07,06,320/-. As per the computation, the correct LTCG assessable in the hands of the assessee is arrived at Rs.54,59,140/-. It is verified that the assessee has not disclosed the correct LTCG in the ROI filed by the assessee for the A.Y. 2010-11. Therefore, the AO has reason to believe that the income of the assessee (LTCG) to the tune of Rs.54,59,140/- has escaped assessment for A.Y. 2010- 11 and as such assessment for A.Y. 2010-11 needs to be re-opened u/s 147 of the Income Tax Act, 1961"
The learned CIT(A) upheld the re–opening of assessment in assessee’s case by observing as follows:–
“5.2.1 The relevant portion in Para no.6 (page no.5) of the impugned Assessment Order is as under:- "The assessee has claimed deduction uls. 54 of Rs.2,11,960 in the computation of income. It is noticed that assessee has purchased immovable property (plot) valued at Rs.6,50,000 on 25-03-2010. The deduction claimed by the assessee is not admissible as per the provisions of Section 54 of the IT Act. Hence the claim made the assessee u/s. 54 is rejected." 5.2.2 In the facts of the case and as per the discussion made by the Ld. AO in the impugned Assessment Order (and reproduced in para no.5.2.1 supra of this order) since the deduction u/s. 54 of the Act being inadmissible cannot be granted to the appellant and the Ld. AO was completely justified in making the disallowance and resultant addition of Rs 2,11,960. Thus, Ground No. 7 is dismissed. 5.3 Before ending discussion is made related to Ground No.1 & 2 which challenge the re-opening of the case u/s. 147 of the Act. The reasons recorded for reopening the case u/s 147 of the Act were found to have been reproduced in the para no. 1 (page no. 1) of the impugned Assessment Order dated 27- 12-2017. They clearly show that in the case of the appellant the reasons were recorded by the Ld. A.O. only and though the information came from ITO, Ward-1(3), Nasik, the Ld. A.O. in this case i.e. ITO, Ward- 2(3), Nagpur had 'Reason to Believe' (within the meaning of those words as are used in the Section 147 of the Act and as interpreted by various Hon'ble courts of Law of this land at various forums) that INCOME HAD ESCAPED ASSESSMENT in the case of the appellant assessee viz. Shri Jasvindersingh Gurubaxsingh Jolly. For ready reference, the relevant portion of the Assessment Order is reproduced as under.- "Information was received from ITO, Ward-1(3), Nashik, vide letter F.No. Nsk/ITO/Ward 1(3)/147/2016-17 dated 24.03.2017, gist of which is as under Shri Jasvindarsingh Gurubaxsingh Jolly ITA no.12/Nag./2022
During the course of assessment proceedings in the case of Satvindersingh Jolly for the A.Y. 2010-11, it was noticed that a property consisting of open land and residential bungalow was sold by the above party jointly with other family members for a consideration of Rs. 5,35,31,600/- on 05.10.2009. As per valuation report the value of the property as on 01/04/1981 was computed at Rs.83,02,500/- and LTCG was computed at Rs.54,59,140/-, Shri Jaswindersingh Gurubaxsingh Jolly, who is assessed in this ward, is one of the family members and his share of sale consideration of the property sold is Rs.1,07,06,320/-, As per the computation, the correct LTCG assessable in the hands of the assessee is arrived at Rs.54,59,140/- It is verified that the assessee has not disclosed the correct LTCG in the ROI filed by the assesseo for the A.Y. 2010-11. Therefore, the AO has reason to believe that the income of the assessee (LTCG) to the tune of Rs.54,59,140/- has escaped assessment for A.Y. 2010- 11 and as such assessment for A.Y. 2010-11 needs to be re-opened u/s 147 of the Income Tax Act, 1961."
We find that the above findings of the learned CIT(A) on the issue of re–opening of assessment under section 147 of the Act is justified and no interference is called for. Accordingly, grounds no.1 and 2, raised by the assessee are dismissed.
Insofar as ground no.3, is concerned, which relates staying of revaluation proceedings, we find that the learned CIT(A) has not be vested with any power by the statute to stay the proceedings relating to reference made before the Departmental Valuation Officer. Consequently, the ground no.3, raised by the assessee is not maintainable and hence dismissed.
As regards ground no.4, is concerned, we find that the issue raised in ground no.4, is premature in nature and does not arising from the impugned assessment order. The order giving effect under section 250 of the Act is a separate order which needs to be challenged independently before the learned CIT(A) pointing out to the infirmities in the report. In this view of the matter, ground no.4, is not maintainable and hence dismissed.
Shri Jasvindarsingh Gurubaxsingh Jolly ITA no.12/Nag./2022
In grounds no.5 and 6, the assessee has challenged the DVO’s report. After hearing both the parties, we find that this issue has not been raised before the learned CIT(A) being first appellate authority for its adjudication. Accordingly, there is no scope on adjudicating the issue since request for admission of additional ground has not been moved. Thus, the grounds no.5 and 6, raised by the assessee are dismissed.
In the result, appeal filed by the assessee is dismissed. Order pronounced in the open Court on 14/08/2024