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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
This appeal by the assessee is directed against the revision order of Pr. Commissioner of Income Tax dated 27.03.2021 passed u/s 263 of the Act for Assessment Year 2012-13. The assessee has raised following grounds of appeal:
“1.That impugned order passed by the Ld. Pr. CIT is bad in law, without jurisdiction, it is based on incorrect interpretation of law and without allowing proper and reasonable opportunity of being heard, moreover the facts have also been incorrectly construed. 2.That on the facts and circumstances of case in law, the Ld. Pr. CIT erred in rejecting the assessee's contention that the initiation of revisionary proceeding u/s 263 is illegal as the order passed by the Ld. A.O. is neither erroneous nor the prejudicial to the interest of Page 1 of 6
Manish Jai Narayan Karwa. Page 2 of 6 revenue as the Ld. A.O. 5(1)-Indore already assessed the capital gain on sales of shares of Scan Steel Limited amounting to Rs. 9,60,41,245/- in the hands of Manish Jainarayan Karwa (HUF) vide assessment order dated 28.12.2019 by narrating all the facts on Page 12 para 10 of the assessment order. 3.That on the facts and in the circumstances of the case and in law the Ld. Pr. CIT erred in rejecting the assessee's contention that he has no jurisdiction to initiate proceeding u/s 263 and set aside the assessment to the file of Ld. A.O. to re-examine the case since the belief has already been formed and income from long term capital gain amounting to Rs. 9,60,41,245/- is already assessed in the case of Manish Jainarayan Karwa HUF by ITO 5(1)- Indore vide assessment order dated 28.12.2019. 4.That on the facts and in the circumstances of the case and in law the Ld. Pr. CIT has erred in not providing justice to the assessee by not initiating proceeding u/s 263 in the case of Manish Jainarayan karwa HUF in who's hand Income from capital gain amounting to Rs. 9,60,41,245/- on sales of shares of Scan Steel Limited is assessed by the Income Tax Officer 5(1) Indore for which assessee has specifically made the request in writing which is reproduce by the Ld. Pr. CIT on page 4 First Para of his order, particularly when he is having charge of Pr. CIT-1 and Pr. CIT-2-Indore who's having jurisdiction of Manish Jainarayan Karwa HUF. 5.That on the facts and in the circumstances of the case and in law the Ld. Pr. CIT by passing order u's 263 directed to the Ld. A.O. to assess same income in the hands of two different assessee namely Manish Karwa Individual and Manish Jainarayan Karwa HUF's particularly when it is in his knowledge that the said income is already assessed in the hands of Manish Jainarayan Karwa HUF..”
The assessment of the assesse was completed u/s 144 r.w. section 147 on 27.11.2019 whereby the AO assessed total income of the assessee at Rs.97,56,510/- against the return of income of Rs.40,14,762/-. Thereafter ongoing through assessment record the Pr. CIT noted that certain points were not examined and investigated by the AO while completed the assessment. Therefore, the Pr. CIT was of the view that the order passed by the AO is erroneous so far as prejudicial to the interest of revenue for want of requisite inquiry on the part of the AO. Accordingly show cause notice dated 07.02.2020 u/s 263 of the Act was issued wherein Pr. CIT propose to set aside the assessment order on the issue of Manish Jai Narayan Karwa. Page 3 of 6 long term capital gain arising from purchase and sale of shares of M/s Scan Steels Ltd. amounting to Rs.9,60,41,245/- in assesse’s individual capacity. In reply to show cause notice assessee pointed out that long term capital gain arising from purchase and sale of these shares have already been assessed in the hands of Manish Jain Narayan Karwa (HUF) and therefore, the same cannot be assessed in the hands of the assesse. The Ld. CIT(A) was not impressed with the reply of the assesse and held that the AO has not conducted any inquiry on this issue of assessment of long term capital gain arising from sale of shares of M/s Scan Steels ltd. Consequently he set aside the order of the assessing officer and remanded the matter to the record of the AO for reexamination of the issue discussed in para no.3 of the impugned order.
Before the Tribunal the ld. AR of the assesse has reiterated the contention as raised before the Pr. CIT and submitted that the long term capital gain arising from sale of shares of M/s Scan Steels ltd. has been assessed by the AO in the case of Manish Jain Narayan Karwa(HUF) and the appeal against the assessment order passed in the case of Manish Jain Narayan Karwa (HUF) is pending before the Ld. CIT(A).
Thus, the Ld. AR has submitted that once the said income have already been assessed in the hands of the HUF then the revision order passed by the Pr. CIT would amount to double taxation of the same income. The Tribunal directed the assesse who is also Karta of the HUF to filed an undertaking that he shall not raise any ground/issue before the Ld. CIT(A) in the appeals against the assessment order passed in the case of HUF or shall withdraw the said ground if already raised. In response the Ld. AR of the assesse has filed undertaking of Mr. Manish Jain Narayan Karwa, Karta of Manish Jai Narayan Karwa (HUF) which reads as under:
Manish Jai Narayan Karwa. Page 4 of 6
Manish Jai Narayan Karwa. Page 5 of 6
On the other hand Ld. DR has submitted that if the assesse is avoided by his undertaking then appropriate order may be passed by this Tribunal.
We have considered the submission of both parties as well as relevant material on record. The assesse has now file the undertaking that he will
Manish Jai Narayan Karwa. Page 6 of 6 withdraw the ground no.3 before the Ld. CIT(A). Thus, ground no.3 raised before the Ld. CIT(A) is now undertaken by the assesse to be withdrawn and thereby the assesse shall not take a plea before the ld. CIT(A) that the capital gain if arising from sales of shares of M/s Scan Steels ltd. shall not belong to any other person or assessable to any other person. Accordingly the capital gain has already assessed in the hands of HUF and in view of undertaking filed by the Karta of Manish Jain Narayan Karwa (HUF) the impugned order passed by the Pr. CIT u/s 263 becomes infructuous and the same is set aside. The AO is directed to ensure that the assesse shall not raise this issue before the Ld. CIT(A) in appeal arising from assessment order in case of Manish Jain Narayan Karwa,(HUF). We may clarify that the HUF can raise any other grounds and issues in respect of assessment of long term capital gain except taking the plea that the said income belongs to some other person.
In the result, appeal of assessee is allowed.
Order pronounced in the open court on 27.07.2023.