Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR
Before: SHRI RAVISH SOOD & SHRI JAMLAPPA D BATTULL
आयकर अपील�य अ�धकरण �यायपीठ रायपुर म�। IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR (Through Virtual Court) BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER AND SHRI JAMLAPPA D BATTULL, ACCOUNTANT MEMBER आयकरअपीलसं. / ITA No. 273/RPR/2016 �नधा�रणवष� / Assessment Year : 2012-13 Ajay Kumar Agrawal, C/o. Ajay Kirana Stores, RajmahalParisar, Jagdalpur, Dist. Baster (C.G.)-494 001 PAN : AJGPA3386A .......अपीलाथ� / Appellant बनाम / V/s. The Income Tax Officer, Jagdalpur, Dist. Baster (C.G.) ……��यथ� / Respondent
Assessee by :Shri R.B. Doshi, AR Revenue by :Shri G.N Singh, DR
2 Ajay Kumar Agrawal Vs. ITO, Jagdalpur ITA No.273/RPR/2016
सुनवाई क� तार�ख / Date of Hearing :31.03.2022 घोषणा क� तार�ख / Date of Pronouncement : 09.05.2022 आदेश/ ORDER PER RAVISH SOOD, JM: The present appeal filed by the assessee is directed against the order passed by the CIT(Appeals)-1, Raipur, dated 01.03.2016, which in turn arises from the order passed by the A.O under Sec. 148 r.w.s. 143(3) of the Income Tax Act, 1961 (for short the ‘Act’) dated 30.04.2014 for assessment year 2012-13. Before us the assessee has assailed the impugned order on the following grounds of appeal:
“1. On the facts and circumstances of the case, Commissioner of Income Tax (Appeals) erred in disposing of appeal without considering written submission filed before him on 02.02.2016. 2. On the facts and in the circumstances of the case, in ex-parte order Commissioner of Income Tax (Appeals) erred in confirming action of Assessing Officer in initiating reassessment proceedings on the basis of reason recorded u/s.148(2) as reassessment proceedings was invalid, illegal and bad in law. 3. On the facts and in the circumstances of the case, in ex-parte order Commissioner of Income Tax (Appeals) erred in confirming action of Assessing Officer in not allowing claim of deduction u/s.54F of Rs.20,62,481/- by not considering written submission filed before him on 02.02.2016 and without considering the facts and circumstances of the case properly and judicially.
3 Ajay Kumar Agrawal Vs. ITO, Jagdalpur ITA No.273/RPR/2016
The appellant craves the right to add, amend or alter any ground or grounds of appeal at the time of hearing.”
Succinctly stated, information was received by the Assessing Officer from the DIT(Intelligence), Bhopal regarding properties sold by the assessee during the year under consideration. As per the information received there were differences in the sale consideration and the value adopted by the stamp valuation authority for registering the aforesaid sale transactions. On verifications by the AO, it transpired that the assessee had not filed his return of income for the year under consideration, i.e, AY 2012-13. On the basis of the aforesaid facts, viz. (i). that the assessee had failed to offer capital gain on sale of property for tax; and (ii). that due to the difference in the sale consideration and the value adopted by the stamp valuation authority for registration of the sale transactions the provisions of Section 50C of the Act would stand triggered, the Assessing Officer reopened the case of the assessee u/s.147 of the Act. Notice u/s.148 of the Act, dated 12.06.2013 was served upon the assessee. In compliance, the assessee filed a copy of his original return of income that was filed on
4 Ajay Kumar Agrawal Vs. ITO, Jagdalpur ITA No.273/RPR/2016
21.11.2012 for the year under consideration. Assessment was, thereafter, framed by the Assessing Officer vide his order passed u/s.148/143(3) of the Act, dated 30.04.2014, wherein the AO adopting the segment rate/stamp value pf the property in question as the sale consideration u/s.50C of the Act determined the LTCG at Rs.21,38,420/-.
Aggrieved, the assessee carried the mater in appeal before the CIT(Appeals). Apropos the assessment framed by the Assessing Officer, the same was assailed by the assessee both qua the validity of the jurisdiction that was assumed by the AO for initiating the re- assessment proceedings; as well as declining of his claim for deduction u/s. 54F of the Act on merits. However, the CIT(Appeals) not finding favour with the contentions advanced by the assessee upheld the view taken by the Assessing Officer and dismissed the appeal.
The assessee being aggrieved with the order of the CIT(Appeal) has carried the matter in appeal before us.
5 Ajay Kumar Agrawal Vs. ITO, Jagdalpur ITA No.273/RPR/2016
At the very outset of the hearing of the appeal, the Ld. Authorized Representative (for short ‘AR’) for the assessee assailed the validity of the jurisdiction that was assumed by the Assessing Officer for re-opening of the assessee’s case u/s. 147 of the Act. Elaborating on his aforesaid claim, it was submitted by the Ld. AR that as the case of the assessee was reopened by the Assessing Officer u/s. 147 of the Act without recording the “reasons to believe”, therefore, the impugned assessment order passed by him u/s. 148/143(3) of the Act, dated 30.04.2014 was not sustainable in the eyes of law and was liable to be struck down. In order to buttress his aforesaid claim the Ld. AR had taken us through the orders of the lower authorities. It was submitted by the Ld. AR that the assessee appellant had vide his letter dated 04.02.2022 applied with the AO for a copy of the “reasons to believe” which, however, had not been made available to him till date. Backed by the aforesaid facts, it was submitted by the Ld. AR that as the assessee’s case had been reopened without recording of the “reasons to believe”, therefore, the jurisdiction assumed by the Assessing Officer was devoid and bereft of any force of law. In order to
6 Ajay Kumar Agrawal Vs. ITO, Jagdalpur ITA No.273/RPR/2016
buttress his aforesaid claim the Ld. AR had taken us through the relevant extract of the “order sheet” of the Assessing Officer wherein, there was no whisper of recording of any “reasons to believe” prior to issuance of the notice u/s.148 of the Act. On the basis of his aforesaid contentions, it was vehemently submitted by the Ld. AR that as the Assessing Officer had blatantly failed to comply with the statutory obligation of recording of the “reasons to believe” prior to issuance of notice u/s.148 of the Act, therefore, the very assumption of jurisdiction by him for reopening the case of the assessee and framing the consequential assessment vide his impugned order passed u/s.148/143(3) of the Act, dated 30.04.2014 was not sustainable in the eyes of law and was liable to be quashed on the said count itself. In support of his aforesaid contentions the Ld. AR had relied on the following judicial pronouncements:
Abdul Majid Vs. CIT (2006) 281 ITR 366 (All.) 2. CIT Vs. Baldwin Boys High School (2014) 364 ITR 637(Karn.) 3. CIT Vs. Shiv Ratan Soni (2005) 279 ITR 261 ( Raj.) 4. Baldev Singh Giani Vs. CIT (2001) 248 ITR 266 (P & H.)
7 Ajay Kumar Agrawal Vs. ITO, Jagdalpur ITA No.273/RPR/2016
Per contra, the Ld. Departmental Representative (for short ‘DR’) relied on the orders of the lower authorities.
We have heard the Ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by the Ld. AR to drive home his aforesaid contentions. As the Ld. AR has assailed the validity of jurisdiction assumed by the Assessing Officer for reopening the case of the assessee and passing of the order u/s.148/143(3) of the Act, dated 30.04.2014, therefore, we shall first deal with the same. In order to verify the factual position, i.e., the veracity of the claim of the assessee that the Assessing Officer had initiated the reassessment proceedings u/s.147 of the Act without recording the “reasons to believe”, we had in the course of the hearing of the appeal, i.e., on 04.02.2022 directed Mr. G.N Singh, Ld. DR to produce the assessment records in the course of next hearing of the appeal. In compliance to the aforesaid directions, the assessment records of the assessee were placed before us in the course of hearing of the appeal on 31.03.2022. On a perusal
8 Ajay Kumar Agrawal Vs. ITO, Jagdalpur ITA No.273/RPR/2016
of the assessment records we have come across the Notice u/s.148 of the Act, dated 12.06.2013 issued by the AO, which for the sake of clarity is reproduced as under:
9 Ajay Kumar Agrawal Vs. ITO, Jagdalpur ITA No.273/RPR/2016
10 Ajay Kumar Agrawal Vs. ITO, Jagdalpur ITA No.273/RPR/2016
However, neither the “reasons to believe” were found placed in the assessment record, nor any reference of the same having been recorded prior to issuance of the Notice u/s 148, dated 12.06.2013 is found mentioned in the “order sheet”. On a perusal of the records, we find that the assessee vide his letter dated 12.02.2016 had, inter alia, applied to the Assessing Officer for a certified copy of the “reasons to believe” u/s. 148(2) of the Act. Also, we find that the Ld. DR pursuant to the direction of the Tribunal for producing the assessment records, had vide his letter dated 28.03.2022 called upon the Addl. CIT Range- Raipur/ITO-Jagdalpur to provide clarification as regards the claim of the assessee that the “reasons to believe” on the basis of which the case of the assessee was reopened u/s.148 were never supplied to him. In reply to the aforesaid letter dated 28.03.2022 (supra), the ITO, Ward-Jagdalpur, Chhattisgarh vide his letter dated 29.03.2022 marked as reference F. No. ITO/JDP-ITAT/2021-22, had, inter alia, stated, that the reasons for re-opening were not available on the assessment records. For the sake of clarity the relevant observations of the
11 Ajay Kumar Agrawal Vs. ITO, Jagdalpur ITA No.273/RPR/2016
Assessing Officer in his letter dated 29.03.2022 (supra) are culled out as under:
“1. Assessee never raised any objection during assessment as it appears from record. 2. Though no reasons were asked by the assessee for reopening during assessment proceedings, however, a letter has been received by this office on 12.02.2016, probably when assessee went into first appeal or thereafter. 3. Reasons for re-opening are not separately placed on record as evident after going through the folder.” (emphasis supplied by us)
On a perusal of the aforesaid facts, we are of the considered view that the Assessing Officer had issued Notice u/s. 148 of the Act, dated 12.06.2013 without recording the “reasons to believe” on the basis of which the case of the assessee was reopened by him. In our considered view, the failure on the part of the Assessing Officer to record “reasons to believe” prior to issuance of notice u/s.148, dated 12.06.2013 would go to the very root of the validity of jurisdiction assumed by him u/s. 147 of the Act. Our aforesaid conviction can safely be gathered from a perusal of the sub-section (2) of Section 148 of the Act, which reads as under: “(2) The Assessing Officer shall, before issuing any notice under this section, record his reasons for doing so.”
12 Ajay Kumar Agrawal Vs. ITO, Jagdalpur ITA No.273/RPR/2016
Our aforesaid view, i.e., the absence of recording of “reasons to believe” by the Assessing Officer prior to issuance of Notice u/s. 148 would render the jurisdiction assumed by him for reopening the case of the assessee u/s.147 of the Act and resultantly the consequential assessment so framed as invalid, is supported by the following judicial pronouncements:
(A) Abdul Majid Vs. CIT (2006) 281 ITR 366 (All.) In the aforesaid case, it was observed by the Hon’ble High Court that recourse to proceedings under Section 147 of the Act, i.e, for reassessment, can be assumed validly on fulfillment of certain conditions, namely, there should be reasonable belief that the income has escaped assessment; “reasons have to be recorded in writing”; and valid notice has to be issued under Section 148 of the Act before making reassessment. It was observed by the Hon’ble High Court, that if any of the condition mentioned above is missing, then, the proceeding would be invalid and shall stand vitiated.
(B) CIT Vs. Baldwin Boys High School (2014) 364 ITR 637 (Karn.)
13 Ajay Kumar Agrawal Vs. ITO, Jagdalpur ITA No.273/RPR/2016
In the aforesaid case, it was observed by the Hon’ble High Court that the Assessing Officer is obliged to record reasons before issuing notice under Section 148 of the Act. Observing, that the Assessing Officer had issued notice u/s.148 of the Act even before reasons were recorded, the Hon’ble High Court upheld the order of the Tribunal wherein assessment had been quashed.
(C) CIT Vs. Shiv Ratan Soni (2005) 279 ITR 261 ( Raj.) :
In the aforesaid case, it was observed by the Hon’ble High Court that satisfaction of the Assessing Officer for formation of belief that income has escaped assessment is a condition precedent before assuming jurisdiction by him. Observing, that the satisfaction about escapement of income from assessment to tax before issuance of notice is to be reflected from reasons recorded by the Assessing Officer, it was therein held that if the reasons are not recorded, there is no valid assumption of jurisdiction and subsequent proceedings are vitiated.
(D) Baldev Singh Giani Vs. CIT (2001) 248 ITR 266 (P & H.)
14 Ajay Kumar Agrawal Vs. ITO, Jagdalpur ITA No.273/RPR/2016
In the aforesaid case, it was observed by the Hon’ble High Court that the requirement of recording of “reasons to believe” enshrined u/s. 148(1) of the Income Tax Act, 1961 was mandatory on the part of the Assessing Officer. Observing, that the assessment record did not contain reasons recorded by the Assessing Officer, the Hon’ble High Court held that the notice of reassessment proceedings had to be treated as nullity.
On the basis of our aforesaid deliberations, we are of the considered view, that as the Assessing Officer prior to issuance of Notice u/s.148, dated 12.06.2013 had failed to record “reasons to believe”, therefore, he had wrongly assumed jurisdiction and framed the impugned assessment vide his order passed u/s.148/143(3) of the Act, dated 30.04.2014. We, thus, not being able to persuade ourselves to uphold the order passed by the Assessing Officer u/s.148/143(3) of the Act, dated 30.04.2014 quash the same for want of jurisdiction.
As we have quashed the assessment order passed by the Assessing Officer u/s. 148/143(3) of the Act, dated 30.04.2014 for
15 Ajay Kumar Agrawal Vs. ITO, Jagdalpur ITA No.273/RPR/2016
want of valid assumption of jurisdiction by him, therefore, we refrain from adverting to and therein adjudicating upon the other contentions advanced by the Ld. AR, i.e, both as regards the validity of the impugned reassessment proceedings and the merits of the case, which, thus, are left open.
In the result, appeal of the assessee is allowed in terms of our aforesaid observations. Order pronounced in open court on 09th day of May, 2022.
Sd/- Sd/- JAMLAPPA D BATTULL RAVISH SOOD (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) रायपुर/ RAIPUR ; �दनांक / Dated : 09th May, 2022 SB आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant. 2. ��यथ� / The Respondent. 3. The CIT(Appeals)-1, Raipur (C.G) 4. The Pr. CIT-1, Raipur (C.G) 5. �वभागीय ��त�न�ध,आयकर अपील�य अ�धकरण,रायपुर ब�च, रायपुर / DR, ITAT, Raipur Bench, Raipur. गाड�फ़ाइल / Guard File. 6. आदेशानुसार / BY ORDER, // True Copy // �नजी स�चव / Private Secretary आयकर अपील�य अ�धकरण, रायपुर / ITAT, Raipur.
16 Ajay Kumar Agrawal Vs. ITO, Jagdalpur ITA No.273/RPR/2016
Date 1 Draft dictated on 01.04.2022 Sr.PS/PS 2 Draft placed before author 05.04.2022 Sr.PS/PS 3 Draft proposed and placed JM/AM before the second Member 4 Draft discussed/approved by AM/JM second Member 5 Approved draft comes to the Sr. Sr.PS/PS PS/PS 6 Kept for pronouncement on Sr.PS/PS 7 Date of uploading of order Sr.PS/PS 8 File sent to Bench Clerk Sr.PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order