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Income Tax Appellate Tribunal, DELHI BENCH “SMC”: NEW DELHI
Before: SHRI KUL BHARAT & DR. B.R.R. KUMAR
O R D E R PER KUL BHARAT, JM:
This appeal, by the assessee, is directed against the order of the learned Commissioner of Income-tax (Appeals), Natioinal Faceless Appeal Centre (NFAC), Delhi, dated 30.07.2022, pertaining to the assessment year 2014-15. The assessee has raised following grounds of appeal:
“1. That the notice issued U/s 148 and re-assessment proceeding initiated U/s 147 are bad in law, without jurisdiction and barred by time limitation. The NFAC has erred in upholding the same.
2. That the NFAC has erred in dismissing the appeal in exparty manner and also erred in upholding the reassessment order passed U/s 147/14A~by the assessing 1 officer, which is illegal, bad in law and without ] jurisdiction
3. That, the NFAC has erred in not passing appellant order on the deceased person, which is illegal, bad in law and without jurisdiction
4. 3. That, the NFAC has erred in not deciding all the Ground of appeal raised and just decided the appeal of merits, which is illegal, bad in law and unjustified.
5. That, NAFC has failed to appreciate that the notice U/s 148 was issued and the re-assessment proceeding was conducted in the name and PAN No. of the assessee and the re-assessment was passed in the capacity of the Legal Heir of Shri. Ashok Kumar Jain, which is illegal, bad in law and without jurisdiction
6. That, NAFC has failed to appreciate that the no reason to belief was recorded, before the assumption of jurisdiction U/s 147/148 of the Act, hence, the same whole proceedings is illegal, bad in law and without jurisdiction
7. That, no proper approval as per the provision of section 151 of the Income Tax Act, 1961 has been taken and given by the Principle C1T, Dehradun, or if any approval is given, than the same is mechanical in nature and without application of mind, hence, the proceedings are bad in law and illegal. The NFAC has upholding the same
8. That, the NFAC has erred in upholding the action of the assessing officer, in completing the re-assessment on Income of Rs.38,33,369.00against the Return of Income declaring income of NIL. The additions/disallowances made at Rs.35,72,539.00on account of Long term capital gain are illegal, unjust, highly excessive
9. That, the NFAC and Assessing officer has erred in making the addition/disallowance of Rs.35,72,539.00on account of Long term Capital Gain which is highly arbitrary, unjustified and against the facts of the case.
10. That, the assessing officer as well as NFAC has erred in taking the fair market value as per section 50C of the 10) ACT, without appreciating, that, the actual market value not morethan at Rs.50,66,667.00, hence, the provision of section 50C is not applicable to the ease of assessee
11. That, the assessing officer as well as NFAC has erred in disallowing, the deduction of section 54F at Rs. 10,00,000.00 without appreciating the fact, that, the 11) assessee has constructed residential house. The disallowance of deduction U/s 54F is purely based on surmises and conjecture without appreciating the facts and circumstances of the case
12. That, the assessing officer as well as NFAC has erred in 12) not allowing the Development Expenses of j Rs.25,68,399.00 incurred, during the previous years, which have been capitalized by the assessee appellant, without appreciating the actual facts and circumstances of the case.
13. That, the assessing officer as well as NFAC has failed to appreciate, that, if there is any legitimate claim of the assessee under the provisions of ACT, than the assessing officer is bound to allow the benefit of the same to the assessee.
14. The NFAC has failed to appreciate the documentary evidences filed by the assessee and made the addition/ disallowances without any basis and reasons, which is highly presumptive, arbitrary, excessive and unjust
15. The NFAC has erred in making the several observations, in the assessment orders, which are purely based on presumption, surmises and conjectures and against the material available on record
16. That the explanation given and evidence produced, material placed and available on record have not been properly considered and judicially interpreted and the same do not justify the additions/ allowances made.
The Appellant craves leave to add, amend, alter and or modify the grounds of appeal of the said appeal.”
Facts, in brief, are that in this case the assessment was reopened u/s 147 of the Income-tax Act, 1961, hereinafter referred to as the “Act” and a notice u/s 148 of the Act was issued on 29.03.2018. In response to the notice the assessee filed return of income. However, thereafter there was no compliance on behalf of the assessee in respect of statutory notices. Therefore, the AO framed the assessment u/s 144 read with Section 147 of the Act, making addition of Rs. 35,72,539/- on account of long term capital gain. Aggrieved against this the assessee preferred appeal before the learned CIT(A). Before the learned CIT(A) also there was no representation on behalf of the assessee, therefore, the appeal of the assessee was dismissed. Now the assessee is in appeal before this Tribunal.
The present appeal is being prosecuted on behalf of the legal heir of Shri Ashok Kumar Jain.
Ground nos. 1 to 7 are against the legality of assessment order. Learned counsel of the assessee at the outset submitted that the initiation of proceedings in the present appeal is bad in law as the notice u/s 148 of the Act was issued on 29.03.2018 addressing Smt. Raj Rani in individual capacity. In response thereof Smt. Raj Rani filed her return of income in individual capacity. The assessment was framed in the capacity of legal heir. He, therefore, contended that the initiation
itself is bad in law and, therefore subsequent proceedings would not survive, even if the action is in accordance with law.
On the other hand, learned DR supported the orders of the authorities below.
However, he fairly conceded that the notice u/s 148 dated 29.03.2018, which also finds mention in the assessment order, is addressed to Smt. Raj Rani w/o Shri Ashok Kumar Jain. Learned DR submitted that it is a typographical error which should not vitiate the entire proceedings.
We have heard learned representatives of the parties and perused the material available on record. There is no dispute with regard to the fact that the notice u/s 148 was issued in individual capacity and the assessment was framed in the capacity of legal heir. Furthermore, interestingly, the AO in the reasons recorded has categorically mentioned the assessee as “Smt. Raj Rani L/H Late Sh.
Ashok Kumar Jain”. However, in the notice u/s 148 the same AO writes “Raj Rani w/o Ashok Kumar Jain” and the assessee in response to such notice filed her return of income in the individual capacity. This fact is not rebutted by the Revenue.
Since the notice does not meet the requirement of law, therefore, we are of the considered view that the re-opening of assessment is bad in law and the impugned assessment made by the AO cannot be sustained. Accordingly, on facts and circumstances of the present case, we are constrained to quash the impugned assessment.
Since the assessment has been quashed the remaining grounds qua merit of addition have become academic nature only, same are not being adjudicated.
Consequently, appeal of the assessee is partly allowed. Before parting it is clarified that we have quashed the assessment proceedings on the ground that notice u/s 148 of the Act, dated 29.03.2018, is bad in law. The Revenue would be at liberty to issue a fresh notice against the legal heirs of assessee and pass assessment afresh if permitted under law.
In the result, assessee’s appeal stands partly allowed.
Order pronounced in open court on 27.09.2023.