TMI Blog2013 (8) TMI 742X X X X Extracts X X X X X X X X Extracts X X X X ..... THAN HIGH COURT]. - ITA No. 550/Agra/2012 - - - Dated:- 23-8-2013 - Shri Bhavnesh Saini And Shri A. L. Gehlot,JJ. For the Appellant : Shri Pankaj Gargh, Advocate For the Respondent : Shri Waseem Arshad, Sr. D.R. ORDER Per Bhavnesh Saini, J.M. This appeal by the assessee is directed against the order of ld. CIT(A), Ghaziabad dated 25.09.2012 for the assessment year 2005-06. 2. The appeal of the assessee was earlier dismissed in default vide order dated 27.05.2013. The assessee filed M.A. No. 23/Agra/2013 explaining the reasons for non-appearance on the date of hearing. M.A. of the assessee was allowed and the appeal was restored and refixed for hearing on merits. 3. The assessee has filed modified grounds of appeal. On ground No. 1 2, the assessee challenged the initiation of re-assessment proceedings u/s. 147 of the IT Act. On ground No. 2 to 6, the assessee challenged the confirmation of addition of Rs.2,31,60,000/-. The facts of the case are that the assessee is individual and derived income from Long-term Capital gains. She filed return of income on 20.12.2011 declaring her income of Rs.2,17,580/- in the office of Income-tax Officer, Aligarh. Noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied the provisions of section 50C of the IT Act and taken the full value of consideration as per order of ADM, Agra at Rs.8,51,10,000/- and computed the capital gain at Rs.8,40,53,957/-. The initiation of re-assessment proceedings as well as addition on merits were challenged before the ld. CIT(A). The assessee's written submission is incorporated in the appellate order in which the assessee submitted that the difference in the sale consideration of value assessed by the Stamp Authorities is under dispute before the Hon'ble High Court, therefore, cannot be a well reason to initiate the re-assessment proceedings u/s. 147 of the IT Act. The proceedings initiated u/s. 147 of the IT Act are wrong, illegal and unjustified and the assessment made by the AO is illegal and void. The assessee filed return of income showing sale consideration at Rs.36.00 lacs as per sale deed, which is correct. Valuation determined by ADM (Finance), Agra is determined in the case of buyers, therefore, it is not applicable in the case of assessee. The ld. CIT(A) held that the reasons recorded by the AO for reopening of assessment on the basis of statutory order of ADM, Agra is correct. Therefore, reopening of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt order is passed by the ITO, Aligarh on dated 29.12.2011 without recording reasons for reopening of assessment. He has submitted that the Assessing Officer at Agra who has recorded the reasons for reopening of assessment was not having any jurisdiction over the assessee and he did not pass any reassessment order whereas the Assessing Officer at Aligarh having jurisdiction over the assessee, who has passed re-assessment order dated 29.12.2011 has not recorded any reasons for reopening of assessment. Therefore, the reassessment order is bad in law. He has relied upon the order of ITAT, Agra Bench on identical facts in the case of Late Shri S.N. Bhargava vs. ITO in ITA No. 58/Agra/2009 dated 14.06.2013. Copy of the order is placed on record. He has relied upon the following decisions : (i). Decision of Hon'ble Delh High Court in the case of Signature Hotels P. Ltd. vs. ITO, 338 ITR 51. (ii). Decision of Hon'ble Rajasthan High Court in the case of CIT vs. Shree Rajasthan Syntex Ltd., 313 ITR 231. (iii). Decision of Hon'ble Rajasthan High Court in the case of CIT vs. Mahesh Gum and Oil Industries, 292 ITR 397. (iv). Decision of Hon'ble Delhi High Court in the case of CIT vs. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay assess or reassess such income, other than the income involving matters which are the subject matters of any appeal, reference or revision, which is chargeable to tax and has escaped assessment. Explanation 1.--Production before the Assessing Officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the foregoing proviso. Explanation 2.--For the purposes of this section, the following shall also be deemed to be cases where income chargeable to tax has escaped assessment, namely :-- (a) where no return of income has been furnished by the assessee although his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax ; (b) where a return of income has been furnished by the assessee but no assessment has been made and it is noticed by the Assessing Officer that the assessee has understated the income or has claimed excessive loss, deduction, allowance or relief in the return ; (ba) where th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 and 732/2005 respectively. The value of the property for the stamp duty purposes was originally taken at Rs.1,07,46,000/- on which stamp duty of Rs.10,74,600/-. Later on the basis of a complaint the ADM (Finance), Agra found that the contents mentioned in the sale deeds were not correct. He therefore, vide his order 29.07.2005 determined the value of the property under sale at Rs.8,51,10,000/- for stamp duty purposes and worked out short payment of stamp duty by Rs.74,36,400/- and also imposed penalty of Rs.18,59,100/- totaling to Rs.92,95,500/-. The assessee has paid Rs.92,95,500/-. As per the above information Smt. Manju Agarwal r/o 22, Shalimar Enclave, Kamla Nagar, Agra had sold her commercial property bearing Khasara No.1235- Area 0.386 Hectare i.e. 3860 sq Mtr. situated by the side of Agra Mathura Highway, Mauja Byepur, Agra to Shri Jagdish Arora r/o 50-60 Rajeev Nagar, Sheetala Road, Agra on 17.02.2005 (F.Y. 2004-05) through sale deed No. 731/2005. The value of the property for the stamp duty purposes was originally taken at Rs.36,00,000/- on which stamp duty was paid at Rs.3,60,000/- . Subsequently, ADM (F R) Agra vide order dated 29.07.2005 determined the value of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce u/s. 148, the assessee filed written reply that he is filing return of income with the Income-tax Officer 3(4), Mathura, hence, the notice u/s. 148 was wrong and incorrect. On 18.08.2003, again notice u/s. 142(1) with the same queries was issued and the assessee challenged the said notice also on the same reasons. Then this case was transferred to ITO, Mathura and, therefore, notice u/s. 142(1) was issued on 22.09.2003, 06.10.2003 and the assessee submitted that he has already filed return on 26.03.1999. The AO observed that no compliance has been made to the statutory notices and show cause notice was issued to explain why the receipt of Rs.5,92,809/- shown as capital receipts may not be taxed. During the discussion, the assessee challenged the proceedings u/s. 147 and subsequently notice u/s. 142(1) on the plea that notice u/s. 148 was without jurisdiction. In view of this position, therefore, a notice u/s. 148 was issued on 13.01.2004 by Income-tax Officer 3(4), Mathura with approval of Additional CIT, Range-3, Mathura and the same was served upon the assessee on the same date. Thereafter notice u/s. 142(1) was issued but the assessee did not file fresh return u/s. 148 and st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a did not apply his mind to the facts of the case and was having no reasons to believe that income chargeable to tax has escaped assessment. The AO at Mathura has also not examined any information, which was alleged to have been supplied by the DDIT(Inv.), Gurgaon. Therefore, re-assessment proceeding is bad in law. 7. On the other hand, the ld. DR produced the assessment record and stated that there is no order sheet available on this file pertaining to the assessee's case and from the record, filed the copy of notice u/s. 148 dated 28.03.2003 issued by ITO, Agra, reasons recorded for reopening of assessment and sanction granted by Addl. CIT, Range-I, Agra dated 28.03.2003. The ld. DR submitted that except the reasons recorded and copy of same filed on record, there is no other reason available on record for reopening of assessment. The ld. DR relied upon the orders of the authorities below and submitted that re- assessment proceedings are as per law and additions have correctly been made in the matter. 8. We have considered the rival submissions and the material available on record. The assessee in the paper book filed letter issued by ITO 3(4), Mathura dated 08.12.2003 at pag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... easons which were recorded by the ITO at Agra. No material is produced before us to counter the submissions of the ld. counsel for the assessee. The details noted in the assessment order and the appellate order would also clarify that initially the re-assessment proceedings were initiated at Agra and the Revenue department finding no jurisdiction over the assessee transferred the case to the ITO, Mathura and the ITO Mathura also without recording fresh reasons proceeded u/s. 148 against the assessee on the basis of same reasons recorded by the ITO, at Agra. When the assessee seriously contested the jurisdiction of the Assessing Officer at Mathura because he could not proceed on the basis of reasons recorded at Agra, the AO at Mathura issued fresh notice u/s. 148 on dated 13.01.2004 with the approval of Addl. CIT, Range-3, Mathura and the same was served upon the assessee. The Assessing Officer has nowhere recorded in the assessment order if any fresh reasons have been recorded at Mathura before issuing notice u/s. 148 on dated 13.01.2004. The AO merely recorded in the assessment order that fresh notice u/s. 148 was issued on 13.01.2004 with the approval of additional CIT, Range-3, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ember, 2001. Thus, it could not be held to be a fictitious person. The reassessment proceedings were not valid and were liable to be quashed." 8.1 Hon'ble Rajasthan High Court in the case of CIT vs. Shree Rajasthan Syntex Ltd., 313 ITR 231 held as under : "The assessee company had leased out certain plant and machinery to another company under agreements executed on different dates for a specified period of time. The depreciation claimed by the assessee on the capital assets leased out to the lessee under section 32 of the Income-tax Act, 1961 for the assessment years 1996-97, 1997-98 and 1998-99 was allowed by the Assessing Officer. The lessee had claimed revenue expenditure for the lease rent paid to the assessee but the Assessing Officer had allowed depreciation on the capital value of the plant and machinery. On noticing this fact, the Assessing Officer of the assessee initiated proceedings under section 147 of the Act and made an addition to the income of the assessee. The Commissioner (Appeals) upheld the addition made by the Assessing Officer for the assessment years 1996-97 and 1997-98 but deleted the addition made by the Assessing Officer for the assessment years 1998- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee. We accordingly set aside the orders of the authorities below and quash the reassessment proceedings u/s. 147 of the IT Act. In the result, all the additions would stand deleted. Therefore, there is no need to decide the additions on merits, which is wholly academic in nature. 10. In the result, the appeal of the assessee is allowed." The facts noted above are not in dispute. It is not in dispute that the ITO 4(2), Agra recorded the reasons for reopening of assessment on 08.03.2011, which is reproduced above. From the above it is clear that these reasons were recorded at Agra and notice u/s. 148 dated 08.03.2011 was also issued by the ITO 4(2), Agra (PB-1), in which the address of the assessee is given at 5/1 Gular Road, Aligarh. There are no other reasons available on record, if any, recorded by the ITO ward 1(2), Aligarh. It would mean that the Assessing Officer, who has passed the impugned reassessment order at Aligarh did not record any reasons at his own, but merely followed the same reasons which were recorded by the ITO 4(2), Agra. The details noted in the assessment order and filed in the paper book would also clarify that initially the re-assessment proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en the matter is subjudice before the Hon'ble High Court on admission of writ petition, there should not have been any satisfaction of the AO or to have reasons to belief that income chargeable to tax has escaped assessment on account of determination of higher value for the purpose of stamp duty by ADM, Agra. Further, no order has been passed by the ADM, Agra in the case of assessee, therefore, there should not have been any satisfaction on the part of the AO to initiate the re-assessment proceedings against the assessee at Agra. The ld. DR contended that the assessee was having two addresses at the time of initiation of re-assessment proceedings and when the reasons were recorded by the AO at Agra and on change of jurisdiction, the matter was transferred to the ITO, Aligarh, there is not illegality in initiating the re-assessment proceedings at Agra and there is no bar at the Assessing Officer, Aligarh to continue with the same proceedings. The contention of the ld. DR is not legally sustainable and is rejected because the provisions of section 127 of the IT Act would operate in such circumstances. Section 127 of the IT Act provides that Director General or Chief Commissioner or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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