2023 (3) TMI 759 - AT - Income Tax

Validity of reopening of assessment u/s 147 - non-serving of notice u/s. 148 - HELD THAT:- We find no merits in the arguments of the assessee for the simple reason that as per documents available with Assessing Officer, the notice u/s. 148 dated 31.03.2013 has been dispatched on the very same day and also served on the assessee within the reasonable time, which is evident from the Postal Department acknowledgment. Therefore, we reject the ground raised by the assessee on non-serving of notice within reasonable time.

No fresh tangible material - We find that from the reasons recorded for re-opening of assessment, there is a live link to form reasonable belief of escapement of income and there is new material in the possession of the AO and thus, the arguments of the Ld. Counsel for the assessee that, there is no fresh tangible material is devoid of merits and thus, we reject argument of the assessee.

Satisfaction from the Ld. CIT - We find that the Ld. CIT while granting approval for issue of notice u/s. 148 of the Act, categorically observed ‘I am satisfied and it is a fit case for issue of notice u/s. 148’, on the basis of reasons submitted by the AO and in our considered view, said satisfaction constitute a valid satisfaction as required under law and thus, we reject argument of the assessee.

Thus we reject arguments of the assessee on the issue of validity of assessment and thus, we uphold the findings recorded by the Ld. CIT(A) to uphold re-opening and consequent re-assessment order.

Additions made on account of computation of capital gain by adopting full value consideration in terms of provisions of section 50C(1) - Although, the assessee has requested to refer the matter to DVO in terms of provisions of section 50C(2) of the Act, but the AO has proceeded with computation of capital gains and adopted full value of consideration in terms of provisions of section 50C(1) of the Act. In our considered view, once the assessee objects for adopting full value of consideration and requests for reference to DVO, it is the duty of the AO to refer the matter to the DVO and find out correct fair market value of the property as on the date of sale.

Since, the AO has failed to comply with the requirements of law, we are of the considered view that the issue needs to go back to the file of the AO and thus, we set aside the issue to the file of the Assessing Officer and direct the AO to reconsider the issue of computation of capital gains and also refer the matter to the DVO to determine correct fair market value of the property as on the date of sale, and decide the issue in accordance with law.

Appeal filed by the assessee is partly allowed for statistical purposes.