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2020 (7) TMI 194 - AT - Income TaxValidity of reopening of assessment u/s 147 - jurisdiction of the AO the ITO Ward 2(2) - notice in the name of wrong person - non approval of the prescribed authority - Notice issued after four years - disallowance of construction cost of building and disallowing the benefit u/s 54 - HELD THAT:- AO in spite of having information in his possession, he has merely gone by the information received from DIT (I&CI) and shows non-application of mind on his part and failure on his part to carry out preliminary enquiry on receipt of such information and thus, the reasons so recorded and the very basis, that the assessee has not filed the return of income and therefore, the income on sale of property has escaped assessment, is vitiated in the instant case. On perusal of the original return filed by the assessee, we find that in the said return, he had computed and disclosed income under the head “long term capital gains” showing full value of consideration and after claiming deduction for cost of acquisition and improvement, has computed long term capital gains and has claimed exemption of equivalent amount on account of fresh investment. The said disclosure matches with the transactions and the full value of consideration (including the impugned transaction which is subject matter of 148 notice) which has been finally brought to tax by the Assessing officer and thus, shows that the impugned transaction which is subject matter of 148 notice was duly reflected and offered to tax in the original return so filed by the assessee and therefore, on this count as well, there is no escapement of income in respect of impugned transaction. Therefore, in our considered view, such action on the part of the Assessing Officer for assumption of jurisdiction U/s 147 cannot be accepted and the notice under section 148 is thus set-aside. Issuing of notice u/s 148 in the wrong name - We agree with the contention of the ld DR that it was only a typographical error in first name of the assessee though other particulars such as assessee’s surname, name of his father and address were correct and which has been corrected during the course of proceedings wherein the assessee has participated and thereafter, the reassessment order has been issued in correct name of the assessee. Therefore, on this account, the notice issued u/s 148 cannot be held as invalid in the eyes of law. Notice issued after four years - As noted that the notice u/s 148 was issued on 27.03.2015 after period of four years from the end of the relevant assessment year 2008-09 and such notice has admittedly been issued after seeking approval from Add.CIT, Range 2 Jaipur which is not in conformity with the provisions of section 151(1) wherein such notice issued after period of four years from the end of the relevant assessment year can be issued after seeking approval from concerned PCCIT/CCIT/PCIT/CIT and on this count as well, where the notice is issued without approval of the prescribed authority, the same is vitiated and cannot be sustained in the eyes of law. Notice issued under section 148 is vitiated on accounts of reasons stated supra and is hereby set-aside for want of valid jurisdiction and requisite approval. The ground of appeal is thus decided in favour of the assessee and against the Revenue. Disallowance of construction cost of building and disallowing the benefit u/s 54 - There is nothing on record in terms of buyers confirmation/affidavit or photographs of the property at the time of sale which can corroborate that what has been purchased/sold is not just a plot of land but a plot of land along with constructed house thereon which could then have been verified by the Assessing officer. - Since we have already quashed the notice u/s 148, no useful purpose would be served in setting aside the matter to the AO to allow the deduction under section 54F as the consequent proceedings stand quashed. The ground is disposed off accordingly.
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