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2015 (5) TMI 84 - PUNJAB & HARYANA HIGH COURT

2015 (5) TMI 84 - PUNJAB & HARYANA HIGH COURT - TMI - Rectification of mistake - whether the assessee could not point out any apparent mistake in the order passed under Section 264 which could be rectified and therefore, the revision petitions filed were rejected? - Held that:- The assessee has raised a legal objection in his communications dated 26.02.2004 and 27.02.2004 before respondent No.1, pertaining to the assessment years 1996-97 and 1997-98 wherein he has raised the objection of jurisdi .....

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lely on the ground that the return had not been filed. The objections having not been dealt with solely on the ground that return had not been filed inspite of being asked to, would, thus, violate the mandate of the Apex Court laid down in GKN Driveshafts (India) Ltd. Vs. Income Tax Officer & others [2002 (11) TMI 7 - SUPREME Court] wherein it has been held that the Assessing Officer is bound to dispose of the objections by passing a speaking order.

The petitioner had filed the revis .....

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e and which had escaped assessment would have to be seen at the time of issuing notice under Section 149 of the Act and not at the time of the conclusion of assessment proceedings and therefore, the reasoning arrived at by respondent No.2 is also without any justification. Also there was sufficient material before respondent No.1 regarding the amount of compensation received by the deceased-assessee which had been supplied by the LAC vide letter dated 08.03.2004 and therefore, the respondent No. .....

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ued by the banks regarding the interest element. The issue of jurisdiction for the 2 years pertaining to the years 1996-97 and 1997-98, as arising under Section 149(1)(b) also be specifically dealt with. - Decided in favour of assessee. - CWP No. 5282 of 2014, CWP No. 5285 of 2014, CWP No. 5309 of 2014, CWP No. 5311 of 2014, CWP No. 5313 of 2014 - Dated:- 10-4-2015 - S. J. Vazifdar, ACJ And G. S. Sandhawalia,JJ. For the Appellants : Ms Radhika Suri, Sr. Adv. & Ms Rajni Paul, Adv. For the Res .....

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re P8), vide which, the Commissioner of Income Tax, Karnal (for short, the 'CIT')-respondent No.2 rejected the objections raised in the revision petitions of the deceased assessee-Hira Lal Kapoor, predecessor-ininterest of the present petitioner. Challenge has also been raised to the order dated 12.09.2013 (Annexure P12), passed by respondent No.2, under Section 154 of the Income Tax Act, 1961 (for short, the 'Act'), whereby it was held that the assessee could not point out any a .....

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e petitioner, the land was situated out of the limits of the notified area and the compensation amount received was exempted from the Long Term Capital Gain (for short, the 'LTCG'). 4. A notice dated 11.03.2003, under Section 148 of the Act was issued by recording reasons that 15 acres of land had been acquired and the amount had been deposited in four bank accounts of Panipat and income tax returns had been filed for the assessment years 1994-95 and 1995-96 but no return for income had .....

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income. The deceased-assessee, vide objections dated 26.02.2004, through the present petitioner, filed objections wherein reliance was placed upon the judgment of the Apex Court in K.M.Sharma Vs. Income Tax Officer, Ward 13(7), New Delhi AIR 2002 SC 1715 on the ground that Section 149 of the Act prescribes a maximum period of 4 years for initiating reassessment proceedings and the quantum of tax had to be of more than ₹ 1 lac for that year. The assessment proceedings for the year 1996-97 t .....

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vided to him and the amount of compensation which had been paid to the assessee. The assessment was framed on 19.03.2004 wherein it was noticed that the present petitioner had attended the proceedings and the necessary objections had been filed on 26.02.2004 and the assessee had been asked to file returns by 09.01.2004 but no return had been filed. The reply of the assessee was held to be unwarranted, untenable, without any force and the ITO came to the conclusion that the assessee was not coope .....

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e Act, apart from charging of interest etc. 6. The revision petitions, filed under Section 264 of the Act were then filed before respondent No.2 by taking the plea that the objections had not been disposed of regarding the initiating of proceedings under Section 148 of the Act and the compensation originally charged was not liable to capital gain tax which had been wrongly charged on the enhanced compensation and was liable to be exempted apart from raising other objections. 7. Respondent No.2 o .....

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expired. Resultantly, the rectification application, under Section 154 of the Act, was filed on 28.02.2013 wherein copy of the objections dated 26.02.2004 were also attached and written submissions dated 05.04.2013, were also submitted, taking the plea that the land which had been acquired was not situated within the notified area and the notification was only issued on 06.01.1994 for Panipat and the enhanced amount of compensation was exempted from LTCG. Reliance was placed upon the judgment of .....

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g given to justify the action was that the demand raised in both the assessment orders for the years 1996-97 and 1997-98, on conclusion of reassessment proceedings was more than ₹ 1 lac and the contention was not maintainable. The completion of assessment without passing a separate order on the said objections were held to be justified. The fact that the land was located beyond the municipal limits was held not to be especially established by the assessee at the assessment stage or under t .....

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icer regarding the details of the land and when the award was passed, he was not justified in framing the assessment and imposing LTCG. Reference was, accordingly, made to the notification dated 06.01.1994 which had been attached in the written submissions before the respondent No.2, to contend that once the land was beyond the notified area and was agricultural land and not falling within the jurisdiction of Municipality, as provided under Section 2(14) of the Act, the authorities below were in .....

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e end of the relevant assessment year, unless the case falls under clause (b) [or clause (c)]; (b) if four years, but not more than six years, have elapsed from the end of the relevant assessment year unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to one lakh rupees or more for that year." 12. After hearing counsel for the parties, we are of the view that the assessee has raised a legal objection in his communications dated 26.02.2004 and .....

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rgeable to tax on the said amount was, thus, relevant factor which was sought to be agitated but never dealt with by respondent No.1, solely on the ground that the return had not been filed. The objections having not been dealt with solely on the ground that return had not been filed inspite of being asked to, would, thus, violate the mandate of the Apex Court laid down in GKN Driveshafts (India) Ltd. Vs. Income Tax Officer & others [2003] (259) ITR 19 (SC) wherein it has been held that the .....

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reasons, the noticee is entitled to file objections to issuance of notice and the Assessing Officer is bound to dispose of the same by passing a speaking order. In the instant case, as the reasons have been disclosed in these proceedings, the Assessing Officer has to dispose of the objections, if filed, by passing a speaking order, before proceeding with the assessment in respect of the abovesaid five assessment years." 13. The same error was made by respondent No.2 wherein also, the petit .....

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