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TMI Blog2016 (7) TMI 849X X X X Extracts X X X X X X X X Extracts X X X X ..... mstances of the case, the CIT (Appeal) erred in not following the principle of natural justice, without providing an opportunity to the appellant against the remand report of the AO which is bad in law and the order is liable to be squashed. 4. For these and other reasons which may be adduced at the time of hearing, the appellant prays before this Honorable Bench to cancel the taxability of capital gain on sale of agriculture land which is offered by the appellant due to ignorance of law. 5. The appellant craves, leaves to add, to alter, to amend and to delete any of the grounds during the course of hearings. " 3. Briefly facts of the case are that the assessee is an individual and filed return of income on 05/10/2012. Admittedly, there was no scrutiny assessment against the original return. Subsequently, notice u/s 148 of the Income-tax Act, 1961 ['the Act' for short] dated 18/12/2012 was issued requiring the assessee to file return of income. In response to the same, assessee submitted that that the return submitted may be treated as return filed in response to notice u/s 148 of the Act. Against the said return of income, assessment was completed by the Income-tax Officer [ITO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s failed to explain whether reinvestment was made during stipulated period. Even during appellate proceedings the appellant failed to produce any evidence to substantiate his claim. Therefore the claim of appellant u/s 54B which was disallowed by AG is justifiable and hence sustained. 11. It is seen that during assessment proceedings the appellant was unable to produce evidence that agricultural activity was carried out on the land acquired by him during financial year 2003-04 and sold during financial year 2007 relevant to AY under appeal. Now during appellate proceedings he claims that the land was outside limits of municipal authority and therefore it is not a capital asset u/s 2(14) of the Act. All these go to show that the appellant has no evidence which he can file in order to substantiate his claim either before the AO during assessment proceedings or during appellate proceedings. Therefore in view of the facts and circumstances of the case, it is held that since the appellant has failed to file any evidence to prove that agricultural activities were carried out on the said land, the action of AO is found to be in order and no interference is called for. The appellant's gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clause (14), of section 2 of the Income-tax Act, 1961 (43 of 1961), in the Gazette of India, Extraordinary, Part II, section 3, sub-section (ii), dated February 13, 1991, under the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. S.O. 9 1(E), dated February 8, 199 1, for specifying certain areas for the purposes of the said clauses and objections and suggestions were invited from the public within a period of 45 days from the date the copies of the Gazette of India containing such notification became available to the public; And whereas copies of the said Gazette were made available to the public on February 13, 1991 And whereas the objections and suggestions received from the public on the said draft notification have been considered by the Central Government Now, therefore, in exercise of the powers conferred by item (B) of clause (ii) of the proviso to sub-clause (c) of clause (1A) and item (b) of subclause (iii) of clause (14) of section 2 of the Income-tax Act, 1961 (43 of 1961), and in supersession of the notification of the Government of India in the erstwhile Ministry of Finance (Department of Revenue and Insurance) No. S.O. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Sun Engineering Works Pvt. Ltd.(1992)(198 ITR 297). The relevant part of the judgment is as under: "Indeed, in the reassessment proceedings for bringing to tax items which had escaped assessment, it would be open to an assessee to put forward claims for deduction of any expenditure in respect of that income or the non-taxability of the items at all. Keeping in view the object and purpose of the proceedings under section 147 of the Act which are for the benefit of the Revenue and not an assessee, an assessee cannot be permitted to convert the reassessment proceedings as his appeal or revision in disguise, and seek relief in respect of items earlier rejected or claim relief in respect of items not claimed in the original assessment proceedings unless relatable to 'escaped income', and reagitate the concluded matters. Even in cases where the claims of the assessee during the course of reassessment proceedings relating on the escaped assessment are accepted, still the allowance of such claims has to be limited to the extent to which they reduce the income to that originally assessed. The income for purposes of 'reassessment' cannot be reduced beyond the income or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fully justified in raising all such claims including the taxability of the income to the extent of reopening of assessment. Clarifying this aspect, we answer question No. 1 in the negative formulated hereinabove, i.e., in favour, of the Revenue, and against the assessee to the extent hereinabove. In so far as question No. 2 is concerned, having perused the judgment of the hon'ble Supreme Court in Sun Engineering Works P. Ltd. case [1992] 198 ITR 297 we have no hesitation to hold that in a reassessment proceedings which relate to the income which has escaped assessment where the assessee would be entitled to put forward the claims for deduction of any expenditure in respect of that income (that income which is referable to escaped income) and also about the taxability of items which were sought to be taxed in the reassessment proceedings only can be agitated and not to income which was not the subject-matter of reassessment. If the contention of the learned counsel Sri Kulkarni were to be accepted which is to the effect that income which has been assessed and accepted by the assessee can also be gone into in the reassessment proceedings, it would be leading to an incongruous ..... X X X X Extracts X X X X X X X X Extracts X X X X
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