TMI Blog2019 (8) TMI 767X X X X Extracts X X X X X X X X Extracts X X X X ..... to have jurisdiction over the assessee. So far as the argument of the ld. DR that the assessee has participated in the assessment proceedings and, therefore, has apparently given his consent to the transfer of jurisdiction to the AO of Gurgaon is concerned, the same, in our opinion, would not confer jurisdiction upon the AO who otherwise was not the AO of the assessee. So far as the argument of the Revenue that the assessee has not raised any objection to the jurisdiction within the prescribed time period is concerned, we find merit in the argument of the ld. counsel that the issue to lack of jurisdiction can be raised at any stage in a case where the return has been filed in response to notice u/s 148/158BC/153A. Hon'ble Bombay High Court in the case of Mavany Brothers vs. CIT [ 2015 (10) TMI 1093 - BOMBAY HIGH COURT] while adjudicating an identical issue has held that Reason to believe that income chargeable to tax has escaped assessment is a jurisdictional fact and only on its satisfaction does the AO acquire jurisdiction to issue notice. Thus this lack of satisfaction of jurisdictional fact can never confer jurisdiction and an objection to it can be raised at any time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as the assessee has not shown any capital gain tax in his income-tax return, the Assessing Officer reopened the assessment by recording reasons and issued notice u/s 148 of the IT Act on 25th March, 2015. The notice was duly served on the assessee. In compliance of the said notice u/s 148, the assessee submitted that the return filed on 6th February, 2013, vide acknowledgement No.5697256900603 should be considered as return filed in response to notice u/s 148. The assessee also requested for copy of reasons for reopening of the case u/s 148 of the IT Act which was provided to the assessee. 4. The Assessing Officer issued notice u/s 142(1) along with questionnaire requiring the assessee to submit the following information:- I. Furnish the copy of return, computation of income, balance sheet and profit and loss account of the relevant year and last two years. II. Furnish details of properties/assets along with the sale/purchase made during the year as under: (a) Sale consideration (b) Mode of receipt of sale consideration (c) Destination of sale consideration. In case any deduction u/s 54, 54B, 54EC, 54F has been c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... il Satija and Shri Dharmendra Bhandari, Directors of Bestech India Pvt. Ltd., nominees of the company for the purpose of representing before the Government Authorities to get the change of land use, sanction, LOI and permission for construction/development of the housing project on the said land for building, carrying out construction and other legal requirements. The owners through M/s Bestech India Pvt. Ltd., made an application on 04.01.2007 to the Government of Haryana to grant permission to construct a residential project over the said land. The Government of Haryana through the Director, Town Country Planning has issued LOI and consequently the licence on 31.05.2008 to construct the Group housing complex on the said land. The licence was granted in the names of the land owners in collaboration with Bestech India Pvt. Ltd. subject to the condition that the licensee will not give any advertisement for the sale of space before the approval of layout/building plan. On going through the copy of account of the assessee with M/s Bestech India Pvt. Ltd., it is noticed that he has received a total payment of ₹ 15,61,76,676/-. Subsequently, the assessee along w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of appreciation and risk if there is depression in the rates of apartments depending upon market conditions). The owners including the assessee have taken a series of activities like: Entering into collaboration with a reputed builder. Putting the sale consideration in terms of 35% share in the space. Getting licence in their names for CLU to construct/develop a residential housing project on the said land. Intent of maximization of profit by intention of selling the space as units. By putting various conditions in the collaboration agreement upon the developer for speedy / efficient execution of the project to get the constructed space. The developer was used due to his brand, experience, expertise (as mentioned on page 2 of the collaboration agreement). The developer was used for assisting the owners to get the licence from the Government, construction of project at the cost of the developer All three factors have helped the assessee / owners to maximize their sale proceeds. Therefore, on the composite analysis of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on account of transfer of land, vide sale deed dated 28th February, 2011 are taxable as longterm capital gain. He, however, rejected the arguments advanced by the assessee challenging the validity of reopening as well as the validity of jurisdiction by the Assessing Officer. 10. So far as the issue relating to validity of jurisdiction is concerned, it was argued before the CIT(A) that the assessee was filing his return with the ITO, Ward 40(3), New Delhi and has never requested for transfer of jurisdiction to Gurgaon. A copy of the submissions of the assessee was forwarded to the Assessing Officer. The Assessing Officer, vide his report dated 12th September, 2016, submitted that the assessee himself had mentioned the address in the ITR as Village-Nakhraula, Tehsil Manesar, Gurgaon. The Assessing Officer reported that this address falls under the territorial jurisdiction of Gurgaon and, as such, the Assessing Officer, Gurgaon was vested with the jurisdiction of the assessee as per section 124 of the IT Act. The Assessing Officer further submitted that the assessee had not raised any objection against the jurisdiction during the assessment proceedings. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... information received by the Assessing Officer was specific and precise and there was no ambiguity about the information received. Further, the Assessing Officer had applied his mind to the information received by verifying the assessment records and observing that no income from sale transaction had been shown by the assessee in the return of income filed by him. Relying on various decisions, the ld.CIT(A) upheld the action of the Assessing Officer in reopening of the assessment. He also rejected the ground raised by the assessee challenging the completion of the assessment u/s 143(3) without service of notice u/s 148 and without providing sufficient opportunity to the assessee. So far as the addition on merit is concerned, the ld.CIT(A) upheld the addition made by the Assessing Officer. He, however, treated the entire sale consideration as long-term capital gain after considering the cost of acquisition as computed by the Assessing Officer @ ₹ 20,000/- per acre which comes to ₹ 2,02,786/-. The ld.CIT(A) directed that the long-term capital gain be adopted at ₹ 16,10,41,866/-. The ld.CIT(A) also denied the benefit of deduction u/s 54B and 54F on the ground that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s culmination of the same agreement. 5. The Ld. CIT (A) has erred on facts and in law in holding that the land transferred was a capital asset and not an agriculture land ignoring the fact that it was an ancestral land on which agricultural activities were done by the appellant/ancestors for ages, it was shown as agriculture land in revenue records and stamp duty was charged on the transfer of this land treating it to be an agriculture land. 6. Without prejudice to the other grounds of appeal the Ld. CIT (A) has erred on facts and in law in assuming value of the land at the rate of ₹ 25,000/- per acre as on 01.04.1981 as taken by the AO. 7. Without prejudice to the other grounds of appeal the Ld. CIT (A) has erred on facts and in law in denying the benefit of deduction u/s 54B and 54F of the Income Tax Act, 1961 on account of investments made in the agricultural land/residential house eligible for the aforesaid deductions. 8. The appellant craves for liberty to add fresh ground(s) of appeal and also to amend, alter and modify any of the grounds of appeal. 14. The ld. counsel for the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tter dated 14th March, 2013, copy of which is placed at page 135 of the paper book, submitted that the ITO (Intelligence) sought to verify from the assessee about the transaction of sale of immovable property. He was intimated, vide letter dated 15th March, 2013 that the assessee had filed income-tax return for the concerned year. Referring to page 141 and 142 of the paper book, he submitted that the Assessing Officer, Gurgaon, was intimated in response to notice u/s 148 issued by him on 25th March, 2015 that the original return was filed on 6th March, 2013 vide acknowledgement No.569725690060313. He submitted that the PAN of the assessee was available with the Assessing Officer of Gurgaon who could have verified as to the place where PAN is linked. He submitted that as per the information received under RTI, the PAN of the assessee was transferred on 22nd April, 2016. Similarly, in the case of Shri Devender Kumar, it was transferred on 11th September, 2017 and in case of Shri Parvinder Kumar, it was transferred on 19th March, 2015. However, the notice u/s 148 in all the three cases were issued on 25th March, 2015, 2nd September, 2013 and 2nd Septe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ough the assessee is not legally required to do so, the assumption of jurisdiction by the Assessing Officer without taking recourse to section 124(2) and, thereafter, issuance of notice u/s 148 is bad in law. 19. So far as the allegation of the Revenue that the assessee has not raised an objection u/s 124(3) is concerned, he submitted that the said section is applicable for voluntary returns u/s 139(1) or u/s 115WD filed by the assessee and section 124(3)(b) is applicable when such return is not filed by the assessee. It is not applicable in respect of the return to be filed in response to notice u/s 148. For the above proposition, he relied on the decision of the Hon'ble Bombay High Court in the case of CIT vs. Lalitkumar Bardia (2017) 84 taxmann.com 213 (Bombay). In any case, he submitted that Shri Attar Singh has objected the above jurisdiction vide his letter dated 30.11.2015, copy placed at page 146 of the paper book and which was disposed of by the Assessing Officer vide his order dated 30.11.2015, copy of which is placed at pages 148 and 149 of the paper book. So far as the allegation of the CIT(A) that the assessee has not raised objection about the jur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20. The ld. counsel vehemently argued that notice u/s 148 can be issued by the Assessing Officer having jurisdiction over the assessee who is regularly assessed to tax. For the above proposition, he relied on the following decisions:- (i) Lt. Col. Paramjit Singh v. CIT (1996) 89 taxman 536 (P H); (ii) Dushyant Kumar Jain vs. DCIT (2016) 66 taxmann.com 126 (Delhi); (iii) M.I. Builders (P) Ltd. vs. ITO (2008) 115 ITD 419 (Lucknow); and (iv) Jindal Photo Films Ltd. vs. DCIT (1998) 234 ITR 170 (Del). 21. Referring to the various decisions relied on by the CIT(A) he submitted that all those decisions are distinguishable and not applicable to the facts of the present case. He submitted that on the facts of the present case the decision of the Hon'ble Punjab Haryana High Court in the case of Lt. Col. Paramjit Singh (supra) which is the jurisdictional High Court will be applicable. In this case, the facts were that the assessee s original assessment was completed at Pune. Thereafter, he shifted to Jalandhar, but his assessment records were not transferred to the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th April, 2015 which was received by the assessee on 23rd April, 2015 and, therefore, the notice u/s 148 dated 16th April, 2015 is illegal is concerned, he submitted that the assessee himself has admitted that he had received notice u/s 148 sent at Gurgaon address. This establishes the fact that he was residing at the address provided in the notices u/s 148 issued by the Assessing Officer and, therefore, the claim of the assessee that he was not the resident of Gurgaon, but, Delhi alone is without any basis. He submitted that the assessee was very much a resident of Gurgaon not only on the basis of address shown by him in the ITR, but, he has duly received the notice sent by the Assessing Officer at the Gurgaon address. Similarly, there is no illegality caused by the Assessing Officer by issuing the second notice and, at the most, the second notice may be treated as infructuous. Referring to the provisions of section 124(3), he submitted that no person can challenge the jurisdiction of the Assessing Officer after one month from the date of service of notice u/s 143(2) and 142(1). Further, the assessee, during the course of assessment proceedings regularly appeared before the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected to proceedings for reopening so long as the ingredients of section 147 are fulfilled. An intimation u/s 143(1)(a) cannot be treated to be an order of assessment. There being no assessment u/s 143(1)(a), the question of change of opinion does not arise. The ld. DR, apart from supporting the order of the CIT(A) and the various decisions relied by him therein also relied on the following decisions:- i) Raymonds Woollen Mills Ltd. vs. ITO Ors., 236 ITR 34; ii) Vasudev Fatandas Vaswani v. ITO,, 2018-TIOL-2305-HC-AHM-IT; iii) PCIT v. Paramount Communication (P) Ltd., 2017-TIOL-253-SC-IT; iv) PCIT vs. Paramount Communication (P) Ltd. (2017) 79 taxmann.com 409 (Delhi), 392 ITR 444 (Delhi); v) Krishna Developers Co. v. DCIT (2018) 91 taxmann.com 306 (SC); vi) Vasudev Fatandas Vaswani v. ITO (2018-TIOL-2305-HC-AHM-IT); vii) Mohammedally Noorbhoy Bandukwala Trust vs. ITO (2017-TIOL- 341-HC-MUM-IT); viii) Aravali Infrapower Ltd. vs. DCIT (2017-TIOL-42-SC-IT), ix) Aravali Infrapower Ltd. vs. DCIT (2017) 390 ITR 456 (Del); ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diction. Further, no mala fide intention can be attributed to the present assessee i.e., Mr. Attar Singh. Even in the case of other two assessees the time limit for issue of notice u/s 143(2) was available as returns were filed on 6th March, 2013 by both the assessees. In the case of Abhishek Jain, ITO, Noida, had no knowledge that the assessee was regularly assessed with the ITO, Delhi and after knowing that he had transferred the case to ITO, Delhi. However, in the present case, even after knowing that the assessee is regularly assessed with the Assessing Officer of Delhi, the Assessing Officer Gurgaon chose to issue notice u/s 148 and also completed the assessment even though the time period for issuing notice u/s 148 by the Assessing Officer of Delhi had not expired. 25. Similarly, so far as the reliance on the case of S.S. Ahluwalia (supra) is concerned, he submitted that here the assessee was an IAS officer of Nagaland cadre who was compulsorily retired in 1993. During the period 1971-72 to 1978- 79, he was filing his return of income at Dimapur, Nagaland. In July 1978 he was posted to Delhi on deputation in the Ministry of Home Affairs, a position which he c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gaon on 26th April, 2016. We find the Assessing Officer, on the basis of the information received that the assessee with his two brothers has sold his agricultural land to M/s Bestech India Pvt. Ltd. for a sum of ₹ 46,85,30,000/-, reopened the assessment after recording reasons and by issuing notice u/s 148 of the Act. A perusal of the assessment order shows that the assessee from the very beginning was challenging the assumption of jurisdiction by the Assessing Officer. Even before the CIT(A), the assessee has challenged the assumption of jurisdiction by the Assessing Officer. However, the ld.CIT(A) rejected the same on the ground that the order u/s 120/127 are not appealable u/s 246A. Further, the assessee has not raised any objection u/s 124(3)(a) to the transfer within one month from the date of service of notice u/s 143(2)/142(1). While doing so, he has relied on the decision of the Punjab Haryana High Court in the case of Smt. Jaswinder Kaur Kooner vs. CIT (A) (2007) 291 ITR 80 and in the case of Subhash Chander v. CIT (2008) 166 Taxman 307 and the decision of the Hon'ble Allahabad High Court in the case of CIT vs. Sohal Lal Sewa Ram Jaggi (2009) 222 CTR 412 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r was posted at Pune when he was in the service of the Army and for the assessment year in question he filed his return of income with the Income-tax Officer there and the same stands assessed. The proceedings had been completed and the tax found payable had been deposited/accounted for. Thereafter, if the assessment proceedings are to be reopened or if the income for the relevant assessment year is to be reassessed, it is the Income-tax Officer who assessed the same in the first instance alone has the jurisdiction to proceed in the matter under Section 147 read with Section 148 of the Act unless the case has been transferred by a competent authority to another Assessing Officer under Section 127 of the Act and in that event the latter will have jurisdiction to proceed. Section 127 of the Act which is relevant for our purpose is reproduced hereunder for facility of reference : 127. Power to transfer cases.--(1) The Director-General or Chief Commissioner or Commissioner may, after giving, the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording, his reasons for doing so, transfer any case from one or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udes also all proceedings under this Act which may be commenced after the date of such order or direction in respect of any year. 5. Under the aforesaid provision, the Director-General or Chief Commissioner or Commissioner can transfer any case at any stage of the proceedings from one Assessing Officer subordinate to him to another. If both the Assessing Officers are not subordinate to the same Director-General or Chief Commissioner or Commissioner, then the transfer can be made on the respective Directors-General or Chief Commissioners or Commissioners agreeing and in the event of disagreement, by the Board or any such Director- General or Chief Commissioner or Commissioner authorised by it. The section expressly provides that on such a transfer it is not necessary to reissue any notice when the same has already been issued by the Assessing Officer from whom the case is transferred and the Assessing Officer to whom the case is transferred is entitled to proceed from the stage at which he receives the case from his predecessor. It is also provided that wherever it is possible to do so, the assessee shall be given a reasonable opportunity of being heard before an o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Kumar jain vs. DCIT (2016) 66 taxmann.com 126 (Delhi) , has held that it was only the Assessing Officer who had passed the original assessment, was empowered to exercise powers under section 147/148 to reopen that assessment. The relevant observation of the Hon'ble Delhi High Court from para 15 to 17 reads as under:- 15. What is evident from the counter affidavit filed by the Respondent is a clear admission that the officer who issued the notice dated 14th March, 2014, and recorded the reasons for re-opening the assessment, i.e. the ITO Ward 39(2) was not the AO of the Assessee. That single fact in itself vitiates the reopening of the assessment. What is also evident is that, perhaps realising the error, a subsequent notice dated 23rd June 2014 under Section 148 was issued by the AO of the Assessee. However, it was beyond the deadline of 31st March, 2014 under Section 149(1)(b) of the Act. 16. The reasons given by the Department in its counter affidavit do not in any way explain the patent illegality in invoking the powers under Section 148 of the Act for reopening the assessment of the Assessee for AY 2007-08. The mere fact that the definit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urisdiction to the Assessing Officer of Gurgaon is concerned, the same, in our opinion, would not confer jurisdiction upon the Assessing Officer who otherwise was not the Assessing Officer of the assessee. The Hon'ble Bombay High Court in the case of CIT vs. Lalitkumar Bardia (supra) has held that mere participation in proceedings or acquiescence would not confer jurisdiction upon the Assessing Officer who otherwise was not the Assessing Officer of the assessee. The Hon'ble Apex Court in the case of Kanwar Singh Saini (supra) has held that there can be no dispute regarding the settled legal proposition that conferment of jurisdiction is a legislative function and it can neither be conferred with the consent of the party nor by a superior court. 31. So far as the argument of the Revenue that the assessee has not raised any objection to the jurisdiction within the prescribed time period is concerned, we find merit in the argument of the ld. counsel that the issue to lack of jurisdiction can be raised at any stage in a case where the return has been filed in response to notice u/s 148/158BC/153A. We find the Hon'ble Bombay High Court in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [Sushil Kumar Mehta v. Gobind Ram Bohra, (1990) 1 SCC 193] this Court has elaborately considered the relevant factual and legal aspect of the case and has laid down the law at para 10, after referring to its earlier decision of a four-Judge Bench of this Court speaking through Venkatarama Ayyar, J. in Kiran Singh v. Chaman Paswan [AIR 1954 SC 340 : (1955) 1 SCR 117] , which would be worthwhile to be extracted as under: (Sushil Kumar Mehta case [Sushil Kumar Mehta v. Gobind Ram Bohra, (1990) 1 SCC 193] , SCC p. 199) 6. 10. 6. It is a fundamental principle well established that a decree passed by a court without jurisdiction is a nullity and that its invalidity could be set up whenever and wherever it is sought to be enforced or relied upon, even at the stage of execution and even in collateral proceedings. A defect of jurisdiction, whether it is pecuniary or territorial, or whether it is in respect of the subject-matter of the action, strikes at the very authority of the court to pass any decree, and such a defect cannot be cured even by consent of parties. If the question now under consideration fell to be determined only on the application of general princip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... called in question by an assessee after the expiry of one month from the date on which he was served with a notice for reopening of assessment u/s 148. However, in the instant case, the assessee had enclosed the copy of return filed with the Assessing Officer of Delhi with his PAN and acknowledgement number. It was in the knowledge of the Assessing Officer of Gurgaon that the assessee is in employment of Delhi Police and his PAN is linked with ITO of Delhi. Further, there was ample time available before the Assessing Officer for verification and consequential issue of notice by the Assessing Officer of correct jurisdiction and no mala fide intention can be attributed to the present assessee. 34. Similarly, in the case of S.S. Ahluwalia (supra) is concerned, in that case also the respondent assessee was assessed at Delhi from 1980-81 to 1983-84. From the assessment year 1984-85 to 1987-88, he was filing the return at Dimapur. The case of the assessee was reopened u/s 148 by the ACIT, Investigation, Delhi, on the basis of certain CBI search. When the question of jurisdiction issue came before the Hon'ble High Court, the Hon'ble High Court he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on this legal ground, the various other grounds on merit are not being adjudicated being academic in nature. Since the legal ground raised by the assessee challenging the reassessment proceedings are decided in favour of the assessee, the grounds raised by the Revenue in its appeal become infructuous and the same is accordingly dismissed. ITA Nos.2683/Del/2018 3112/Del/2018 (Shri Devender Kumar vs. ITO and vice versa) AND ITA Nos.2684/Del/2018 2700/Del/2018 (Shri Parvinder Kumar vs. ITO and vice versa) 36. After hearing both the sides, we find the grounds raised by the respective assessees and the Revenue in the above appeals are identical to grounds raised by the assessee and Revenue in ITA Nos.2682/Del/2018 2913/Del/2018. We have already decided the issue and the legal ground raised by the assessee challenging the validity of the reassessment proceedings have been decided in favour of the assessee. Accordingly, the appeal filed by the assessee has been allowed and the appeal of the Revenue has been dismissed. Following similar reasonings, the appeals filed by the assessees are allowed and the appeals filed by the Revenue are dismissed. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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