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TMI Blog2020 (8) TMI 563X X X X Extracts X X X X X X X X Extracts X X X X ..... said land was situated in village Kapriwas PO Dharuhera Distt. Rewari. At the time of assessment framed u/s 143(3) on 14.12.2011 in the case of Smt. Asharfi Devi, it was held by the then AO that the land in question (Sold) covered under the definition of capital asset u/s 2(14) of the I.T. Act, 1961 and therefore, liable for capital gain u/s 45 of the I.T. Act, 1961 after gathering distance certificate from the different state Authorities. During the course of assessment proceedings in the case of Asharfi Devi, it was submitted that the land sold belongs to HUF. The then AO asked the assessee to furnish documentary evidence that the land belongs to HUF. After considering her reply and the documents produced at that time, the AO denied the claim of the assessee that the land in question belongs to HUF. Being aggrieved by the order of the AO, the assessee preferred appeal before the Ld. CIT(A). The Ld. CIT(A), Rohtak in his appellate order in appeal No. 526 & 527/RWR/2011-12 date 21.01.2013 by accepting the ground of the assessee set aside/cancelled the assessment made by the AO in the status of Individual. He further directed that since the land was inherited by the assessee from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Rs. 1,25,892/- (21,631*582/100 =1,25,892/-). The Long-term Capital gain was worked out at Rs. 1,38,39,317/-(1,39,65,209-1,25,892=1,38,39,317/-) in the case of Smt. Asharf, Devi in Individual status. Therefore, in compliance of Hon'ble ITAT's Order the Capital Gain is to be Charged to tax in HUF Status of Smt.Asharfi Devi by applying the same cost of acquisition of the land in question as determined in the case of Individual status for the same assessment year. Thus, by taking the cost of acquisition of the land as on 01.04.1981 as that determined in the individual status of Smt. Asharfi Devi, the Long-term Capital gains in HUF Status of the assessee is worked out as under: Sale consideration of 11 Kanal 03 Marla (223 Marla) Rs. 1,39,65,209/- Less: Cost of acquisition 21,631x582/100 Rs. 1,25,892/- Long term, capital gain. Rs. 1,38,39,317/- As the Long-term Capital Gain has been assessed at Capital Loss of Rs. 3,489/- vide order u/s 147/143(3) of the Act dated 26.03.2014, therefore, Long-term Capital Gain to the extent of Rs. 1,38,42,806/- has escaped assessment. I, therefore, have reason to believe that income of the assessee from Longterm Capital gains to the extent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned Commissioner of Income Tax (Appeals) has failed to appreciate that there was no tangible and relevant material on record on the basis of which it could be held that, there was any "reasons to believe" with the learned Income Tax Officer the income of the appellant had escaped assessment and, in view thereof, the proceedings initiated were illegal, untenable and therefore, unsustainable. 1.2. That the learned Commissioner of Income Tax (Appeals) has further erred both in law and on facts in failure to appreciate that, issuance of notice u/s 148 merely amounted to change of opinion as original assessment was completed u/s 143(3) and, no tangible material surfaced after the completion of assessment and, therefore notice was illegal and, without jurisdiction. 1.3. That the basis adopted in the reasons recorded that action u/s 148 of the Act in compliance of order of Hon'ble Tribunal dated 26.9.2014 in ITA No. 1869/D/2013 is based on misinterpretation and misconstruction of the findings of the Hon'ble Tribunal and hence the action is without jurisdiction. 2. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in sustaining an addition of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Singh, HUF, the AO, vide letter dated 15th March, 2013, wrote a letter to Smt. Asharfi Devi, copy of which is placed at page 1 and 2 of the paper book to furnish certain documents such as copy of PAN of HUF, copy of return of income, if any, of HUF and the calculation of such long-term capital gain on sale of land in question along with supporting documents. Referring to page 3 of the paper book, he submitted that the assessee, vide letter dated 20th May, 2013, responded that the assessee has not filed any income-tax return for the impugned assessment year. Referring to page 5 of the paper book, the ld. Counsel drew the attention of the Bench to the notice issued u/s 148 of the Act to the assessee HUF. Referring to page 6-13 of the paper book, he submitted that the assessee furnished the return of income declaring an income of Rs. 3,580/- on 10th October, 2013 in response to such notice u/s 148 of the Act. Referring to page 39 and 40 of the paper book, the ld. Counsel for the assessee submitted that the AO passed the order u/s 143(3)/148 on 26th March, 2014 accepting the return of income of Rs. 3,580/-. Referring to page 44 of the paper book, the ld. Counsel drew the attention of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the case of CIT vs. Multiplex Trading and Industrial Co. Ltd., 378 ITR 351, the decision of the Hon'ble Supreme Court in the case of CIT vs. Burlop Dealers Ltd., 79 ITR 609 (SC) and various other decisions as mentioned in the synopsis. He submitted that the duty of the assessee is only to 'fully and truly' disclose all primary facts and there is no duty cast by law on the assessee to indicate to AO or draw his intention to what factual, legal or other inferences can be drawn from already available primary facts disclosed by assessee. For the above proposition, he relied on the decision of the Hon'ble Delhi High Court in the case of Ranbaxy Laboratories Ltd. vs. DCIT, 351 ITR 23 and various other decisions. 9.4 Referring to the decision of the Tribunal in the case of Smt. Ashrafi Devi in individual status for A.Y. 2009-10, vide ITA No.1869/Del/2013, order dated 26th September, 2014, he submitted that the Tribunal had only directed the AO to verify as to whether such long-term capital gain has been declared in the return of the HUF or not. However, in the instant case, the AO, instead of verifying that such long-term capital gain arisen on transfer of the land has already been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich is the copy of reasons recorded for issue of notice u/s 148 in the second round, he submitted that the AO has once again disputed the cost of acquisition as determined/reported by the assessee in respect of land sold by the assessee during the period under consideration and, as such, initiated proceedings once against u/s 148 after the order of the Tribunal. 10.1 Referring to the decision of the Hon'ble Delhi High Court in the case of Le Passage To India Tours & Travels (P) Ltd. vs. ACIT, 232 Taxman 277, he submitted that the Hon'ble High Court has held that a virtual assertion of same reasons in different words in second reassessment does not clothe reassessment notice with any more sanctity. Referring to the decision of the Hon'ble Calcutta High Court in the case of Berger Paints India Ltd. vs. ACIT, 322 ITR 369, he submitted that the Hon'ble High Court has held that where rectification proceedings had been dropped, reassessment proceedings could not have been started on the basis of same materials. Further, it is the settled proposition of law that a particular case cannot be heard twice by the same authority on same facts and issue as it gets hit by the principle of res ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee can make a fresh claim in appellate proceedings. For the above proposition, he relied on the decision of the Hon'ble Madras High Court in the case of CIT vs. Abhinitha Foundation Pvt. Ltd., 396 ITR 251; decision of the Hon'ble Bombay High Court in the case of Sanchit Software and Solutions (P) Ltd. vs. CIT, 349 ITR 404; decision of the Hon'ble Bombay High Court in the case of CIT vs. Pruthvi Brokers and Shareholders (P) Ltd., 349 ITR 136 and various other decisions. Referring to the decision of the coordinate Bench of the Tribunal in the case of Narayan Singh, HUF vs. ITO, vide ITA No.3935/Del/2017, order dated 11th June, 2020, he submitted that under identical circumstances the reopening of assessment by the AO was quashed on the ground that the AO has totally misinterpreted the directions of the Tribunal and grossly erred in once again reopening the assessment on the same set of facts which have already been considered while framing the assessment order dated 20th March, 2014 in the hands of the HUF. He accordingly submitted that the reassessment proceedings ought to be quashed and also the addition made by the AO on account of long-term capital gain has to be deleted. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . AR. And in case it is found that the HUF has been taxed for the capital gain on the land in question; then the AO shall delete the same levied on the individual assessee. Therefore we set-aside the order of the Id CIT(A) and remit the matter back to the file of the AO and direct him to verify whether the HUF has been taxed on the capital gain on the land in question, and if so, the addition made on the individual assessee's need to be deleted. Needless to say, sufficient opportunity may be granted to all the three assessees." 14. Thus, we find merit in the argument of the ld. Counsel for the assessee that the Tribunal had merely directed the AO to verify as to whether the long-term capital gain on sale of such land was offered in the hands of the HUF or not. However, we find, the AO, in the instant case, issued notice u/s 148 to the assessee copy of which is placed at page 5 of the paper book. A perusal of the reasons recorded nowhere shows that there is any allegation by the AO of any failure on the part of the assessee to disclose fully and truly all material facts necessary for completion of the assessment. In the instant case, the assessment year involved is A.Y. 2009-10 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e], we find that no action can be taken under section 147 after the expiry of four years from the end of the relevant assessment year if the following conditions are satisfied: (a) an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year; and (b) unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee: (i) to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148; or (ii) to disclose fully and truly all material facts necessary for his assessment for that assessment year. Condition (a) is admittedly satisfied inasmuch as the original assessment was completed under section 143(3) of the said Act. Condition (b) deals with a special kind of escapement of income chargeable to tax. The escapement must arise out of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148. This is clearly not the case here because the petitioner did file the return. Since there was no failure to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 05 are without jurisdiction as no action under section 147 could be taken beyond the four year period in the circumstances narrated above." 16. The various decisions relied on by the ld. Counsel to the proposition that where there is no allegation in the reasons recorded that there is failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment u/s 143(3), the notice issued u/s 148 after a period of four years from the end of the relevant assessment year in a case where the original assessment has been framed u/s 143(3) is illegal and invalid since the proceedings are without jurisdiction. Since, in the instant case, the original assessment was framed u/s 147/143(3) on 26th March, 2014 accepting the returned income at Rs. 3,580/- wherein the issue of capital gain on transfer of such land was duly considered and accepted on the basis of various supporting documents filed at the time of such reassessment proceedings and since there is no allegation in the reasons recorded that there is failure on the part of the assessee to disclose fully and truly all material facts necessary for completion of the assessment, therefore, the notice issu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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