TMI Blog2022 (10) TMI 386X X X X Extracts X X X X X X X X Extracts X X X X ..... favour of the assessee. Applicability of section 11(1A) of the Act and exemption of capital gain arising out of compulsory acquisition of assessee s land - In adjudication of valuation of cost of acquisition it is very clear that a land was purchased before 01.04.1981. The base rate of index is started from 01.04.1981 as per the Act. The valuation of the property should not be the same on the date of acquisition beyond 01.04.1981 on the date 01/04/1981. We relied in the judgment Govindaraju vs. ITO Ward 8-(2) Bangalore [ 2015 (8) TMI 271 - KARNATAKA HIGH COURT] Where assessee determined fair market value of property according to valuation report of a registered valuer, Assessing Officer could not have arrived at 'fair market value' of property ignoring valuation report on record. So, the report drawn by the Government Valuer is very much accepted. Mr. Sehgal also mentioned that both the revenue authorities did not take contingence of any other valuation report from any of the authority. So, this particular report is accepted. As the benefit of section 12A is applicable in both the years. Mr. Sehgal specially mentioned the judgment in the case of Prem Prakash Man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax. Rs.5,06,68,190/- 4 That the Ld. CIT(A) has erred in dismissing the ground no. 6 of appeal in summary manner without appreciating the facts that provisions of section 96 of the RFCTLARR Act are applicable on the assessee s case. Hence, not liable to tax. Rs.5,06,68,190/- 5 That the Ld. CIT(A) has erred in dismissing the ground no. 7 of appeal in summary manner without appreciating the facts that value adopted by the assessee appellant is based on the report of registered approved govt. valuer after considering site and position of land. As such, value taken by the Ld. AO is unjustified. Hence, need to be set aside. Rs.5,06,68,190/- 6 That the Ld. Assessing Officer as well as the learned CIT(A) has erred in law and on facts in taking the status of the assessee appellant as AOP against status as claimed in the return of AOP (Trust). Rs.5,06,68,190/- 7 That the appellant craves to add or amend the ground of appeal. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed return accordingly. The notice u/s 148 was issued by the ld. Assessing Officer,Ward-1(4)/Mansa (in brevity the AO) dated 06.12.2016. In response to the said notices, the assessee filed return declaring nil income in Form 7 on 21.02.2017 u/s 139 (4A). Accordingly the assessee claimed exemption u/s 11 on the strength of application filed by the assessee u/s 12AA of the Act on 21.12.2016. The application of registration was filed before the ld. Commissioner of Income Tax (Exemption), Chandigarh, [in brevity the ld. CIT(E)]. The application was filed earlier before filing of the return u/s 148 of the Act. But the ld. AO did not consider assessee s claim in return and assessed the return as Association of Person (Trust) and added back the income with the total income of the assessee. In other issue, for the assessment year 2014-15, the agricultural land of assessee was acquired by Punjab Govt on dated 29.08.2013. The assessee computed capital gain tax by ascertaining the cost of acquisition on basis of the valuation of property on dated 1.4.1981 through registered valuer which was valued amount to Rs.59,15,000/-. But the valuation on dated 01/04/81 of said land was rejected by the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fted to concurrent jurisdiction under the ld. Commissioner of Income Tax (E), Chandigarh. Mr. Sehgal also placed that the territorial jurisdictional Assessing Officer, Ward 1(4), Mansa had no authority for completion of assessment as per the CBDT Circular No. 52/2014 dated 22.10.2014. The relevant part is extracted hereunder: Commissioner of Income Tax (Exemption) Chandigarh States of Jauum and Kashmir Himachal Pradesh, Punjab Haryana and Union territory of Chandigarh All cases of persons in the territorial, area specified in column (4) claiming exemption under clauses (21), (22),(22A),(22B),(23),(23A),(23AAA), and (23B), (23C), (23F), (23FA), (24), (46) and (47) of section 10, section 11, section 12, section 13A and section 13B of the Income tax Act, 1961 and assessed or assessable by an income tax authority at serial numbers 50 to 68 specified in the notification of Government of India bearing number S.O. 2752 dated the 22nd October, 2014. 6.3 Mr. Sehgal, also pointed out the relevant section for ascertaining in the jurisdiction of the assessee. Jurisdiction of Income-tax authorities. Section 120 (3) In issuing the directions or orders referred to in sub-secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid facts, it is, therefore, requested that the proceedings started under section 148 of the Income Tax Act started may kindly be dropped as notice has been issued without jurisdiction. 3. The objections of the assessee were rejected vide this office order dated 12.09.2017 as these were not acceptable for the following reasons:- (i) As regards filing of return of income claiming the status as charitable trust is not acceptable because the assessee is not having registration u/ s 12AA of I. T. Act, 1961. (ii) In this case no exemption u/s 12A of I. T. Act, 1961 is available upto the assessment year 2016-17. The assessee has applied for registration u/s 12AA of I. T. Act, 1961 before the Commissioner of Income-tax (Exemption) on 21.12.2016 i.e. after receipt of notice u/s 148 of I. T. Act, 1961. The application has been rejected by the worthy CIT(Exemptions). The assessee is in appeal before the Hon ble ITAT, Amritsar and in case the same is allowed by the Hon ble, ITAT the exemption would not be available for the year under consideration i.e. for the Asstt. Year 2014-15, the exemption would only be available to the assessee after the date of application i.e. 21.12.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hinda but thereafter, as per Notification No.52/2014 dated 22.10.2014, the Hon ble CBDT has changed the jurisdiction of the persons claiming exemptions under section (21), (22), (22A), (22B)k, (23), (23A), (23AAA), (23B), (23C), (23F), (23FA), (24), (46) and (47) of Section 10, Section 11, Section 12, Section 13A and section 13B of the Income Tax Act, 1961 to the Assessing Officer working under the Commissioner of Income-tax (Exemptions), Chandigarh earlier being assessable by the Assessing Officer working under Pr. Commissioner of Income Tax referred at Sr. No. 50 to 68 of the notification of the Government of India bearing number S.O. 2752(E) dated the 22nd October, 2014. Admittedly, in this case the assessee trust is claiming exemption under section 11 and 12 of the Income-tax Act. Therefore, the basic jurisdiction iw the case of the assessee trust is with the Assessing Officer (Exemptions), Amritsar as per provisions of Section 124 read with Section 120 of the Income Tax Act. Accordingly, the assessee trust has challenged your jurisdiction vide application dated 05.09.2017 as in this case, notice u/s 148 of the Income Tax Act has been issued on 06.12.2016. Return in response to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance in existence which could show that the present Assessing Officer could not exercise jurisdiction over the appellant. Subsequent to a valid issue of notice under section 148 and assumption of valid jurisdiction the present proceedings were initiated. The entire logic presumption of jurisdiction was explained in the case of Abhishek Jain v. ITO: [2018] 94 taxmann.com 355 (Delhi)/[2018] 405 ITR 1 (Delhi): holding that in terms of section 124(3)(b) jurisdiction of an Assessing Officer cannot be called in question by an assessee after expiry of one-month from date on which he was served with a notice for reopening assessment under section 148 of Income Tax Act. Hon'ble jurisdictional High Court in the case of Rajni Gugnani vs. CIT: [2014] 44 taxmann.com 98 (Punjab Haryana) clarified the conflict of territorial and transactional AO vis-avis the AO where the assessee claims to have the jurisdiction. It was clarified that where assessee was not only maintaining residence in Delhi but also had bank account in Delhi where dubious transaction had taken place, Income-tax authority of Delhi had jurisdiction over assessee. In the present case, at the time of issue of notice for r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no applicability in this case, since the facts are entirely different with the present case. By way of specific notification dated 22.10.2014 that the jurisdiction all over India is through transfer of assessee who claimed exemption u/s 11 and 12. He further mentioned that in case of Rajni Gugnani at page 5 of the order is also different fact, because here also there is no conflict between two AOs. In the assessee s case as per the notification the jurisdiction stands transfer. Thus submission of the assessee by way of ground no. 1 may please be accepted. 9. The ld. Counsel of the assessee Mr. Sehgal submitted chart of the events which is extracted as follows: SEQUENCE OF EVENTS Date of Incorporation 23.09.2013 Issue of Notice u/s 148 06.12.2016 Application for registration u/s 12AA 21.12.2016 Filing of Return of Income in response to Notice u/s 148 for AY 2014-15 AY 2015-16 21.02.2017 22.02.2017 Order of Rejection of registration application by CIT(Ex.) 30.06.2017 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s 12AA. Accordingly, the jurisdiction was generated in the financial year 2016-17 before the ld CIT(E), Chandigarh. During the assessment this particular jurisdiction was deemed jurisdiction so this particular jurisdiction is not with the assessing authority, ITO Ward 1(4), Mansa but with the CIT(E) Chandigarh. 10.2 In this respect the reliance was placed on the judgment of M. I. Builders P. Ltd. Vs. ITO in ITA No.111/Luck/2006 date of order 07.09.2007, 115 ITD 0419 (2008). As per the order: 29. The argument of learned Departmental Representative that since the assessee has not objected to the assessment framed for the asst. yr. 2001-02 and, therefore, Asstt. CIT, Range-IV, Lucknow can validly issue notice under s. 148(1) is not sustainable in law. As discussed above, protection of the proceedings and assessment thereafter on account of failure of the assessee to object within the time allowed under s. 124(3) is available to specific proceeding and not to every proceeding. Erroneous assumption of jurisdiction cannot, in general, be validated. Such validation is specific in s. 124(3). Secondly, principles of estoppel are not applicable to income-tax proceedings. What may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3,375/-. The exemption was claimed in applicability of section 11(1A) of the Act and exemption of capital gain arising out of compulsory acquisition of assessee s land. In view of the said section, the assessee has also invested the net consideration to the extent of Rs.10,76,33,375/- in another agricultural land. The assessee is debitable this particular land was acquired by the assessee on date which was prior to 01.04.1981. For the valuation of the cost of acquisition, the assessee was made valuation of the land by Mr. Mani Kant Garg, the Government approved valuer of Income Tax. The valuation certificate is enclosed in paper book from page 153 to 157 dated 20.02.2017. According to the valuation report the cost of land on 01.04.1981 is Rs.59,15,000/-. The valuation report was placed by the assessee before the AO. The observation of the ld. AO in this is as follows:- d) In para 2 of the reply the assessee also contended that as per order of worthy Commissioner of Income-tax (Exemptions), Chandigarh the assessee was not owner of the land which was acquired by the Punjab Govt. This contention of the assessee is also not acceptable in view of the fact that as per acquisition le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Rs. 5970 per kanal (Rs.47,760/- per acre) relying upon valuation report dated 20/02/2017 where the fair market value as on 01/04/1981 has been calculated at Rs. 59,15,000/- per acre. The calculation of the Assessing Officer was based upon actual transaction having been transacted at the relevant time as per the record of revenue authorities. The valuation report is submitted by the appellant was not based on actual transaction but merely on assumptions. The appellant has not pointed out any defect in the comparative case adopted by the Assessing Officer which is a real and not imaginary. The calculation of the Assessing Officer is based on credible information, therefore in absence of any objection by the appellant cannot be disbelieved. The ground of appeal is dismissed. In consideration of totality of circumstances as mentioned above, the grounds of appeal from 3 to 7 are devoid of any merits and hence dismissed. 16. Other than the agricultural land in both the years, assessee claimed deduction of interest for the year 2014-15 amount to Rs.2,37,702/- and for A.Y. 2015-16 amount to Rs. 44,73,197/- and also Golak donation Rs.2,54,505/- and Rs.3,56,836/- for A.Y. 2014 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16] 68 taxmann.com 152 (Cochin- Trib.) iii. Punjab Educational Society vs. ITO-IT, Moga [2017] 88 taxmann.com 113 (Amritsar-Trib.). iv. St. Jude s Convent School vs. ACIT, Circle-III, Jalandhar [2017] 77 taxmann.com 173 (Amritsar-Trib.). 17. The ld. CIT(A) had rejected the claim of the assessee as applicability of section 11(1A) for the A.Y. 2014-15 only due to the want of registration u/s 12AA and it has been approved beyond any doubt that assessee is deemed to be registered u/s 12AA for the year under consideration on the basis of second proviso to clause 2 of section 12A as per binding judgments. The assessment for both the years was pending during the time of approval/deemed approval. So the assessment proceedings were pending during approval. So the applicability of section 12A is also casted in the A.Y. 2014-15 and 2015-16. The expenses related to Golak donation and interest should be calculated in taking consideration of section 11 r.w.s. 12A of the Act. 19. In adjudication of valuation of cost of acquisition it is very clear that a land was purchased before 01.04.1981. The base rate of index is started from 01.04.1981 as per the Act. The valuation of the propert ..... X X X X Extracts X X X X X X X X Extracts X X X X
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