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TMI Blog2024 (11) TMI 957X X X X Extracts X X X X X X X X Extracts X X X X ..... unds on disallowance of deduction claimed u/s 54F, Rs. 8,00,00,001/-: a. The learned CIT(A) has erred in upholding the addition of Rs. 8,00,00,001/- under the head 'capital gains' on the facts and circumstances of the case. b. The authorities below have failed to appreciate that the appellant has utilised a sum of Rs. 7,74,00,000/- for reinvestment in house property and is eligible for deduction under section 54F of the Act, on the facts and circumstances of the case. c. The authorities below have failed to appreciate that deduction under section 54F of the Act is allowable if the sale consideration is utilized towards reinvestment within the specified time, on the facts and circumstances of the case. d. The authorities below have failed to appreciate that the purchase deed could not be executed as a portion of the schedule land was subject to a prohibition to enter the property subsequent to the agreement entered by the appellant, thus, there was impossibility of performance on the part of the appellant to execute the sale deed, on the facts and circumstances of the case. e. The learned CIT(A) ought to have awaited for the release of remaining land by and the per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder CASS to verify "whether the deduction from capital gains has been claimed correctly." Accordingly, the statutory notices u/s 143(2) & 142(1) of the Act were issued and in response to notices, the assessee furnished the details as called for. The assessee has sold agricultural dry land bearing Survey No.78/7 at Nagawara Village, Kasaba Hobli, Bangalore on 11/12/2015 for consideration of Rs. 8,00,00,001/-. This property was acquired by the assessee during 1998-99. The assessee has arrived at capital gains of Rs. 7,65,51,146/- after claiming the benefit of Indexation. The assessee has later entered into an agreement of sale with M/s. Karnataka State Muslim Federation (hereinafter referred to as KSMF), Bangalore executed on 3/8/2016 to invest in a property bearing No.7/31,32,33 at Kadugondanahalli, Nagawara Main Road, Arabic College Post, Bangalore for Rs. 9,81,18,900/-. The assessee has stated that he has already paid Rs. 7,74,00,000/- towards purchase of the said property and balance amount would be paid at the time of registration of sale deed. The assessee has also stated that the registration of the property has not taken place due to interference of government organizations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [taking into account the various Govt. Agencies approvals necessary before construction of the house] takes a long time but as per the categorical provisions, conditions and the time limit laid down in Section 54F,[ though very short for a metro regions residential house], has to be complied as they cannot be overlooked. In future the Government may consider amending the Act and extending the timelines as laid down in Section 54F from the date of approval of Sanction Plan by the Govt. Agencies. Based on the above discussion of facts and circumstances, the ld CIT(A)/NFAC confirmed the decision taken by the AO and accordingly dismissed the appeal of the assessee. 4.2 Aggrieved by the order of ld. CIT(A)/NFAC, the assessee has filed the present appeal before the Tribunal. The assessee has filed a paper book comprising 107 pages enclosing therein following copies: 1. Copy of agreement to sell dated 3.8.2016, for advance paid to purchase property in Sy.No.7/21.32.33 measuring 24,500 sq.ft. 2. Copy of registered agreement to sell dated 10.12.2018, for advance paid to purchase property in Sy.No.7/21,32,33 measuring 24,500 sq.ft. 3. Copy of paper publication in the Hindu dated 17.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as it goes to the root of assumption of jurisdiction. He also draws our attention to Instruction No.1/2011 [F.NO. 187/12/2010-IT(A-I), dated 31/01/2011 placed on page 98 of the paper book filed by the assessee. The ld. AR of the assessee highly relied on the judgment of the High Court of Bombay in the case of Ashok Devichand Jain v. Union of India [2023] reported in 452 ITR 43 (Bom) as well as Order of the coordinate bench of ITAT, Kolkata in the case of Krishnendu Chowdhury v. Income Tax Officer reported in [2017] 78 taxmann.com 89 (Kolkata- Trib). 6.2 The ld. DR on the other hand although accepted that there is a defect in issuing Notice U/s 143(2) of the Act in terms of the Instruction No.1/2011 [F.NO. 187/12/2010-IT(A-I) dated 31/01/2011 but vehemently submitted that the said defect is curable in terms of the provisions contained in Section 292B as well as Section 292BB of the Act and also submitted that the assessee has appeared & cooperated in the proceedings before the lower authorities. 7. We have heard the rival submissions & perused the material available on record. It is an undisputed fact that the notice U/s 143(2) of the Act in the case of the assessee is issued by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer who issued the notice under section 148 of the Act, had no jurisdiction to issue such notice. According to Petitioner as per instruction No. 1/2011 dated 31st January, 2011 issued by the Central Board of Direct Taxes, where income declared/returned by any Non- Corporate assessee is up to Rs. 20 lakhs, then the jurisdiction will be of ITO and where the income declared returned by a Non Corporate assessee is above Rs. 20 lakhs, the jurisdiction will be of DC/AC. 3. Petitioner has filed return of income of about Rs. 64,34,663/- and therefore, the jurisdiction will be that of DC/AC and not ITO. Mr. Jain submitted that since notice under section 148 of the Act has been issued by ITO, and not by DC/AC that is by a person who did not have any jurisdiction over Petitioner, such notice was bad on the count of having been issued by an officer who had no authority in law to issue such notice. 4. We have considered the affidavit in reply of one Mr. Suresh G. Kamble, ITO who had issued the notice under section 148 of the Act. Said Mr. Kamble, ITO, Ward 12(3)(1), Mumbai admits that such a defective notice has been issued but according to him, PAN of Petitioner was lying with ITO Ward ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es their cost of compliance. The Board had considered the matter and is of the opinion that the existing limits need to be revised to remove the abovementioned hardship. An increase in the monetary limits is also considered desirable in view of the increase in the scale of trade and industry since 2001, when the present income limits were introduced. It has therefore been decided to increase the monetary limits as under: Income Declared (Mofussil areas) ITOs ACs/DCs Corporate returns Upto Rs. 20 lacs Above Rs. 20 lacs Non-corporate returns Upto Rs. 10 lacs Above Rs. 15 lacs Metro charges for the purpose of above instructions shall be Ahmedabad, Bangalore, Chennai, Delhi, Kolkata, Hyderabad, Mumbai and Pune. The above instructions are issued in supersession of the earlier instructions and shall be applicable with effect from 1-4-2011. The notice u/s. 143(2) and order sheet entries which were referred by the Id. counsel for assessee are placed at Annexure no. 2 & 5 of the paper book respectively. Admittedly the notice u/s. 143(2) in the instant case was issued by the Id. ACIT to initiate the assessment proceedings which was later transfer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed by the assessee on October 29, 2004, i.e., during the current financial year 2004-05. The selection for scrutiny of the assessee's case and completion of the assessment was not valid. 6. We find that the Hon'ble Chhatishgarh High Court in Sunita Finlease Ltd. 's case (supra) has also considered the decision of Hon'ble Supreme Court in the case of UCO Bank (1999) 237 1TR 889 and quoted from page 896 as under: "Such instructions may be by way of relaxation of any of the provisions of the sections specified there or otherwise. The Board thus has power, inter alia, to tone down the rigour of the law and ensure a fair enforcement of its provisions, by issuing circulars in exercise of its statutory powers under section 119 of the Income-tax Act, which are binding on the authorities in the administration of the Act. Under section 119(2) (a), however, the circulars as contemplated therein cannot be adverse to the assessee. Thus, the authority which wields the power for its own advantage under the Act is given the right to forgo the advantage when required to wield it in a manner it considers just by relaxing the rigour of the law or in other permissible manners as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in Instruction No. 9 dated 20th September, 2004. At this juncture, we would like to clarify that Instruction No. 9/2004 dated 20th September, 2004 referred by the Tribunal in Ajanta Financial Services (P.) Ltd. 's case (supra) as well as the Hon'ble Chattishgarh High Court in the case of Dy. CIT v. Sunita Finlease Ltd. [2011] 330 ITR 491/11 taxmann.com 241 are in respect of the corporate assesses. However, in the case of the non-corporate assesses similar instruction has been issued in Instruction No. 10 dated 20.09.2004. In this case also as per the order sheet entries incorporated in the preceding paragraphs, it is observed that the selection of scrutiny was made on 20.06.2005 and notice u/s. 143(2)(ii) and 142(1) was issued on 11.07.2005 i.e. beyond the period of the scrutiny as specified in Instruction No. 10/2004 dated 20.09.2004. Therefore, keeping in view Of the decision of Hon'ble Chattishgarh High Court in the case of Sunita Finlease Ltd. (supra) as well as Tribunal's order in ITA No. 1426/Kol/2011 in the case of Ajanta Financial Services (P.) Ltd. (supra). 8.1 In view of above we set aside the orders of the revenue authorities by squashing the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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