2019 (4) TMI 870 - AT - Income Tax

Tribunal remands case for DVO Report, evidence, confrontation, speaking order.

The Tribunal set aside the CIT(A)'s decision and remanded the case to the Assessing Officer to obtain the DVO's Report and necessary evidences from Land ... Re-opening of the assessment u/s 147 - ex-parte order - HELD THAT:- In the absence of any material on record by way of submissions etc. or for that matter any representation on behalf of the assessee despite opportunity the challenge fails. As noticed, considering the submissions of the Revenue, and on a consideration of the material available on record, find no good reason available on record which would justify an interference in the conclusion arrived at. Being satisfied with the same on the facts as they stand Ground raised by the assessee is dismissed. Benefit u/s 54F - HELD THAT:- Considering the circumstances and not commenting either on the correctness or the completeness of the evidences relied upon on behalf of the assessee before the CIT(A), it is directed that in case the evidence filed is not reliable, sufficient or complete, the AO shall call for the DVO’s Report and necessary evidences from the Land Revenue Authorities, confront the report to the assessee and pass an order after hearing the assessee in accordance with law. In view thereof, the impugned order is set aside back to the file of the AO with a direction to pass a speaking order in accordance with law. - Remanded before AO Issues Involved:1. Defectiveness of the CIT(A)'s order in law and facts.2. Justification of the re-assessment framed under Section 147 read with Section 148 of the I.T. Act, 1961.3. Addition of Rs. 24,64,857/- under the head Long Term Capital Gains concerning whether the sold agricultural land is a capital asset under Section 2(14) of the I.T. Act, 1961.4. Application of fair market value by the Assessing Officer instead of the valuation report certified by a Government Approved Qualified Valuer.Detailed Analysis:Issue 1: Defectiveness of the CIT(A)'s Order- The first ground raised by the assessee was deemed general in nature, elaborated in subsequent grounds, and thus required no specific adjudication.Issue 2: Justification of the Re-assessment- The assessee challenged the re-opening of the assessment, arguing that the reasons recorded were based on incomplete notification without proof and proper satisfaction.- The CIT(A) upheld the re-assessment, citing the Hon'ble Supreme Court's judgment in ACIT vs. Rajesh Jhaveri Stock Brokers Pvt. Ltd., which held that at the stage of issuing notice under Section 148, the only question is whether there was relevant material for a reasonable belief of income escapement.- The Tribunal found no material on record from the assessee to counter the CIT(A)'s decision and dismissed this ground.Issue 3: Addition of Rs. 24,64,857/- Under Long Term Capital Gains- The assessee sold land in Ballomajra, Mohali, and declared capital gains at 'nil' after claiming deduction under Section 54F.- The AO found the land to be within one kilometer of Mohali Kharar road, thus a capital asset under Section 2(14).- The AO rejected the assessee's valuation report, which was based on opinions without documentary evidence, and instead used average sale deed values from the Registrar's office to compute the capital gains.- The CIT(A) upheld the AO's action, noting that the AO's valuation was based on factual information from revenue authorities, not subjective estimation.- The Tribunal found the CIT(A)'s decision-making process incorrect. It noted that if the Patwari's Report was vague, the CIT(A) should have called for a specific report from Land Revenue Authorities and confronted the assessee.- The Tribunal emphasized the need for fairness and due process, criticizing the CIT(A) for rejecting the Patwari's Report based on the valuer's report, which the AO had already discarded.Issue 4: Application of Fair Market Value- The assessee argued that the AO arbitrarily applied his own fair market value instead of the valuation report by a Government Approved Qualified Valuer.- The CIT(A) dismissed this ground, supporting the AO's reliance on factual information from revenue authorities over the valuer's opinion-based report.- The Tribunal highlighted that the tax authorities should have referred the matter to the DVO if the valuer's report was to be discarded and called for necessary evidences from Land Revenue Authorities.Conclusion:- The Tribunal set aside the impugned order and remanded the case back to the AO with directions to obtain the DVO's Report and necessary evidences from Land Revenue Authorities, confront the assessee with these, and pass a speaking order in accordance with law.- The appeal was allowed for statistical purposes, emphasizing the need for fairness and due process in tax assessments.Order Pronounced:- The order was pronounced in the Open Court on 01.04.2019.