TaxTMI 
TaxTMI 
2015 (10) TMI 1093
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....nt of Rs. 66 lakhs should be deducted from out of the consideration for the transfer `received by the appellant' or should go to enhance the cost of acquisition of the land and only to view order, not for print the cinema building and accordingly the capital gains if any should be reduced by the aforesaid sum of Rs. 66 lakhs? (4) Whether on the facts and in the circumstances of the case, the assessment of the appellant for the AY 1996-97 was validly reopened and the notice under Section 147 was valid in law?" 3. Briefly the facts leading to this appeal are as under : (a) On 22/09/1997, the appellant filed its return of income along with its balance sheet and profit and loss account for the assessment year 1996-97. The return of income was processed under Section 143(1)(a) of the Act and an intimation duly issued to the appellant. (b) On 13/11/2000 a notice under Section 148 of the Act was issued to the appellant seeking to reopen the assessment for assessment year 1996-97. In response to the notice dated 13/11/2000 the appellant on 17/11/2000 filed a fresh return of income and indicated therein that the other documents namely balance sheet and profit and loss accoun....
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....nd appaurtenant thereto to M/s. Sapana Real Estate and in return consideration in money terms (Rs.66 lakhs already paid) as well as in kind (35% of the built-up area of the building) was agreed and fixed. The partnership firm was formed as a result of family settlement dtd. 8.8.95 and the sole asset of this partnership was the Cinema Theatre and land at which it is situated. The contract for the so called remodelling provided for the assessee to give M/s. Sapna Real Estate uninterrupted access to the theatre building and the land. After taking possession of the threatre along with the land, the builder demolished the theatre and constructed another building, which is being sold as a commercial space. In return for this, the consideration has been fixed and paid to the firm (in the form of payments to the partners). M/s. Sapna Real Estate is allowed to sell 65% of the builtup area along with the undivided rights in the land to the various customers and the assessee will have no say in the matter. The assessee had executed an irrevocable power of attorney dated 11.09.1995 in favour of the Builder which authorises him to negotiate and settle any person in the status of tenant, to repr....
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....er to M/s. Sapna Real Estate. In view of the above, it was held that the transfer in terms of Section 2(47) has taken place and there has been profit on account of the aforesaid transaction of Rs. 72.28 lakhs being the capital gains. 6. Being aggrieved, the appellant filed an appeal to the Commissioner of Income Tax Appeals [CIT(A)]. It is at that stage that the appellant for the first time raised an objection to the reopening notice dated 13/11/2000 under Section 148 of the Act that it was without jurisdiction. This on the ground that the confidential report of the DDIT had not been furnished to the appellant. Besides, the return of income filed in 1997 was not available with the Revenue. Consequently, there could be no occasion for the Assessing Officer to have any reason to believe that income chargeable to tax has escaped assessment. In support of this the appellant placed reliance upon an inspection of the records of the Revenue with regard to the appellant on 8/09/2004. In the absence of the original return there was no basis for issuing the impugned notice. Besides, the appellant also raised various contentions with regard to the issue of no capital gains being attracted ....
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....ent from the fact that the appellant had while filing the return of income on 17/11/2000 consequent to the reopening notice on 13/11/2000 had indicated that profit and loss account and balance sheet were part of the original return and therefore were not being separately attached. The return as filed on 17/11/2000 was identical to one filed on 22/09/1997. Inspite of the same on 20/11/2000 the Assessing Officer called for the profit and loss account and balance sheet on the ground that the same is not attached to the return of the income filed on 17/11/2000. It is submitted that if the return of income was available with the Assessing Officer there would have been no occasion for him to call for the balance sheet and profit and loss account by letter dated 20/09/2000 from the appellant. Thus the conclusion of the CIT(A) as well as the Tribunal that the original return of income may have been available on 13/11/2000 when the notice for reopening was issued without any evidence/basis cannot be sustained. 12. As against the above, Mrs. A. Desai submits that it is not open to the appellant to raise an issue of jurisdiction to issue notice under Section 148 of the Act before the first....
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....isdiction and an objection to it can be raised at any time even in appeal proceedings. The mere fact that no objection is taken before the Assessing Officer would not by itself bestow jurisdiction as the Assessing Officer. Such an objection can be taken in appeal also. Moreover, the Apex Court in its recent decision in Kanwar Singh Saini v. High Court of Delhi [2012] 4 SCC 307 has held that it is settled position that conferment of jurisdiction is a legislative function and cannot be conferred by consent of petitioner. An issue of jurisdiction can be raised at any time even in appeal or execution. Reliance in this regard could usefully be made to Indian Bank v. Manilal Govindji Khona [2015] 3 SCC 712. Paras 22 of the said judgment read as under : "22. In Sushil Kumar Mehta case [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 extra....
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....profit and loss account and the balance sheet was enclosed to the original return of income filed on 22/09/1997. The Assessing Officer had on 20/11/2000 called upon the appellant to produce the balance sheet and profit and loss account for the assessment year 1996-97 as the same were not attached to the return of income filed on 17/11/2000. In case the Revenue had in its possession the 1997 Return of Income then it would have had relied upon the annexures filed with the original return of income and no occasion to call for it from the appellant could arise. The absence of record is prima facie evident from the letter dated 20/11/2000 addressed by the Assessing Officer to the appellant merely 7 days after the issuing of the impugned notice. This aspect has not at all been considered by the authorities under the Act, including the Tribunal. The impugned order of the Tribunal while rejecting the appellant's plea of the notice being without jurisdiction has not dealt with the appellant's above contention but merely upheld the order of the CIT(A). In view of the above the impugned order of the Tribunal holding that the notice dated 13/11/2000 was issued under Section 148 of the ....