TaxTMI 
TaxTMI 
2019 (8) TMI 767
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....el/2018 (by the Revenue) 3. Facts of the case, in brief, are that the assessee is an individual and derives income from 'Salary' and 'Income from other sources.' He filed his return of income on 5th March, 2013, declaring the total income at Rs. 1,94,860/- which was revised to Rs. 3,81,630/- on 6th March, 2013. On the basis of the information received that the assessee has entered into a transaction of sale of immovable property during the F.Y. 2010-11 for Rs. 46,85,30,000/- to different parties and the land sold is situated at a distance of less than 8 kms. from the Municipal Corporation limit of Gurgaon for which the land is qualified to be a capital asset u/s 2(14) of the IT Act, 1961 and as the assessee has not shown any capital gain tax in his income-tax return, the Assessing Officer reopened the assessment by recording reasons and issued notice u/s 148 of the IT Act on 25th March, 2015. The notice was duly served on the assessee. In compliance of the said notice u/s 148, the assessee submitted that the return filed on 6th February, 2013, vide acknowledgement No.5697256900603 should be considered as return filed in response to notice u/s 148. The assessee also requested for ....
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....commercial/cyber over the said land. As owners were not fully equipped to execute and complete the proposed work of Group housing complex, they entered into this agreement with the developer due to his reputation/ experience /expertise and capability to obtain permission for change of land use and to obtain license from the Government for the development/construction of the said housing complex. The Assessing Officer analysed the various clauses of the collaboration agreement. He noted that the owners issued a special power of attorney in 2006 in favour of one Shri Sunil Satija and Shri Dharmendra Bhandari, Directors of Bestech India Pvt. Ltd., nominees of the company for the purpose of representing before the Government Authorities to get the change of land use, sanction, LOI and permission for construction/development of the housing project on the said land for building, carrying out construction and other legal requirements. The owners through M/s Bestech India Pvt. Ltd., made an application on 04.01.2007 to the Government of Haryana to grant permission to construct a residential project over the said land. The Government of Haryana through the Director, Town & Country Planning....
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....ew of the detailed facts and reason as above, it is clear that the land owners including the assessee converted their land holding collectibly with the help of developer to develop the same as constructed space (Units/Apartments) where the cost/market of each unit depends on various parameters as discussed above. The land owners were facing the risk and rewards involved w.r.t. the market condition in respect of potential sale consideration of the units (reward in case of appreciation and risk if there is depression in the rates of apartments depending upon market conditions). The owners including the assessee have taken a series of activities like: * Entering into collaboration with a reputed builder. * Putting the sale consideration in terms of 35% share in the space. * Getting licence in their names for CLU to construct/develop a residential housing project on the said land. * Intent of maximization of profit by intention of selling the space as units. * By putting various conditions in the collaboration agreement upon the developer for speedy / efficient execution of the project to get the constructed space. * The developer was used due to his brand, experience, expe....
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....concerned, the ld.CIT(A) held that the profits arisen to the assessee on account of transfer of land, vide sale deed dated 28th February, 2011 are taxable as longterm capital gain. He, however, rejected the arguments advanced by the assessee challenging the validity of reopening as well as the validity of jurisdiction by the Assessing Officer. 10. So far as the issue relating to validity of jurisdiction is concerned, it was argued before the CIT(A) that the assessee was filing his return with the ITO, Ward 40(3), New Delhi and has never requested for transfer of jurisdiction to Gurgaon. A copy of the submissions of the assessee was forwarded to the Assessing Officer. The Assessing Officer, vide his report dated 12th September, 2016, submitted that the assessee himself had mentioned the address in the ITR as Village-Nakhraula, Tehsil Manesar, Gurgaon. The Assessing Officer reported that this address falls under the territorial jurisdiction of Gurgaon and, as such, the Assessing Officer, Gurgaon was vested with the jurisdiction of the assessee as per section 124 of the IT Act. The Assessing Officer further submitted that the assessee had not raised any objection against the jurisdic....
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....me filed. The information received by the Assessing Officer was specific and precise and there was no ambiguity about the information received. Further, the Assessing Officer had applied his mind to the information received by verifying the assessment records and observing that no income from sale transaction had been shown by the assessee in the return of income filed by him. Relying on various decisions, the ld.CIT(A) upheld the action of the Assessing Officer in reopening of the assessment. He also rejected the ground raised by the assessee challenging the completion of the assessment u/s 143(3) without service of notice u/s 148 and without providing sufficient opportunity to the assessee. So far as the addition on merit is concerned, the ld.CIT(A) upheld the addition made by the Assessing Officer. He, however, treated the entire sale consideration as long-term capital gain after considering the cost of acquisition as computed by the Assessing Officer @ Rs. 20,000/- per acre which comes to Rs. 2,02,786/-. The ld.CIT(A) directed that the long-term capital gain be adopted at Rs. 16,10,41,866/-. The ld.CIT(A) also denied the benefit of deduction u/s 54B and 54F on the ground that t....
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....ts and in law in holding that the land transferred was a capital asset and not an agriculture land ignoring the fact that it was an ancestral land on which agricultural activities were done by the appellant/ancestors for ages, it was shown as agriculture land in revenue records and stamp duty was charged on the transfer of this land treating it to be an agriculture land. 6. Without prejudice to the other grounds of appeal the Ld. CIT (A) has erred on facts and in law in assuming value of the land at the rate of Rs. 25,000/- per acre as on 01.04.1981 as taken by the AO. 7. Without prejudice to the other grounds of appeal the Ld. CIT (A) has erred on facts and in law in denying the benefit of deduction u/s 54B and 54F of the Income Tax Act, 1961 on account of investments made in the agricultural land/residential house eligible for the aforesaid deductions. 8. The appellant craves for liberty to add fresh ground(s) of appeal and also to amend, alter and modify any of the grounds of appeal." 14. The ld. counsel for the assessee strongly challenged the order of the CIT(A) in rejecting the claim of the assessee challenging the validity of jurisdiction by the Assessing Officer. He ....
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.... He was intimated, vide letter dated 15th March, 2013 that the assessee had filed income-tax return for the concerned year. Referring to page 141 and 142 of the paper book, he submitted that the Assessing Officer, Gurgaon, was intimated in response to notice u/s 148 issued by him on 25th March, 2015 that the original return was filed on 6th March, 2013 vide acknowledgement No.569725690060313. He submitted that the PAN of the assessee was available with the Assessing Officer of Gurgaon who could have verified as to the place where PAN is linked. He submitted that as per the information received under RTI, the PAN of the assessee was transferred on 22nd April, 2016. Similarly, in the case of Shri Devender Kumar, it was transferred on 11th September, 2017 and in case of Shri Parvinder Kumar, it was transferred on 19th March, 2015. However, the notice u/s 148 in all the three cases were issued on 25th March, 2015, 2nd September, 2013 and 2nd September, 2013, respectively. Referring to page 148 and 149 of the paper book, he submitted that while disposing of the objection, vide order dated 30.11.2015, the Assessing Officer, Gurgaon had examined the ITR. Once he had examined the income-t....
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.... section is applicable for voluntary returns u/s 139(1) or u/s 115WD filed by the assessee and section 124(3)(b) is applicable when such return is not filed by the assessee. It is not applicable in respect of the return to be filed in response to notice u/s 148. For the above proposition, he relied on the decision of the Hon'ble Bombay High Court in the case of CIT vs. Lalitkumar Bardia (2017) 84 taxmann.com 213 (Bombay). In any case, he submitted that Shri Attar Singh has objected the above jurisdiction vide his letter dated 30.11.2015, copy placed at page 146 of the paper book and which was disposed of by the Assessing Officer vide his order dated 30.11.2015, copy of which is placed at pages 148 and 149 of the paper book. So far as the allegation of the CIT(A) that the assessee has not raised objection about the jurisdiction within the prescribed period of one month is concerned, he submitted that it is only in case of voluntary return filed by the assessee that the dispute over jurisdiction has to be raised within time allowed in section 124(3). However, in case of return filed in response to notice u/s 148, the time limit for raising objections cannot be placed by virtue of....
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....2008) 115 ITD 419 (Lucknow); and (iv) Jindal Photo Films Ltd. vs. DCIT (1998) 234 ITR 170 (Del). 21. Referring to the various decisions relied on by the CIT(A) he submitted that all those decisions are distinguishable and not applicable to the facts of the present case. He submitted that on the facts of the present case the decision of the Hon'ble Punjab & Haryana High Court in the case of Lt. Col. Paramjit Singh (supra) which is the jurisdictional High Court will be applicable. In this case, the facts were that the assessee's original assessment was completed at Pune. Thereafter, he shifted to Jalandhar, but his assessment records were not transferred to the Assessing Officer of Jalandhar by passing an order u/s 127. On the basis of a complaint received from assessee's relatives, the Assessing Officer at Jalandhar initiated reassessment proceedings for issuing notice u/s 148. The Hon'ble Punjab & Haryana High Court held that the Assessing Officer at Jalandhar had no jurisdiction to reopen the assessment and, therefore, notice issued u/s 148 was liable to be quashed. He accordingly submitted that since the notice u/s 148 has been issued by an officer not having jurisdic....
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.... Gurgaon address. Similarly, there is no illegality caused by the Assessing Officer by issuing the second notice and, at the most, the second notice may be treated as infructuous. Referring to the provisions of section 124(3), he submitted that no person can challenge the jurisdiction of the Assessing Officer after one month from the date of service of notice u/s 143(2) and 142(1). Further, the assessee, during the course of assessment proceedings regularly appeared before the Assessing Officer and till the completion of the assessment, the jurisdiction was never challenged. 23. Referring to the decision of the Hon'ble Delhi High Court in the case of Abhishek Jain vs. ITO (2018) 94 taxmann.com 355 (Delhi), he submitted that the Hon'ble Delhi High Court in the said decision has held that in terms of section 124(3)(b) the jurisdiction of an Assessing Officer cannot be called in question by an assessee after expiry of one month from the date on which he was served with a notice for reopening of assessment u/s 148. He accordingly submitted that since, in the case of the assessee, the jurisdiction assumed by the ITO, Gurgaon was not challenged within the time limit provided in ....
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....o. v. DCIT (2018) 91 taxmann.com 306 (SC); vi) Vasudev Fatandas Vaswani v. ITO (2018-TIOL-2305-HC-AHM-IT); vii) Mohammedally Noorbhoy Bandukwala Trust vs. ITO (2017-TIOL- 341-HC-MUM-IT); viii) Aravali Infrapower Ltd. vs. DCIT (2017-TIOL-42-SC-IT), ix) Aravali Infrapower Ltd. vs. DCIT (2017) 390 ITR 456 (Del); x) Dr. Chhangur Rai vs. CIT (2017-TIOL-660-HC-ALL-IT); xi) Amsa India Pvt. Ltd. vs. CIT (2017-TIOL-603-HC-DEL-IT); 24. The ld. counsel, in his rejoinder, submitted that the decisions relied on by the ld. DR in the case of Abhishek Jain (supra) and in the case of S.S. Ahluwalia (supra) are not applicable. First of all, the A.O. falling under the jurisdiction of Punjab & Haryana High Court is bound by the decision of the Hon'ble Punjab & Haryana High Court in the case of Lt. Col. Paramjit Singh (supra) wherein it has been held that if the assessment proceedings already completed by an Assessing Officer are to be reopened or if the income for the relevant assessment year has to be reassessed, it is the ITO who assessed the same in the first instance has the jurisdiction to proceed in the matter u/s 147 read with section 148 unless the case has been transferred by....
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....nd cadre who was compulsorily retired in 1993. During the period 1971-72 to 1978- 79, he was filing his return of income at Dimapur, Nagaland. In July 1978 he was posted to Delhi on deputation in the Ministry of Home Affairs, a position which he continued to hold till 1984. The income-tax returns for the assessment years 1980-81 to 1983-84 were filed at Delhi with the ITO, Salary Circle. The return for the assessment year 1984-85 was filed by the Respondent at Dimapur, Nagaland on 8th August, 1985. The return was processed on 31st March, 1987 u/s 143(1) of the IT Act. A search by the CBI took place on 27th March, 1987 on the basis of certain allegations that he has acquired certain commercial properties at Delhi apart from huge unaccounted/undisclosed deposits in the form of FD receipts which were in the name of the assessee and his family members. The Assessing Officer at Delhi issued notice u/s 148 on 26th June, 1987 in respect of assessment year 1984-85, 1985-86, 1986-87 and 1987-88. Further, in that case, there was exchange of correspondence between the Assessing Officer at Delhi and ITO, Dimapur and the ITO Dimapur considered and accepted that for the assessment year 1986-87 t....
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....ner vs. CIT (A) (2007) 291 ITR 80 and in the case of Subhash Chander v. CIT (2008) 166 Taxman 307 and the decision of the Hon'ble Allahabad High Court in the case of CIT vs. Sohal Lal Sewa Ram Jaggi (2009) 222 CTR 412 and various other decisions. He further held that where the jurisdiction has irregularly been exercised and the assessee participated in the proceedings, the assessee can be said to have waived the objection regarding jurisdiction. Further, the assessee has mentioned his address of Gurgaon in the return of income. The ld. CIT(A) accordingly held that the Assessing Officer has rightly assumed jurisdiction over the assessee and there is no irregularity or illegality. 27. It is the submission of the ld. counsel for the assessee that the Assessing Officer, Gurgaon was intimated vide letter dated 4th May, 2015 that the original return was filed on 6th March, 2013 with the Assessing Officer of Delhi and the Assessing Officer, Gurgaon could have verified as to which place the PAN is linked with. It is also the argument of the ld. counsel for the assessee that the case of the assessee was not transferred from the Assessing Officer of Delhi to Assessing Officer of Gurgaon....
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....y of being heard in the matter, wherever it is possible to do so, and after recording, his reasons for doing so, transfer any case from one or more Assessing Officers subordinate to him (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) also subordinate to him. (2) Where the Assessing Officer or Assessing Officers from whom the case is to be transferred and the Assessing Officer or Assessing Officers to whom the case is to be transferred are not subordinate to the same Director-General or Chief Commissioner or Commissioner,-- (a) where the Directors-General or Chief Commissioners or Commissioners to whom such Assessing Officers are subordinate are in agreement, then the Director-General or Chief Commissioner or Commissioner from whose jurisdiction the case is to be transferred may, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, pass the order ; (b) where the Directors-General or Chief Commissioners or Commissioners aforesaid are not in agreement, the order transfe....
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....opportunity of being heard before an order of transfer is passed and that the competent authority will record his reasons for the transfer. The Explanation to Section 127, makes it clear that once an order of transfer is made under the section, all pending proceedings for different years are transferred and the Assessing Officer to whom the case is transferred would be in a position to continue all the pending proceedings and to institute further proceedings against the assessee in respect of any year, past or future, and even to reopen the assessment for an earlier year which stood completed at the date of the transfer. It is clear that in the absence of any transfer order no Assessing Officer other than the one who initiated the proceedings or completed the assessment shall have jurisdiction to continue with the proceedings or even to reopen a concluded assessment. It is common ground between the parties that the file of the petitioner pertaining to the assessment year 1988-89 has not been transferred from the jurisdiction of the Assessing Officer, Pune, to the Income-tax Officer, Jalandhar (respondent No. 2 herein). As a matter of fact, no order of transfer has been passed by th....
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....he Act also includes a DCIT and other superior officers or an ITO of some other ward who may be vested with the relevant jurisdiction by virtue of orders issued under Section 120 (1) or Section 120 (2) of the Act will not make a difference to the above legal position. The reason is not far to seek. It is only the AO who has issued the original assessment order dated 13th April 2009 for AY 2007-08 under Section 143 (3) of the Act who is empowered to exercise powers under Section 147/148 to re-open the assessment. This is because he alone would be in a position to form reasons to believe that some income of that particular AY has escaped assessment. This again cannot be based on a mere change of opinion. Further, in terms of Section 151 of the Act such a move will have to have the prior approval of the CIT. Under the scheme of the Act, if a superior officer forms an opinion that the original assessment order is prejudicial to the interests of the Revenue, recourse can be had to Section 263 of the Act. In any event the question of an ITO who is not the AO who passed the original assessment order under Section 143(3) of the Act for particular AY, exercising the powers under Sections 14....
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....13. We have considered the rival contentions. The jurisdiction under Section 147/148 of the Act is an extra ordinary jurisdiction and can only be exercised when condition precedent as provided in Sections 147/148 of the Act are satisfied. It is the appellant's case that the aforesaid conditions are not satisfied inasmuch as in the absence of the Assessing Officer having the original return of income available it would not be possible for him to have a reasonable belief that income chargeable to tax has escaped assessment. This issue of jurisdiction according to the respondent - Revenue could only have been raised before the Assessing Officer and not having been raised before him, the appellant had waived its rights to raise the same. The appellant having submitted to the jurisdiction of the Assessing Officer cannot now challenge the same. This is not entirely correct. It is well settled that mere acquiescence will not give jurisdiction to an authority who has no jurisdiction. In fact this Court in CIT V/s. ITSC reported in 365 ITR 87 has held that mere participation by a party in proceedings without jurisdiction will not vest/confer jurisdiction on the authority. Reason to believe ....
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....ullities.' (Kiran Singh case [AIR 1954 SC 340 : (1955) 1 SCR 117] , AIR p. 342, para 6)" Thus, it is open to the petitioner to raise the issue of jurisdiction before the appellate authorities." 32. In view of the above discussion and considering the fact that the assessee was employed with Delhi Police and was regularly filing his return of income at Delhi under ITO, Ward 64(3) [earlier ITO, Ward 40(3)] and since this fact was known to the ITO at Gurgaon, therefore, in absence of any transfer of jurisdiction u/s 127, we hold that the ITO, Gurgaon has no jurisdiction over the assessee. Therefore, respectfully following the decision of the Hon'ble Punjab & Haryana High Court, which is the jurisdictional High Court in view of the assessment order being passed by the ITO at Gurgaon, we hold that the Assessing Officer, Gurgaon had no jurisdiction over the assessee to issue notice u/s 148 and consequently pass the order u/s 147/143(3). Therefore, the notice issued u/s 148 is quashed. Since the reopening is quashed the subsequent orders passed on account of such reopening are also quashed. 33. So far as the decisions of the Hon'ble Delhi High Court relied upon by the ld. DR, ....
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....127 is required to be passed. While going through para 51 of the order, it shows that at clause 8 of para 51, there was exchange of correspondence between the ITO of Delhi and ITO of Dimapur and ITO Dimapur considered and accepted that for assessment year 1984-85 to 1987-88, the Assessing Officer at Delhi had jurisdiction to initiate and complete the assessment proceedings. Similarly, order u/s 127 of the Act was passed and the case was transferred to ITO, Ward 20, New Delhi. Thus, the case of S.S. Ahluwalia (supra) cannot be equated with that of the assessee. In any case, since the Assessing Officer of Gurgaon has passed the assessment order, who falls under the jurisdiction of Punjab & Haryana High Court, therefore, the decision of Hon'ble Punjab & Haryana High Court will prevail over the decision of the Hon'ble Delhi High Court. If the assessment proceedings already completed by Assessing Officer are to be reopened or if the income for the relevant assessment year is to be reassessed, it is the ITO who assessed the same in the first instance has the jurisdiction to proceed in the matter u/s 147 read with section 148 unless the case has been transferred by a competent aut....