TaxTMI 
TaxTMI 
TaxTMI 
2020 (12) TMI 525
X X X X Extracts X X X X
X X X X Extracts X X X X
.... an addition of Rs. 5,50,17,042/- by holding the assessee as an absolute owner of the property being leasehold and encumbered property and, by applying provisions of section 50C of the Income Tax Act, 1961 while computing capital gain arising from transfer of such a property as the transfer of the leasehold and encumbered property is not covered under the provisions of section 50C. 3. For that the learned Assessing Officer has grossly erred in facts and in law in making an addition of Rs. 5,50,17,042/- in complete disregard to the actual sale price realized by the assessee without any evidence of the receipt of the alleged sales consideration by the assessee. 4. For that the learned Assessing Officer has grossly failed in applying basic principles of law and natural justice while framing the assessment order u/s. 147/143(3) of the Income Tax Act, 1961. 5. The appellant craves the leave to take additional grounds as the time of hearing of appeal. 3. Although, in this appeal, the assessee has raised multiple grounds of appeal but at the time of hearing, the solitary grievance of the assessee has been confined to the issue that reassessment proceedings initiated by the Assessin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....assessing officer again issued a letter dated 20.06.2014 to the assessee asking him to file a fresh return of income electronically in response to the notice u/s. 148 of the Act. In compliance, the assessee filed return electronically vide e-filing Acknowledgement Number 198367710210614 on 21.06.2014. The return so filed had been selected for scrutiny and notice u/s. 143(2) of the Act was issued on 07.01.2015. Later on, the assessee vide his letter dated 27.03.2015 requested for the reasons for issuing notice u/s. 148 of the Act. The assessing officer, by his letter dated 06.04.2015 informed the assessee regarding the reasons for reopening of assessment u/s. 147 of the Act. During the reassessment proceedings the assessee submitted written submissions before the assessing officer to substantiate his claim, however, the assessing officer rejected the same and taking into account the valuation report of DVO had computed the long term capital gain of Rs. 5,50,17,042/-. 6. Aggrieved by the order of the Assessing Officer, the assessee carried the matter in appeal before the ld. CIT(A) who has held that the re-assessment proceedings initiated by the Assessing Officer was valid in the ey....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the case are that assessee filed return of income on 14.12.1999, which was processed by the Department under section 143(1) of the Act on 07.01.2000. However, notice u/s. 148 of the Act for reopening was issued on 25.01.2000 (before the expiry of time to issue notice under section 143(2) of the Act). The Hon'ble High Court framed the question of law as under: "Whether Assessing Officer can proceeds with extraordinary power u/s. 147, particularly when normal procedure of assessment of income u/s. 143(3) are available which are otherwise within time?" The Hon'ble Bombay High Court of Nagpur Bench in the case of Smt. Suman vs. ITO (supra) answered the question of law in favour of assessee as follows: "12. Reliance is placed upon the decision of the Apex Court in Rajesh Jhaveri (supra) by the Revenue and in particular upon paragraph 18 thereof which reads as under:- "18. So long as the ingredients of section 147 are fulfilled, the Assessing Officer is free to initiate proceeding under section 147 and failure to take steps under section 143(3) will not render the Assessing Officer powerless to initiate reassessment proceedings even when intimation under section 143(1) h....
X X X X Extracts X X X X
X X X X Extracts X X X X
....for the Revenue. The learned DR argued before us that so long as the ingredients of section 147 are fulfilled, the Assessing Officer is free to initiate proceeding under section 147 and failure to take steps under section 143(3) will not render the Assessing Officer powerless to initiate reassessment proceedings under section 147 of the Act. Therefore, ld DR relied on the judgment of the Hon'ble Supreme Court in the case of Rajesh Jhaveri Stock Brokers (P) Ltd. 291 ITR 500 (SC), to support the action of the Assessing Officer to issue notice under section 148 of the Act before expiry of time limit to issue notice under section 143(2) of the Act. The above cited judgment by ld DR in the case of Rajesh Jhaveri in (2007) 291 ITR 500 (SC) is reproduced below for ready reference: "17. The scope and effect of section 147 as substituted with effect from April 1, 1989, as also sections 148 to 152 are substantially different from the provisions as they stood prior to such substitution. Under the old provisions of section 147, separate clauses (a) and (b) laid down the circumstances under which income escaping assessment for the past assessment years could be assessed or reassessed. To ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssessee's case under consideration the time limit to issue notice under section 143(2) was not expired therefore assessing officer cannot issue the notice under section 148 to make the reassessment under section 147 of the Act. Therefore, we do not agree with the argument of ld DR to the effect that the Assessing Officer is free to initiate proceeding under section 147 and failure to take steps under section 143(3) will not render the Assessing Officer powerless to initiate reassessment proceedings under section 147 of the Act. 11. We note that in the assessee's case, return of income for the year was filed by the assessee on 29.06.2013 and therefore notice under section 143(2) of the Act could have been issued by the assessing officer up to 30.09.2014. In other words, in assessee's case the time available for issue of notice under section 143(2) of the Act is on or before 30.09.2014 and after 30.09.2014, the assessing officer cannot issue notice under section 143(2) of the Act to frame the assessment under section 143(3) of the Act. However, in the assessee's case, the assessing officer issued notice under section 148 of the Act on 21.06.2014. Thus, assessing offi....