TaxTMI 
TaxTMI 
2021 (4) TMI 901
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....chased the property in auction from UCO Bank for Rs. 9,02,021/- on 18/09/2007 and sold the same on 26/09/2007 for Rs. 9,81,000/-, therefore, under these peculiar circumstances value adopted by stamp authorities at Rs. 15,98,915/- cannot be considered as deemed sales consideration. He has further erred in applying the provisions of Section 50C without referring the matter to DVO. 3. The appellant craves to alter, amend and modify any ground of appeal. 4. Necessary cost be awarded to the assessee." 2. The hearing of the appeal was concluded through video conference in view of the prevailing situation of Covid-19 Pandemic. 3. The brief facts of the case are that the assessee is an advocate and is engaged in legal practice. He filed his return of income on 31.07.2008 with ITO, Ward-7(1), Jaipur at total income of Rs. 1,40,840/-. The ITO, Ward-2(3) issued notice u/s 148 of the Income Tax Act, 1961 (in short, the Act) on 27.03.2015. The assessee objected to the notice issued u/s 148 vide letter dated 19.08.2015 on various grounds like lack of jurisdiction, reopening of assessment on the basis of information received from DIT (I & CI) and non-filing of return. The ....
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.... In this case survey u/s 133A was conducted at business premises of assessee and notice u/s 148 was issued by ITO at Suratgarh. CIT(A) held that pecuniary or territorial jurisdiction as contemplated u/s 124 was not applicable as assessee was filling his return of income with ITO at Chennai. Hon'ble ITAT held that assessee was regularly filing his returns of income at Chennai and at time of issuance of notice under section 148, ITO at Suratgarh had no jurisdiction over assessee. Hon'ble High Court held that no error or illegality is found in observations of CIT(A) as approved by ITAT. ITO at Suratgarh got jurisdiction over assessee only on 21.08.2007 and prior to that he had no jurisdiction over assessee when he was filing returns of income with ITO at Chennai. Proposal for transfer of jurisdiction over assessee, from Chennai to Suratgarh, materialized only on 21.08.2007 and proceedings initiated prior to such date by issuance of notice under section 148 was not authorized and competent. When proceedings were sought to be adopted by ITO at Suratgarh, jurisdiction for assessment in relation to assessee was being exercised at Chennai. High Court was unable to find any cogent r....
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.... (i) Sh. Kulwant Singh vs. ITO ITA No.841/JP/18 order dt. 20.12.2018 (Jaipur) (Trib.) (ii) PCIT Vs. RMG Polyvinyl (I) Ltd. (2017) 156 DTR 79 (Del.) (HC) In view of above, notice issued u/s 148 and consequent order passed u/s 147 is illegal and bad in law and the same be quashed. 6. On the other hand, the ld. DR has vehemently supported the orders of the revenue authorities and also relied on the following decisions: (i) Advantage Strategic Consulting (P) Ltd. Vs Pr.CIT (2017) 88 taxmann.com 104 (Mad.) (ii) CIT Vs Nova Promoters & Finlease (P) Ltd. (2012) 18 taxmann.com 217 (Del) (iii) Phool Chand Bajrang Lal Vs ITO (1993) 69 Taxman 627 (SC) (iv) CIT Vs Bidhu Bhusan Sarkar (1967) 63 ITR 278 (SC) (v) Abhishek Jain Vs ITO (2018) 94 taxmann.com 355 (Del) 7. We have considering the rival contentions of both the parties and have perused the material placed on record. We have also deliberated upon the decisions cited in the orders passed by the authorities below as well as cited before us and we have also gone through the orders passed by the revenue authorities. The Assessing Officer has reopened the assessment ....
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....see was regularly filing his returns of income at Chennai and at time of issuance of notice under section 148, ITO at Suratgarh had no jurisdiction over assessee. Hon'ble High Court held that no error or illegality is found in observations of CIT(A) as approved by the ITAT. The ITO at Suratgarh got jurisdiction over assessee only on 21.08.2007 and prior to that he had no jurisdiction over assessee when he was filing returns of income with ITO at Chennai. Proposal for transfer of jurisdiction over assessee, from Chennai to Suratgarh, materialized only on 21.08.2007 and proceedings initiated prior to such date by issuance of notice under section 148 was not authorized and competent. When proceedings were sought to be adopted by ITO at Suratgarh, jurisdiction for assessment in relation to assessee was being exercised at Chennai. Hon'ble High Court was unable to find any cogent reason to entertain appeal so as to interfere with concurrent orders passed by CIT(A) and ITAT. 8. From the reasons recorded it can be noted that that notice u/s 148 is issued solely on the basis of information received from DIT(I & CI), Jaipur wherein it is stated that assessee has sold property P. No. C....
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....iry conducted by the AO thereon as also the conclusions thereof. Further where the reasons make a reference to any document, such document and / or relevant portion thereof must be enclosed along with the reasons. Therefore, reasons recorded by the AO are found to be not in accordance with law. Consequently, the reassessment proceedings, culminating in the order under appeal, are also not sustainable in the eye of law and they too are cancelled. Nothing further survives for adjudication. In the absence of the link between the information available with AO and formation of belief by AO for reassessment, reassessment proceedings are not valid. The Coordinate Bench of Ahmadabad Tribunal in the case of Smt. Sunita Jain Vs. ITO (2017) 49 CCH 0330 (Ahd.) (Trib.) has held as under: The Hon'ble ITAT after relying on the decision of Gujarat High Court in case of Harikishan Sunderlal Virmani Vs. DCIT, quashed the assessment framed u/s 147. The Hon'ble High Court in its case held that the material on the basis of which the AO seeks to assume the jurisdiction under section 147 of the Act is the information received from the external source viz. the Principal Director of Inc....
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..... 15,20,500/- chargeable to tax has escaped assessment for the A.Y.2011-12 and thus it is a fit case to initiate proceeding within the meaning of section 147 of Income Tax Act,1951. Notice u/s 148 of Income Tax Act,1961 is issued accordingly." Thus, it is manifest from the reasons recorded by the Assessing Officer that the Assessing Officer begins with the statement that the assessee has not filed return of income for the A.Y. 2011-12. Further while forming the belief, again the Assessing Officer has stated that the assessee has not filed return of income and therefore, he has reason to believe that the income of Rs. 15,20,500/- to be deposited in the bank account chargeable to tax, has escaped assessment. This statement of the Assessing Officer in the reasons recorded is the basis for formation of belief is factually incorrect as the Assessing Officer himself has recorded this fact in the assessment order and stated that the return of income was filed by the assessee through e-filing on 05/9/2011 declaring total income of Rs. 2,26,290/-. Further when the assessee has declared the turnover of more than Rs. 31.00 lacs then the deposits in the bank account would not....
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.... to note the said return of income was not filed in pursuance to issuance of notice u/s 148 but the same was the return of income which was originally filed by the assessee u/s 139 of the Act. It is therefore clear that the whole foundation of the Revenue's reasoning is contradictory and self-defeating where at the time of issuance of notice u/s 148, it says that the assessee has failed to file his return of income and subsequently, during the proceedings u/s 147, it admits that the assessee has filed his return of income originally under section 139. On this ground itself, the assumption of jurisdiction u/s 147 cannot be sustained and the subject proceedings are liable to be quashed. 15. Now, coming to the reasons which have been recorded by the ITO Ward 6(1), Jaipur for initiating proceedings u/s 147 of the Act which are reproduced as under: "As per AIR information generated from the system, the assessee has made investment of Rs. 1057000/- for purchase of units and SB Account during FY 2006-07 relevant for A Y 2007-08. Since as per system no return of income has been filed for A Y 2007-08 the above transaction is not verifiable. I have, therefore, ....
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....aped assessment for the A Y in question. While the AO has referred to the fact that the ED gave information regarding cash deposits being found in the books of the Assessee, the AO did not state that he examined the returns filed by the Assessee for the said AY and detected that the said cash deposits were not reflected in the returns. In fact, the AO contradicted himself in the reasons recorded by him by noticing the information of the ED to the above effect and then stating that on perusal of the records for the AY in question it was noticed that the Assessee "had not disclosed these transactions in its books of account" Further the AO refers to the ED's information that Mr. Chetan Gupta, partner of the Assessee, failed to explain the sources of the cash deposits as shown in the books of account However, that by itself could not have led the AO to even prima facie conclude that income of the Assessee had escaped assessment. The explanation or the lack of it of the entries in the books of account may have certain relevance as far as ED is concerned but that by itself does not provide the vita! link for concluding that for the purposes of the Act any part of cash depos....