TaxTMI 
TaxTMI 
2021 (5) TMI 26
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.... [CIT(A)]-3, Visakhapatnam in common order dated 31.05.2018 for the Assessment Year (A.Ys.) 2009-10 to 2011-12. Facts of the case are identical in all the appeals, hence all the appeals are clubbed, heard together and disposed off in a common order for the sake of convenience. The facts of the case are extracted from I.T.A. No.725/Viz/2019 and the same are applicable in all the appeals except the change in amounts. 1. Condonation of Delay: These appeals are filed by the assessees with the delay of 492 days and the assessees have filed the condonation petitions stating that the assessees have received the appeal orders from the Ld.CIT(A) on 31.05.2018 and the appeals ought to have been filed on or before 30.07.2018, but the appeals were filed on 31.12.2019 resulting in delay of 492 days. The assessees have filed the petition for condonation of delay along with the affidavits. In their petition for condonation the assessees have stated that the income tax related matters were looked after by Shri A.Murali Mohana Raju, Accountant and he has collected all the necessary papers for filing the appeal from the Advocate and got it signed by the assessees and fell sick for 10 days and lat....
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....ity. 4. Soon thereafter, the appellant(s) filed appeal(s) accompanied by the subject application(s) on 19.07.2008. Notably, the respondent(s) did not expressly refute the stand taken by the appellant (s) - that they had no knowledge about passing of order dated 29.12.2003 until June, 2008. Unless that fact was to be refuted, the question of disbelieving the stand taken by the appellant(s) on affidavit, cannot arise and for which reason, the High Court should have shown indulgence to the appellant(s) by condoning the delay in filing the concerned appeal(s). This aspect has been glossed over by the High Court. 5. Accordingly, these appeals are allowed. We set aside the impugned order of the High Court and relegate the parties before the High Court, by allowing the civil application(s) filed by the appellant(s) for condonation of delay in filing the concerned appeal. In the instant case the assessee was under the bonafide impression of having filed the appeal by the Ld.Accountant, but came to know the fact of not having filed the appeal when there was pressure from the department for payment of demand. Therefore, following the orders of the Hon'ble Supreme Court, ....
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....tive share holding in the land for the financial years 2008-09 to 2010-11 relevant to the A.Ys.2009-10 to 2011-12 as under : Financial Year Asst.Year Consideration admitted for all 62 flats (Rs.) 2008-09 2009-10 1,27,04,500 2009-10 2010-11 1,63,44,500 2010-11 2011-12 4,09,04,000 Total 6,99,53,000 4.3. A Search and seizure operations u/s 132 of the Income Tax Act, 1961 (in short 'Act') were conducted in the case of 'Navya Constructions Group' (in short 'Navya group'/builders) on 17.12.2013 and the group is engaged in the business of constructions and development of house properties in and around the Visakhapatnam District, since, the year 2005. During the course search proceedings a statement was recorded on oath from Shri M.VijayaKumar, Managing Director of Navya Constructions u/s 132(4) on 10.04.2014, wherein, he had stated that the firm (builders) had sold 48 flats of land owners share and received the amount of Rs. 12,42,15,000/- and out of which a sum of Rs. 4,31,27,426/- was retained by the firm and the balance amount of Rs. 8,10,87,574/- was paid to the land owners. The Deputy Director of Income Tax(Inv){in short DDIT} du....
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.... the details given below: Name of the assessee Assessment years Concealment Of income.Rs. K.Subba Raju 2009-10,2010-11 and 2011-12 36,23,449 K.Lakshmii Sirisha 2009-10,2010-11 and 2011-12 36,23,449 S.Raja Ramesh 2009-10,2010-11 and 2011-12 36,23,449 K.Lakshmi Uma 2009-10,2010-11 and 2011-12 36,23,449 K.Prasad 2009-10,2010-11 and 2011-12 31,35,728 K.Bhaskara Raju 2009-10,2010-11 and 2011-12 24,01,495 K.Siva Rama Raju 2009-10,2010-11 and 2011-12 19,16,425 S.Lavanya 2009-10,2010-11 and 2011-12 24,01,495 K.Krishna Kumari 2009-10,2010-11 and 2011-12 21,57,635 5.0 Against the order of the AO, the assessee went on appeal before the Ld.CIT(A) and challenged assessments on merits as well as on technical grounds. The Ld.CIT(A),with regard to assessee's objection of completion of assessment without communicating the reasons held that the AO has shown the reasons recorded to the Ld. AR of the assessee during the assessment proceedings and hence viewed that there was no lapse on the part of the AO in communicating the reasons to the assessee and accordingly dismissed the appeal of the assessee and held ....
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.... the Act. 5. Without prejudice to the above, the learned Commissioner of Income Tax 1 (Appeals) is not justified in upholding the action of the assessing officer in recomputing the capital gains at Rs, 927,050 as against Ps. 1,78,185 admitted by the appellant by adopting the sale consideration of flats at Rs. 9,64,59,574 as against the actual consideration of Rs. 6,99,53,000 received by the appellant and other co-owners. 6. Any other grounds may be urged at the time of hearing. 6.0 Ground No.1 and 6 are general in nature which does not require specific adjudication. 7.0. Ground No.2 and 3 are related to the completion of assessment without communicating the reasons. The assessee in ground No.2 and 3 challenged the validity of reassessments made u/s 147 r.w.s. 143(3) without communicating the reasons. In the instant case, the AO had issued the notice u/s 148 calling for the return of income and the assessee has filed a letter dated 23.09.2016 to treat the return already filed as return in response to the notice u/s 148. Subsequently the assessee has requested for supply the reasons recorded for reopening the assessment, vide letter dated 21.10.2016. The AO di....
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....s. Therefore, argued that there is no merit in the argument of the Ld.AR that the assessment was completed without communicating the reasons. Since, the AO has communicated the reasons to the assessee, the legal requirement of supplying the reasons was complied with by the AO and hence argued that the Ld.CIT(A) has rightly upheld the validity of the assessment. Therefore, the Ld.DR requested to uphold the order of the Ld.CIT(A) and no interference is called for in the order of the Ld.CIT(A) and dismiss the appeals of the assessee. 8. We have heard both the parties and perused the material placed on record. In the instant case, the assessee has requested for supply of reasons and the AO has not communicated the reasons in writing, however, shown the reasons recorded to the authorized representative of the assessee during the course of assessment proceedings. The other objection of the AO was that the assessee had requested for reasons only in one case i.e. ShriK.Subba Raju and not other cases and hence viewed that the AO is not obliged in supplying reasons in other cases. There is no dispute that the AO has completed the assessment of all cases on the basis of the statement recor....
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.....12.2017 in ITA Nos.294, 295 & 576/Viz/2014). The coordinate bench of ITAT held as under . "9. The AO has completed the assessment without communicating the reasons recorded for issue of notice u/s 148, in spite of the specific request made by the assessee for furnishing the reasons. As per the judgement of Hon'ble Supreme Court in the case of M/s GKN Drive Shafts (India) Ltd. Vs. ITO, it is obligatory on the part of AO to communicate the reasons on furnishing the return of income. The assessee in response to the notice issued u/s 148 submitted a letter to the AO to treat the returns filed earlier as returns in response to the notice issued u/s 148. Thus the assessee has complied with the mandate of Hon'ble Supreme Court judgement cited supra but the AO failed to communicate the reasons. The assessee relied on the decision of Hon'ble High Court of Calcutta in the case of Berger Paints India Ltd. Vs. ACIT (Supra), wherein Hon'ble High Court held that the assumption of jurisdiction of assessing officer u/s 147 depends upon existence of reasons followed by communication thereof to theassessee. If the notice served under section 148 is challenged, the AO cannot proceed with th....
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....ble A.P.High court also considered the issue of validity of assessments for non-communication of reasons in Commissioner of Income Tax-III vs Shri N.Surya Prakasha Rao in Income Tax Appellate Tribunal Appeal No.156 of 2014 dated 06/03/2014 relied upon by the Ld.A.R and upheld the order of Tribunal and dismissed the appeal of the revenue. The department did not place any other judgments to controvert the decisions relied upon by the assessee. Similar issue was considered by Hon'ble Karnataka High court in Pr.CIT vs V. Ramaiah in (2019) 103 Taxamann.com 201 and held that non communication of reasons recorded to the assessee is fatal to the assessment and the Hon'ble Supreme court dismissed the SLP filed by the Revenue in [2019] 103 taxmann.com 202 (SC). For the sake of clarity we reproduce the relevant part of the order of Hon'ble High court which reads as under: 5. Having heard the learned counsels for the parties, we are satisfied that no substantial question of law arises in the present appeal filed by the Revenue in as much as the recording of reasons for reassessment under Section 147/148 of the Income Tax Act or non-communication thereof to the assessee does not amount....
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....hority as preliminary objection of assessee, once the assessee has raised the objection to such reassessment proceedings, the meeting of such objections in the main reassessment order, could be procedural aspect of the matter, but the recording of the reasons before the initiation of the reassessment proceedings and communication thereof to the assessee is sine qua non, as held by Hon'ble Supreme Court and that goes to the root of the matter and confers or deprives the assessing authority of the jurisdiction to undertake such reassessment proceedings, as the case may be. 9. In the present case, admittedly, such reasons were not supplied to the assessee during the contemporary period before going ahead with the reassessment proceedings. Therefore, the Tribunal in our opinion was perfectly justified in quashing such reassessment order. In view of the foregoing discussion, we hold that completion of assessment u/s 143(3) r.w.s 147 of the Act, without communicating the reasons recorded to the assessee, when specifically requested is unsustainable and liable to be quashed. 9. Now, we take up ground No.4 which relates to the question as to whether in the facts and the ....
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....nt recorded u/s 132(4), and the joint receipt that was seized during the course of search no other material is available with the department to believe that either the assessee had under stated the receipts or concealed the income. Thus submitted that, the basis for reopening the assessment was the Joint Receipt that was seized by the department during the course of search and the statement recorded u/s 132(4), hence, argued that the AO ought to have taken action u/s 153C, but not u/s 147 of the Act. The Ld AR further argued that search assessments required to be made u/s 153A or 153C as per the scheme, but not under section u/s 147 of the act. Therefore argued that the assessment made u/s 147 r.w.s. 143(3) is invalid and required to be quashed and the assessee's appeals to be allowed. The Ld.AR relied on the decision of Hon'ble Delhi High Court in the case of Pr.CIT (Central)-3 Vs. Anand Kumar Jain in ITA No.23/2021 dated 12/02/2021 and the decision of this Tribunal in the case of G.Koteswara Rao & others in I.T.A. No.400/Viz/2014 dated 29.10.2015. 9.2. On the other hand, the Ld.DR relied on the order of the Ld.CIT(A) and argued that the Joint Receipt was supplied by the builde....
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....and seized during the course of search. The department failed to controvert that the said joint receipt was not seized during the course of search and thus, we hold that the joint receipt was the document found and seized during the course of search, evidencing the payments stated to have been made by the builder to the assessee , which is the foundation for reopening the assessments. 10.1. As per section 153C of the Act, notwithstanding anything contained in section 139, 147, 148, 149, 151 and 153, where the AO is satisfied that any money, bullion, jewellery, valuable article or thing seized or requisitioned belongs to or the books of accounts or documents seized or pertains or pertain to or any other information contained therein relates to a person other than the person referred to in section 153A (searched person), then the AO of the searched person handover the books of accounts, documents or valuable articles or things or documents or the assets to the officer having jurisdiction over such other person and the AO of such other person shall proceed against each such other person and issue notice and assess or reassess the income as per section 153C of the act. As provided i....
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.... view of the non-abstante clause begin with section 153A, the Assessing Officer has no jurisdiction to issue notice u/s 148 reopen the assessment of those six assessment year which falls within the exclusive jurisdiction of section 153A. Though, both provisions of the Act empowers the Assessing Officer to assess or reassess the income escaped from assessment, both sections are dealing with different situations. Section 147 comes into operation when, the Assessing Officer believes that there is an escapement of income chargeable to tax, either from the return already filed or through some external material evidence came to his knowledge, which shows the escapement of income. Whereas, section 153A comes into operation when there is search u/s 132 or books of accounts, or any other asset or other documents requisitioned u/s 132A. If Assessing Officer justified in proceeding with section 147 to reopen the assessment, then there would be no relevance to section 153A, which was inserted in to the Act to deal exclusively with search cases. The legislators in their wisdom clearly spelt out the provisions of law applicable to search cases by using the word shall to begin with section 153A, ....