TaxTMI 
TaxTMI 
2021 (9) TMI 329
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....,169/- vide order u/s 143(3)1147 dated 20.12.2017. 2. The Ld. CIT(A) erred on facts & law in confirming the validity of the proceedings u/s 1471148 because the Joint Commissioner of Income Tax did not record the satisfaction on the reasons recorded by the AO, as prescribed u/s 151, that the case of the assessee was fit for issue of notice u/s 148. 3. The Ld. CIT(A) erred on facts S law in confirming the validity of the proceedings u/s 1471148 because the ownership of land introduced as capital in the firm was ancestral belonging to the HUF while the reasons have been recorded u/s 147 & notice u/s 148 has been issued in the status of individual. 4. The Ld. CIT(A) erred on facts & law in confirming the validity of the proceedings u/s 147/148 because the reasons recorded by the AO to initiate the proceedings are reasons to suspect & not reasons to believe and further, there is no reason to believe that income of the assessee has escaped assessment. 5. The Ld. CIT(A) erred on facts & law in assessing the Long Term Capital Gains by invoking the provision of section 45(3) of the Income Tax Act, 1961 because no real income arose/received or accrued to t....
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....s under: "I have to very humbly submit that the notice u/s 148 has been issued and the copy of live reasons to issue notice u/s 148 has been provided. The objections against the same for which the assessee is entitled as per the binding precedent of the Apex Court in the case of GKN Driveshafts (India) Ltd. V. ITO(2002) 125 Taxman 963 (SC) are as under because the return of income in respect to notice u/s 148 has already been filed:- (i) The notice u/s 148 has not been served in accordance with the provisions of Section 282 of the Income Tax Act, 1961. (ii) The satisfaction of the Joint Commissioner of Income Tax on the reasons recorded which is mandatory in accordance with the provisions of Section 151(2), has not been recorded in accordance with the procedure laid down under the Act. (iii) The provisions of Section 45(3) are also not applicable because it is only a deeming provision which creates fiction only to fix the, year of transfer and consideration on transfer but there is no fiction regarding accrual of profits and gains on transfer of capital gain, (iv) It has been categorically stated in the reasons for initiating the reasses....
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....actually transferred to the firm. As per provisions of Section 48, the amount recorded in the books of account of the firm, as the value of the capital asset shall be deemed to be the full value of the consideration received or accruing as a result of the transfer of the capital asset. iv. The plea regarding ancestral land taken in individual status is not acceptable although the land was ancestral yet the assessee has become a partner in the firm in the capacity of individual and not in HUF capacity. Thus, this plea is also not acceptable. 5.3 The A.O. framed the assessment by making the addition of Rs. 3,87,03,600/- on account of Long Term Capital Gain. 6. Being aggrieved the assessee carried the matter to the Ld. CIT(A) and challenged the validity of the reassessment proceedings. The assessee furnished the written submission which had been incorporated by the Ld. CIT(A) in para 4.1 of the impugned order and read as under: In the above stated Grounds of Appeal the assessee has challenged the validity of proceedings u/s 147/148 & the submissions of the assessee are as under;- (i) The notice u/s 148 was not served in accordance with the provisions o....
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....essment by observing in para 4.2 of the impugned order as under: 4.2 I have given careful consideration to the contentions above and find that exactly identical objections were filed before the Assessing Officer in the assessment proceedings as has been mentioned in paragraph 2.1 of the assessment order. The objections of the appellant were met by the Assessing Officer vide order dated 15/11/2017 which has been extracted in paragraph 3 of assessment order. The service of notice in this case has been made on 27/03/2017 through notice server, therefore the contention is not acceptable. The appellant is making bald averment that the approving authority did not apply mind without mentioning the basis of such assumption. Similarly, the appellant is becoming judge in its own case by taking an argument that the provisions of section 45(3) of Income Tax Act could not have been applied in his case. In A.L.A. Firm v. CIT [1991] 189 ITR 285 (SC), a similar issue of capital gains was before the Assessing Officer and it was held that the jurisdiction of the Income-tax Officer to reassess income arises if he has, in consequence of specific and relevant information coming into h....
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....he said sale deed on which the A.O. has relied while computing the capital gain [Refer Page No. 10 of the paper -book] and thereafter the department provided the copy of sale deed to the assessee. [Refer Page No. 4 to 7 of the paper book] 6. That during the course of assessment proceedings the assesse filed certificate from Tehsildar & Valuation Report of the registered Valuer with regard to FMV of the subject land as on 01.04.1981 but these were rejected arbitrarily. [Refer Para 5(ii) on Page No. 5 & 6 of the assessment order] 7. That the Ld. CIT(A) also rejected the certificate of Tehsildar & Valuation Report by the registered Valuer regarding the FMV of the subject land as on 01.04.1981. [Refer para 5.2.20 on Page No. 10 & 11 of the appellate order] 8. But neither the A.O. nort eh Ld. CIT(A) allowed any further opportunity to the assessee to submit the documentary evidence regarding the FMV of the property as on 01.04.1981. 9. The assessee on the advice of his counsel, engaged for filing the appeal before this Hon'ble Bench of ITAT, obtained the comparable sale instances from the local revenue authorities regarding the FMV of the subject l....
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....nted by sufficient cause to lead such an evidence and that this evidence would have material bearing on the issue which needs to be decided by the Tribunal and ends of justice demand admission of such an evidence, the Tribunal can pass an order to that effect. "The Hon'ble Delhi High Court relied upon the following case while deciding the above said case:- * Analkar Trades and Estates (P.) Ltd. (No. 2) Vs. CIT [1990] 186 ITR 313 (Mad.) * R. Dalmia Vs. CIt [1978] 113 ITR 522 (Delhi) * R.S.S.. Shanmugam Pillai and Sons V. CIT [1974] 95 ITR 109 (Mad.) * ITO V. B.N. Bhattachayra [ 1978] 112 ITR 423 (Cal.) (iv) Decision of ITAT, Delhi 'I' Bench in the case of UOP LIC Vs. Additional Director of Income reported in 108 ITD 186 in which it was held that the additional evidence should be admitted. If it to may pronounce the judgment but all for any other substantiate cause and in this case, the department was not in appeal, but still the department evidence was admitted since it has bearing in the judgment of the above said case. (v) Decision of Madhya Pradesh High Court in the case of CIT Vs. Gani Bhai Wahab Bhai reported in 232 ITR ....
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....the eyes of the law. 9.1 Ld. Counsel for the assessee drew our attention towards page no. 3 of the assessee's paper book wherein JCIT, Range-1, Bathinda gave the approval to issue the notice under section 148 of the Act. It was submitted that in the said approval the Ld. JCIT, Range-1, Bathinda simply mentioned that this is a "fit case to issue notice under section 148 of the Act" and no satisfaction has been recorded therefore the satisfaction so recorded was not valid in the eyes of law for issuing the notice under section 148 of the Act. The reliance was placed on the decision of the ITAT Chandigarh Bench "B" in the case of Shri Tek Chand, Karnal Vs. ITO Ward-2, Kaithal in ITA No. 255/Chd/2020 for the A.Y. 2009-10 (copy of the said order was furnished which is placed on record). The reliance was also placed on the following case laws : * CIT Vs. S. Goyanka Lime & Chemical Ltd. [2015] 64 taxmann.com 313 (SC) * Arjun Singh Vs. ADIT [2000] 246 ITR 363 (M.P.) 10. In his rival submissions the Ld. CIT DR strongly supported the orders of the authorities below and further submitted that the A.O. as well as the approving authority recorded their satisfaction befor....
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....2021 in ITA No. 215/Chd/2020 for the A.Y. 2009-10 in the case of Shri Tek Chand, Karnal Vs. ITO, Ward-2, Kaithal, the issue has been decided in favour of the assessee and the relevant findings have been given in para 14 to 14.4 which read as under: 14. We have considered the submissions of both the parties and perused the material available on the record. In the present case it is noticed that the A.O. obtained the approval of the JCIT before issuing the notice under section 148 of the Act, performa copy of which is placed at page no. 1 of the assessee's paper book, in the said Performa for recording the reasons for initiating the proceedings under section 147 / 148 of the Act and for obtaining the approval of the Ld. JCIT, it has been mentioned in column no. 11 as under: " Yes it is approved for 148 action " SD/- (Umesh Takyar) Joint Commissioner of Income Tax Range-1, Jalandhar From the aforesaid approval it is clear that the JCIT, Range-1, Jalandhar recorded the satisfaction in a mechanical manner without application of mind. He accorded the sanction for issuing notice under section 148 of the Act in a mechanical man....
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.... been satisfied in the circumstances of the case or not. 14.3 On an identical issue the ITAT Chandigarh Bench "B" Chandigarh vide order dt. 15/03/2021 in ITA No. 215/Chd/2020 for the A.Y. 2009-10 in the case of Shri Tek Chand Vs ITO, Ward-2, Kaithal held as under: 14.1 The A.O. obtained the approval of the PR. CIT before issuing the notice under section 148 of the Act. The proposal dt. 11/03/2016 seeking the approval for issuance of notice under section 148 of the Act, by the A.O. is placed at page no. 2 & 3 of the assessee's paper book. While giving the approval the Ld. PR. CIT, Karnal recorded as under: " Yes, satisfied, it is a fit case for issue of notice under section 148 " Sd/- Pr. CIT, Karnal 14.2 From the aforesaid approval, it is clear that the Ld. Pr. CIT recorded satisfaction in the mechanical manner, without application of mind to accord sanction for issuing notice under section 148 of the Act. On an identical issue the Hon'ble M.P. High Court in the case of CIT Jabalpur Vs. S. Goyanka Lime & Chemical Ltd. reported at (2015) 56 Taxmann.com 390 by following its own decision in the case of Arjun Singh Vs. ADIT (200....