2022 (5) TMI 1170

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.... issue of impugned notice. Consequently the assessment order passed in pursuance of aforesaid notice is also void ab-initio. 3. The learned lower authorities have grossly erred in construing the general observation of the Hon'ble Income Tax Appellate Tribunal in another assessees case as findings or directions, though there was neither a finding nor a direction given by the Hon'ble Tribunal in the appellate order of another assessee. 4. The assessment order passed by the learned Assessing Off icer by recourse to sec 147 r.w.s 150 of the l.T.Act,1961 and upheld by the learned CIT(A) is ab-initio void , inasmuch as, no opportunity of being heard, in terms of Explanation 3 below section 153 of the I.T.Act,1961 was granted. 5. The notice issued under section 148 is void ab-initio, inasmuch as no satisfaction of the Jt CIT in terms of sec 151(2) of the I.T.Act,1961, was obtained prior to issue of notice u/s 148 of the I. T. Act, 1961. 6. The Learned lower authorities have grossly erred in holding that the status of the appellant was that of an " Association of Persons instead of Joint Owners' of separately and distinctly identifiable properties, a....

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....m other sources not proved to be transferred to the joint lessees or individuals thereof 20,25,422/-   Total Rs. 6,34,10,287/- 3. The Hon'ble ITAT has deleted the additions in the hands of the company treating the same as income of the joint lessee of Industrial Estate(assessee) who have filed the return of income for the A.Y 2008-09 and 2009-10 in the status of AOP. The A.O. find that the assessee for the A.Y 2007-08 has not filed the return of income and the A.O. has reason to believe that there is a income escaped the assessment and issued the notice u/s 148 of the Act on 27.03.2014 after obtaining the sanction u/s 151 of the Act. Subsequently the notice u/s 143(2) and 142(1) of the Act are issued. In compliance to notice, the assessee has filed the return of income on 02.06.2014. Subsequently, the Ld. AR of the assessee appeared from time to time and submitted the details as called for and the case was discussed. The assessee has filed the objections on the initiation of reassessment proceedings vide letter dated 13.02.2015 and the reply to the objections was provided to the assessee on 18.02.2015. 4. The assessee is a AOP and having income from house pro....

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....lect Rent on behalf of the joint Lessees from the tenants of various establishments on the Land. For these services the Company charged service charges to the Joint Lessees. For the better control & management, the joint Lessees did not have any separate bank account in respect of transactions relating to the said estate property. And therefore, all the transactions of the Joint Lessees were made by the Company on behalf of the Joint Lessees through the bank account of the said Company, under the said Power of attorney. Year to Year, the rent collected by the Company on behalf of the joint Lessees and other receipts received on behalf of the Joint Lessees were credited by the company to the ledger account in Company's books of account and all payments made by the Company on behalf of the joint Lessees were debited to the said account. Likewise, the Company made investments on behalf of the said joint Lessees under the Power of Attorney as above out of the funds belonging to the joint lessees. 5. Whereas, the A.O. has considered the facts of rental income from property/other incomes and observed as under: 'During the course of assessment proceedings....

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....istributed among joint lessees accordingly to their respective shares. 6. On the disputed issue (i) with respect to income from house property, the assessee has disclosed the loss from house property of Rs. 5,88,542/- in respect of payment of land revenue tax, property tax and bad debts. Whereas, the assessee has submitted the details of land revenue tax and therefore the A.O has considered the deduction of land revenue tax on the house property income and assessed the income from house property of Rs. 3,22,080/- as against the loss of Rs. 5,88,542/- claimed by the assessee. (ii) The A.O has made an addition of long term capital gains Rs.13,30,000/- from receipt of transfer fees/ compensation of tenancy rights and short term capital gains of Rs.9,433/- under the head income from capital gains.(iii) on applicability of provisions of Sec. 50C of the Act, the A.O. observed that in the assessee's case the market value exceeded the sale consideration. The property value is less than the stamp duty value of S.R.O disclosed by the assessee and made an addition of differential value of Rs.2,91,20,000/-.(iv) the A.O. observed that the assessee has not offered the long term capital gains ....

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.... of the case. The Ld. AR emphasized that the A.O has issued the notice based on the observations of the Hon'ble ITAT in the case of M/s industrial estates Pvt Ltd and no independent enquiry was conducted for recording the reasons and purely relied on the findings of the other assessing officer. The Ld. AR has demonstrated the reasons recorded for the reopening of assessment at page 9 of the paper book. The Ld. AR submitted that the assessee is an AOP and has filed the return of income for the A.Y 2008-09 and 2009-10 in the status of AOP. Whereas for the A.Y 2007-08, the assessee has not filed the return of income and the A.O. has issued notice u/sec148 of the Act after recording the reasons based on the observations of the Hon'ble Tribunal in ITO Vs. Industrial Estates Pvt Ltd in ITA No.4171,4920&4671/Mum/2009 for A.Y 2005-06, 206-07 &2007-08. 2006-07 order dated 30-08-2013 at Page 5 Para 13 to 15 which is read as under: 13. We have considered the rival submissions and carefully perused the orders of the lower Authorities and the material evidences brought on record in the form of Paper Book. It is not in dispute that the assessee is managing the said piece of land on beha....

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.... all these three Assessment Years i.e. 2005-06, 2006-07 & 2007-08 are confirmed. 11. The Ld. AR contentions are that the A.O. has issued notice based on the findings of the Hon'ble Tribunal in particular at Para 15 of the order. Further the time limit for issuing notice u/s 148 of the Act has to be considered before any decision is taken by the A.O. The Ld. AR demonstrated the notice issued u/s 148 of the Act dated 27.03.2014 at page 8 of the paper book served on 16-04-2014 and read the specific Para on reasons recorded placed at page 9 for issuing notice as under: "The ITAT deleted the additions made in the hands of the company saying they are income of the joint lessees who have filed returns for income for A.Y 2008-09 & 2009-10 in the status AOP. The assessee has not filed return of income as AOP for A.Y 2007-08. The failure on the part of the assessee has resulted in escapement of income of Rs. 6,34,10,287/- as discussed above. Therefore I have reason to believe that income amounting to Rs. 6,34,10,287/- has escaped income on account of failure of the assessee to file return of income." 12. The Ld.AR made submissions on the applicability of provisions an....