2024 (5) TMI 1070

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....ner of Income Tax is bad in law and facts of the case. 3. That the appellant craves leave to add, amend or delete any of the grounds of appeal at the time of hearing of appeal or before the appeal is being heard and disposed off." 3. Briefly the facts of the case are that the assessee originally filed his return of income declaring total income of Rs. 3,31,640/- which was assessed to tax under section 143(3) vide order dt. 18/02/2014 wherein the assessed income was determined at Rs. 3,69,540/-. Subsequently, proceedings under section 147(a) were initiated and notice under section 148 was issued. In response to the notice, the assessee filed his return of income and thereafter, the reassessment proceedings were completed vide order dt. 21/12/2017 passed under section 143(3) r.w.s 147 of the Act. 4. In the reassessment order so passed under section 143(3) r.w.s 147 of the Act, the AO brought to tax capital gains on sale of the land and super structure situated in Mohal Bakhai Tehsil Shimla amounting to Rs. 2,36,10,000/- and thereafter, after allowing transfer expenses of Rs. 27,00,000/-, index cost of Rs. 14,37,717/- (including CLU expenses of Rs 234,614) and deduction....

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....u/s 263(2) of the Act which provides that no order shall be passed under sub-section (1) after the expiry of two years from the end of the financial year in which the order sought to be revised was passed. 9. Regarding the sale of the immovable property situated at Village Jagjit Nagar Solan, it was further submitted that, the assessee had sold the said piece of agricultural land at Jagjit Nagar, Solan for a consideration of Rs. 23,99,000/- and the said matter was duly enquired into and examined by the AO while passing the original assessment order under section 143(3) dt. 18/02/2014. In this regard, our reference was drawn to the office note appended to the assessment order and the contents thereof read as under: "Further, during the course of assessment proceedings, the assessee sold out agricultural land situated at Jagjit Nagar, Dharta Teh. Krishan Nagar, Distt. Solan measuring 1-7-12 bighas for Rs. 23.99 lacs on 08.04.2010. The assessee purchased agricultural land from his brother on 18.06.2010 measuring 10 biswa situated at Jagjit Nagar, Dharta Teh. Krishan Nagar, Distt. Solan for Rs. 8 lacs and the purchases have been made from the funds lying in his Bank Account....

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....he plea of the assessee regarding limitation was duly addressed by the ld PCIT wherein he has held that reassessment proceedings were completed by passing of order u/s 147 r/w 143(3) dated 21/12/2017 and therefore, the revisionary proceedings were initiated by issuance of show-cause on 4/01/2021 within the limitation period. It was submitted that the order so sought to be revised is the reassessment order and not the original assessment order and therefore, it is open to the AO to examine any other matter which come to his notice during the course of reassessment proceedings and need not restrict himself to the matter for which the proceedings were reopened and reasons recorded. It was submitted that where the relevant facts are on record and during the reassessment proceedings, the AO failed to examine certain matter and the ld PCIT noticing the same invoked his jurisdiction u/s 263, there is no infirminity in the action of the ld PCIT in invoking his jurisdiction and passing the impugned order. It was further submitted that given the Covid 19 pandemic, the limitation period was extended by the Hon'ble Supreme Court and subsequently by the CBDT and therefore, as far as passing of ....

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....e ground that the assessee sold property worth Rs. 2,36,10,000/- and did not declare any capital gain/losss in the return filed for the relevant assessment year. When confronted on the issue during the course of assessment proceedings, the assessee's counsel submitted that his assessee, Shri Mohan Lal Gupta entered into an agreement to sell the property on 20.10.2008 for a total consideration of Rs. 2,36,00,000/-. Since the purchasing party was non-agriculturist and had to take permission from H.P. Govt. u/s 118 of Tenancy Land Reforms Act, 1972. The purchaser got permission u/s 118 of Tenancy Land Reforms Act, 1972 during the F.Y. 2010-11 relevant to Asstt. Year 2011-2 and sale deed was got executed by the assesse in favour of the purchaser during the year under consideration. However, as the sale was completed in the Asstt. Year 2009-10 and the assessee had already shown capital gain in the return of income for the Asstt. Year 2009-10 as such no capital gain was shown in the return for the Assessment Year 2011-12. Copy of acknowledgment of revised return filed for the Asstt. Year 2009-10 has been obtained and placed on record. Further, during the course of assessment pro....

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....as claimed / allowed excess deduction u/s 54F by Rs. 79,80,694/-. 3. Therefore, I have reasons to believe that, by the reason of being failure on the part of the assesssee to disclose fully and truly all material facts necessary of his assessment, for A.Y. 2011-2 the capital gain arising out of sale of Immovable property or any other income which may come to notice during assessment proceedings, income amounting to atleast Rs. 79,80,964/- on account of capital gain for A.Y. 2011-12, has escaped assessment within the meaning of section 147 of the I.T. Act. Approval for issue of notice u/s 147 is obtained from Pr. Commissioner of Income Tax, Shimla vide his office letter no. Pr. CIT/Shimla/2016- 17/151(2)/1041 dated 31/05/2016." 22. It is apparent from the reasons so recorded that the case of the assessee was reopened on account of excess claim of deduction under section 54F by an amount of Rs. 79,80,694/- in respect of purchase of an immovable property situated at New Shimla. 23. Further, during the course of reassessment proceedings, the AO also brought the tax capital gains arising on sale of the land and super structure amounting to Rs. 2,36,10,000/-. While doing s....

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.... brought to tax the transaction relating to the sale of land for Rs 2.31 crores as having escaped assessment and not the other transaction for Rs 23.99 lacs apparently for the reason that the same has not escaped assessment and going by the findings of his predecessor in the original assessment proceedings. Accordingly, as far as the matter pertaining to the sale of the immovable property for Rs. 23.99 lacs, it is apparent that the action under section 263 is initiated for the matter which was already decided in the original assessment proceedings under section 143(3) of the Act and not in the reassessment proceedings. Therefore, in such circumstances where the Ld. Pr. CIT seek to review any issue arising out of the original assessment order, the time limit for passing the order under section 263 will run from the end of the financial year in which the original assessment order was passed under section 143(3) of the Act and not from the end of the financial year from passing of the subsequent reassessment order under section 147 of the Act. 25. In this regard, useful guidance can be drawn from the decision of Hon'ble Supreme Court in case of CIT Vs. Alagendran Finance Ltd. [2007....