TaxTMI 
TaxTMI 
2025 (3) TMI 21
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....rroneous footing, it is not reasons to believe in the eyes of law as mandated by Sec.147 which is pre-requisite/sine qua non for reopening u/s 147/148, reassessment u/s.147/148, is invalid &, is liable to be quashed. Gr.No.3 On the facts and circumstances of the case and in law, approval granted by Id JCIT u/s.151(1) in most mechanical & routine manner without application of mind on the reasons recorded by the Ld. A.O. on wrong facts/ erroneous footing. Gr.No.4 On the facts and circumstances of the case and in law, the ld CIT has erred in upholding addition of Rs. 91,57,837/- on account of long term capital gain on land acquired by NRDA in another assessment year; while the assessee has claimed the same as exempt income on transfer of agriculture land; addition of Rs. 91,57,837/- is liable to be deleted. Gr.No.5 The appellant craves leave to add, amend, or alter either any of the ground or grounds of appeal either before or at the time of appeal." Also, the assessee has raised additional ground of appeal which reads as under: "Additional Gr.No.1 "On the facts and circumstances of the case and in law, assessment made u/s147 rws.143(3) dt.27-12-17 for AY12-13 is inva....
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.... of the assessee dated 05.03.2024. The Ld. DR objected to the seeking of condonation of delay of 15 days involved in the present appeal. 3. After having given a thoughtful consideration to the reasons leading to the delay of 15 days in filing of the present appeal, we are of the view that as the same is not in ordinate and has occasioned for justifiable reasons, therefore, the same merits to be condoned. 4. Succinctly stated, the assessee had e-filed his return of income for A.Y.2012-13 on 28.08.2012, declaring an income of Rs. 16,98,520/-. The return of income filed by the assessee was processed as such u/s. 143(1) of the Act on 25.10.2012. 5. Subsequently, the A.O observed that though the assessee had received an amount of Rs. 94,95,250/- from Naya Raipur Development Authority (NRDA) on 31.03.2012 as sale consideration of 3.998 acres of agricultural land (Khasra No.305/9 AND Khasra No.305/10) that was sold vide registered sale deed dated 31.03.2012, but had not offered the "capital gain" arising on the said sale transaction for tax. It was observed by him that the assessee had wrongly claimed the entire amount of sale consideration as exempt on the ground that the subject agri....
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....s not a capital asset as per Section 2(14) of the Act. The CIT(Appeals) observed that the A.O in order to verify the factual position had carried out an inquiry with the Tehsildar and Patwari who had in their respective reports after verifying the records had stated that the shortest distance of Raipur Municipality to Village: Tuta was 07 km. The CIT(Appeals) taking cognizance of the fact that the land in question was not an agricultural land and was not used by the assessee for agricultural purpose for two years immediately preceding the date of transfer, thus, was of the view that the A.O had rightly concluded that the assessee was not entitled to claim exemption u/s.10(37) of the Act. Accordingly, the CIT(Appeals) finding no infirmity in the view taken by the A.O upheld the same and dismissed the appeal. For the sake of clarity, the observations of the CIT(Appeals) are culled out as under: "5.2 The addition made by the Assessing Officer and the submissions of the appellant have been perused. The issue in this case relates to a sum of Rs. 94,95,250/- which was received from Naya Raipur Development Authority (NRDA) towards acquisition of agricultural land. It is seen from the as....
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....rive home his contentions. 9. Shri Sunil Kumar Agrawal, Ld. Authorized Representative (for short 'AR') for the assessee, submitted that the A.O had grossly erred in law and facts of the case in assuming jurisdiction and framing the impugned assessment vide his order u/s.143(3) r.w.s. 147 of the Act, dated 27.12.2017. Elaborating on his contention, the Ld. AR submitted that as the A.O had framed the assessment without issuing notice u/s.143(2) of the Act, therefore, the assessment was liable to be quashed on the said count itself. The Ld. AR in support of his aforesaid contention had relied on the following judicial pronouncements: (i) ACIT & Anr. Vs. Hotel Blue Moon [2010] 321 ITR 362 (SC) (ii) CIT Vs. Laxman Das Khandelwal (2019) 417 ITR 325 (SC) (iii) Pr. CIT Vs. S.G Portfolio (P). Ltd. (2023) 454 ITR 761 (Delhi) (iv) Swapna Manuel Vs. ACIT (2024) 160 taxmann.com 166 ( Mad. HC) (v) Sapthagiri Finance & Investment (2012) 25 taxmann.com 341 ( Mad. HC) (vi) Pr. CIT Vs. Shri Jai Shiv Shankar Traders (P). Ltd. (2015) 64 taxmann.com 220 (Delhi). (vi) CIT Vs. Salarpur Cold Storage (P) Ltd., (2014) 50 taxmann.com 105 (Allahabad) (vii) Pr. CIT Vs. Marck Biosciences Ltd. (....
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....se of the assessment proceedings, therefore, we have consulted the assessment record and perused the order sheet notings. The copy of the return of income filed by the assessee on 14.10.2017 vide e-filing acknowledgment No.2432504901410017 is found available on record, Page 72 to 75 of the assessment records. 14. We have thoughtfully considered the contentions advanced by the Ld. authorized representatives of both the parties in the backdrop of the orders of the lower authorities. 15. Admittedly, it is a matter of fact borne from record that the assessee in compliance to the notice issued u/s. 148 of the Act, dated 22.03.2017 had filed his return of income on 14.10.2017 declaring an income of Rs. 16,98,520/-. The copy of the return of income filed by the assessee in response to notice u/s. 148 of the Act, dated 14.10.2017 is found available at Page 72 to 75 of the assessment record. Apart from that, the Ld. AR in order to dispel all doubts as regards his claim that the assessee had in compliance to notice u/s. 148 of the Act, dated 22.03.2017 filed his return of income on 14.10.2017, had placed on record a copy of the "screen shot" of the assessee's e-filing portal account, which....
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....435 (P & H). Also, the A.O had claimed that the limitation prescribed under the "1st proviso" to Section 143(2) of the Act is not applicable to reassessment proceedings u/s. 147 of the Act. 17. Controversy involved in the present appeal lies in a narrow compass, i.e. as to whether or not the assessment framed by the A.O vide order u/s. 143(3) r.w.s. 147 of the Act dated 27.12.2017 in absence of notice u/s. 143(2) of the Act having been issued by him is sustainable in the eyes of law? 18. Before proceeding any further, it would be relevant to deal with the Ld. DR's contention that as the assessee had not assailed the validity of the AO's jurisdiction in the course of the assessment proceedings, therefore, the same could not be allowed to be raised in the course of the present appellate proceedings before the Tribunal. We find that the ITAT, Mumbai in the case of Futura Polyster Limited Vs. ITO-6(3)(1), ITA Nos. 1459 & 1460/Mum/2018, dated 16.07.2020, after relying on the judgment of the Hon'ble High Court of Bombay in the case of CIT Vs. Pruthvi Brokers & Shareholders (P) Ltd. (2012) 349 ITR 336 (Bom) and a host of other judicial pronouncements had held that an assessee is entitle....
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....Tax Officer. The Tribunal also refused the appellant's application for making a reference to the High Court. The High Court upheld the decision of the Tribunal and refused to call for a statement of case. It is in these circumstances that the appellant filed the appeal before the Supreme Court. The Supreme Court held as under :- "5. In CIT v. Kanpur Coal Syndicate, a three Judge bench of this Court discussed the scope of Section 31(3)(a) of the Income Tax Act, 1922 which is almost identical to Section 251(1)(a). The court held as under: (ITR p. 229) "If an appeal lies, Section 31 of the Act describes the powers of the Appellate Assistant Commissioner in such an appeal. Under Section 31(3)(a) in disposing of such an appeal the Appellate Assistant Commissioner may, in the case of an order of assessment, confirm, reduce, enhance or annul the assessment; under clause (b) thereof he may set aside the assessment and direct the Income Tax Officer to make a fresh assessment. The Appellate Assistant Commissioner has, therefore, plenary powers in disposing of an appeal. The scope of his power is co-terminus with that of the Income-tax Officer. He can do what the Income-tax Officer ....
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....ave been raised at that particular stage when the return was filed or when the assessment order was made, or that the ground became available on account of change of circumstances or law. There may be several factors justifying raising of such new plea in appeal, and each case has to be considered on its own facts. If the Appellate Assistant Commissioner is satisfied he would be acting within his jurisdiction in considering the question so raised in all its aspects. Of course, while permitting the assessee to raise an additional ground, the Appellate Assistant Commissioner should exercise his discretion in accordance with law and reason. He must be satisfied that the ground raised was bona fide and that the same could not have been raised earlier for good reasons. The satisfaction of the Appellate Assistant Commissioner depends upon the facts and circumstances of each case and no rigid principles or any hard and fast rule can be laid down for this purpose." [emphasis supplied] 13. The underlined observations in the above passage do not curtail the ambit of the jurisdiction of the appellate authorities stipulated earlier. They do not restrict the new/additional grounds that may b....
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....turing Company Limited v. Commissioner of Income-tax, (1971) 82 ITR 363. This was, therefore, a case of error in perception/judgment. Despite the same, the Supreme Court upheld the decision of the Appellate Assistant Commissioner in allowing the deduction. The words "could not have been raised" must, therefore, be construed liberally and not strictly. 15. It is indeed a question of exercise of discretion whether or not to allow an assessee to raise a claim which was not raised when the return was filed or the assessment order was made. As held by the Supreme Court there may be several factors justifying the raising of a new plea in appeal and each case must be considered on its own facts. However, such cases include those, where the ground though available when the return was filed or the assessment order was made, was not taken or raised for reasons which the appellate authorities may consider valid. In other words, the jurisdiction of the appellate authorities to consider a fresh or new ground or claim is not restricted to cases where such a ground did not exist when the return was filed and the assessment order was made. 16(A). A Full Bench of this Court in Ahmedabad Elect....
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.... are other separate remedies provided under the Income-tax Act." (C) It is unnecessary to refer to all the judgments that the Full Bench referred to while answering the reference. The Full Bench referred to the observations of the Supreme Court in Jute Corporation of India Limited v. Commissioner of Income-tax (supra) set out above. It is important to note that even in this case, therefore, the ground existed when the return was filed. The mere fact that a decision of a court is rendered subsequently does not indicate that the ground did not exist when the law was enacted. Judgments are only a declaration of the law. The assessee could have raised the ground in its return itself. It did not have to await a decision of a court in that regard. Indeed, even if a judgment is against an assessee, it is always open to the assessee to claim the deduction and carry the matter higher. The words "could not have been raised", therefore, cannot be read strictly. Neither the Supreme Court nor the Full Bench of this Court meant them to be read strictly. They include cases where the assessee did not raise the claim for a reason found to be reasonable or valid by the appellate authorities in the....
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....her the Tribunal has jurisdiction to examine the same." Under Section 254 of the Income Tax Act the Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. The power of the Tribunal in dealing with the appeals is thus expressed in the widest possible terms. The purpose of the assessment proceedings before the taxing authorities is to assess correctly the tax liability of an assessee in accordance with law. If, for example, as a result of a judicial decision given while the appeal is pending before the Tribunal, it is found that a non-taxable item is taxed or a permissible deduction is denied, we do not see any reason why the assessee should be prevented from raising that question before the Tribunal for the first time, so long as the relevant facts are on record in respect of that item. We do not see any reason to restrict the power of the Tribunal under Section 254 only to decide the grounds which arise from the order of the Commissioner of Income Tax (Appeals). Both the assessee as well as the Department have a right to file an appea1/cross- objections before the Tribunal. We fail to see why t....
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....e (India) Limited v. Commissioner of Income-tax. We are unable to agree. The decision was rendered by a Bench of two learned Judges and expressly refers to the judgment of the Bench of three learned Judges in National Thermal Power Company Limited vs. Commissioner of Income-tax (supra). The question before the Court was whether the appellant-assessee could make a claim for deduction, other than by filing a revised return. After the return was filed, the appellant sought to claim a deduction by way of a letter before the Assessing Officer. The claim, therefore, was not before the appellate authorities. The deduction was disallowed by the Assessing Officer on the ground that there was no provision under the Act to make an amendment in the return of income by modifying an application at the assessment stage without revising the return. The Commissioner of Income-tax (Appeals) allowed the assessee's appeal. The Tribunal, however, allowed the department's appeal. In the Supreme Court, the assessee relied upon the judgment in National Thermal Power Company Limited contending that it was open to the assessee to raise the points of law even before the Tribunal. The Supreme Court he....
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....e Act. 19. Apropos the maintainability of the aforesaid claim of the assessee, we find that the Hon'ble Apex Court in the cases of ACIT & Anr. Vs. Hotel Blue Moon [2010] 321 ITR 362 (SC) and CIT Vs. Laxman Das Khandelwal (2019) 417 ITR 325 (SC), had held that pursuant to the return of income filed by the assessee, the A.O remains under a statutory obligation to issue notice u/s. 143(2) of the Act for framing the assessment. 20. Our aforesaid view is further fortified by the judgment of the Hon'ble High Court of Delhi in the case of Pr. CIT Vs. Shri Jai Shiv Shankar Traders (P) Ltd. (2016) 3783 ITR 488 (Del). The Hon'ble High Court had held that absence of notice u/s.143(2) of the Act impregnates the proceeding with a jurisdictional defect, and hence, renders it as invalid in the eyes of law. The aforesaid view had thereafter been reiterated by the Hon'ble High Court of Delhi in the case of Pr. CIT Vs. Dart Infrabuild (P) Ltd., (2024) 166 taxmann.com 4 (Del). Also, the Hon'ble High Court of Allahabad in the case of CIT Vs. Salarpur Cold Storage (P) Ltd. (2015) 228 Taxman 48 (Allahabad) had after relying upon the judgment of the Hon'ble Apex Court in the case of CIT Vs. Hotel Blue ....