TaxTMI 
TaxTMI 
2025 (3) TMI 21
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....rongly recorded by the Ld. A.O. without having any tangible material merely on presumption and summarized on erroneous 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 a....
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....sessee at the threshold submitted that the present appeal involves a delay of 15 days. Elaborating on the reasons leading to the impugned delay, the Ld. AR has filed an application a/w. an "affidavit" 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 "....
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....gs had based on a letter of the Executive Engineer, PWD, Raipur claimed that the distance of the subject land situated at Teli Talab (Tuta Mod) from Raipur (Panchpedi Naka) was 12.8 km, and, thus, being situated beyond 08 kms was 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 s....
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....have heard the Ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by the ld. AR to drive 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) Sa....
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....course of the assessment proceedings. Apart from that, the A.O had stated that no obligation is cast to issue notice u/s. 143(2) of the Act for framing of an assessment u/s. 147 of the Act. 13. As the A.O had come forth with an evasive reply on the issue as to whether or not a notice u/s. 143(2) of the Act was issued in the course 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 ....
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....ng the course of assessment proceedings and had participated in the same, therefore, he cannot be permitted to raise such objection in the course of the present appellate proceedings. The A.O in support of his aforesaid contention had relied on the judgment of the Hon'ble High Court of Punjab & Haryana in the case of CIT Vs. OCM India Ltd. (2017) 79 taxmann.com 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. W....
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....ring the hearing of the appeal that the assessee claimed an additional deduction in respect of its liability to purchase tax. The Appellate Assistant Commissioner (AAC) permitted it to raise the claim and allowed the deduction. The Tribunal held that the AAC had no jurisdiction to entertain the additional ground or to grant relief on a ground which had not been raised before the Income 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....
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....ely different from the existence of jurisdiction. 12. At page 694, after referring to certain observations of the Supreme Court in Additional Commissioner of Income-tax v. Gurjargravures P. Ltd., (1978) 111 ITR 1, the Supreme Court observed at Page 694 as under :- "The above observations do not rule out a case for raising an additional ground before the Appellate Assistant Commissioner if the ground so raised could not have 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 r....
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....axation Act, 1941". Thus, the ground existed when the return was filed. The assessment order was even made and received by the assessee. It is only after the appeal was filed that the assessee claimed a deduction in respect of the amount paid towards the purchase tax under the said Act. It is also significant to note that the assessee's entitlement to claim deduction had been held to be valid in view of an earlier judgment of the Supreme Court in Kedarnath Jute Manufacturing 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....
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....llate Assistant Commissioner also has the power to enhance the tax liability of the assessee although the Department does not have a right of appeal before the Appellate Assistant Commissioner. The Explanation to subsection (2), however, makes it clear that for the purpose of enhancement, the Appellate Assistant Commissioner cannot travel beyond the proceedings which were originally before the Income-tax Officer or refer to new sources of income which were not before the Income-tax Officer at all. For this purpose, there 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 groun....
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....amed as many as five questions while making a reference to us. Since the Tribunal has not examined the additional grounds raised by the assessee on merit, we do not propose to answer the questions relating to the merit of those contentions. We reframe the question which arises for our consideration in order to bring out the point which requires determination more clearly. It is as follows: "Where on the facts found by the authorities below a question of law arises (though not raised before the authorities) which bears on the tax liability of the assessee, whether 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 t....
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....0,00,000/- under section 43B of the Act. 21. The conclusion that the error in not claiming the deduction in the return of income was inadvertent cannot be faulted for more than one reason. It is a finding of fact which cannot be termed perverse. There is nothing on record that militates against the finding. The appellant has not suggested, much less established that the omission was deliberate, mala-fide or even otherwise. The inference that the omission was inadvertent is, therefore, irresistible. 22. It was then submitted by Mr. Gupta that the Supreme Court had taken a different view in Goetze (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....
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....d return and did not impinge on the powers of the Tribunal. In paragraph 19, the Division Bench held that there was no prohibition on the powers of the Tribunal to entertain an additional ground which, according to the Tribunal, arises in the matter and for the just decision of the case." We, thus, in terms of the aforesaid settled position of law are of a firm conviction that the assessee in the present case before us remained well within his right to assail the validity of the jurisdiction that was assumed by the A.O for framing of assessment 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. 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. ....