TaxTMI 
TaxTMI 
2025 (5) TMI 1064
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....The Humble - Assessee most respectfully begs to submit as under: 1. That in the aforesaid matter, the ld. CIT(A) passed the order u/s 250 on dated 31.07.2024 (hereinafter referred as "impugned order"). As per Section 253(3), the appeal was to be filed on/before dated 29.09.2024 however, the same has been filed on dated 01.10.2024. Thus, the appeal was filed with a delay of 2 days. 2. Reasonable Cause Exist: In this connection, it is humbly submitted that although there was no delay in filing the instant appeal, in as much as the same was e-filed on dated 29.09.2024 i.e within the statutory period of 60 days. However, the physical filing was delayed due to a bona fide delay in obtaining the necessary documents from the client. Despite our diligent efforts to request the documentation in a timely manner, the client encountered unforeseen circumstances that prevented the prompt supply of the appeal materials, which ultimately resulted delay in a physical filing that caused delay of two days later i.e on 01.10.2024 than the intended deadline. The unavoidable results of this were 'unintentional' and imminent delay in performance of the litigant obligations. ....
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....which this Hon'ble Tribunal deems fit and proper, be also passed in favour of applicant-assessee." 3. During the course of hearing, the ld. DR not objected to assessee's application for condonation of delay and prayed that Court may decide the issue as deem fit in the interest of justice as delay is of two days only. 4. We have heard the contention of the parties and perused the materials available on record. The prayer by the assessee for condonation of delay of two days has merit as the assessee has filed the online appeal in time but the physical copy of the same were forwarded 2 days later and thereby register considered it delayed for 2 days. Considering that fact, we concur with the submission of the assessee. Thus, the delay of two days in filing the appeal by the assessee is condoned. 5. In this appeal, the assessee has raised the following grounds: - "1.1. The ld. CIT(A) erred in law as well as facts of the case in confirming the validity of the impugned notice u/s 148A of the Act as also the notice issued u/s 148 of the Act dated 30.03.2022 are bad in law and facts of the case, for want of jurisdiction and hence the same deserves to be quashed. The asses....
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....ore, notice was issued as per provision of section 147/148 of the Act. Assessee has filed its Return of Income in response to that notice issued u/s 148 on 07/09/2022 declaring income of Rs. 78,750/-. 6.1 Ld. AO issued required statutory notice along with the questionnaire on 26/08/2022, 12/09/2022 and on 29/12/2022. In response to the same, the assessee submitted its reply alongwith 26AS, computation of income, copy of purchases deed and sale deed and details of expenses incurred and copy of return of income filed in response to the notice u/s 148. During the year under consideration, assessee, 'Ashok Kumar Jain (PAN: ACIPJ2962J)'was engaged in family business with his brothers at Raipur. 6.2 During the year under consideration, assessee has sold immovable property for a consideration of Rs.85,00,000/-, whereas stamp duty valuation was Rs.93,20,000/-. Assessee had purchased the said immovable property at Rs.65,74,500/-in the F.Y. 2011-12 and claimed Rs.85,76,163/-as cost of acquisition after indexation. Assessee has also claimed construction cost of Rs. 9,31,742/- after indexation. Further assessee has claimed that he has paid Rs. Rs.18,750/- and Rs.50,992/-as additi....
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....d to the returned income of the assessee as against the loss of Rs. 1,87,905/- declared by the assessee. 7. Aggrieved from the order of the National Faceless Assessment Center, assessee preferred an appeal before the ld. CIT(A)/NFAC. Apropos to the grounds so raised the relevant finding of the ld. CIT(A)/NFAC is reiterated here in below: "4.2 Decision 4.2.1 Briefly stated the fact of the case is that during the relevant previous year the appellant sold immovable property for consideration of Rs. 85,00,000/- whereas the Stamp Valuation Authority has determined the value of the property sold at Rs. 93,20,000/-. The AO found that while computing long term capital gains the appellant has claimed indexed cost of construction amounting to Rs. 9,31,742/-. However, as discussed by the AO in the impugned assessment order, the appellant failed to provide satisfactory details and documentary evidences in support of this construction expenditure claimed. The A.O. in the assessment completed therefore disallowed appellant's claim of deduction on account of 'indexed cost of construction' while computing capital gains. Accordingly, in the assessment computed taxab....
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.... raised by the appellant is thus dismissed. 5.1 The second ground of appeal raised by the appellant read as under. "That the learned AO erred in facts and law by not considering the cost of construction claimed of Rs 714275 whereas after indexation the value comes to Rs 931742 which may kindly be allowed". 5.2 Decision 5.2.1 In view of the detailed discussion made in the first ground of appeal, this ground of appeal need no separate adjudication and hence dismissed. 6.1 The third ground of appeal raised by the appellant read as under. "That the learned AO erred in facts and law by not allowing the credit of TDS of Rs 85375 which may kindly be allowed". 6.2 Decision 6.2.1 In the submission made, the appellant has not provided any details or documentary evidences to establish that he is eligible for credit for TDS amounting to Rs. 85,375/-. However, the A.O. is directed to allow due credit of TDS to the appellant after due verification. This ground of appeal raised by the appellant is thus allowed. 7.1 The fourth ground of appeal raised by the appellant read as under: "That the learned AO erred ....
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....perties whereas in the notice no reason or proof was mentioned about the said purchases mentioned in the notice and more so there was no property purchased by the Assessee during the period under consideration We have requested AO to provide us the proof of such purchases of immovable properties on which basis AO have initiated the proceedings in absence of which the issue of notice is not valid and passing order is against the provisions of law" 8.2 Decision 8.2.1 On perusal of the annexure to notice issued u/s. 148A(b) of the I. T. Act dated 17.03.2022 it is noted that sale of immovable property is shown at Rs. 93,20,000/-, and purchase of immovable property is shown at Rs. 85,00,000/-. It is to be noted that these mistakes by the A.O. in the notice issued, has been raised by the appellant only after attending the entire re-assessment proceedings without raising any objections before the A.O. In other words no objections were raised before the Assessing Officer but were raised only during the present appeal proceedings. In such cases, Hon'ble Supreme Court and several Hon'ble High Courts have held that the reassessment proceedings are not vitiated. The c....
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....48 of the I.T. Act shall be issued beyond 6 years from the end of the relevant assessment year. In this case, as per said provision u/s. 149(1)(b) before substitution by the finance act 2021 with effect from 01.04.2021] notice u/s. 148 of the I. T. Act could be issued on or before 31.03.2022. Thus, notice issued u/s. 148 of the I. T. Act dated 30.03.2022 is a valid notice. It may further be mentioned that the decision of the Supreme Court in Union of India vs Ashish Agarwal, 2022 SCC OnLine Hon'ble Supreme Court 543 read with the time extension provided by Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (for short 'TOLA') allows extended reassessment notices to travel back in time to their original date when such notices were to be issued and then new Section 149 of the Act is to be applied at that point. Thus, the Apex Court has in fact legalised/validated all the notices issued under un-amended provisions by treating them to be deemed show cause notice u/s. 148A of the I. T. Act (as substituted by Finance Act, 2021) as a one time measure. Therefore, if the contention raised by the appellant is accepted, then it would render the said ....
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....ious grounds so raised by the assessee, ld. AR of the assessee, has filed the written submissions which is reproduced herein below: Brief General Facts: The assessee is an individual (hereinafter referred as "Assessee"). In the present case, the ld. AO issued notice u/s 148 dt.30.03.2022 recording the following reason, that the assessee: 1. Received interest other than interest on security of Rs. 3,747/- 2. Purchased an immovable property of Rs. 85,00,000/- 3. Sold immovable property of Rs. 93,20,000/- alleging that income of Rs. 1,78,23,747/- has escaped assessment under the provisions of income escaping assessment u/s 148/147 of the Act and that assessee did not filed ROI. The ld. AO issued various notice(s) and the assessee filed his ROI against notice u/s 148 of the Act and filed various replies and document. The ld. AO however completed the assessment u/s 144 r/w 147 on dt. 01.03.2023 with impugned addition/disallowance of Rs. 9,31,742/- on account of LTCG and disallowance of cost of construction claimed by the assessee. Aggrieved from the above order, the assessee filed appeal before ld. CIT(A)/NFAC on 13....
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.... AO, acting as an honest person with reasonable prudence has to form a belief. Belief indicates something concrete or reliable. Kindly refer: Gangasharan & Sons Pvt. Ltd. v/s ITO & Anr. (1981) 130 ITR 1 (SC) and ITO v/s Lakhmani Mewal Das (1976) 103 ITR 437 (SC). 1.3 A belief can't be without any reason, surprisingly however, in present case it is not at all known what is the genesis i.e. material/information coming to his possession even remotely. The ld. AO in present case considered the valuation for the purpose of S. 50C of the Act being Rs. 93,20,000 as against the actual sale consideration of Rs. 85,00,000/- without even considering and applying his mind that the assessee himself has already taken Rs. 93,20,000/- as his value as per S. 50C of the Act for computation of LTCG, while computing his income. Further, the assessee while forming his reasons to belief completely overlooked the fact that the impugned property purchased for Rs. 85,00,000/- does not exist and there is no such transaction is regards to any property sold during the year. The ld. AO merely on that basis of presumption stated that there were two transactions of sale and purchase of property existed,....
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....to derive satisfaction as to escapement, necessitating issuance of notice u/s 148 of the Act. Further, there has to be a proximate connection/nexus between the material/information coming to possession and the formation of the believe. It cannot be a mere rumour, gossip or here say. The AO, acting as an honest person with reasonable prudence has to form a belief. The belief must indicate something concrete or reliable to form a basis of reopening. The requirement of recording of reason to believe or recording a satisfaction being parimateria, the principle propounded by the Hon'ble Courts in the context of pre-amended law, shall fully apply on the facts of the present case. 2.2 The information provided in the impugned Notice u/s 148 dt 30.03.2022 is vague, without any basis, wherein baseless conclusions were made and is based on entirely wrong factual premise that the assessee has sold a immovable property as well as purchased an immovable property. However, the assessee vide its various replies letters had categorically denied having purchased any property and had already disclosed the LTCG pertaining to sale of immovable property in his ROI filed against 148 of the Act d....
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....all upon assessee to provide any justification on any transaction in question - Further, fact was that assessee had filed his return of income and had also paid total tax and had also claimed refund of certain amount - Whether Assessing Officer before issuing notice, was bound to atleast verify or enquire information that was received in accordance with risk management strategy - Held, yes - Whether, therefore, impugned reopening notice issued under section 148A(b) and further order passed under section 148A(d) had to be quashed and set aside - Held, yes [Paras 7 and 8] [In favour of assessee]" 3. Complete Violation of S. 148A of the Act.: 3.1 The assessee had already disclosed the LTCG in his ROI before the AO, completely disclosing the transaction with himself taking the value of purpose of 50C of the Act as per stamp authorities and paying the due tax thereon. However the authorities below completely ignored this fact and that there existed no transaction of purchased of any immovable property by the assessee, these facts were at all not dealt with by the ld. AO which is against the judicial guidelines and the binding directions given by the Hon'ble Apex Court ....
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....Chief CIT/Chief CIT/Principal CIT/CIT." It was further held : "Para 8.....In the circumstances, the Revenue is directed to adhere to the following : xxxxx------------xxxxxxx-----------xxxxxx xxxxx (c) The order disposing the objections should deal with each objections and give proper reasons for the conclusion. (d) A personal hearing shall be given and minimum seven working days advance notice of such personal hearing shall be granted....." 3.3.2. Also in the case of Sabh Infrastructure Ltd. Vs. ACIT (2017) 398 ITR 198 (Del.) it was held in Para 19 that : " Para19 (iv) the exercise of considering the assessee's objections to the reopening of assessment is not a mechanical ritual. It is a quasi-judicial function. The order disposing of the objections should deal with each objection and give proper reasons for the conclusion. No attempt should be made to add to the reasons for reopening of the assessment beyond what has already been disclosed." 4. Reassessment is time barred by limitation : 4.1 With the enactment of Finance Act, 2021, the old provisions of sections 147, 148, 149 and 151 stood substituted with....
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.... C.5 Because a bare reading of the proviso to Sec 49(1)(b) clearly indicate that the alleged escaped taxable income must be Rs.50 lakh or more then only the benefit of the extended time limit is permissible. Further, the normal limitation period expires on the completion of 3 years from the end of relevant AY which is 2015-16. Since, in this case the escaped taxable income escaping assessments is only Rs. 7,43,837/-, only normal period of limitation of 3 years shall apply if so required. The impugned notice u/s 148A(b) is issued on dated 30.03.2022 and notice u/s 148 shall be issued even thereafter, whereas, the limitation of 3 years had already expired, hence the impugned notice u/s 148A(b) and the proposed initiation is barred by limitation. 5. Addition/ disallowance not part of reasons raised - not permissible: 2.1 Admittedly, the very escaped income of Rs. 1.78 cr which formed part of reasons to believe was not added to declared income as against which however, the ld. AO chose to make any addition of LTCG which was already disclosed by the assessee himself. Such an approach is, completely impermissible by law and the AO has acted completely beyond jurisdict....
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....ories Ltd. v/s CIT (2011) 336 ITR 136 (Del HC) wherein, it was held that the AO had jurisdiction to reassess income other than the income in respect of which proceedings u/s 147 were initiated but he was not justified in doing so when the very reasons for initiation of those proceedings ceased to survive. Legislature could not be presumed to have intended to give blanket powers to the AO that on assuming jurisdiction u/s 147 regarding assessment or reassessment of escaped income, he would keep on making roving inquiries and thereby including different items of income, not connected or related with the reasons to believe, on the basis of which he assumed jurisdiction. It was further held that the Tribunal was right in holding that the AO had the jurisdiction to reassess issues other than the issues in respect of which proceedings were initiated but he was not so justified when the reasons for initiation of those proceedings ceased to survive. The observations of the Hon'ble High Court on pages 147 and 148 of in 336 ITR 136 are worth noting. 2.2.4 Also kindly refer CIT vs Mohmed Juned Dadani (2013) 355 ITR 172 (Guj) (DC 7-15). However, it may be clarified t....
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....ds the validity of the assessment the ld. CIT(A) has already dealt with the contention of the assessee at page 9.2 of the impugned order and so far as the merits of the dispute assessee has not given details to the ld. AO and before ld.CIT(A) has dealt with the fact that as to why those expenditure were not considered as cost of acquisition. Even the assessee has not furnished the bills to the ld. CIT(A) to the extent of its claim. 11. We have heard the rival contentions and perused the material placed on record. Vide ground no. 2 & 3 the assessee challenges the finding of the lower authority and stated that the assessee-appellant was denied the benefit of the cost of acquisition of the same property for which the capital gain was subjected to the re- assessment proceeding. Assessee-appellant has produced the bills /letters in respect of an amount of Rs. 6,44,603/-, Further on perusal of the copies of above bills/letters submitted by the assessee-appellant it is found was found by the ld. CIT(A) that the work carried out is not related to construction today existing structure and hence cannot be considered as expenditure on account of 'cost of construction'. The expendit....