TaxTMI 
TaxTMI 
2025 (6) TMI 1304
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.... both the appeals admittedly arising in the backdrop of identical facts, are being adjudicated by us dealing with the facts in the case of the assessee, Sarika Srivastava in ITA No. 56/Agr/2022. 4. Grounds raised by assessee in ITA No. 56/Agr/2022 read as under : "1. That the proceedings initiated under Section 263 of the Income Tax Act, 1961 (the Act) against the Appellant are void ab initio and unsustainable in law. 2. That the Impugned Order dated 29.03.2022 is in violation of the provisions of Section 263 of the Act and passed without considering the facts of the Appellant's case. 3. That the Ld. Pr. CIT, while initiating proceedings under Section 263 of the Act and passing the Impugned Order has failed to appreciate that the Ld. AO in the case of the Appellant passed the Assessment Order dated 31.10.2019 after duly considering all submissions of the Appellant. 4. That the Ld. Pr. CIT while making the order u/s 263 had ignored that the Asstt Order dt. 31-10-2019 had been passed u/s 143(3) read with Sec 148, and there is no escapement of Income as per Reason to Believe recorded by A.O. then no other matter can be subject to examination ....
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....t only Rs. 31,66,500/-, the minimum rate as per the Stamp Valuation Authority was Rs. 57,57,000/-. Thus, the actual valuation for both these plots sold was Rs. 1,16,65,000/- (Rs. 59,08,000 plus Rs. 57,57,000/-), whereas the sale consideration received as per the Sale Deed is only Rs. 54,16,600/- (Rs. 22,50,100/- plus Rs. 31.66,500/-). Thus, the value of the 2 plots sold by the Assessee as co-owner u/s 50C of the Income Tax Act, 1961 amounts to Rs. 1,16,65,000/-, but the sale consideration received has been disclosed at only Rs. 54,16,600/- by the 2 co-owners i.e. Dr. Sarika Srivastava and her husband Dr. Atul Srivastava. As per the provisions of Section 50C, the value adopted by the Stamp Valuation Authority was deemed to be the full value of the consideration received as a result of the transfer and thus, the difference of Rs. 62,48,400/- (Rs. 1,16,65,000/- less Rs. 54,16,600/-) was to be brought to tax. Half share of the Assessee as co-owner of the properties amounted to Rs. 31,24,200/- and this amount i.e. the difference between the Sale Consideration disclosed as per the Sale Deed and the full value of the consideration received u/s 50C amounting to Rs. 31,24,....
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....2 Despite the repeated requirements u/s 142(1), the Assessee did not file the statement of Bank Accounts for all the year and filed the copy of Bank Account statements for a very short period i.e. 05.12.2011 to 24.12.2011 for HDFC Bank, Sanjay Place, Agra. Perusal of the Balance Sheet as on 31.03.2012 of the Assessee Dr. Sarika Srivastava shows that the details of Cash & Banks have been given in Schedule "D" from which it can be seen that the Assessee had in addition to bank account at HDFC Bank, a Bank Account No. 7398 at State Bank of India and a Bank Account No. 9865 in Punjab National bank along with FDRs in SBI and HDFC Bank. However, the Assessee did not file any statement of the account at State Bank of India & PNB and filed the Bank Statement for a very short period in December, 2011 for the HDFC Bank Account. Thus, the Assessee deliberately evaded furnishing the Bank Account statements. It is further very surprising to note that the Assessing Officer did not make any inquiry on this issue despite the blatant non-compliance by the Assessee and completed the Assessment at Returned Income without any verification of the Bank Account and without any proper inquiry. ....
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....nt was completed at the Returned Income without the Assessee having filed the Cash Flow Statement. Thus, inquiry relating to cash deposits and cash flow was initiated by the A.O. but the assessment was closed without making further inquiries and without any further verification regarding the cash deposits and cash flow. 5. During the relevant previous year, Mutual Fund units worth Rs. 5,50,000/- were bought of Kotak Floater Fund. However, units worth Rs. 2,50,000/- only have been disclosed in the Balance Sheet. The AO did not make inquiry in to the fact as to how the rest of the units worth Rs. 3,00,000/- have been disclosed. 6. In the Profit & Loss Account, LTCG on Land at Arsena of Rs. 24,28,300/- is shown. However, the Sale and Purchase Deed is not available on record for any such land. The AO did not inquire into this discrepancy. 7. In the Balance Sheet, a portion of "Land TIBCO" has been shown as sold during the year. However, Sale Deed of the said land is not available on record. The AO did not ask about the details of this transaction. 8. It is seen that the last reply by the Assessee was filed on 07.08.2019 in which the Assessee has main....
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....f non-compliance, it will be presumed that you have nothing to say in your case and the case will be decided on merits on the basis of documents available on record." 7. As is evident from the above, the discrepancies noted by the ld. PCIT are as under : (1). That despite records revealing stamp duty value of 2 properties sold by the assessee during the year exceeding the actual consideration received, the AO failed to invoke section 50C of the Act, while assessing capital gains earned on the said transaction, and make addition of the excess of the stamp duty value to the actual consideration received. (2). The assessee was found to have been allowed claim of deduction /exemption of its capital gain u/s. 54F of the Act amounting to Rs. 16,06,618/- without any proof / evidence of eligibility of the same. He noted no enquiry conducted by the Assessing Officer with respect to the same. (3). That despite the AO asking the assessee to file copies of all bank statements, the same were not filed by the assessee and the AO ignored the said fact. (4). That even on the issue for which jurisdiction to assess u/s 147 of the Act was assumed by the AO compl....
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....ance Sheet and the source of investment therein therefore duly disclosed. That therefore there was no question of escapement of income and the proceedings initiated by the AO were therefore invalid and needed to be dropped. The assessee pointed out to ld. PCIT, that despite stating so, ld. Assessing Officer did not drop the proceedings but completed the assessment though without making any addition to the returned income. She pointed out to the ld. PCIT that from the contents of assessment order it is evident that the reasons to believe recorded by the Assessing Officer failed. That it is settled proposition of law that if no addition had been made by the Assessing Officer in the assessment order on the basis of the reasons recorded, notice u/s. 148 becomes invalid and no addition can be made on any other income. 9. Reply of the assessee was considered by ld. PCIT and was rejected stating that the issue for which reopening was resorted to was clearly not enquired by the Assessing Officer and therefore, proposition of law relied upon by the assessee could not be applied in the present case. The relevant findings of the ld. PCIT at para 5 to 9 of his order read as under : ....
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....oneous in so far as it is prejudicial to the interests of the revenue and hence suitable order under section 263 is to be passed. 8. In view of the COVID pandemic and resultant economic and health hardships being faced by a lot of persons, considerate view is being taken in this case, where the scope of actions include not just that of cancelling the assessment and directing a fresh assessment, but also modifying the assessment, and even passing an Order enhancing the assessment. 9. After careful consideration of the material available on record, it is found that the order passed by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the revenue on the issues mentioned above. Therefore, the Assessment Order passed u/s 143(3) r.w.s. 147 dated 31.10.2019 by the Assessing Officer in your case for A.Y. 2012-13 is hereby modified (partly set aside) with the directions to the Assessing Officer to examine the issues as mentioned in Para 1 to Para 8 of Notice u/s 263 dated 17.03.2022 (appearing in Para 3 of this Order) and to pass an Order accordingly after affording reasonable opportunity of being heard to the Assessee." 10. The argum....
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....us is that it was satisfactorily explained to the AO that there was no escapement of income and therefore there was no error in the order vis a vis the said issue and as a consequence thereof since the basis for assuming jurisdiction u/s 147 of the Act by the AO had failed, he had no jurisdiction to inquire into other issues. That therefore both on the issue for which reopening was resorted as also other issues noted by the Ld. PCIT, there was no error in the order of the AO for not conducting adequate inquiries with respect to the same. 15. The Ld. PCIT, we have noted does not dispute the proposition of law that where the basis for assuming jurisdiction u/s 147 of the Act fails no addition can be made on any other issues. He however finds the said proposition not applicable in the present case since, as per the Ld. PCIT, the AO's order was erroneous in accepting assesses explanation on the issue for which reopening was resorted. As per the Ld. PCIT therefore it was not a case where there was no escapment of income as noted by the AO in his reasons recorded. 16. The limited issue for our consideration therefore is whether the assesses explanation to the AO regarding the sourc....