AI Drafter 
TaxTMI 
TaxTMI 
2025 (6) TMI 1705
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....opinion and also by way of an oral additional ground, by recourse to Rule 27 of the ITAT Rules, challenged the assumption of jurisdiction itself u/s 147 of the Act, as initiated during the pendency of rectification proceedings. Hon'ble Delhi High Court in the case of Sanjay Sawhney vs Pr. CIT vide ITA No.834/2019, order dated 18.05.2020 has held that the assessee can urge any ground by way of oral application under Rules 27 of the ITAT Rules. Accordingly same is admitted. Thus the issue in controversy primarily is that if at the time of reopening, the proceedings u/s 154 of the Act was pending, could the reopening have been done? The reliance has been placed by the ld. counsel on the judgement of the Hon'ble Supreme Court in the case of S.M. Overseas (P) Ltd. vs. CIT (2022) 145 taxmann.com 375 (SC) and we consider it relevant here to reproduce the said decision:- "1. Feeling aggrieved and dissatisfied with the impugned judgment and orders dated 27.07.2010 passed by the High Court of Punjab and Haryana at Chandigarh in ITA No. 556 of 2009 as well as the subsequent order dated 29.09.2010 passed in Review Application No. 166-CII of 2010 dismissing the Review Application p....
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....rd that, in fact, the notice under Section 154 of the Act was withdrawn on the ground that the same was beyond the period of limitation prescribed under Section 154(7) of the Act. In the absence of any specific order of withdrawal of the proceedings under Section 154 of the Act, the proceedings initiated under Section 154 of the Act can be said to have been pending. 5. In that view of the matter, during the pendency of the proceedings under Section 154 of the Act, it was not permissible on the part of the Revenue to initiate the proceedings under Section 147/148 of the Act pending the proceedings under Section 154 of the Act. The High Court has erred in presuming and observing that the proceedings under Section 154 were invalid because the same were beyond the period of limitation. 6. In view of the above and for the reasons stated above, the impugned judgment and order passed by the High Court is unsustainable and the same deserves to be quashed and set aside. The impugned judgment and order passed by the High Court is hereby quashed and set aside. The order passed by the ITAT is hereby restored. 7. The present Appeals are accordingly allowed to the afor....
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.... permissible on the part of the Revenue to initiate the proceedings u/s 147/148 of the Act. 8. As far as application of provisions of section 154(8) of the Act is concerned, the same is applicable where the application is moved by an assessee which is not the case. Thus, the assertions of the ld. DR by relying provisions of section 154(8) of the Act do not come to the rescue. 9. In any case, when the material on record establish that AO was aware of the disputed transaction of short term capital gain for which notice was issued by way of rectification proceedings, and the proceedings are deemed to have been dropped then subsequent assumption of jurisdiction u/s 147 of the Act will certainly lead to reopening on stale information and just a change of opinion. 10. Thus we are inclined to allow the ground no. 1 to 4 and also the additional ground admitted by way of Rule 27 of ITAT Rules. The appeal of the assessee is allowed. The impugned reassessment is quashed. Order pronounced in the open court on 18.06.2025. ============= Document 1 LVY Government of India Ministry of Finance, Department of Revenue Office of the Income Tax Officer, Ward-1, Karnal Aayakar Bha....
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....the Act for the purpose of section 40(a)(ia) of the Act and it shall be deemed that the payer has deducted and paid tax on such amount on the date of furnishing of return of income by the resident recipient. Accordingly, on the basis of annotated report submitted the objection raised by the IAP was settled/dropped by the Addl. Commissioner of Income Tax (Audit), Chandigarh. 4. In this case RAP also raised objection, which is re-produced hereunder :- "Scrutiny of capital account forming part of Balance Sheet revealed that assessee had received sale consideration of Rs.50,00,000/- for its depreciable asset i.e. building with the written down value of Rs.4,34,597/- resulting in net short term capital gain of Rs.45,65,403/ -. In this way whole of the short term capital gain was credited in the capital account and no short term capital gain tax was charged as whole of the block sold/cleared from the schedule of depreciation chart. According to section 50 of the Income Tax Act if an assessee has sold a capital asset forming part of block of assets on which the depreciation has been allowed under Income Tax Act, the income arising from such capital asset is treated as short term.....
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....tification of the mistake, as per particulars given below., will have the effect of enhancing the assessment/increasing your liability. 2. If you wish to be heard, you are requested to appear in person or through an authorized representative in my office on 17.11.2016_at 11:00 A.M. alternatively, you may send a written reply, so as to reach me on or before the date mentioned above :- Particulars of mistake proposed to be rectified. Yours faithfully, (S. K. SHARMA) Income-Tax Officer, Ward-4, Karnal Particulars of Mistake :- On perusal of assessment record it is observed that you have claimed expenses under the head lease rent at Rs. 6,74,160/- in contravention of provisions of Section 194-1 of the I.T. Act, 1961, As per the provision of section 194-1 of I.T. Act, 1961 you have required to deduct TDS as the amount debited exceeding Rs. 1,80,000/- but you have failed to do so as there is no evidence is found placed on record. However, you have claimed that "he has not deducted TDS on the amount of lease rent paid since the recipient company is an existing income tax assessee and have discharged the tax liability in accordance with the provisions of law". But you hav....