TaxTMI 
TaxTMI 
2025 (6) TMI 1771
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....sued under Section 148 of the IT Act by respondent No. 2 and the show cause notice dated 08-11-2024 issued by respondent No. 4 to the petitioner against the proposed variation in income. Similarly, it challenges the order dated 27-11-2024 and the notice dated 28-11-2024 issued and passed by respondent No. 3, thereby rejecting the objections raised by the petitioner to the notice dated 08-11-2024 as well as proposing a variation in his assessment for the assessment year 2020-21. 3. The facts relevant for considering the challenge raised in the writ petition are that : (a) On 11-09-2019, the petitioner and his wife had jointly purchased the agricultural land bearing Khasra No.90, admeasuring 03.64 H.R., Mouza Khumari, Tahsil Ramtek for a consideration of Rs. 14,40,000/- (for short,- 'the land'). However, the petitioner had paid the stamp duty as per the ready reckoner value of the said land of Rs. 21,03,000/-. (b) Respondent No. 2-Deputy Commissioner of Income Tax/Assessing Officer had received the information which suggests that the income chargeable to tax for the assessment year 2020-21 to the petitioner had escaped assessment, which can be deduced from the sa....
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....aw and cannot be sustained in the eyes of the law. He further canvassed that the JAO has no jurisdiction to issue a notice under Section 148A of the IT Act, since the Law to that effect has been settled by this Court in the decision of Hexaware Technologies Ltd. v. Assistant Commissioner of Income Tax & others in Writ Petition No. 1778/2023, by judgment dated 03-05-2024. Therefore, further proceedings based on the said notice deserve to be quashed and set aside. 5. He further argued that the order dated 27-11-2024 passed by respondent No. 3, relying upon the judgments of the Delhi High Court and the Calcutta High Court, while failing to consider the judgment of this Court in Hexaware Technologies Ltd., is erroneous. 6. He drew our attention to the notice issued to the petitioner's wife under Section 137(6) of the IT Act and the observation of respondent No. 4 in the order dated 05-06-2024. He submitted that the authorities have not considered the said order and passed an order contrary to it, which cannot be sustained in the eyes of the law. 7. Lastly, he propounded that the agricultural land was located beyond 8 km from the municipality's limits. The population of the....
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....d show cause notice within the stipulated time. Therefore, as per the material available on record, the respondent authorities held that the petitioner failed to declare the aforesaid income of Rs. 6,63,000/- under the provisions of Section 56(2)(x) of the IT Act, which was chargeable to tax, and had escaped assessment for the Assessment year 2020-21. He also pointed out the provisions of Sections 148 and 56(2)(x) of the IT Act. He further contended that in the assessment order, in respect of the petitioner's wife, it was observed that though the sale deed was executed in the joint name of petitioner and his wife her name was included in the registered sale deed, but as the petitioner had paid the consideration amount his case was re-opened for assessment. Therefore, it was observed that property is not a capital asset of the petitioner's wife, but it was certainly of the petitioner. Therefore, the relief granted to the petitioner's wife is hardly of any assistance in supporting his submission. Furthermore, he propounded that the petitioner had not established with the documentary evidence that the property in question could not be termed a 'capital asset'. Therefore, the passi....
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....r 2020-21. The Assessing Officer had information which suggested that the petitioner had not paid the tax on the said difference amount, which was chargeable to tax, and, therefore, the notice under Section 148A (b) of the IT Act was issued to the petitioner. According to the petitioner, the agricultural land was located beyond 8 km. aerial distance from nearest municipality and the population of the village Khumari was below 10000 and, therefore, the land in question cannot be termed as the 'capital asset' as contemplated in terms of Section 2(14) of the IT Act and, therefore, the petitioner is not liable to pay the tax on the said difference amount of Rs.6,63,000/-. 13. To ascertain the said controversy, it would be proper to reproduce Section 2(14) of the IT Act as under : "2(14). "Capital Asset" means - (a) property of any kind held by an assessee, whether or not connected with his business or profession; (b) --------- (c) ------- but does not include - (i) ------ (ii) ------ (iii) agricultural land in India, not being land situated (a) in any area which is comprised within the jurisdiction of a....
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....ated in the village. Therefore, as contemplated under Section 2(14) of the IT Act, the said land does not fall in the ambit of 'capital asset'. Hence, the dictum laid down in the Commissioner of Income Tax (supra) case would apply to the case at hand regarding determining the question of 'capital asset'. 15. In Arvind Sahdeo Gupta (supra), this Court, after considering the various judgments of this Court as well as the Hon'ble Apex Court, has held that:-- "No statutory remedy is available to challenge the notice U/s 148 of the Act, so it can be challenged in writ jurisdiction. Also, if the statutory authority has not acted in accordance with the provisions of the enactment in question, extraordinary jurisdiction could be exercised". 16. Similarly, in Gandhibag Sahakari Bank Ltd. (supra), this Court, after considering various judgments of this Court as well as the Hon'ble Apex Court, has observed as under : "While the objection to 'maintainability' goes to the root of the matter, and if such objection is found to be of substance, the Court would be rendered incapable of receiving the lis for adjudication. On the other hand, the question of 'maintainability' i....
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....essing Officer to observe that "the petitioner failed to pay the tax on the difference amount of Rs. 6,63,000/- chargeable to the tax under the provisions of the IT Act and thereby had escaped assessment for the year 2020-21." Except for stating that such information was available on the insight portal, no material has been brought on record to show the existence of a reason to believe by the Assessing Officer that the income of Rs. 6,63,000/- had escaped assessment in respect of the petitioner. The reasons disclosed by the assessing office do not indicate that any exercise of independent verification thereafter was undertaken, resulting in consideration of the same with due application of mind by the Assessing Officer so as to reopen the completed assessment. Similarly, the Assessing Officer did not verify whether the agricultural land, i.e., the property in question, can be termed as 'capital asset' or not in view of Section 2(14) of the IT Act. Only by stating that information was available on the insight portal did the Assessing Officer form a belief that the indicated amount had escaped assessment at the hands of the petitioner. This Court in Gandhibag Sahakari Bank Ltd., has ....
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.... been provided. In the said case, the petitioner therein has not challenged the authenticity of the notice issued under Section 148-A of the IT Act. Therefore, the Court has held that there is no reason to warrant interference by this Court in exercise of jurisdiction under Article 226/227 of the Constitution of India at this intermediate stage." 20. However, as discussed above, it is evident that the Assessing Officer, without satisfying himself and applying his mind, issued the impugned notices and, therefore, the law laid down in Anshul Jain (supra) is of hardly any assistance to the respondents in support of their contentions. However, it does not appear that the Assessing Officer independently obtained the material and formed his opinion based on said material that there was escapement of the income. While drawing only inference, he has to know the connotation of 'capital asset' as per Section 2(14) of the IT Act, of which clause (iii) excludes the 'agricultural land' which is located beyond 8 km in aerial distance from the municipality and the population of the village is less than ten thousand does not fall within the purview of capital asset. Thus it is apparent....