TaxTMI 
TaxTMI 
2025 (8) TMI 971
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....e for the year under appeal nor disclosed such transactions to the Department therefore, the case of the assessee was re-opened by issue of notice u/s 148 and served upon the assessee on 13.10.2014. Since no compliance was made of filing the return of income in response to notice u/s 148 of the Act, two notices were issued u/s 142(1). The second notice u/s 142(1) was issued on 11.02.2015. In response to the said notice, return of income was e-filed by the assessee on 17.02.2015 through e-filing portal in ITRV and on 18.02.2015, assessee submitted a copy of the return of income so filed alongwith a letter of even date. The AO thereafter, issued notice u/s 143(2) alongwith questionnaire and notice u/s 142(1) on 18.02.2015 for 20.02.2015. On the fixed date, the assessee sought adjournment and the case was finally fixed for 27.02.2015. As no details were filed, as sought by the AO, he concluded the proceeding and passed the assessment order dated 27.02.2015 u/s 143(3)/147 of the Act wherein addition of INR 8,89,37,168/- was made towards Long Term Capital Gain ("LTCG") from the sale of land which was claimed by the assessee as agricultural land in the return of income filed in response ....
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....43(2) of the Act, was issued on the same day of filing of return income, which shows complete non application of mind on the part of assessing officer and thus, the assessment so framed was without jurisdiction and according all proceedings thereafter are nullity. Additional Ground No. 2 : That the impugned assessment so framed is bad in law and on facts, in as much as, the initiation of proceedings under section 147 of the Act and, further completion of assessment under section 143(3)/147 of the Act was without satisfying the statutory pre- conditions (i.e. with non application of mind, without there being any tangible material and without supplying the copy of reasons recorded) as envisaged in aforesaid section and was without jurisdiction and was liable to be quashed, as such." 6. Since the additional grounds of appeal are legal in nature thus, the same are admitted for adjudication by following the order of Hon'ble Supreme Court in the case of NTPC Ltd. reported in 229 ITR 383(SC). 7. Ground of appeal No.1 is general in nature hence, dismissed. 8. First we have taken legal issues raised by the assessee in the appeal memo as well through additional grounds of a....
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....mination, the assessment order passed u/s 143(3) was quashed. Accordingly, Ld.AR for the assessee submits that the facts of the present case are identical to the facts in the case of Himmat Mittal (supra) as in the present case also the AO issued notice us/ 143(2) on spot without verifying the contents and thus is bad in law and consequent reassessment order passed u/s 143(3)/147 of the Act deserves to be quashed. 12. On the other hand, Ld. Sr. DR for the Revenue submits that the return of income was filed on 17.02.2015 electronically which was treated as nonest by the CPC since it was not followed by duly signed copy of acknowledgement of ITR-V sent to CPC, Bangalore. He further submits that the assessee as on the very next day filed the return of income before the AO and after considering the same, AO had issued notice u/s 143(2) of the Act to the assessee. Ld. Sr. DR for the Revenue drew our attention to the notice issued u/s 143(2) available at page 7 of the Paper Book alongwith 142(1), notice of even date and the questionnaire wherein the AO made specific queries with respect to the transaction of sale of property by the assessee therefore, it cannot said that there was no ....
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.... Counsel duly authorized to represent on his behalf has received the notice u/s 143(2) and further received the notice u/s 142(1) alongwith questionnaire on 18.02.2015. From the perusal of the questionnaire, it could be seen that it contained the complete details of the transactions carried out by the assessee on sale of land thus it is not a general query later but contained specific query about the transaction of sale carried out by the assessee, therefore, it cannot be said that the AO had issued the notice u/s 143(2) without applying his mind and was issued in mechanical manner. Further the facts of the case of Himmat Mittal (supra) as relied upon by the assessee are not applicable to the facts of the present case where the Co-ordinate SMC Bench observed that notice u/s 143(2) was issued by the AO without applying his mind on the return furnished by the assessee. In view of these facts and the discussion made herein above, in our considered opinion, the notice u/s 143(2) of the Act alongwith questionnaire were issued after proper application of mind on the return of income filed by the assessee and the material available on record including the reasons recorded for re-opening o....
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....referred the application of the assessee dated 20.02.2015 and it is further observed that the final opportunity was given on 27.02.2015 which according to ld. AR is in contradiction to the entry made in the order sheet entry dated 20.02.2105. Ld. AR further drew our attention to the order sheet entry dated 23.02.2015 page 31 of the Paper Book wherein it is observed by the AO as under:- 18. Ld.AR thus submits that the case was fixed for hearing on 27.02.2015 and on the said date when the assessee filed an application through e-mail wherein the order of Hon'ble High Court dated 26.02.2015 was submitted before the AO passed u/s 281B of the Act, the AO passed the reassessment order on the same day without even providing any further opportunity to the assessee though the case was got barred by limitation only in March, 2016. It is thus submitted by Ld.AR that no proper opportunity of being heard was provided to the assessee therefore, consequent order passed is in the violation of principle of natural justice and deserves to be quashed. 19. On the other hand, Ld.Sr. DR for the Revenue vehemently supported the orders of the lower authorities and submits that in this case, the asses....
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....number of the electronic transmission and the date of transmission as an evidence of filing of the return. (3) A copy of the electronic transmission of filing the return of income shall be downloaded and kept by the person. (4) Where a return of income is filed electronically without digital signature, on successful transmission of the data, an acknowledgement in Form ITR-V as provided in rule 12 of the Income Tax Rules, 1962 shall be generated by the server of the Central Government and available to the person. (5) The Form ITR-V shall also contain the acknowledgement number of the electronic transmission and the date of transmission as an evidence of filing of the return. (6) A copy of ITR-V shall be downloaded and after taking a printout of such a form, it shall be physically verified under the signature of the person and forwarded to the Centre. (7) The Form ITR-V duly verified shall be sent to the Centre, either through ordinary or speed post, within such period of uploading the electronically filed return as may be specified by the Director General in this behalf. (8) The date of transmitting the data electronically shall ....
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.... provided that if the assessee has not raised the contention about the return filed by him as invalid and participated in the assessment proceedings, the assessee cannot challenge the same subsequently. We find that before us assessee has failed to rebut such findings of ld. CIT(A). Accordingly, Ground of appeal No.3 raised by the assessee is dismissed. 27. Ground of appeal No.4 raised by the assessee is with respect to the issue of notice u/s 143(2) on the Counsel of the assessee without following the procedural manner provided in Section 282 of the Act. 28. Heard the contentions of both the parties and perused the material available on record. On this issue, we find that the notice issued u/s 143(2) of the Act by the AO was served upon the Ld. Counsel of the assessee duly appointed by the assessee with regard to the representation of his case before the Income Tax authorities and therefore, there is no error in the action of the AO in serving the notice u/s 143(2) of the Act to the Ld. Counsel of the assessee. Further assessee has not raised any objections in this regard during the assessment proceedings and participated in the same. Thus looking to these facts we find no e....
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....s related to HUF as it was ancestral property and therefore, the capital gain arising out of the said property has to be assessed in the hands of the HUF and not in his individual capacity. The assessee has made a detailed written submission in this regard which reads as under:- E. Property did not belong to the assessee in his individual capacity Assessee has raised the following ground of appeal in this regard:- 6. "That having regard to the fact that there was a family settlement amongst the appellant and his two sons whereby the appellant and his two sons were having 1/3rd shares in the ancestral land, which stood mutated in the name of appellant, the Ld. CIT(A) has grossly erred in rejecting the contention that the liability of the appellant should be restricted to 1/3rd of the total liability." It was throughout the case of the assessee that the land did not belong to him. It was the ancestral property and his family had inherited 1/6th of the same. Since it was the ancestral property, his sons had share equal to that of him. Accordingly, he was the owner of only 1/3rd of the 1/6th share. He also produced a copy of family settlement dated 0....
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....ovided he gives his sons equal shares with himself, and if does so, the effect in law is not only a separation of the father from the sons but a separation of the sons inter se. 07. Partition is a severance of joint status and as such it is a matter of individual volition. All that is necessary, therefore, to constitute a partition, is a definite and un-equivocal indication of his intention by a member of a joint family to separate himself from the family and enjoy his share in severalty. 08. Hon'ble Supreme Court in Raghaamma vs Chenchamma (AIR 1964 SC 136) had pointed out that there should be an intimation, indication, or representation of such intention and that, what form that manifestation should take would depend upon the circumstances of each case. It is implicit that this manifestation of intention should be to the knowledge of the persons affected. 09. An agreement to separate is not required by law to be in writing. If it is in writing & clearly indicates on the face of it an intention to separate and hold the property in defined shares as separate owners, no evidence is admissible of the subsequent acts of the parties to alter or control it....
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....partition of the HUF could not be regarded as his separate property. It was held to have become the property of the joint hindu family of the assessee and his sons. 14. In the present case, it is held that the property sold by the assessee was an ancestral property and therefore, as per Mitakshara Law, the sons of the assessee had an interest equal to that of his father (present assessee). It is needless to say that the right which the son takes at his birth in the ancestral property is wholly independent of his father. He does not claim through his father. Even before the CIT(A) assessee had taken a specific ground that his father had only 1/3rd share in the ancestral property. However, CIT(A) has not dealt with the same. Assessee had also produced the family settlement dated 03.10.2007, however, Ld. CIT(A) was not convinced with the same, observing that the assessee had for the first time in the Rejoinder come-up with the plea that there was a family settlement. It is needless to say that there cannot be any estopel against the statute. It is a well settled law that in the ancestral property, the sons have interest equal to his father. CIT(A) had repelled the contention ....
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....capacity and thus the Long term capital gains as computed by the AO in the hands of assessee deserves to be uphold. He prayed accordingly. 36. Heard the contentions of both the parties and perused the material available on record. It is an admitted fact that the lands in question which were sold during the year, were inherited by the assessee's family from his fore-father and there were total six family to whom the land parcels were transferred under inheritance. The assessee, being head of his family, was considered as one of the seller in the Sale Deed and the heads of other five families were taken as co-owner for the purpose of execution of the sale deed which was registered before the competent authorities. It is also seen that the mutation was also registered in revenue records in the name of six co-owner families which are six separate families. The assessee also filed family statement between himself and his two major sons with respect to their shares in the said property according to which the assessee is having 1/3rd share in the overall 1/6th share of his family thus, the assessee is the owner of 1/18th share in the lands sold. Once the lands are inherited from the fo....
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.... families had received their 1/6th share in the sale consideration separately, the same should be assessed in the hands of their smaller HUF. Thus, the capital arising from the transfer of sale of these lands is to be assessed in HUF capacity only and not in the hands of the assessee in individual capacity. Accordingly, we hold that the assessment order passed by making addition towards the long term capital gain from the sale of ancestral lands in his individual capacity is bad in law and the subject lands being under the ownership of the HUF therefore, the same should be assessed in HUF capacity only. Therefore, we direct the AO to delete the additions made in the hands of the assessee on account of LTCG from sale of such land and further direct to take necessary action in the hands of HUF in accordance with the provisions of law. With this, the Ground of appeal No.6 raised by the assessee is hereby allowed. 40. Ground of appeal No.7 is with respect to the addition of INR 75,000/- made on account of agricultural income declared by holding the same as undisclosed. 41. Heard the contentions of both the parties and perused the material available on record. Lower authorities ha....