TaxTMI 
TaxTMI 
2026 (7) TMI 1214
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....his brother was the owner of the land property. For the impugned land property, the assessee entered into joint development agreement as on 29th March 2007 with developer. In lieu of transfer of land property under the JDA the assessee was to get certain portion of constructed area in the developed property. In view of the JDA, the assessment of the assessee for A.Y. 2007-08 was reopened on premise that as per the provision of section 2(47) of the Act transfers of land under the JDA was completed on the date of JDA itself. Accordingly, the assessment order under section 143(3) r.w.s. 147 of the Act was made for the A.Y. 2007-08 vide order dated 23rd March 2015 and capital gain was brought to tax making addition to the total income. 4. The assessee filed appeal before the learned CIT(A) against the assessment framed for A.Y. 2007-08. The learned CIT(A) vide order dated 02nd February 2017 dismissed the assessee's appeal and confirmed the finding of the AO. 4.1 Against the learned CIT(A) order dated 02nd February 2017, the assessee filed subsequent appeal before the Tribunal in ITA No. 724/Bang/2017. The Tribunal vide order dated 21st November 2017 held that the reopening of the....
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....about conversion of land. As per the Official Memorandum dated 04.02.2008 brought on record before us by way of additional evidence, the conversion of land in the present case has taken place on 04.02.2008. Hence, this tribunal order is squarely applicable in the present case and the judgment of Hon'ble Karnataka High Court rendered in the case of CIT vs. Dr. T. K. Dayalu (Supra) was duly considered by the tribunal in this case. Hence, respectfully following this tribunal order, we hold that reopening in the present case is not valid because the same is without application of mind on the crucial fact of conversion of agriculture land to non agriculture land on subsequent date not falling in the present assessment year and hence, it does not constitute a tangible material to form a belief that the income has escaped assessment for the present year. Accordingly, we hold that the reopening is not valid and consequential assessment is quashed. 4.2 The AO considered the above finding of the Tribunal for A.Y. 2007- 08 as finding or direction as per section 150(1) of the Act, for reopening of assessment for A.Y. 2008-09 i.e. year under dispute before us. Accordingly, the AO recorded re....
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....already become time-barred on the relevant date. 7.2 The learned AR submitted that the alleged finding or direction relied upon by the AO emanates from the order of the Tribunal passed for AY 2007-08 on 21.11.2017. Pursuant thereto, the AO sought to reopen the assessment for AY 2008-09 by issuing notice under section 148 on 19.03.2018. 7.3 It was contended that under the provisions of section 149 as applicable at the relevant point of time, the maximum period available for reopening AY 2008-09 was six years from the end of the relevant assessment year, which expired on 31.03.2015. Therefore, on the date when the Tribunal passed the order on 21.11.2017, the assessment for AY 2008-09 had already attained finality and had become barred by limitation. 7.4 The learned AR further submitted that even if the date of the order of the learned CIT(A), being 02.02.2017, is taken as the relevant date for the purpose of section 150(2) of the Act, the position remains unchanged because on that date also the limitation period for reopening AY 2008-09 had already expired on 31.03.2015. Therefore, by virtue of section 150(2) of the Act, the provisions of section 150(1) could not be invoked ....
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....Act. 7.10 Referring to the decisions of the Hon'ble Supreme Court in ITO v. Murlidhar Bhagwan Das (52 ITR 335) and Rajinder Nath v. CIT (120 ITR 14), the learned AR submitted that a "finding" must be one which is necessary for disposal of the appeal before the appellate authority. Any incidental observation, collateral remark or consequential inference cannot be regarded as a finding within the meaning of section 150 of the Act. Likewise, a "direction" must be an express and mandatory command requiring positive action. Mere liberty granted to the Department or a casual observation does not constitute a direction. 7.11 The learned AR submitted that the Tribunal while deciding AY 2007- 08 merely held that the reopening for that year was invalid because the conversion of agricultural land into non-agricultural land took place on 04.02.2008, which did not fall within the relevant previous year corresponding to AY 2007-08. Consequently, the reassessment for AY 2007-08 was quashed. 7.12 It was argued that nowhere in the order of the Tribunal, any finding/ direction was given to the AO to reopen AY 2008-09. Similarly, the Tribunal did not record any finding that capital gains....
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....also demonstrates complete non-application of mind. Instead of dealing with the assessee's specific objection regarding absence of any finding or direction under section 150 of the Act, the AO merely relied upon decisions relating to "reason to believe" under section 147 of the Act. The issue involved in the present case is not existence of reasons to believe but satisfaction of the jurisdictional requirements prescribed under section 150 of the Act. Therefore, the objections were rejected mechanically without addressing the real controversy. 7.19 Accordingly, the learned AR submitted that since the order of the Hon'ble Tribunal for AY 2007-08 does not contain any specific finding or direction concerning AY 2008-09, the essential jurisdictional condition for invoking section 150(1) is absent. Consequently, the notice issued under section 148 r.w.s. 150 and the reassessment framed pursuant thereto are without jurisdiction, invalid in law and liable to be quashed. 8. On the contrary, the learned DR submitted that the Tribunal's order for AY 2007-08 clearly established that the transfer under the JDA did not occur in AY 2007-08 but arose only after conversion of the ....
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....ppellate, revisional or judicial order. Secondly, the assessment sought to be reopened should not have already become barred by limitation on the date contemplated under section 150(2) of the Act. 9.2 We shall first examine whether the Tribunal order for AY 2007-08 contains any finding or direction within the meaning of section 150(1) of the Act. 9.3 From the material placed before us, we note that the assessment for AY 2007-08 was reopened on the premise that transfer under the Joint Development Agreement dated 29.03.2007 had taken place during the relevant previous year. The Tribunal while adjudicating the validity of such reopening examined clause 12.3 of the JDA and noted that the land-owner was required to hand over the property after conversion from agricultural to non-agricultural use. The Tribunal further noted that such conversion had admittedly taken place only on 04.02.2008. On these facts, the Tribunal held that the reopening for AY 2007-08 was without application of mind and that no tangible material existed to form a belief that income had escaped assessment in that year. Consequently, the reassessment for AY 2007-08 was quashed. 9.4 Thus, the entire controve....
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....be treated as a finding or direction for invoking section 150 of the Act. The jurisdiction under section 150 cannot arise by implication or inference. It must flow from an express and necessary finding contained in the appellate order itself. Accordingly, we hold that the Tribunal order passed in assessee's own case for AY 2007-08 does not contain any finding or direction capable of invoking section 150(1) of the Act. The very jurisdictional foundation assumed by the AO for issuance of notice under section 148 of the Act is therefore absent. On this ground alone, the reassessment deserves to be quashed. 9.8 Even otherwise, we find substantial merit in the alternate contention of the assessee based on section 150(2) of the Act. The undisputed facts are that the notice under section 148 for AY 2008-09 was issued on 19.03.2018. Under the provisions of section 149 as applicable at the relevant time, the outer limitation for reopening AY 2008-09 expired on 31.03.2015. Thus, the notice issued under section 148 of the Act is admittedly time-barred. 9.9 The question then arises as to the point of time at which limitation is required to be examined under section 150(2) of the Act.....