TaxTMI 
TaxTMI 
2026 (9) TMI 485
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....chargeable to tax had escaped assessment. The reopening is, therefore, bad in law and void ab initio . 2. That the learned Assessing officer has erred in law as well as on facts, as the sanction granted under section 151 of the I.T. Act, 1961, for initiation of proceedings under section 147/148 was accorded mechanically by the Joint Commissioner of Income Tax (JCIT), without proper application of mind. Such mechanical approval vitiates the assumption of jurisdiction under section 147. thereby rendering the impugned assessment order void ab initio and liable to be quashed. 3. That the learned Commissioner of Income-tax (Appeals ) has erred in ignoring the fact that the Assessing Officer failed to dispose of the objection filed by the assessee against the reopening of assessment by passing speaking order, in contravention of the law laid down by the Hon'ble Supreme Court in GKN Driveshafts (India Ltd. vs. ITO; and, therefore, the assessment order is void-ab-initio . (B) In this case, assessment order dated 30.12.2016 was passed by the Assessing Officer ("AO", for short) u/s 143(3) read with section 147 of the Income Tax Act, 1961 ("Act", for short) whereby th....
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....ssing Officer in his order specifically mentioned that the notice u/s 148 was issued on 30.03.2016 through speed post bearing no RU248000795IN Dated 31.03.2016. The authorised representative of the appellant was also taken part in the assessment proceeding and has not questioned the non service of notice u/s 148 of the Income Tax Act, 1961. As Assessing Officer send the notice through speed post, no confirmation of service of the notice under speed post given by the postal department but to sender has to verify online up to certain time limit(Normally 3 months) which is not available now on the portal of postal department. The issue of non serving of notice u/s 148 could have been raised during the course of assessment proceeding, participating in the assessment proceeding are construed as that the appellant is under knowledge that the proceeding u/s 147 is initiated. So the undue benefit of non serving of notice can not be given in the appeal proceeding. These grounds of appeal are hence dismissed. 6.3 Ground No. 3 to 6: In these grounds, the appellant has assailed the addition of Rs, 16,85,210/- under the head of Long Term Capital Gain, contending that the Assessing Offi....
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....ax Act makes it clear that agricultural land situated within the limits of a municipality or within such specified distance thereof, as notified under the statute, falls within the definition of "capital asset" and is therefore chargeable to capital gains tax upon transfer. 6.3.4 Further, the appellant has contended that there are various tests presently applied to determine whether land qualifies as Rural Agricultural Land, as set out below: Tests to determine agricultural land status (CIT v. Siddhartha J. Desai, 139 ITR 628): 1. Land classified as agricultural in revenue records ( Yes) 2. Land actually used for agriculture ( Yes) 3. No conversion to non-agricultural use ( Yes) 4. No alternative commercial use ( Yes) 5. Land affected by floods, used for self-consumption (O Yes) Honorable High Court Gujarat has observed in case of CIT v. Siddhartha J. Desai on the appellant had relied stated that " the land is located on the outskirts of the Biallimora town but it was not situate within the municipal limits.' The important test, the appellant has missed in the submission. Honorable High Court in above case ....
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....n this issue are therefore dismissed. 6.4 Ground no. 7: In this ground of appeal, the appellant has challenged the action of the Assessing Officer in rejecting the claim for expenses purportedly incurred towards improvement and execution of the sale deed. On perusal of Assessment Order it is observed that the appellant claimed improvement expenses of Rs. 1,15,000/-, transfer expenses by way of advocate's fee of Rs. 4,500/-, and brokerage expenses of Rs. 80,000/- in connection with the transfer of the property. It is evident from the record that during the course of the assessment proceedings the appellant failed to furnish any documentary evidence in support of these claimed expenditures. However, the Assessing Officer had allowed the transfer expenses paid as advocate fee of Rs. 4,500/- and 50% of fencing expense of Rs. 65,000/- i.e. Rs. 32,500/- and disallowed the rest amount. 6.4.2 During the course of the appeal proceedings, the appellant has not produced any additional evidence to substantiate the claims in respect of brokerage and improvement expenses. In the absence of any credible evidence or material to justify the claimed expenditures, the Assessing ....
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....nd as on 07.03.2007 after considering all merits and demerits of the case. 6.5.2 Accordingly, the Assessing Officer correctly computed the sale consideration for the purpose of assessing long-term capital gain in terms of the report of the AVO, as contemplated under the relevant provisions of law. This ground of appeal hence dismissed. 7. In the result, the appeal stands Dismissed. (B.2) The present appeal has been filed by the assessee against the aforesaid impugned appellate order dated 19.12.2025 of the Ld. CIT(A). In the course of the appellate proceedings in Income Tax Appellate Tribunal ("ITAT", for short), a paper book containing the following particulars was filed from the assessee's side: - PAPER BOOK INDEX OF COMPILATION SI. No. Particulars of documents 1. Query Letter dated 19-02-2015 2. Reply filed on 10-03-2015 3. Computation of Income 4. Ration Card 5. Notice u/s 148 dated 30-03-2016 6. Proforma for recording the reasons for initiating proceedings u/s 147 dated 18-03-2016 7. Reply u/s 142(1)/147 dated 20-05-2016 8. Manual ITR for A.Y. 2011-12 9. Bank Account 10. ....
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....r section 147/148 was accorded mechanically by the Joint Commissioner of Income Tax (JCIT), without proper application of mind. Such mechanical approval vitiates the assumption of jurisdiction under section 147, thereby Rendering the impugned assessment order void ab initio and liable to be quashed- Approval to initiate the proceeding in the case was given by the Range-Head, Faizabad which is as per the Income Tax Act-1961. Ground-3. That the learned Commissioner of Income-tax (Appeals) has erred in ignoring the fact that the Assessing Officer failed to dispose of the objection filed by the assessee against the reopening of assessment by passing speaking order, in contravention of the law laid down by the Hon'ble Supreme Court in GKN Driveshafts (India Ltd. vs. ITO; and, therefore, the assessment order is void-ab- initio- As per this office records the appellant had not raised any objection regarding the reopening of case she was required to raise the objection during the Assessment Proceeding or before the assessment was passed. Ground-4. That the learned Commissioner of Income-tax (Appeals) has erred in law and on facts in confirming the ac....
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....nce, the copies of aforesaid records are reproduced below: - (C.1) The Ld. Counsel for the assessee further submitted that even on merits, the addition made by the Assessing Officer and confirmed by the Ld. CIT(A) deserve to be deleted. In this regard, he drew attention of the Bench to the intimation and certificate given to the Assessing Officer by Municipal Authorities, included at page no. 4 of the aforesaid paper book referred to in forgoing paragraph (B.2) of this order. In the aforesaid report of the Municipal Authorities, it is categorically stated that the land sold by the assessee was 10.08 KM away from the municipal limits of Faizabad. It is further stated in the report that there was no road for access to the aforesaid land. The ld. Counsel for the assessee also drew attention of the Bench to the affidavit of the assessee filed before the Assessing Officer during the assessment proceedings, contained at page no. 4 of the aforesaid paper book. In the affidavit, the assessee had stated on oath that the land sold was agricultural land, located at 11.5 KM distance from the municipal limits. In view of the aforesaid, the Ld. Counsel for the assessee submitted that the addi....
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....fficer in a perfunctory manner. Because of these reasons, it is held that the initiation of proceedings u/s 147 of the Act was wrongly done and that the Assessing Officer could not have reasonably come to the belief that the entire aforesaid amount of Rs. 20,47,952/- had escaped assessment. Further, the approval given by the Ld. JCIT is also vitiated because of being a mechanical approval and because of non-application of mind. Therefore, the assessment order dated 30.12.2016 is hereby annulled. (D.1) Even on merit, it is found that the municipal authorities have categorically stated that the land of sold was agricultural land, located more than 10 KM away from municipal limits. Moreover, the assessee has also filed an affidavit stating that the land was agricultural land, located more than 11 KM away from the municipal limits. Therefore, on merits also because the land sold by the assessee was agricultural land, located more than 10 KM from the municipal limits and because it is agricultural land, the same is not a capital asset for the purpose of computation of income under the head `Capital Gains'. Definition of 'Capital Asset' u/s 2(14) of I.T. Act makes it abund....
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....am Sander Pandey, Hallclarification & certification in the matter Hanuman Kund, Avodhya, Fzd. AV, 2011-12 when issued to the Tehsildar, Sadar, Faizprocess situated Manjha Barahta is being who bas advised that presently the consolidation process of land speederover to him so that the "hoobast Adhikari Chankbandi letter issued to the Bandobast Adhikari we may be taken from him. After that the vide his letter no. 1401/ Profaro-Fish requisite my Sadar. Faizbad and who has ed land of village Manjha Barahata, Pargana RECT / 2016 dated 19.11.2016 certifying that -6 748,800 & 801 in question is situated at around sli Awadh, Faizabad gata no. 789,790.794.795.7 was asked to explain in the matter vide order Haveli Limit. The certificate of Executive Officer, Nagar mary 23. 11.2016 as you have submitted the concert in question at 10.8 cheet entry dated 23.11.2016 that we had certifie" . has certified the such distance around 2 whereas the Bandobast Adhikari Chakbe to the certificate of the Bandobast Adhikari kilometer whereus pal limit and asked accord be charged accordingly kilometer . Term Capital Gain me cate of the assessee appeared and filed requisite Chakbandi date so adjourned the advoc....
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.... the AVO for correction in the land valuation. The same was forwarded to AVO vide this office letter dated 26.12.2016 and requested The AVO, Allahabad has provided the valuation report vide his letter F.No.67/AVO/ITO/ALLD/2010-11 brought into the knowledge of the counsel of the have been taken printon 29.12.2016, From perusal of calculation sheet of valuation the assessee present for correct. The valuation officer has taken the value of such land as on 07.03.2007 after considering all merits and demerits of the case. 7. Further as submitted that the Agriculture Land may not be treated as capital asset as the (4) Smt. Usha Devi D/o Shri Shyam Sunder Pandev, Hanuman Kund, Avodhya, Fzd. AY. 2011-12 AVO Allahabad has clearly shows at point no. 5.2 as Agriculture Land and placed reliance of case of M/s Varghese KP Vs. ITO 131 ITR 597 AIR 1981assumption that there can never be a sale Mis mee result is that S50C imposes tax on assumption at the price below the market value. IT is no col the revenue must demonstrate that the the NOW repealed $ 52(2), observed that scope of received more than the amount " ther what it was sold at the market value." She further placed reliance of....
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....t and not agricultural. The valuation of State Stamp Authority is also supported this facts that the said land s treated as high value land other than agricultural land. In light of above facts the objection of he assessee with regard to valuation as well as capital asset is not found correct and the such land is by AVO, Allahabad. 10 Further the assessee has claimed vide her reply filed on 29.12.2016 that before calculation of LTCG the improvement expenses of Rs. 1,15,000/- made out by her since year 1989-90 to 1997-98 and transfer expenses paid as advocate fee at Rs. 4,500/- and brokerage expenses of Rs. 80,000/- may be allowed. She was asked for have any payment proof of these expenses incurred? The advocate of the assessee have nothing provided in this respect simply saying that the all activities circumstances the Fencing expenses of 50% i.e. necessary for security of land against the cja. e. Rs. 32,500/- is to be allowed treated as it is claimed expenses of Rs. 65,000/- incurred in the year 1989-90. With regard to other expenses the advocate fee of Rs. 4,500/- is also may be allowed as it proceedings u/s 271(1)(c) of the Income Tax Act, 1961 initiated for furnishing ....