2022 (5) TMI 551 - HC - Income Tax

Reopening of assessment u/s 147 - Capital gain on land sold - petitioner submits that the two land in question were jointly owned by seven persons. The petitioner herein and the aforesaid Dushyant Bhati both were also co-owners of the aforesaid agricultural land which was sold by two separate registered sale deeds. For the same set of reasons proceedings under Section 148 of the Act, 1961, were initiated against the petitioner and the aforesaid Dushyant Bhati who is the son of the petitioner - HELD THAT - Assessment Order under Section 147 read with Section 144 B of the Act, 1961, in respect of Dushyant Bhati has been passed by the National Faceless Assessment Centre, Delhi, accepting his claim that the land in question was accepted to be an agricultural land situate beyond 8 km. of municipal limits. Thus the disclosed income in the returns for the Assessment Year 2013-14 has been accepted and no tax has been imposed in respect of the sale of the land in question. On the other hand totally contrary view has been taken in the matter of the petitioner vide reassessment order dated 28.03.2022, under Section 147 read with Section 144 B of the Act, 1961, passed by the National Faceless Assessment Centre, Delhi, whereby 1/7th of the consideration in respect of the land in question, belonging to the petitioner, has been assessed as a long term capital gain on the finding that the land in question is not an agricultural land. Thus, on the same set of facts while the respondents have accepted the claim of petitioner's son in respect of the same land and on the other hand in respect of the same land the stand taken by the petitioner has been rejected and the sale proceeds of the agricultural land has been assessed as a long term capital gain. As two conflicting reassessment orders have been passed by the National Faceless Assessment Centre in respect of two co-owners of the same land, we direct the newly impleaded respondent no.4 to look into the matter and file his personal affidavit explaining the state of affairs and the steps being taken by the Government. Put up as a fresh case for further hearing on 04.05.2022

Summary

Issues:
1. Discrepancy in reassessment orders passed by the National Faceless Assessment Centre for co-owners of the same land.
2. Petition to quash the notice dated 30.03.2021 under Section 148 of the Income Tax Act, 1961.
3. Request for amendment of the writ petition to include a prayer to quash the reassessment order dated 28.03.2022.
4. Conflicting orders by the National Faceless Assessment Centre.

Analysis:
1. The High Court addressed the issue of conflicting reassessment orders issued by the National Faceless Assessment Centre for two co-owners of the same land. While one co-owner's claim regarding the land being agricultural was accepted, the other co-owner's claim was rejected, leading to a discrepancy in the treatment of the sale proceeds. The Court directed the newly impleaded respondent to investigate the matter and provide a personal affidavit detailing the steps being taken by the Government to resolve the issue. The case was scheduled for further hearing on 04.05.2022 alongside other related cases.

2. The petitioner had filed a writ petition seeking to quash the notice dated 30.03.2021 issued under Section 148 of the Income Tax Act, 1961. The petitioner's counsel argued that the reassessment order dated 28.03.2022, passed by the National Faceless Assessment Centre, treated a portion of the sale proceeds of the land as long-term capital gains, contrary to the treatment of the other co-owner's proceeds. The Court allowed time for amending the writ petition to include a prayer to quash the reassessment order dated 28.03.2022.

3. The petitioner's counsel requested a week's time to amend the writ petition to specifically challenge the reassessment order dated 28.03.2022. The respondent's counsel also sought time to file a counter affidavit in response to the writ petition and the supplementary affidavit submitted. The Court granted the requested time for both parties to complete the necessary filings before the next hearing date.

4. The Court noted the concern raised by the respondent's counsel regarding conflicting orders issued by the National Faceless Assessment Centre and acknowledged the need to address these anomalies. This acknowledgment led to the decision to direct the newly impleaded respondent to investigate the matter and provide a detailed explanation of the situation and the actions being taken by the Government. The Court emphasized the importance of resolving the discrepancies in the assessment orders to ensure fairness and consistency in tax assessments.