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2020 (12) TMI 1070 - AT - Income TaxValidity of notice - Reopening of assessment u/s 147 - disallowing the capital gains as claimed by the assessee - advertent error in the notice issued by the AO reflecting only the PAN column of the notice mentions PAN of the HUF instead of the individual - HELD THAT - A careful reading of the Section point towards the benefit envisaged to all the stakeholders whether it is the citizen or the state. In our case, the assessee as well as the revenue. Even, the revenue is precluded from treating the return of income filed by the assessee as null and void in cases where there has been a mistake, defect or omission in such return of income. The mistakes in the return such as wrong quoting of the Section or provision pertaining deduction, exemption or wrong filing of the column or wrong typing of PAN or address are not to be treated as fatal to make a valid return invalid. Section 292B has been invoked to benefit the assesses where the returns have been filed in correct jurisdiction. There is a marked difference between want of basic or inherent jurisdiction and exercise of authority which has not been vested with the Assessing Officer. In the instant case, the Assessing Officer has rightly invoked the provisions of Section 148 by recording the reasons and by issue of notice to the proper person to which it was intended to. In the present case, there is an in advertent error in the notice issued by the AO reflecting only the PAN column of the notice mentions PAN of the HUF instead of the individual whereas the body of the notice and the address shows that the notice is clearly meant for the assessee himself. The provisions of Section 292B have been further clarified the Circular No. 179 of CBDT dated 30.09.1975 that this provision has been made to provide against purely technical objects without substance coming in the way of validity of the assessment proceedings. On going through the Reasons recorded, the address on the notice, the body of the notice issue of notice, we hold that the notice of the Assessing Officer wherein there is a mistake only in the PAN number, the notice is covered by the provisions of Section 292B. Capital gain - ascertaining the fair market value of a capital asset - Valuation made by the DVO - CIT (A) directed the Assessing Officer to adopt the valuation as made by the DVO - invoking the jurisdiction by the AO u/s 55A - HELD THAT - On going through the explanatory note to the Finance Bill 2012, we find that the amendment is substantive in nature and is prospective. The amendment is applicable to all the proceedings taken up after 01.07.2012. In the case of Dove Investments Pvt. Ltd. Vs Gujarat Industrial Investment Corporation 2006 (2) TMI 287 - SUPREME COURT as observed that regard must be had to the context, the subject matter and object of the statutory provision in question in determining whether the same is mandatory or directory. No universal principle of law could be laid down in that behalf as to whether a particular provision or enactment shall be considered mandatory or directory. It is the duty of the Court to try to get the real intention of the Legislature by carefully analyzing the whole scope of the statute or section or phrase under consideration. In the instant case, the notice has been issued on 18.03.2014 and the proceedings have been concluded on 31.03.2015. Hence, the invoking of provisions of Section 55A existing from 01.07.2012 by the Assessing Officer and reference to the Valuation Officer which is in accordance with the provisions of the Act inforce at that time, cannot be faulted with. Objection to the Valuation Process - if the value as determined by the registered valuer is correct or the value determined by the DVO is correct - As gone through the reports of Tahsildar Sadar, ADM Finance regarding the circle rates. While the report of the DVO is based on the prices given as per the circle rates notified by the ADM Finance, the value determined by the registered valuer was based on the report of the Tahsildar which was based on the local enquiries. There has been a dispute as to which segment price of Rampuri Mohalla has to be taken into consideration. The benefit of construction has not been adequately allowed. Keeping in view the entire facts of the case, we hold that the ends of the justice would well served by referring the matter back to the file of the AO to accord further benefit to the construction of nala, boundary wall, tube well, earth filling work and to determine the price taking into consideration the value of Mohalla Rampuri segment. In the result, the appeal of the assessee on the grounds of reopening and reference to Valuation Officer is dismissed. The process and method of determining the FMV is set aside with directions.
Issues Involved:
1. Validity of reassessment proceedings and notice under Section 148. 2. Jurisdictional defect in the notice issued under Section 148. 3. Application of Section 292B to rectify defects in the notice. 4. Correctness of the valuation of property for capital gains calculation. 5. Application of amended provisions of Section 55A for valuation. Detailed Analysis: 1. Validity of Reassessment Proceedings and Notice under Section 148: The assessee challenged the reassessment proceedings on the grounds that no valid notice under Section 148 was issued before the reassessment. The notice was issued to "Narendra Kumar Gill (HUF)" with a different PAN, whereas the assessment was framed in the name of the individual with a different PAN. The assessee argued that this discrepancy invalidated the notice and the subsequent reassessment proceedings. 2. Jurisdictional Defect in the Notice Issued under Section 148: The assessee contended that the notice under Section 148 was issued to the HUF, but the assessment was completed in the individual capacity. The notice reflected the PAN of the HUF, whereas the body of the notice mentioned the individual. The assessee argued that this defect was not curable and rendered the notice invalid. 3. Application of Section 292B to Rectify Defects in the Notice: The revenue argued that the defect in the PAN mentioned in the notice was a mere technical error and could be rectified under Section 292B of the Income Tax Act. The section provides that no notice shall be invalid merely by reason of any mistake, defect, or omission if it is in substance and effect in conformity with the intent and purpose of the Act. 4. Correctness of the Valuation of Property for Capital Gains Calculation: The assessee disputed the valuation of the property as on 01.04.1981 used for calculating capital gains. The Assessing Officer took the value at ?120 per sq. mtr based on ADM Finance's report, whereas the assessee claimed a value of ?3,600 per sq. mtr based on a registered valuer's report. The CIT(A) adopted the valuation made by the DVO at ?167.50 per sq. mtr. 5. Application of Amended Provisions of Section 55A for Valuation: The assessee argued that the provisions of Section 55A, as amended on 01.07.2012, could not be applied retrospectively to the assessment year 2009-10. The amended provisions allow the Assessing Officer to refer to the valuation officer if the value claimed is at variance with the fair market value, whereas the earlier provisions allowed reference only if the value claimed was less than the fair market value. Issue-wise Analysis: Jurisdictional Issue – Notice under Section 148: The Tribunal examined whether the mention of a different PAN in the notice invalidated it. The Tribunal noted that the reasons recorded by the Assessing Officer clearly mentioned the name of the individual, and the body of the notice reflected the assessment was intended for the individual. The Tribunal held that the defect in the PAN was a technical error and did not invalidate the notice, invoking Section 292B to rectify the defect. Valuation Issue: The Tribunal addressed the objections regarding the valuation process. The Assessing Officer's reference to the DVO was found to be in accordance with the provisions of Section 55A as amended. The Tribunal noted that the DVO's valuation was based on notified land rates and construction parameters. However, it directed the Assessing Officer to re-examine the valuation, considering the construction of the nala, boundary wall, tube well, and earth filling work, and to use the correct segment price for Mohalla Rampuri. Conclusion: The Tribunal dismissed the appeal on the grounds of reopening and reference to the Valuation Officer but set aside the process and method of determining the fair market value with specific directions for re-evaluation. The Tribunal emphasized the application of Section 292B to rectify technical defects in the notice and upheld the validity of the reassessment proceedings. The matter was remanded to the Assessing Officer for a fresh determination of the property's fair market value, considering the additional construction and correct segment price.
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