9911796707
TMI Blog2017 (6) TMI 1113X X X X Extracts X X X X X X X X Extracts X X X X ..... 2-2017 - SHRI A. D. JAIN, JUDICIAL MEMBER For The Assessee : Shri M. M. Agarwal, CA. For The Revenue : Shri Waseem Arshad, Sr.DR. ORDER This is assessee s appeal for Assessment Year 2006-07, taking the following grounds: 1. Because on due consideration of the facts, circumstances of the case, submissions made him and cited precedents, learned CIT(Appeals), has grossly erred in upholding the validity of ignition of proceedings under section 148 of the Act. 2. Because learned CIT (Appeals) failed to appreciate that there was no valid reason assigned by the AO in the purported 2 reasons to believe and the reasons recorded by the AO were based on conjectures, surmises and in bad faith. The proceedings so initiated were illegal, bad in law and without jurisdiction. 3. Because, learned CIT (Appeals) failed to appreciate that there was no mention of any income escaping assessment for assessment year 2006-07 in the purported reasons recorded by the AO and in any case, the issue of notice under section 148 of the Act was barred by limitation. 4. Because holding so learned CIT (Appeals) failed to appreciate that various judgments refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he reason to believe escapement of income, the AO has further reason that such alleged escaped income amounts, or is likely to amount to ₹ 1 lacs or more, for that year; and that in the present case, the AO had not specified the quantum of income alleged to have escaped assessment. The assessee relied on Mahesh Kumar Gupta Vs. CIT , 363 ITR 300 (All.) and Amar Nath Agarwal Vs. CIT , 371 ITR 183 (All), wherein, Mahesh Kumar Gupta (supra) was relied on. 6. The ld. CIT(A) rejected the assessee s contentions and observed in the impugned order that in Mahesh Kumar Gupta (supra), the Hon ble Allahabad High Court has held that the sanctioning Authority was not aware of the quantum, or likely quantum of the income escaping assessment in that case, as it was not recorded in the reasons and, therefore, the notice issued u/s 148 of the Act beyond four years of the end of the relevant assessment year, was barred by time; that similarly, in Amar Nath Agarwal (supra), the Hon ble Allahabad High Court had quashed the reassessment proceedings on two counts, namely, that the reasons recorded by the AO did not indicate that the assessee had failed to disclose fully and truly all mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eard the parties and have perused the material on record. The observations of the ld. CIT(A) in the impugned order and the arguments of the ld. Representatives for both the parties have been considered. The following are the reasons (APB 20) recorded by the AO to initiate proceedings u/s 147 of the Act against the assessee: Reasons for initiating proceeding u/s 147 in the case of Sri Pataria S/o Sri Mani Ram, Village Maholi Distt. Mathura for A.Y. 2006-07. As per the information received from ITO-3(1), Mathura, the assessee introduced his land in term of capital amounting to ₹ 30,00,000/- to become the partners in the Bhakti Promotors Builders vide Partnership deed, dated 01/Aug/2005, which appears to have been escaped from being taxed, as there is no information with this office that he files his return of income. Therefore, I have 7 reason to believe that Capital Gain arising from transfer of this land has escaped from being taxed. Section 149(1)(b) of the Act states that no notice u/s 148 shall be issued for the relevant assessment year, if four years, but not more than six years, have elapsed from the end of the relevant assessment year, unless the income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n , which is taxable. 12. In the above view of the matter, the distinction erroneously sought to be drawn by the ld. CIT(A), between the facts of the present case and those in 9 Mahesh Kumar Gupta (supra) and Amar Nath Agarwal (supra), is, really, non-existent. 13. At this juncture, it would be apt to reproduce herein, the relevant portion of Mahesh Kumar Gupta (supra): 11. The reason assigned for reopening is that the petitioner after converting the leasehold land into freehold sold the property within three years after converting the land into freehold resulting into short term capital gain in view of the Karnataka High Court's decision referred to above. What income is said to have been escaped does not find mention therein. Even assuming for the sake of argument, the income was liable to be taxed as short term gain unless there is any material before the authority concerned that it exceeds the limit of ₹ 1 Lakh, extended period of limitation of six years will not be available to the department. The normal period of limitation is four years for giving the notice under section 148 and where the escaped income is likely to amount to ₹ 1 Lakh or m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment after close of the argument has filed the following judgements for consideration of this Court:- 1. GKN Driveshafts (India) Ltd. Vs. ITO [2002] 259 ITR 19/125 Taxman Taxman 963 (SC) 2. Dr. H.S. Bawa Vs. CIT, [2012] 25 Taxmann.com 15/210 Taxman 57 (P H). 3. Vikram Kothari (HUF) Vs. State of U.P., [2011] Taxmann.com 280/200 Taxmann.com 152 (Alld). 4. Export Credit Guarantee Corporation of India Vs. Addl. CIT [2013] 30 Taxmann.com, 211 (Bom). 5. Asstt.CIT Vs. Rajesh Jhavri, [2007] 291 ITR 500/161 Taxman 316 (SC). 12 6. Chief Commissioner (Admn.) (U.P.) V. Kanhaiya Lal Kapoor, [2005] 147 Taxman, 12 (All). 7. Pooran Mal Vs. Director of Inspection, [1974) 93 ITR 505 (SC) 8. Deep Chand Daga Vs. ITO [1970] 77 ITR, 661 (MP) and, 9. Fisher Xomox Sanmar Ltd. V. Assistant CIT, [2007] 294 ITR 620 [2008] 168 Taxman 251 (Mad.) 14. None of the judgments referred to above have any connection to the point in issue even remotely. They relate either to the question of non-disclosure of income or failure on the part of the assessee to disclose the income fully or truly and what amounts to reason to believe an information . None of thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 20. The aforesaid reasons, makes it clear that the assessee was required to pay short term capital gains tax instead of long term capital gains tax and, therefore, the Assessing Officer had reasons to believe that the income had escaped assessment. In the instant case, admittedly, the notice was issued after four years but before six years. In our opinion, the reasons so recorded by the Assessing Officer was not sufficient to intiate proceedings under Section 148 of the Act. We find from the reasons recorded by the Assessing Officer that no such reasons has been recorded to the effect that the escaped income in likely to be ₹ 1 lac or more except for the assessment year 2001-02. 21. In Mahesh Kumar Gupta v. CIT [2014] 363 ITR 300/[2013] 215 Taxman 114/33 taxmann.com 409 (All) a coordinate Bench of this Court held that it is imperative for the Assessing Officer to record in his that the escaped income is likely to be ₹ 1 lac or more so that the Chief Commissioner or Commissioner may record his satisfaction u/s 151 of the Act. 15 The Court further held that if the said reason has not been recorded by the Assessing Officer, the initiation of the reassessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
