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TMI Blog2020 (1) TMI 964X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer and after arriving at the satisfaction by applying his mind to the relevant facts of the case as emerging from the analysis and cross verification of the tangible material, a belief was formed by the Assessing Officer about the escapement of income of the assessee from the assessment for the year under consideration. The assessment of the assessee for the year under consideration thus was reopened by the Assessing Officer after arriving at his own satisfaction by analysing and cross-verifying the information received by him and since the same is clearly evident from the reasons recorded by him, we are of the view that the reopening of assessment by the Assessing Officer is in accordance with law and there is no legal infirmity as alleged on behalf of the assessee. We, therefore, find no merit in the case of the assessee on this issue and reject the same - Decided against assessee. - I.T.A. No. 2339/KOL/2019 - - - Dated:- 22-1-2020 - Shri P.M. Jagtap, Vice-President And Shri Satbeer Singh Godara, Judicial Member For the Appellant : Shri Mahadev Ghosh, Advocate and Shri K.N. Kundu, Advocate For the Respondent : Smt. Ranu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice under section 148. There was, however, no response to the said reminder by the assessee. Thereafter a notice under section 142(1) was issued by the ITO, Ward-38(4), Midnapore on 12.11.2018 fixing the case of the assessee for hearing on 29.11.2018. The said notice also remained un-complied with by the assessee. Another letter dated 03.12.2018, therefore, was issued by the Assessing Officer, in response to which a letter was filed through Speed Post on 14.12.2018 by Shri Gour Chandra Saha, father of the assessee making the following submission:- I, Sri Gour Chandra Saha, am a resident of Vill-Nischindipur, Ghatal, Ward-04, Paschim Medinipur, My younger son Somnath Saha was workman of Gold workman at Cuttack and had been supplying order of the customers. In 2010 he had bought a land in the lane of Chunavati at Cuttack town. Within one year from the purchasing of land the people of that area began to tyrannize over us. We are puzzled for their tyranny, They pressed us to leave Cuttack and also threatened to make us murder. I also had been living with my sons resident two years. I had seen their violence in my own eyes. I had been disappointed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee, however, failed to comply with the said requirement. Meanwhile a letter was issued by the Assessing Officer on 05.11.2018 to Shri Pawan Kumar Jajodia for furnishing the information regarding the transaction of the property in question with the assessee. In response thereto, the Assessing Officer received a letter through Speed Post from Shri Pawan Kumar Jajodia stating that the entire sale consideration for the property was paid by him to the assessee in cash out of the cash available with him Along with the said letter, Shri Pawan Kumar Jajodia filed the statement of computation of his total income for A.Y. 2012-13 and also furnished the photo copies of the relevant sale deed dated 16.08.2011. 4. Keeping in view the reply received from Shri Pawan Kumar Jajodia and the failure of the assessee to comply with his requirement, the submission made on behalf of the assessee vide letter dated 14.12.2018 was not found acceptable by the Assessing Officer. He accordingly proceeded to compute the long-term capital gain arising from the sale of the land by the assesese at ₹ 97,48,024/- (sale consideration of ₹ 1,37,00,000/- minus indexed cost of acquisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment in this case. 8.2 At the stage of reopening a case, the assessing officer is not always required to conduct a through investigation. In fact, the kind of fact finding that the assessing officer is required to make depends upon the quality of facts at hand. In this case, the sale deed and other related details left no doubt that the appellant had transacted in land. Further, since he had not filed a return of income, there remained no doubt that income in the form of LTCG had escaped assessment. Suffice it to say that the ITO Wd. 2(3), Cuttack had tangible material before him and he had made verifications to arrive at a conclusion that income had escaped assessment in this case. Therefore, it would not be correct to state that the ld. AO did not apply his independent mind before concluding that income had escaped assessment on this case, or that there was no material of any substance base on which he could have formed his reasons to believe that income had escaped assessment in this case. 8.2.1 On this aspect of the case, I refer to, and draw support from, the following decisions: The Hon'ble Apex Court in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use at the material point of time when the notice under section 148 was issued, the assessee s address had changed from Cuttack to Midnapore and it was the ITO, Ward-38(4), Midnapore, who had Jurisdiction over him. It was contended on behalf of the assessee that the notice under section 148 thus was issued by the Assessing Officer, who did not have jurisdiction over his case and the entire proceedings under section 147/148 was ab initio void. In order to appreciate the stand of the assessee and decide this issue, the ld. CIT(Appeals) culled out the relevant facts of the assessee s case as under:- (a) The appellant of Cuttack and had been filing his Return of Income with the ITO Ward 2(3), Cuttack. (b) After the AY 2010-11, he did not file his Return of Income. (c) His next Return of Income (after the AY 2010-11) was filed for the AY 2016-17 with the address of Midnapore. (d) During his stay in Cuttack, he had purchased a land there and later on sold it there itself. (e) The resultant long term capital gains were not declared by him as he did not file his Return of Income. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that he assumes. This fact is further clear if the following expressions in the above referred sections are referred to: -124. (1) Income-tax Officers shall perform their functions in respect of such areas or of such persons or classes of persons or of such incomes or classes of income as the Commissioner may direct. 124 (3) within the limits of the area assigned to him (Emphasis Supplied) 9.4. As per the scheme of the Act, one needs to understand as to when and how does the AO assume jurisdiction over a case when the appellant shifts from one territorial jurisdiction to another. Naturally, jurisdiction in such case is not assumed suo-moto by the assessing officer. There is an administrative procedure laid down for it. According to the procedure, if an assessee moves from one territorial jurisdiction to another, ideally, he should inform the assessing officer who originally held jurisdiction over his case, to take necessary steps and to transfer his case to the AO in the new jurisdiction. If the assessee does not inform the assessing officer, the later can, own his own accord, move a proposal before the Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1961 dated 14th Sept. 2018 to ITO Ward 38(4), Midnapore, it has been lying with ITO ward 38 (4), Midnapore. 9.7.c. Return of Income: Returns of Income for the AY 2011-12 and 2012-13 had not been -filed by the assessee. The return of income for AY 2009-10 and 2010-11.have been filed by the assessee on 30.03.2010 and 30.07.2010 respectively mentioning the address as, 'Gangamandir, Basak Bhawan, PO: Buxi Bazar, Dist. Cuttack (Orissa) PIN 753001 with ITO, Ward 2 (3), Cuttack. 9.8. Thus, the appellant had his address at Cuttack because of which the ITO Ward 2(3) was holding jurisdiction over his case. He moved a proposal to transfer the case to the ITO Ward 38(4) Midnapore the moment he realised that the appellant's address had changed. The appellant had not informed the ITO Ward 2(3), Cuttack about the change of his address, nor did he request for transfer of jurisdiction over his case. Therefore, the earliest time when the change of his address came before the ITO Ward 2(3) Cuttack, was when he was verifying the facts incorporated in the information he received from the investigation wing. Thereafter, he moved the proposal for transfer of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case when the notice under section 148 was issued by him and the jurisdiction over the assessee s case remained with the ITO, Ward-2(3), Cuttack till such time it was assigned to the ITO, Ward-38(4), Midnapore by the Principal CIT. He accordingly rejected the contentions raised on behalf of the assessee in support of this issue and upheld the validity of assessment made by the Assessing Officer under section 144/147 of the Act. The ld. CIT(Appeals) also did not find merit in the other grounds raised in the appeal of the assessee and dismissed the appeal of the assessee vide his appellate order dated 30.09.2019. Aggrieved by the order of the ld. CIT(Appeals), the assessee has preferred this appeal before the Tribunal. 8. Although as many as nine grounds are raised by the assessee in the present appeal challenging the validity of the assessment made by the Assessing Officer under section 144/147 of the Act, the ld. Counsel for the assessee has pressed and argued two issues, which relate to the validity of the assessment. 9. The first issue raised by the ld. Counsel for the assessee while challenging the validity of the order passed by the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 144/147, the entire proceedings under section 147/148 were bad-in-law and the assessment made in the case of the assessee under section 144/147 is liable to be cancelled being invalid. 10. The ld. D.R., on the other hand, strongly supported the impugned order of the ld. CIT(Appeals) on this issue upholding the validity of the notice issued by the ITO, Ward-2(3), Cuttack under section 148 to the assessee on 30.03.2018. She read out and relied on the observations/findings recorded by the ld. CIT(Appeals) in his impugned order in paragraph no. 9.3 to 9.11 in support of the revenue s case. She submitted that the assessee was earlier residing in Cuttack and not only the returns of income up to 2010-11 were filed by the assessee with ITO, Ward-2(3), Cuttack, but even address of the assessee as given in PAN was that of Cuttack in Orissa. She submitted that the returns of income for A.Y. 2011-12, 2012-13 and 2013-14 were not filed by the assessee and the intimation of change of address was not given by the assessee to the ITO, Ward-2(3), Cuttack. She submitted that even the address given for the purpose of PAN was not got changed by the assessee and the Assessing Officer c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 148 on the ground that the address of the assessee having been changed to Midnapore, West Bengal before the issuance of notice under section 148 on 30.03.2018, the ITO, Ward-2(3), Cuttack had no jurisdiction over the assessee s case and the notice issued by him under section 148 to the assessee was invalid. He has contended that the proceedings initiated in the assessee s case under section 147/148, therefore, were invalid ab initio and the assessment made under section 144/147 is liable to be cancelled being bad-in-law. In this regard, it is observed that the assessee was residing in Cuttack earlier and his returns of income for A.Y. 2009-10 and 2010-11 were filed by him with ITO, Ward-2(3), Cuttack on 30.03.2010 and 30.07.2010 respectively mentioning the address of Cuttack. Thereafter the assessee did not file his returns of income for A.Y. 2011-12 to 2015-16 and although he is stated to be shifted to Midnapore, West Bengal, the intimation of change of address was not given by the assessee to the ITO, Ward-2(3), Cuttack. Even the address of Cuttack given in PAN Card remained unchanged by the assessee and as rightly observed by the ld. CIT(Appeals) in his imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g further Hon ble Supreme Court has observed that in the absence of any specific intimation to the Assessing Officer with respect to the change in address, the Assessing Officer would be justified in sending the notice at the available address mentioned in PAN database of the assessee, more particularly when the return has been filed under E-Module Scheme . Keeping in view this proposition propounded by the Hon ble Apex Court, we are unable to accept the contention raised on behalf of the assessee that a mere mentioning of the new address in the return of income filed subsequently for A.Y. 2016-17 was enough and sufficient to transfer jurisdiction over his case from ITO, Ward-2(3), Cuttack from ITO, Ward-38(4), Midnapore, especially when there was no specific intimation given by the assessee to the ITO, Ward-2(3), Cuttack with respect to change of his address and even the PAN database had remained unchanged. The jurisdiction over the assessee s case was transferred from ITO, Ward-2(3), Cuttack to Ward-38(4), Midnapore only subsequently when order under section 127(1) of the Act was passed by the ld. Principal CIT, Cuttack on 14.09.2018 and PAN database was also changed on 15.09.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issuing a notice under section 148 mechanically without applying his mind to the material available on record. He contended that the Assessing Officer simply relied on the information supplied by the Directorate of Income Tax (Investigation) and formed the reasons to believe that the income of the assessee had escaped assessment for the year under consideration. He contended that the belief of the Assessing Officer regarding the escapement of income of the assessee was based on imaginary story and not on facts as is evident from the reasons recorded by him. He contended that the Assessing Officer did not apply his mind properly and independently while arriving at the satisfaction about the escapement of the income of the assessee. He simply jumped to the conclusion about the escapement of the income of the assessee on the basis of investigation report of Directorate of income Tax (Investigation) and reopening of assessment thus was based on the borrowed satisfaction without independent application of mind. He contended that the reasons recorded by the Assessing Officer do not stand to the test of jurisdictional requirements and, therefore, the very assumption of jurisdiction to rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he is liable to pay long term capital gain towards the said transaction. Analysis of information collected/ received: On going through the sale deeds of the both the transaction, it is found that the assessee purchased the land from one Ms Rabiya Khanum of Buxi Bazar on a cost of ₹ 29,30,000/- in the year 2008-09 and sold the property to Sri Pawan Kumar Jajodia, Purighat, Cuttack with ₹ 1,37,00,000/- in the year 2011-12. Furthermore, it was seen that one account in Bank of India, Nayasarak, Cuttack was opened only for the purpose of the buying the property and the same was closed after the transaction. Enquiries made by the AO as sequel to information collected/received: The above information has been crossverified with the return of income filed by the assessee in ITBA/AST/e-filing portal. The income shown in the last return i.e AY 2010-11 was ₹ 2,37,570/-. As per the data of his latest return i.e for AY 2016-17, the assessee is showing his address as Paschim Medinipur, Kolkata. Findings of the A.O : The impugned transaction of selling the immovable property was made by the assessee in the F.Y 2011-12 to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property for ₹ 29,30,000/- on 30.04.2008 and the same was sold on 16.08.2011 for ₹ 1,37,00,000/-. The said information received by the Assessing Officer was duly supported by the documentary evidence in the form of sale deeds of both the transactions and after going through the same, it was noted by the Assessing Officer that the sale of immovable property of the assessee had given rise to a long-term capital gain, which was chargeable to tax in the hands of the assessee for the year under consideration, i.e. A.Y. 2012-13. The Assessing Officer also computed such long-term capital gain chargeable to tax in the hands of the assessee for the year under consideration at ₹ 97,48,025/- and when he sought to cross-verify the same with the return of income filed by the assessee, it was found that the assessee had not filed his return of income for the year under consideration. It is thus clear that the specific information received by the Assessing Officer, which constituted tangible material, was analysed, verified and cross-checked by the Assessing Officer and after such analysis and cross verification, a belief was formed by him that this substantial long-term capital ..... X X X X Extracts X X X X X X X X Extracts X X X X
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