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TMI Blog2020 (4) TMI 324X X X X Extracts X X X X X X X X Extracts X X X X ..... holds that the proceedings without concerned authority having territorial jurisdiction are not upheld. We therefore hold that the re-assessment forming subject-matter of PCIT s sec. 263 assumption of revision jurisdiction itself stands quashed. His revision directions under challenge are therefore non est to the limited extent being in the nature of collateral proceeding only. - Decided in favour of assessee. - ITA No. 1137/Kol/2019 - - - Dated:- 29-1-2020 - Shri S.S.Godara, Judicial Member And Dr. A.L. Saini, Accountant Member For the Appellant : Shri S.M. Surana, Advocate And Shri N.M. Bhansali, Advocate For the Respondent : Shri Ram Bilash Meena, CIT-DR ORDER PER S.S.GODARA, JUDICIAL MEMBER:- This assessee s appeal for assessment year 2009-10 arises against the Principal Commissioner of Income Tax-16 Kolkata s M.No.PCIT- 16/Kol/u/s263/2018-19/8438-40 dated 29.03.2019, involving proceedings u/s 263 of the Income Tax Act, 1961; in short the Act . Heard both the parties. Case file perused. 2. The assessee s sole substantive grievance plead that the PCIT herein has erred in law and on facts in assuming is u/s. 263 of the Act revision jurisdic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tural land was situated more than 9 km away from the Municipal Limits and the land was an agricultural land. The A.O. has not verified thesaid certificate from the Patwari directly and that no letter u/s. 133(6) was issued to the said Patwari regarding confirmation of certificate and no attempt was made by the A.O. to verify the genuineness and correctness of the certificate. The A.O. completely relied upon the submission of the assessee and the alleged certificate of the Patwari and accordingly no capital gain was taxed on the sale of the said land and the re-assessment u/s. 148 was completed at the original return of income of ₹ 3,08,869/-. 3. Subsequently, a letter dated 03.10.2017 was received from the Pr.C.I.T-1, Jaipur stating that the daughter of the assessee, Miss Puja Agarwal has also sold land which was adjacent to the land sold by Sri G.C. Aganval, the assessee, in the, same year and the addition on account of capital gain from the said sale of the land by assessee's daughter, Miss Puja Agarwal was made by the IT.O., Ward-3(2), Jaipur on the basis of the verification carried out by Sri Ravinder Pratap Singh, Patwari, Tehsil Alwar along with income-tax Insp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceived in reply to this office notice dated 22.11.2018 also. Subsequently, reminder was issued to the assessee at the Howrah address vide letter dated 04.02.2019 which was also returned by the postal authority. Finally, a letter of opportunity for hearing was sent on 12.03.2019 at the address of the daughter of the assessee, Miss Puja Agarwal at Jaipur which was available from the correspondence folder of the Assessing Officer. The said notice has been served on assessee on 19.03.2019. 6. The relevant portion of the 263 notice are as under : In the instant case, return of income for the assessment year 2009-10 was filed by the assessee declaring total income of ₹ 3,08,869/- and the assessment was completed u/s 147 of the I.T. Act, 1961 on 30.12.2016 on the basis of returned income. Subsequently, it was found that the Assessment was completed considering the plot of land sold by the assessee during the assessment year as Agricultural land on the basis of the copy the purported certificate produced by the assessee from Patwari of Gram Kukus Thesil Amer, Dist. Jaipur certifying that the land in question 11las an Agricultural land situated more than 9 KM away fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessment was completed without making proper enquiry is wrong and incorrect. Therefore assessment so made is erroneous and prejudicial to the interest of revenue and the provisions of sec. 263 are not attracted in my case. I would like to invite your kind attention that the power u/s 263 cannot be invoked to correct each and every type of mistake committed by the A.O. Every erroneous order cannot be disturbed U/S 263. The power of suo-motu revision u/s 263(1) of the IT. Act, 1961 is in the nature of supervisory jurisdiction and can be exercised only if circumstances specified therein exist - vide observations of the Bombay High Court - 203-ITR-108 (Bom) in the case of Gabriel India Ltd. Your petitioner states that it is well settled in law that the power u/s 263 of the income Tax Act 1961 can be exercised only when the assessment order is ' prejudicial to the interests of the revenue ' as well as erroneous order. Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interest of the revenue. . This view has been well settled by the Apex Court in the case of Malabar Industrial Co. Ltd - Vs-Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... request you to kindly consider the matter judicially and drop the proceedings u/s.263 under intimation to me . 8. The assessment record and submission of the assessee have been examined by me. The only issue under consideration for revision proceedings is whether the land sold by the assessee at Jaipur vide registration document No.2008396001129 dated 29.07.2008 was the capital asset and capital gain was liable to be taxed by the Assessing Officer. As has been discussed in para 2,3 and 4 above, both Tehsilder, Alwar, Jaipur and Patwari have physically inspected the said land on 16.09.2017 and have certified that the land was located within 5.7 km. distance of Municipal limit of Jaipur city. Therefore, the land was not an agricultural land and it was a capital asset u/s.2(14) of the Income-tax Act, 1961. The Patwari who earlier gave a letter to the assessee copy of which was produced before the Assessing Officer has also withdrawn his certificate by letter dated 15.09.2017 to ITO,Wd-3(2), Jaipur and has admitted that the said certificate was issued by him without actual physical verification of the location of the land. In view of the validation of location of the said land by T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of the case discussed above, the assessment order u/s.143(3) dt.30.12.2016 passed by the Assessing Officer is held erroneous and in so far as it is prejudicial to the interest of revenue. The assessment order u/s.143(3) dt.19.12.2016 passed by the Assessing Officer is hereby cancelled and the Assessing Officer is directed to pass a fresh assessment order. On the issues for which the assessment is directed to be revised uls.263 of the Income-tax Act, 1961, the Assessing Officer is directed to complete the revision assessment proceeding and pass a speaking order after carrying out any further enquiries necessary and marshalling necessary facts and documents on the issue of genuineness of claim of huge agricultural income. The assessee should be provided sufficient opportunity before passing any assessment order. 3. Learned authorized representative invited our attention to the assessee s petition dated 28.11.2019 seeking to raise an additional ground that the Assessing Officer had not issued any valid notice u/s 148 before completing the re-assessment in question dated 30.12.2016 forming subject-matter of revision proceedings. The Revenue objected the assessee s admissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Hotel Blue Moon (2010) 321 ITR 362 (SC) whilst quashing the assessment in question to be non est void. 9. MR. Surana lastly takes us to the case records as well including assessment notings. He states that there is no copy of the relevant notice in assessment records. His further contention is that neither assessee had authorized anyone nor its auditor had ever put in appearance before the Assessing Officer during the re-assessment in question. We invited learned counsel s attention to the fact that the same auditor had represented the assessee even in section 263 as well as consequential assessment framed on 26.07.2014. Mr. Surana reiterates that once the original assessment / re-assessment is non est, the above auditor s subsequent act and conduct or that of the assessee itself cannot validate the same as held in hon'ble apex court s decision (supra). He therefore prays that the impugned re-assessment framed on 28.12.2010 is to be held non est, null and void at the threshold itself and therefore, there is no scope for the CIT to exercise his jurisdiction vested u/s. 263 of the Act. 10. Mr. Usman (CIT DR) represents the Revenue. He first of all informs us that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ords since the same has seen multiple rounds of proceedings involving movement of the case file from one authority to another. Learned DR quotes Section 292B of the Act as well that the assessee cannot plead non issuance of notice at this belated stage once it had defended the relevant assessment is revision proceedings. 12. We have given our thoughtful consideration to rival submissions. Suffice to say, we have already narrated the basic facts that our instant adjudication is confined to assessee s third substantive ground that the CIT could not have revised the reassessment in question framed on 28.12.2010 since the latter one is a non est order in the eyes of law not exigible to revision. We quote all the relevant case law relied upon at the assessee s behest (supra) to observe first of all that it is very much open for the assessee to challenge validity of the re-assessment in section 263 proceedings on the ground that same are non est in the eyes of law. Co-ordinate bench s decision(s) (supra) have already concluded that assessment proceedings are primary proceedings whereas those u/s 263 of the Act are in the nature of collateral proceedings. The question before us in this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e conclude in view of these facts that the CIT s said observation is against the assessment records. Mere on non production of the notice(s) in question; in our considered view, is not sufficient to conclude that the Assessing Officer had not issued sec. 143(2) and sec. 142(1) notices which is view of the above overwhelming supportive evidence in the nature of assessment proceedings before us. We quote sec. 136 of the Act to conclude that the legislature has indeed treated proceedings before us Income Tax authorities to be judicial proceedings as well. 4. Coming to admission of assessee s additional ground, we note that hon'ble apex court s landmark decision in National Thermal Power Corporation. Ltd. vs. Commissioner of Income-tax (1998) 229 ITR 383 (SC) considered in All Cargo Global Logistics Ltd. vs. DCIT (2012) 137 ITD 26 (Mum) holds that the tribunal can very well entertain an additional ground in order to determine the correct taxable in case provided the relevant facts are already on record. We go by the very reasoning herein as well to admit assessee s additional ground. 5. We now advert to the relevant factual matrix. There is hardly any dispute that it is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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