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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 ..... s also filed on 31.08.2016 through e-filing in response to notice u/s.148. The assessment was reopened on the following grounds by the ITO, Wd-3(2), Jaipur who has recorded satisfaction for re-opening as under: "As per information received from sub-registrars, the assessee has sold property/properties at Khasra No. 376, 377, 378, 379, 381, 393/2314, Kukas, Amer, Jaipur on 29.07.2008. As per the provisions of section 50C of the Income tax Act, 1961 the sale consideration or registered value, whichever is higher, is Rs. 73,67,140/-. As per the records available with this office the assessee has not filed his return of income for A. Yr. 2009-2010, consequent to non-filing of return of income by the assessee it is established that income from capital gained amounting to Rs. 73,67,140/- has escaped assessment. Hence, it is a fit case for issuance of notice u/s. 148 of the IT Act, 1961/or A.Yr. 2009-2010. In view of the above reasons, it is requested that necessary approval as laid down under sub section (2) of Section 151 of the I T Act, 1961 may kindly be accorded". 2. Subsequently, the case was transferred to ITO, Ward-46(1), Kolkata from the IT.O., Ward-3(2), Jaipur on the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. C.I.T.-I, Jaipur wherein it was stated that Sri Ramrai Sharma, Patwari who has given certificate dated 03.09.2016 to Sri G.C. Agarwal, the assessee and who has produced this certificate before the IT.O, Wd-46(1),Kolkata at the time of re-assessment was incorrect and fabricated . It is found that the said Patwari has since retired and he had given a letter dated 15.09.2017 to ITO Ward,- 3(2), Jaipur stating that the earlier certificate issued by him was without any actual verification of the land. However, the location of the land was also verified by Tehsilder of the Tehsil Alwar, Jaipur vide letter No. LA/2017/5809 dated 25.09.2017 (In Hindi) who has also confirmed that the Patwari in the latest report has given the location of the land within 5.7 km of Municipal Corporation of Jaipur after joint verification of Patwari and ITI. Based on this information in case of Puja Agarwal, proceeding u/s. 263 was carried out and the matter has reached to the Hon'ble High Court, Rajasthan. 4. In view if the information received from Pr. C.I.T.-l, Jaipur , the case records of Sri Girish Chandra Agarwal was called for by me and examined and it was found that the A.O. has not taxed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rejudicial to the interest of revenue. Since, the land was treated as an Agricultural land which consequently exempted the assessee from making payment of tax on capital gain without due verification and enquiry. Considering the above facts, the undersigned is proposing to revise the assessment Order you may please furnish your written or oral submission on 30.11.2018 at 12.30 P.M " 7. In response to opportunity letter issued on 12.03.2019 the assessee has sought adjournment vide letter dated 19.03.2019 and asked for seven days time. Accordingly the assessee was given further time upto 28.03.2019 to furnish written submission. On 26.03.2019" Sri N.M. Bhansali, Advocate attended andfiled a written submission dated 25.03.2019 along with 'Vakalatnama'. A copy of the same submission has also been received by post from the assessee on 28.03.2019 which is placed on record. The contents of the submission are as under: "I have received your above show-cause notice u/s 263 dtd. 12.03.2019 alongwith copy of notice dtd. 11.05.2018, 02.11.2018 and 04.02.2019 allegedly sent at my old address. In this connection I state that I had not received any noticed dtd. 11.05.2018, 02.11.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... beyond the scope of his powers u/s 263 of the IT Act, 1961. In the case of CIT-Vs-MAX India Ltd. 295-ITR-282 (SC) the Hon'ble Supreme Court has held that the phrase "prejudicial to the interest of Revenue" in sec. 263 of the Income tax Act, 1961 has to be in conjunction with the expression "erroneous" order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interest of Revenue". It has also been held that the revision u/s 263 cannot be made merely because the CIT is not satisfied with the order passed by the Assessing Officer. In the case referred above the Hon'ble court held that where the view expressed by the A.O. is a possible view, the CIT cannot hold the Asst. order as an erroneous order prejudicial to the interest of Revenue. Further it is well settled in law that there is a distinction between "lack of inquiry" and "inadequate inquiry". If there was any inquiry, even inadequate, that would not by itself give occasion to the Commissioner to pass orders under section 263 of the Income-tax Act, 1961, merely because he had a different opinion in the matter of reliance in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te evidences there is no iota of doubt left that the land was not an agricultural land but the capital asset u/s.2(14) of the Income-tax Act, 1961 and the Assessing Officer has not carried out detailed verification and enquiries into the location of the land and genuineness of the alleged certificate of the Patwari submitted by the assessee which is now found to be false. The huge burden was cast upon the Assessing Officer in the re-assessment proceeding u/s.148 when the assessment was re-opened by the Assessing Officer himself on the ground of escapement. In this context casual assessment done by the Assessing Officer was highly uncalled for. The Assessing Officer is therefore erred completely in allowing the exemption u/s.10 of the Income-tax Act, 1961 to the assessee and not bring into the tax the capital gains which the assessee was liable to pay u/s.45 of the Income-tax Act, 1961. The assessment order is therefore found erroneous and in so far as it is prejudicial to the interest of revenue. 9. The Hort'ble Kolkata High Court in the case of M/s Raj Mandir Estate Pvt. Ltd. (2016) 70 Taxmann.com 124 (CAL) has held that the inadequate enquiry is a valid ground for revision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ata in ITA No.1214/Kol/2013 decided on 11.05.2018 has declined the Revenue's identical plea as under:- "7. We sought to know what is to whether the assessee could raise such a plea in the instant proceedings involving question of validity of CIT's order passed u/s. 263 of the Act. Learned counsel takes as to a co-ordinate bench's order ITA No.764- 766/Kol/2014 in M/s Classic Flour & & food Processing Pvt. Ltd. Kolkata vs. CIT-IV, Kolkata decided on 05.04.2017. Learned co-ordinate bench held that an assessment is in the nature of primary proceedings whereas revision process u/s. 263 of the Act is a collateral one wherein validity of the former can always be challenged. This tribunal's decision in M/s Westlife Development Ltd. vs. Principal CIT in ITA No. 686/Mum/2016 places reliance upon hon'ble apex court's judgment in Kiran Singh & Ors. vs. Chaman Paswan & Ors.(1955) 1 SCR 117 (SC). Their lordships are of the view that a decree passed by a court without jurisdiction is a nullity which could be put to challenge in execution or in collateral proceedings. Their lordships conclude that any defect of jurisdiction in pecuniary or territorial or in respect of subject-matter of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceedings of the Act is affirmed upto hon'ble apex court. He pleads that it would be an anomalous situation if the instant second round disturbs tribunal's earlier finding (supra) having already concluded that CIT had rightly exercised his revision jurisdiction as re-assessment order dated 28.12.2010 is erroneous causing prejudice to the interest of the Revenue. 11. Learned CIT-DR emphasizes that relevant assessment records duly corroborate the fact that the Assessing Officer had issued u/s 143(2) notice on 16.11.2009 as followed by Section 142(1) notice. Mr. Usman states that the assessee's third substantive ground in question takes advantage of the CIT above crucial observation (supra) going against the assessment records. He pleads that the same are not binding on the Revenue since they are neither appealable nor rectifiable at its behest. He further invites our attention to the CIT's notice(s) initiating section 263 proceedings dated 21.12.2011 and 15.01.2013, as well as assessee's reply thereto on the latter date to the effect that it had filed all the relevant details and documents as called during the assessment from time to time. The assessee had asserted as per its re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case. It emerges from the case records that the Assessing Officer had initiated the impugned re-opening vide section 148 notice issued on 03.11.2009. These assessment file notings dated 16.11.2009 make it clear that he had issued section 143(2) as well as section 142(1) notice(s). Learned counsel's case is that there is no such notice on record. We find no merit in the instant plea as the above narrated assessment notings make it clear that Assessing Officer had indeed issued the said two notices. We quote section 114(e) of the Indian Evidence Act to presume as a court that the Assessing Officer had performed an official act of completing re-assessment in assessee's case as per the prescribed procedure. We reiterate that although assessee has pleaded of neither it itself nor its authorized representative to have appeared during the course of scrutiny in furtherance to the said notice(s), the above narrated 'facts speak otherwise wherein it had not even filed its authorized representative affidavit to rebut the above assessment notice(s). The very auditor had been continuing to represent the assessee's right from re-assessment to section 263 proceedings as well as the consequen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecution of the assessee's sale deed, the ITO Ward-3(2) Jaipur had issued sec. 148 notice dated 23.03.2016 after forming reasons to believe that her taxable income liable to be assessed as escaped assessment. The assessee's letter dated 27.06.2016 pleaded that he had been regularly filing his returns before ITO Ward-46(1) Kolkata. The relevant re-assessment forming subject-matter under challenged dated 30.12.2016 also indicates that after receiving the assessee's said letter / petition, the ITO Ward-3(2) Jaipur transferred sec.148 proceedings to ITO Ward-46(1) Kolkata vide its speed post letter dated 11.07.2016 and the impugned re-assessment stood framed thereafter. 6. Mr. Surana submits in this factual backdrop that the Assessing Officer Jaipur did not have territorial jurisdiction in assessee's case and therefore, the entire re-assessment deserves to be quashed as non est. The Revenue's case on the other hand is that the ITO at Jaipur transferred the case to ITO Ward-46(2) Kolkata after coming to know about the assessee to have been regularly assessed in the latter jurisdiction. We find no force in Revenue's argument. The fact remains undisputed is that ITO Ward-3(2) Jaipur who h ..... 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