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TMI Blog2021 (6) TMI 540X X X X Extracts X X X X X X X X Extracts X X X X ..... rior to recording of the reasons and issuance of notice u/s 148, for formation of reasonable belief that income has escaped assessment and reopening the assessment proceedings is conspicuously absent in the instant case. It is not a question of sufficiency or materiality of information in possession of the AO rather it is a case of complete absence of any information or material prior to recording of reasons and issuance of notice u/s 148 and in light of the same, the reassessment proceedings deserve to be quashed and set-aside. Thus the sole basis for adopting the enhanced value of the property is a communication received from the sub-registrar regarding revaluation of the property and reference made to this effect to the higher authorities dated 21.09.2009. However, such a communication is not supported by any revaluation order and even during the course of the present proceedings, no such revaluation order is either brought to our notice or placed on record. Further, we find that Deputy Director of Stamps vide reply dated 5.02.2018 in response to assessee s RTI application has confirmed that no such reference was either received from Sub-Registrar 4 Jaipur vide letter no. 57 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO for re-opening the case after 8-9 years and in reassessing the total income. 2. At the outset, it is noted that there is a delay in filing the present appeal by the assessee company. In this regard, the ld. AR submitted that the assessee in its return of income has declared income from long term capital gains by adopting the transaction value of ₹ 76,00,000/- as per the registered conveyance deed dated 28.05.2008 however, the Assessing Officer by invoking provisions of section 50C has substituted the transaction value with ₹ 90,19,200/- basis information received from Sub Registrar Stamps. It was accordingly submitted that the whole foundation of the present case is the information received by the Assessing Officer that the property has been valued at ₹ 90,19,200/- as against declared transaction value of ₹ 76,00,000/-. It was submitted that during the appellate proceedings, the assessee in response to it s RTI application for the clarification from Deputy Director. Stamps, Govt of Rajasthan dated 5th Feb, 2018 that there is no reference dated 20.01.2009 was ever made for revision in the stamp duty value. Further, no such order against such reference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We therefore find that where the assessee claims that such a clarification which has been issued by a competent regulatory authority is critical for determining the issue at hand and the matter was regularly pursued by the assessee before the ld CIT(A), and the assessee was hopeful that where the same is taken into consideration and appropriate order is passed by the ld CIT(A), the whole of the addition would have been deleted and due to certain administrative exigencies or otherwise, the same couldn t be considered by the ld CIT(A) while passing the impugned order and even appropriate rectification order is not passed till date, the assessee is diligent in pursuing its matters and the explanation so offered for the delay in filing the present appeal is found to be reasonable and acceptable in interest of substantial justice and the delay is hereby condoned and the appeal is admitted for necessary adjudication. 5. Now, coming to the merits of the case, the ld AR raised various contentions during the course of hearing as also contained in the written submissions and the same read as under: Ground No. 1: 1. The learned Assessing Officer has grossly erred in fact as well as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,000/- on 28.05.2008. As per information received from sub-registrar of Jaipur district. The sub registrar has valued the property at ₹ 90,19,200/- against the value of ₹ 76,00,000/- shown as sale consideration by the assessee, in the ITR for the A. Y. 2009-10, it is seen that assessee has calculated LTCG by taking value at ₹ 76,00,000/-. as per the provision of section 50C, value of property should have been taken at ₹ 90,19,200/- for calculating LTCG. In view of above facts, Therefore, I have reasons to believe that income to the extent of ₹ 14,19,200/- chargeable to tax, has escaped assessment. 1.4 The above Notice remained to be replied within time since such Notice not reach the assessee Co. on a/c of some technical reasons and later when a copy of said Notice / letter dt. 24.04.2016 was collected in person by the AR of the A Company, same was Replied to vide AR s Reply dt. 09.11.2016 drawing attention of the AO towards the basis of declaring Income on Sale of the Two lands on the basis of Value of the Registered Documents which contained as endorsements u/s 54 of the Rajasthan Stamp Act certifying the Value of the Document for Registration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The reference in the section is to the value adopted or assessed (or assessable) by any authorities of the state govt. (Stamp Valuation Authorities) and on simple reading of same, it is evident that situations such as the present case as that of revision or reassessment in value is neither envisaged nor permitted under the section (Sec.50) to carry out any revision in the value and consequentially in the income of the Assessee. Here the terms have to be interpreted in the context they are used and unless such term reassessment or revision in value was included in the said section or any of its Proviso or sub sections, carrying out any rectification/ revision on the basis of any such revision in value by the Stamp Valuation Authorities would be against the provisions of the act and thus illegal and bad in law. 1.8 The Objections raised in the above detailed submissions dt. 21.11.2016 were summarily dealt in brief by the AO at page 4 of his Assessment Order [pages 24 of Paper Book] including w.r.t. the Objection as to unconcluded proceedings for enhancement / revaluation of property being not final but after which, the conclusion drawn by AO without actually dealing wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the then Stamp Authorities at Rs. ₹ 76,00,000 and thus its such action cannot be deemed to be a failure in disclosing fully and truly all material facts necessary for its assessment, which is an essential condition precedent/ to exist for reassessment under first proviso to sec 147 of ITA. 2.4. Attention was also drawn to the alleged arbitrary proceedings by the Stamp Authorities in terms of making the reference by the Sub Registrar-IV, Jaipur viz., to his superior way back on 21.01.2009 and which remained unconcluded more then 7 years, both from the date of registration of the document as well as from the date of such reference and that also without any details and opportunities to the parties concerned which were mandatory even under the Provisions of the Rajasthan Stamp Act, 1998. Attention towards Sec.54 of the Raj Stamp Act. 1998 is also drawn. Neither the Letter dt. 15.11.2016 of the Sub Registrar-IV, Jaipur to the AO referred to in the Order of the AO conveying any details wrt. Date of revisit to the property, basis of such revaluation/ revision or outcome of such reference as also w.r.t. extending any opportunity to the parties concerned to render their objectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t arrive at any trail of such Reference or of its revision/ revaluation. Nor any pendency to such reference is on record of such department. Mr. Ajay Kumar Bhargava, Advocate accordingly based on his research issued a confirmatory Certificate in support of above factual position viz., that there was No such Reference or Revision in the valuation of such Property after its Registration on the records of the Stamp Dept. nor any such Reference remaining Pending in the Computer Records of such Stamp Registration Department. 2.09 In view of aforesaid factual position viz., no Revision in the value of property as alleged was made or was in the process of being made and no disposal of reference , if at all any, by the Collector Stamps was there till date, the entire reassessment proceedings which being without any basis was appealed to be deserving to be quashed and held as null and void. 2.10 Without prejudice to the aforesaid submissions, attention was also drawn to the fact that the assessee company had also filed an Application under the RTI Act ( Right to Information Act) with the Stamp and Registration Department for ascertaining the final outcome of any such reference ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (17.10.2018), the AR of the Assessee, Mr. Pramod Patni a Sr. Partner in the CA Firm M/s Shah Patni Co. while leaving for the hearing in Appeal at around 10.30 am or so received a Phone call which informed him of Demise of his Father in law, Dr. S.K. Jain, residing at Jaipur and was then admitted in a Hospital in immediate vicinity of AR s office. Due to which news, Pramod Patni left the Appeal file as it is in his office and rushed to the Hospital for needful further actions in the said matter. Thus, Mr. Patni could not attend to the Appeal Hearing. Further at such time non of his Jr.Partners had reached the office who could have been briefed about the case and seeking an adjournment in the matter. Copy of Death Certificate of Dr. S.K. Jain attached. 2.15. After Mr. Patni informed one of his Jr. Partners of his inability to attend to an Appeal before CIT(A), Ajmer, directions were issued to him for seeking a. Adjournment of hearing in the case after 7 days stating said peculiar event having occurred and accordingly Mr. Kailash T. , Jr. partner visited the CIT(A), Ajmer, camping at ITAT Bldg. at Jaipur and attempted to submit the Application for Adjournment, which the CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same with the 3rd E.mail dt. 22.10.18. 2.18. However, surprisingly the Assessee Co. received by Post on 16.11.18 the Order in Appeal by the CIT(A), Ajmer, dt. 17th Oct.,2018 and on reading of which observed the following: i. The Order in Appeal passed in the date of 17.10.2018 itself, while the POA favoring the sender of email and submissions itself sent on 18.10.2018. ii. The Conclusion Para in the Order in Appeal based only on 1st Set of Written Submissions as evident from Para 2.1. to Para 4.3. at Pages 8-9-10 of Order placed at page. Nos. 57 to 59 of the 1st Paper Book before the ITAT. The said Written Submission before CIT (A) in Reass. Procd. to CIT(A), Ajmer with email dt. 17.10.18 as Item at Sr. No. 3. iii. The Conclusion drawn and the Order so passed and the Conclusion drawn outrightly ignoring Submissions attached as item nos. 4 and 5 in the very same mail to CIT(A), Ajmer containing the Supplementary Submission 2nd Resubmission and the Reply from Registration and Stamp Dept., Govt. of Rajasthan again RTI Application dt. 5.2.18 , which were submitted as attachment with the very same mail dt. 17.10.18. 2.19. Factually stating, the Supplementary W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... having passed Order in Appeal was shown to CIT(A)- Ajmer, Mr. Anil Singh, who even then showing dismay towards the working of his office, assured that since he having agreed to the company filing a Rectification Application for carrying out necessary amends, if required, in the Appeal Order, necessary justice would be done in the case. 2.22 In view of all the aforesaid developments in the case, the AR of the Assessee Co., feeling confident of a favorable outcome in the case at the level of the CIT(A), Ajmer itself, advised the Co. for not file a case at the ITAT, keeping the time and effort of the Bench in mind. However, when despite repeated reminders, no disposal of the Application for Rectification of Appeal Order coming forth, the Company deciding to file a belated Appeal before the ITAT, Jaipur Bench with an appropriate request for Condonation of Delay in filing such Appeal. 2.23. Both sub para 3.4. of Assessment Order at page 5 (page 25 of Paper Book) as also the 1st Sub Para to Para 4.3. of the CIT(A)- Ajmer Order at its page 10 (Page 59 of the Paper Book) refer to Sec.50C of ITA as also to the Value determined for purpose of Stamp Duty and while factually such Value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d legal proposition that reassessment proceedings can be initiated basis the information and material in possession of the Assessing officer and where on review and examination thereof, where he forms a reasonable belief that the income has escaped assessment and pursuant thereto, he records his reasons for reopening the assessment, seek appropriate approvals from the competent authority and thereafter, issue notice u/s 148 of the Act. In the instant case, we find that there is nothing on record which can demonstrate that the AO was in receipt of any information or having any material in possession prior to recording of the reasons and issuance of notice u/s 148 of the Act. It is only on receipt of objections by the assessee during the course of reassessment proceedings that the AO has sought information from the Sub-Registrar wherein the latter has stated vide letter dated 15.11. 2016 that value of the property was revised after spot verification and enhanced from ₹ 76,00,000/- to ₹ 90,19,200/- as evident from para 3.4 of the reassessment order which reads as under: 3.4 Considering assessee s objection vide this office letter No. 1569 dated 15.11.2016, informati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sis such examination, the advocate has issued a confirmation certificate that there was no such reference or revision in the valuation of the property after its registration on the records of the stamp duty authority. It has been further submitted that Deputy Director of Stamps vide reply dated 5.02.2018 in response to RTI application dated 11.12.2017 has also confirmed that no such reference from Sub-Registrar 4 Jaipur vide letter no. 57 dated 21.01.2009 was received by the said office and no such order passed in any such reference. It was further submitted that the assessee has filed this confirmation in response to RTI application before the ld CIT(A) and is therefore part of record and which is mistakenly not been considered by the ld CIT(A). 11. We find that the sole basis for adopting the enhanced value of the property is a communication received from the sub-registrar regarding revaluation of the property and reference made to this effect to the higher authorities dated 21.09.2009. However, such a communication is not supported by any revaluation order and even during the course of the present proceedings, no such revaluation order is either brought to our notice or place ..... X X X X Extracts X X X X X X X X Extracts X X X X
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