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TMI Blog2024 (11) TMI 627X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 147 of the Act. Procedural irregularities by the CIT(A) regarding the Vivad Se Vishwas Scheme - Order of the ld. CIT (A) is also dismissed as he has passed a wrong order in quantum appeal because the assessee has not applied for any immunity under Vivad Se Vishwas Scheme/Act, 2020 in quantum appeal - HELD THAT:- From the order of the ld. CIT (A), it is clear that the order relates to penalty under section 271(1)(b) and 271F. Therefore, the order passed by ld. CIT (A) is quashed. AO while making the addition has not invoked or applied any provisions of law. AO has not stated under what provision of law he has made the addition and under what head whether, under business or trading income, agriculture income, capital gain or under section 48, 56 or under section 68 or 69. Thus the addition so made without any provision of Act is also against the law and liable to be deleted on this ground alone. Without invoking the provision of Act/law, the AO cannot make the addition. For each and every offence, specific provisions are given in the law/Act to hold any person as victim defaulter, therefore, without applying any provision for that a person cannot be taxed and penalized. As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... without jurisdiction, without approval/satisfaction from the proper or competent authority, against the principle of natural justice and various other reasons or and further contrary to the real facts of the case hence the same may kindly be quashed. 1.2. The ld. AO has grossly erred in law as well as on the facts of the case order in passing the Ex-party order u/s 144 rws147 without providing the adequate and reasonable opportunity of being heard to the assessee in gross breach of law and are bad in law, invalid, illegal and on facts of the case, and hence the same may kindly be quashed and the resultant addition may kindly be deleted in full. 2.1 The ld. CIT(A) has grossly erred in law as well as on the facts of the case in dismissing the appeal of the assessee on the wrong allegation that the assessee has gone in Vivad Se Vishwas Sceme /act 2020 , while assessee has not adopted or gone in Vivad Se Vishwas Sceme /Act 2020 against this quantum Appeal. Further the date of hearing was given on 20.07.2023 and the ld. CIT(A) has passed the order on dt. 17.07.2023 before the due date of hearing, thus the order in passing the Ex-party order without providing the adequate and reasonable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under: 1. That I am not a regular Income Tax Assesee and holding PAN : EOSPM3462N. 2.That an appeal is being filled by me before your honor for A.Y.2011-12 by the delay about 10 Months and 23 days. Although actually there is no delay if following facts are being considered. 3.That as per date of order the appeal was to be filed on or before 15.09.2024 but the same is being filed by delay of 10 Months 23 days. Although actually there is no delay if following facts are being considered. 4.That I would like to submit that actually there is no delay in the appeal filling, Still if your honor is of the view that the appeal is being filled with the delay. Then the reason of late filing was that as the ld. CIT(A) has send the hearing notice on dt.13.07.2023 in which the date of hearing was given on dt.20.07.2023. However the ld. CIT(A) has passed the order on dt. 17.07.2023, on wrong allegation that the assessee has gone in Vivad Se Vishwas Sceme /act 2020 , while I have not adopted or gone in Vivad Se Vishwas Sceme /Act 2020 against this quantum Appeal and the ld. CIT(A) has passed the order on dt. 17.07.2023 before the due date of hearing i.e 20.07.2023, thus the order in passing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... who is also the affected parties. Thus due to all this reason the appeal could not be filed within time. 12.That I am not much literate person and living in rural area. 13.That the contents or averment of application for condonation of delay are true and correct and may be treated as part of this affidavit. Place: Jaipur Date: .08.2024 Deponent Considering the reasons mentioned in the said application accompanied by an Affidavit of the assessee, I feel that the reasons mentioned in the application constitute sufficient cause for not filing the appeal within the time before the Tribunal. Moreover, no counter affidavit has been filed by the revenue. Therefore, taking a lenient view and considering the principles laid down in the case of Collector, Land Acquisition vs. Mst. Katiji, 1987 AIR 1353 (SC), I condone the delay in filing the appeal before me and decide the appeal herein below. 3. Ground nos. 1 and 2 of the appeal raised by the assessee relates to challenging the invalid action under section 147 read with section 148 and invalid and illegal assessment and illegal order by the ld. CIT (A). 4. The brief facts of the case are that the assessee is an Individual and derived her in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vide acknowledgement no. 286790001040322, u/s 5(2) of the Act, for the full and final settlement of tax-arrears. As per provisions of section 4(2) of the Act, any appeal, filed before Commissioner (Appeals), shall be deemed to have been withdrawn from the date on which certificate under section 5(1) of the Act, was issued by the designated authority. In view of aforesaid facts of the case, this appeal is dismissed. Against the said order of the ld. CIT (A), the assessee has preferred the present appeal before the Tribunal on the grounds mentioned above. 5. Before me, the ld. Counsel of the assessee reiterated his submissions as made before the first appellate authority and submitted his written submissions which are being reproduced hereunder : 1. Notice u/s 148 not served upon the assessee: At the very outset it is submitted that the Ld. AO has erred in framing there assessment order without serving notice u/s 148 properly to the appellant and therefore assessment is made without jurisdiction and deserve to be quashed. In instant case the notice u/s 148 of the IT act was not served upon the assessee. As the Ld. AO has issued the Notice U/s 148 on dt.27/03/2018 and in the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should not be initiated on the assessee. The same contention is favored by many land mark judgments which are as follows : Honourable ITAT, Agra Bench in M/s K.P. Cold Storage Vs ITO ITA No. 145/Agra/2018 had held that; In the present case AO on basis of information received from the ADIT(Inv.) that there were huge cash deposits in the bank accounts maintained by assessee during the period F.Y 2008-09, had issued notice under section 148 which culminated into assessment framed determining total income at Rs. 2,21,60,400/- as against Rs. 12,45,390/- originally returned by assessee. Assessee contended that no notice under section 148 was served upon assessee and ex-parte assessment was completed without serving any notice under section 148 till the completion of assessment which rendered the assessment order to be held void-ab-initio. It was held a valid service of a valid notice under section 148, is not a mere procedural requirement, but is a condition precedent to the validity of any assessment, reassessment or re-computation to be made under section 147 and it is so because of the use of words shall serve on the assessee and also the requirement to the effect before making the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt which are evidenced by the remand report and field correspondence mentioned above. Assessee s contention that said Ved Prakash was neither his employee nor his authorized agent, remains uncontroverted. Merely because he appeared in some other group entities will not detract the fact that notice was not served on assessee. During the course of reassessment AO was intimated about non service of notices u/s 148 and 143(2) but AO failed to take cognizance of assessee s intimation and objections. From the assessment record, remand reports, field correspondence and oral contentions, department could not demonstrate before us that notice u/s 148 was served on the assessee for A.Y. 2001-02. In the absence of a valid service of notice u/s 148 on the assessee the reassessment proceedings for AY2001-02 are bad in law, consequently they are quashed. CIT vs. Hotline International Pvt. Ltd 296 ITR 333 (Del); Hotel Blue Moon 321 ITR 362 (SC), followed. The above decision has been affirmed by the Hon ble High Court Delhi refer CIT v/s Chetan Gupta 94 CCH 13(Del). In the case of A.K. Kochandi Ors. vs. AGRICULTURAL INCOME TAX OFFICER(1975) 43 CCH 0749 KerHC (1976) 1976 CTR 0072 (KER) : (1977) 110 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... approval was in photocopy and not in original or there was no original letter or documents of approval. Further the name of the assessee was at Sr. 46 out of 56 assessee's and even there was no tick on the name of the assessee in the approval list, which creates a doubt that the approval has been received before the issue of notice u/s 148 of the Act as the approval letter lying on the file after issuance of the notice u/s 148 or not before or attached with the notice u/s 148 and may reach in the office of the AO after 31.03.2016. Thus, in our view, approval u/s 151 cannot be given of all the 56 assessee's in a single documents, as all assessee's are the independent and separate also the reason recorded are different in each case and it is not possible that there shall be same reasons. Looking to these facts and record it is also held that the procedures and way of approval and satisfaction is not proper. Here AO initiated proceedings u/s. 147 r.w.s. 148 on basis of information furnished and CIT gave approval without applying his mind in slipshod manner. As approval/sanction given by CIT was without recording his own independent satisfaction as noted above, therefore th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their own which is mandatory condition of the law as provided for re opening of any assessment. Section 147 of Act clearly specify. In impugned case the Ld. AO had claimed that a certain transaction of bogus LTCG on the basis of statements as recorded of third party and Ld. AO could not have been made any enquiry regarding both the facts and without conducting any enquiry/investigation re-opened the case and issued the notices which is completely based on perverse findings and deserve to be declared as null and void ab initio. Here in impugned case AO s self-satisfaction regarding escapement of income is not bringing on record which is mandatory condition of law under section 147 of Income Tax Act, 1961, it could have been come only after conducting enquiry and investigation but Ld. AO did not make such therefore complete reassessment proceedings come under suspicious circle, various honorable courts propounded and led on this aspect and issue direction to handle such situation. Similarly in the case of CIT v. Indo Arab Air Services (2016) 130 DTR 78/ 283 CTR 92 (Delhi)(HC) it was held that mere information that huge cash deposits were made in the bank accounts could not give the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... find reference in the reasons recorded by him, it was held that the basic requirement of section 147 was not satisfied. Hence, the HC quashed and set aside the impugned notices under section 148 of the Act. (AY. 2009-10 to 2011-12) In an identical matter of Hitesh Ashok Vaswani Vs DCIT (ITAT Ahmedabad) dated 12/11/2020 Hon ble ITAT Ahemdabad held that the information received from investigation wing, emanating from the search records would not per se empower the Assessing Officer to exercise the power of reassessment. Such information with regard to escapement of income which comes into possession of an Assessing Officer has to be processed and, on the basis, thereof an opinion has to be formed objectively before issuing notice under Section 148 of the Act to an assessee :- 87. Coming to the second question of the assessee, we note that the power of reassessment is conferred on the Assessing Officer by the provisions of Section 147/148 of the Act. But such power is subject to the certain conditions laid down under Section 147/148/149/151 of the Act. One of the very first condition is that before issuing notice under Section 148 of the Act for reassessment proceeding under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing as detailed under: On the basis of analysis base on above seized documents it has been found that these transaction are done in cash by ASV (Ashok Sunderdas Vaswani) for the relevant assessment year 2008-09. 91. Thus what is inferred from the satisfaction recorded by the AO is that there was no application of the mind of the AO which was pre-requisite for acquiring the jurisdiction under Section 147/148 of the Act. As such the AO in the reason recorded nowhere mentioned how he reached to believe that the information received from the investigation wing represent income of the assessee and such income has escaped assessment. There is no mention in reasons recorded with respect to the fact that whether the assessee has filed original return or weather assessment under Section 143(3) was made earlier or not. if assessment under Section 143(3) completed earlier then how it was failure on the part of the assessee to disclose all material facts fully and truly during assessment proceeding for initiating reassessment proceeding after expiry of 4 year from the end of relevant assessment year. Prayer: In view of the above facts , circumstances the case and legal position the notice as w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der of the ld. CIT(A) may kindly be quashed and the resultant addition may kindly be deleted in full. 6. On the other hand, the ld. D/R has vehemently supported the orders of the Revenue authorities. 7. I have considered the rival contentions of both the parties and perused the material available on record. From perusal of the record, I observe that the AO has reopened the case of the assessee for escaping the income of Rs. 28,02,415/- on account of alleged unexplained investment in purchase of property and assessee has also not filed her return of income and accordingly issued notice under section 148 of the IT Act on 27.03.2018 after recording reasons that income of the assessee had escaped assessment within the meaning of section 147 of the IT Act, 1961. Thereafter the AO framed assessment under section 144 r.w.s. 147 of the IT Act by making addition of Rs. 28,02,415/- of the above investment in purchase of property as alleged undisclosed sources without invoking any provisions of law. The assessee agitated the addition in the appeal before the ld. CIT (A), who dismissed the appeal of the assessee by observing as under :- During the course of the appellate proceedings the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of being heard, allowing the assessee to file the reply on wrong stands taken by the appellate authority which is against the principles of natural justice. 7.1 Before me, the ld. A/R of the assessee submitted that the assessee was not served with the notice under section 148 of the Act. In this regard, he also submitted that the assessment order was silent in respect of service of notice on the assessee, the assessment order only mentioned that the notice under section 148 was issued. The AO has not placed any evidence that the notice under section 148 was served on the assessee. In this regard, the ld. A/R placed reliance on various cases laws. For taking any action under section 148 a valid service of the notice is pre-condition. Reference is made to judgment of Hon ble Delhi High Court in case of Shri Chetan Gupta vs. ACIT (2014) 160 TTJ 09 (Del.). For valid assumption of jurisdiction to frame a reassessment, a proper and valid service of notice u/s 148 on assessee is mandatory requirement violation thereof will result in quashing of the reassessment proceedings. Assessee has strongly demonstrated that the notice was not served on him, on the contrary, AO also has not brought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .03.2016 which is even not signed by him but signed by ITO (T J), who is not a competent authority to give and signed the approval letter, which shows how the PR. CIT has acted in very formal way. When we examined of the assessment record, it is gathered that the approval was in photocopy and not in original or there was no original letter or documents of approval. Further the name of the assessee was at Sr. 46 out of 56 assessee's and even there was no tick on the name of the assessee in the approval list, which creates a doubt that the approval has been received before the issue of notice u/s 148 of the Act as the approval letter lying on the file after issuance of the notice u/s 148 or not before or attached with the notice u/s 148 and may reach in the office of the AO after 31.03.2016. Thus, in our view, approval u/s 151 cannot be given of all the 56 assessee's in a single documents, as all assessee's are the independent and separate also the reason recorded are different in each case and it is not possible that there shall be same reasons. Looking to these facts and record it is also held that the procedures and way of approval and satisfaction is not proper. Here ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for any immunity under Vivad Se Vishwas Scheme/Act, 2020 in quantum appeal. From the order of the ld. CIT (A), it is clear that the order relates to penalty under section 271(1)(b) and 271F. Therefore, the order passed by ld. CIT (A) is quashed. Ground No. 3 : Addition of Rs. 28,02,415/- on account of alleged unexplained investment in purchase of property. FACTS : Kindly refer facts mentioned in GOA 1. SUBMISSION: 1. No provisions has been applied by the ld. AO: At the very outset it is submitted that the ld. AO made the addition of Rs. 28,02,415/- but he has not invoked or applied any provisions of law while making the addition. The ld. AO has not stated under what provision of law he has made the addition and under what head whether, under business or trading income, agriculture income, capital gain or u/s 48, 56 or u/s 68 or 69. Thus the addition so made without any provision of act is also against the law and liable to be deleted on this ground alone. When the ld. AO has not invoked any provision of Act/law then also how the ld.AO can make the addition. When in the law and in the Act for each and every offence specific provisions are given to held any person as victim default ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erseas P. Ltd. reported in [2017] 395 ITR 677 (Del). In the case of Oryx Fisheries Pvt. Ltd. Vs. UOI reported in (2010) 13 SCC 427, it is held by the Hon'ble Supreme Court that the show cause notice should give the noticee a reasonable opportunity of making objections against proposed charges indicated in the notice and the person proceeded against must be told the charges against him so that he can make his defense and prove his innocence. In the entire course of the proceeding, at no stage the Petitioner is made aware of the provisions of law which have been contravened and/or under which the additions are sought to be made which is in gross violation of the principles of natural justice and the procedure adopted by the Department is not fair or proper. In the case of New Delhi Television Ltd. Vs. DCIT reported in [2020] 424 ITR 607 (SC), it is held by the Hon'ble Apex Court that the Assessee must be put to notice of all the provisions on which the Department relies. Hence also the addition is liable to be deleted in full. 2. Correct facts misinterpreted by the ld. CIT(A):- 2.1 As the assessee is an agriculturist since long period, has not filed her return on income being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ltural work, construction etc on that agricultural land. On the basis of agreement dated 25.05.199 during the year 2010-11, Ram Sahay S/o Sukh Dev has decided to do registry of its share in above agricultural land in the favour of his Wife Smt. Prabhati Devi and Smt Rukhmani Devi W/o Shri Ram Phool has decided to do registry of her share in above agricultural land in favour of her daughter in law Smt. Vimla Devi W/o Deen Dayal. Thus during the year 2010-11 no financial transaction was executed for purchase of above Khasra number 3415 rakba 4.87 hectre by the purchaser of above land because the possession of the above possession and payment has already been done by purchaser family member on dated 25.05.1999. As per income tax act 1961, the transfer of immovable assets will be deemed when the possession of assets was handed over to purchaser by seller and payment of sales consideration has been completed. In our case possession was handed by the seller to purchaser on dated 25.05.1999 and payment of sales consideration was also made on 25.05.1999. So the actual transfer of this immovable agriculture land was done on dt. 25.05.1999 as per definition of transfer of immovable assets un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld have asked to the ld. AO to make the inquiry from the seller and purchaser, and when the payment was made by the family member in the year 1999, then how the ld. CIT(A) can ask for the source in this year and when the payment has been made by the family members. Further the other allegation of the ld. CIT(A) that It may be pointed out that all the transaction of immovable property are necessarily required to be register with a Registrar of Properties alongwith the payment of registration cost for giving the transaction legal and enforceable title to the parties. There is no option with transacting parties to either not register the document or register it at later date. Though the parties to the transaction may have agreed to postpone the registration of document to a later date, they do not have such option and the legal rights in the property are created only upon the registration of document and payment of requisite charges. The mere fact that the purchaser was permitted to carry out agricultural activity in the land does not allowed the transaction to become legal and enforceable. The purchase deal is not complete without registration (which is the case happens in 2010). How ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be deleted on this ground alone. Without invoking the provision of Act/law, the AO cannot make the addition. For each and every offence, specific provisions are given in the law/Act to hold any person as victim defaulter, therefore, without applying any provision for that a person cannot be taxed and penalized. As the AO himself has not stated under what provision the assessee is liable to be taxed or penalized or under that provision his offence falls, therefore, addition cannot be made against the assessee. On this preposition, I rely on the recent decision of Coordinate Bench of the Tribunal in the case of Arvind Kumar Nehra vs. ITO Jaipur in ITA No. 32/JP/2024 dated 10.04.2024 wherein it has been held as under :- It is also noteworthy to mention from the entire conspectus of the case that the AO has also not invoked any provisions of IT Act while making the lump Sum addition of Rs. 50,00,000/- for cash deposits in the bank account during the Demonetization Period, Unsecured Loan capital introduced. Hence, in our view lump-sum addition cannot be made under these accounts. The AO must have referred the specific amount with specific details and documents which he has not provided ..... X X X X Extracts X X X X X X X X Extracts X X X X
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