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TMI Blog2025 (1) TMI 1474X X X X Extracts X X X X X X X X Extracts X X X X ..... he revenue. The assumption of jurisdiction u/s. 263 of the Act being contrary to the provisions of law and facts on record, hence, the proceedings initiated u/s. 263 of the Act hence, the impugned order dated 14.03.2024 deserves to be quashed. 3. The Id. Pr. CIT (Central), Jaipur erred in law as well as on the facts of the case in wrongly setting aside the assessment order dated 09.06.2021 by incorrectly observing that neither the appellant/AR attended nor any submission was made, which allegation, is absolutely incorrect on the face of the record in as much as for at least four times (dated 06.01.2023, 09.10.2023, 23.01.2024 & 04.03.2024), submissions were uploaded on the official website of ITD and also sent through email but were unfortunately ignored. It is a classic example of the violation of principle of natural justice and of the mandatory requirement of providing opportunity of being heard before an order could be passed. The impugned order suffering from the serious violation deserves to be quashed and set aside without giving any second chance to the erring officer. 4. The Id. Pr. CIT (Central), Jaipur, in the impugned order passed u/s. 263 of the Act, raised an alto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ough the note of the AO briefing the facts before the superior authorities to take permission for the purposes of section 148 of the Act and following facts emerged out of that, "As per this note the sale agreement dated: 18.1.2012 was found and impounded. Through this sale agreement, Sh. Mahendra Mehra purchased property being land on Khasra No. 6453 & 6454 measuring 2 Bighas 6 Biswas situated in Tonk on 18 1.2012 from 6 parties namely Sh. Charan Singh, Sh. Bharat Singh, Ms. Sharda, Manbhar, Angoori and Smt. Phoola, r/o Dhanna Talai Tonk for Rs. 1,26,50,000/- Out of total sale consideration. Rs 11 Lacs were paid in cash on the date of agreement. Balance amount of Rs. 115.50 Lacs were to be paid, in three installments of Rs. 40 Lacs on 28.2.2012 Rs. 35.50 Lacs on 30.7.2012 and Rs. 40 Lacs on 30.1.2013. As per endorsement on the back side of the agreement, Sh. Mehra also paid cash of Rs. 40 Lacs on 28.2.2012. The remaining payment of Rs. 75.50 Lacs were made in the year under consideration as per terms and condition of the sale agreement. Thus, total payments of Rs 75.50 Lacs (Rs. 35.50 Lacs + Rs. 40.00 Lacs) in cash were made during the year under consideration. A). during, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion collected/ received. The said documents have been found from the business premises of the assessee during the course of survey and protective addition was made in the case of assessee for A.Y. 2012-13 for part investment. Hence no separate enquiries are required to be made F) Findings of the A.O. Since original documents were found from the premises of the assessee and the source of investment in purchase of lands is not explained, it can be concluded that the investment in purchase of property to the extent of Rs. 1.64 crores an unexplained in the hands of assessee which has escaped assessment u/s. 147 of the Act on protective basis. The unexplained investment to the tune of Rs. 164 Lacs on protective basis has escaped assessment in the hands of assessee which is chargeable to tax G) Applicability of the provisions of section 147/151 to the facts of the case; It is pertinent to mention here that in this case the assessee has filed return of income for the year under consideration. No assessment as stipulated u/s. 2(40) of the Act has been made. The return has been simply processed u/s. 143(1) of the Act. In view of the above, provisions of clause (b) of explanation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessed under the protective scheme of assessment. It is further observed that the order of the Ld. CIT (A) in the case of Sh. Mahendra Mehra for A.Y.s 2012-13 and 2013-14 was passed on 12.10.2023 and confirmed the order as substantive assessment, whereas the notice u/s. 263 of the Act was issued first time on 04-08-2022 and final order was passed on 14.03.2024. This chronology of event has its own importance, i.e. when the status of Sh. Mahendra Mehra has been taken as substantive and further confirmed by the Ld. CIT (A), there is no protective assessment stands on its own feet now against the assessee under consideration. 6. In view of above, the notices mentioned (supra) issued u/s. 263 of the Act are no more valid as the order against which the same were issued, is no more in existence, as the department has taken a firm stand against Sh. Mahendra Mehra. Now let's consider the position of law with regard to protective assessments. The concept of protective assessment has not been defined in the Income-tax Act and there are no specific provisions governing the same. However, it is well settled by judicial precedents and it is an established departmental practice which has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct made a statement on the basis of reopening of the present assessee's completed assessment for the year 2008-09. In the substantive proceedings, several assessee's were subjected to taxation on basis of search and substantive additions were made (as against Navratan Kothari, Vimal Chand Surana (HUF), Kushal Chand Surana and Rajendra Kumar Jain, etc.) for different years falling in the block assessment period. No substantive addition was made, however, in respect of the assessee company. A protective assessment was made on assumption that in the event substantive additions were to be set aside, the assessee was liable to pay this amount. The CIT (A) directed that amounts brought to tax on protective basis ought to be deleted. The CIT (A)'s reasoning was that additions were enhanced in the case of other assessee's and some of the amounts were deleted in view of documentary evidence gathered. The CIT (A) made two tabular charts in Para 2.1.8.5. One reflected the amounts added by the AO and the final amount sustained on the basis of assessment of evidence. After discussing all these aspects, the CIT (A) held that additions made on protective basis were not sustainable, in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olve the present assessee, which had sold the lands to the third party and against whom there was no allegation of withholding material or suppression of facts, nor was anything incriminating recorded, no protective assessment could have been made. 5. for the foregoing discussions, this court is of the opinion that no substantial question of law arises. 8. The ratio laid down above is further confirmed by the Hon'ble Apex Court in the case of the same assessee vide [2021] 127 taxmann.com 281 (SC) PCIT, Central v. Kalyan Build mart (P.) Ltd. In view of the above, we are of the firm view that, the revenue has taken a firm view against Sh. Mahendra Mehra; hence there can't be any simultaneous proceedings of the same matter and amount against the assessee under consideration. 9. To further strengthen our view, we draw strength from the following judicial pronouncements of Hon'ble Apex Court and Hon'ble High Courts as under: [2023] 153 taxmann.com 298 (SC) PCIT (Central) v. Panchmukhi Management (P.) Ltd. G.K. Consultants Ltd. v. ITO [IT Appeal No. 1502 (Delhi) of 2013, dated 27-6-2014], [upheld in CIT v. G.K. Consultants Ltd., [IT Appeal No. 86 of 2015, dated 24-5- 2016] High C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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