Vinita Darbari vs ITO

1.

That on the facts and circumstances of the case, the impugned order passed by the Ld. Commissioner of Income-tax (Appeals), NFAC, is bad in law, void-ab-Initio, contrary to facts and violative of principles of natural justice.

2.1

That on the facts and circumstances of the case, the Ld. CIT(A) erred in law in upholding the validity of re-assessment Initiated u/s 147/148 despite the fact that the alleged Income escaping assessment was less than Rs. 50 lakhs, making the notice issued after expiry of 3 years from end of AY 2016-17 barred by limitation in terms of section 149(1)(b).

2.2

That the allegation in the order u/s 148A(d) being factually incorrect and without application of mind and in the absence of there being any case of income escaping assessment vis-à-vis transaction of sale of property, the assumption of jurisdiction u/s 147 is illegal and not sustainable.

3.

That on the facts and circumstances of the case, the Ld. CIT(A) has erred in upholding the validity of order u/s 148A(d) and notice u/s 148 even though same were without valid approval in terms of section 151 of the Act.

4.1

That on the facts and circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs. 6,19,455/- representing the 50% share of long-term capital gain belonging to Smt. Neelam Saxena, the co-owner.

4.2

That the appellant and her mother Smt. Neelam Saxena were joint holder of the property and the sale proceeds being credited in the joint bank account, the upholding of addition in respect of share of long term capital gain of co-owner in the hands of appellant is irrational and bereft of merits.

4.3

That the addition in the hands of the appellant is contrary to the scheme of the Act and thus not sustainable.

5.1

That on the facts and circumstances of the case, the Ld. CIT(A)'s order is invalid, void and unsustainable because the entire order appears to have been generated through artificial intelligence, without any Independent judicial application of mind, and contains factually incorrect case law citations, incorrect legal propositions, templated reasoning unrelated to facts, and mechanical confirmation of assessment order.

5.2

That the Ld. CIT(A) failed to adjudicate the written submissions, ignored material evidence filed, and reproduced irrelevant judicial extracts, thereby rendering the appellate order a nullity in law.

6.

That the orders passed by lower authorities are not sustainable on facts and are bad in law.

7.

The appellant craves leave to add, amend, alter or withdraw any ground of appeal at any time before or during the hearing.

6.

We have heard the rival contention and perused the records. We find that notice under Section 148 of the Act was issued on 09.02.2024. In the notice, the Assessing officer recorded that income chargeable to tax has escaped assessment and that the order under sub-section (d) of Section 148A of the Act has been passed. We find force in the contention of the Ld.AR that in response to the said notice, the assessee submitted that in this case the income escaped assessment is below Rs. 50.00 lacs, therefore, the notice dated 09.02.2024 was issued for A.Y. 2017-18 whereas the last date for issuing the notice under section 148A(b) was upto 31.03.2021 as the income escaped assessment for the said year was much below Rs. 50,00,000/-, It was further submitted that department is not correct as the assessee had not purchased any property during the year under consideration which is alleged to have been purchased for Rs.32,20,000/-, Further, in the said reply, an objection was raised that the income which can be considered as escaped assessment is less than Rs. 50 lacs, which was supported by the relevant documents and affidavit, which is covered by the Provision of Clause of Sub Section 1 of Section 149 of Income Tax Act, 1961 which demonstrates that the notice was barred by limitation. It is further noted that assesse had sold the properties during the year under consideration amounting to Rs. 1,02,45,000/- which was also incorrect as the assessee had sold one immovable property in two tranches i.e. the first floor and the second floor with a total consideration of Rs. 70,25,000/- and the assessee was owning half share in the said immovable property as the other co-owner was his brother Sh. Bhupinder Singh against whom the notice was assessment was completed on the basis of share of each of the assessee. i.e. the assessee under reference and his brother Shri Bhupinder Singh. The amount of share of the assessee in the sale of the property works out to Rs.35,12,500/- only which has also been accepted by the department while framing the assessment. As per the provisions of Section 149 the notice u/s. 148 can be issued in the case of the assessee company only within the 3 years from the end of relevant assessment year which means 3 years from 31.03.2018 .c upto 31.03.2021 whereas in the instant case the notice has been issued on 09.02.2024 which is after the date mentioned in the act so the notice issued is barred by time as per the law. In view of above, Ld. AR has submitted that the notice has been issued against both the co-owners Le, the assessee under reference and his brother Sh. Bhupinder Singh. It was further submitted that the Assessing Officer was well within his knowledge that the total share of the sale consideration of the property works out to Rs.35,12,000/- which was much below the limit of Rs. 50 lacs and the proceedings initiated against the assessee under section 148 were void ab initio. The notice has been issued considering. that the income has escaped assessment for more than Rs. 50 lacs as per the provisions laid down under clause b of sub-section 1 of Section 149 of the Income Tax Act, 1961 which is against the facts of the case as the information on the basis of which the notice issued under section 148 is incorrect and as per the correct information the income which can be considered as escaped assessment during the year under consideration is Rs. 35,91,700/- only (i.c. sale consideration of immovable property Rs. 35,12,50/- + contractual receipts Rs. 72900/-). The assessment was ultimately completed at an income of Rs. 35,91,700/-, which also proves that the escaped income is below Rs. 50 lacs. As per provisions of Section 149(1)(a) the notice u/s. 148 of the Act can be issued in the case of the assesse only within the 3 years from the end of Revenue the relevant assessment year which means 3 years from 31.3.2018 i.e. upto 31.3.2021 whereas in the instant case the notice has been issued on 09.02.2024 which is after the date mentioned, therefore, the notice issued to the assessee under section 148 and assessment framed under section 147 r.w.s. 144 and 144B of the Act is barred by time which in my considered view deserve to be quashed.

7.

I draw support from the decision of the Hon'ble Rajasthan High Court in Abdul Majeed Vs ITO (supra) wherein, it was held that where the Assessing Officer issued reopening notice by passing order under Section 148A(d) of the Act after expiry of three years from the end of relevant assessment year on the ground that the assessee made undisclosed cash deposit amounting to Rs. 52.00 lacs in his bank account, however, no material was available to show that the cash deposit was more than Rs. 19.39 lacs were made, the Assessing Officer was not justified to presume that the assessee might have more bank account merely on the basis of such cash deposit of Rs. 19.39 lacs as escaped assessment. Thus, in view of aforesaid factual and legal discussion, we find that the notice under Section 148 of the Act was issued beyond the prescribed period of limitation, therefore, assessment proceedings under Section 147 is held invalid and subsequent action initiated by Assessing Officer is void ab initio.