Income Tax Appellate Tribunal - Ranchi
Shri Manoj Kumar Poddar, Ranchi vs Dcit Cir-2 , Ranchi on 9 December, 2020
IN THE INCOME TAX APPELLATE TRIBUNAL
RANCHI BENCH "E" COURT AT KOLKATA
Before Shri J.Sudhakar Reddy, Accountant Member and
Shri S.S.Godara, Judicial Member
ITA No.132/Ran/2018
Assessment Year :2013-14
Shri Manoj Kumar Poddar, बनाम Principal
C/o Ramjidas Parmanand, V/s. Commissioner of
Jyoti Sangam Lane, Upper Income Tax, Ranchi
Bazar, Ranchi-834001
[P AN No. ACVPP 0745 J]
अपीलाथ /Appellant .. यथ /Respondent
अपीलाथ / क ओर से/By Appellant Shri M.K. Choudhury, Advocate
यथ क ओर से/By Respondent Shri Inderjt Singh, CIT-DR
सन
ु वाई क तार ख/Date of Hearing 24-11-2020
घोषणा क तार ख/Date of Pronouncement 09-12-2020
आदे श /O R D E R
PER S.S.Godara, Judicial Member:-
This assessee's appeal for assessment year 2013-14 arises against the Principal Commissioner of Income Tax-Ranchi's order dated 26.03.2018 passed in Memo.No. Pr.CIT/RAN/263/2017-18/3495-98 involving proceedings u/s 263 of the Income Tax Act, 1961; in short 'the Act'.
Heard both the parties. Case file perused.
2. We advert to the basic relevant facts. This assessee had filed his return on 25.02.2015 stating total income of ₹36,13,890/-. The same stood summarily processed u/s 143(1) of the Act. The Assessing Officer thereafter took up CASS limited scrutiny on the sole issue of "sale consideration of ITA No.132/Ran/2018 A.Y. 2013-14 Sh. Manoj Kr. Poddar Vs. PCIT, RAN Page 2 property in ITR is less than consideration reported" and framed the regular assessment in issue dated 11.03.2016 not only accepting the taxpayer's impugned income but also made it clear therein that the gross sale consideration was the same in ITR and information available with the department.
3. A perusal of the case file suggest that the PCIT thereafter sought to invoke his sec. 263 revision jurisdiction thereby terming the above regular assessment as an erroneous one causing prejudice to interest of the Revenue. He issuesd his show cause notice dated 12.07.2016 to this effect reading as under:-
"It may please be recalled that the return for the A/.Y. 2013-14, declaring therein a total income of Rs.36,13,890/-, was filed by you electronically on 21/2/2015. Return was processed u/s 143(1). Subsequently your case got selected for scrutiny under the CASS which had categorized your case as a "limited scrutiny" one. Statutory notices u/s 143(2) & 142(1) were duly issued by the DCIT, Circle-2, Ranchi, After herring and scrutiny of the relevant documents the assessment order was finally passed by the A.O on 11/3/2016, whereby the returned income was accepted.
The reason for selection of your case for scrutiny was that the sale consideration of property as declared by you in the return was less than the figure reported in AIR. In the course of the assessment proceeding the A.O examined this issue and she found that though the consideration of Rs.3,51,61,500/- as reflected in the AIR exceed the sale consideration of Rs.2,07,77,500/- as declared by you in the return, the said apparent difference was attributable to the fact that the AIR / ITS erroneously reported the same transactions more than once, thereby inflating the amount of sale consideration. Since this error get detected by the A.O she chose not to draw any adverse inference in your case during the limited scrutiny assessment proceeding. As the scope of thorough enquiry in your case was restricted in view of the CBDT's instruction no. 7 of 2014 dated 26/9/2014 and since there was a very little time left with the A.O after the submission of the relevant documents relating to the property by you, the A.O was constrained to accept the income declared in the return.
Subsequent scrutiny of the sale deed as submitted by you during the assessment proceeding revealed that there was a difference of rs.39,31,200/- between the sale consideration actually received by you and the stamp duty valuation of the property. Hence the said amount ought to have been brought to tax under the head "Capital Gain" in consonance with the provisions of Sec. 50C of the I.T. Act, 1961. It is noticed that the A.O failed to tax the said amount in her assessment order. Omission to do so on the part of the A.O. ITA No.132/Ran/2018 A.Y. 2013-14 Sh. Manoj Kr. Poddar Vs. PCIT, RAN Page 3 has thereby clearly rendered the assessment order dated 11/3/2016 erroneous as well as prejudicial to the interest of the revenue. It is thus proposed to invoke the provisions of Sec. 263 in your case.
You are accordingly directed to appear before the undersigned either in person or through an authorized representative on27/7/2016 at 12.30 P.M. in his office chamber situated on the first floor of the Central Revenue Building, 5A, Main Road, Ranchi to explain as to why such action should not be taken in respect of the completed assessment proceeding for the A.Y 2013-14. It may be noted that in the event of non-compliance on your part, the case may9 be adjudicated ex-parte on merit without any further correspondence with you.
Please treat the mater as 'Urgent"."
The assessee strongly contested PCIT's above revision proposal which stands declined in is impugned order dated 26.03.2018 declaring the above regular assessment as revisable u/s 263 of the Act followed by directions issued to the Assessing Officer to make necessary enquiries qua the difference between the sale consideration received from transfer of property and the stamp duty value as reported in the AIR at ₹3,51,61,500/- as against that declared of ₹39,31,200/- only.
This leaves assessee aggrieved.
4. We have given our thoughtful consideration to rival pleadings against and in support of the PCIT's action invoking sec. 263 revision jurisdiction. There can hardly be any dispute about the settled law regarding the impugned revision jurisdiction that before the CIT or the PCIT, as the case may be, seeks to revise any assessment by terming it as an erroneous causing prejudice to interest of the Revenue, he has to satisfy himself that both these conditions co-exist simultaneously as held in in Malabar Industrial Co. Ltd. vs. Commissioner of Income Tax (2000) 243 ITR 83 (SC) Commissioner of Income Tax vs. Max India (2007) 295 ITR 282 (SC) and Commissioner of Income Tax vs. Kwality Steel Suppliers Complex (2017) 395 ITR 1 (SC) to this effect. Their lordships further make it clear that not each & every year assessment is an erroneous are causing prejudice to the interest of the ITA No.132/Ran/2018 A.Y. 2013-14 Sh. Manoj Kr. Poddar Vs. PCIT, RAN Page 4 Revenue in case the Assessing Officer has taken one of the two possible views which is sought to be substantiated by the revisional authority.
5. We keep in view the foregoing settled legal proposition and advert to the relevant facts involved in the instant lis. Learned authorized representative's only argument during the course of hearing is that the Assessing Officer had framed his regular assessment on the above sole issue of limited scrutiny regarding sale consideration of property in ITR allegedly found less than that reported. Learned CIT-DR's case on the other hand; going by the PCIT's sec.263 show cause notice, is that since the Assessing Officer had not examined the above sole issue, the impugned revision jurisdiction has been rightly invoked in facts of the instant case.
6. After giving our thoughtful consideration to the foregoing rival pleadings against and in support of the PCIT's exercise of revision jurisdiction, we find no merit in the Revenue's stand. We make it clear that the PCIT has himself made it clear in the revision show cause notice that the reason of difference between the sale consideration reflected in the AIR and that declared in the return was attributable to the erroneous reporting of the very transactions for more than once resulting in inflation thereof (supra). That being the case and more so in view of the fact that the Assessing Officer had carried out all of his enquiries during assessment, we find no substance to affirm the PCIT's exercise of revision jurisdiction with former issue in the show cause notice hereinabove.
7. Coming to the latter aspect of invoking sec.50C for the purpose of making LTCG capital gains addition / disallowance qua between sale consideration and stamp price, we observe that the same never formed the reason of limited scrutiny and therefore, the Assessing Officer went by the sole issue of difference in sale consideration of property in ITR to be less than the consideration reported only. We conclude that any addition of capital gains ITA No.132/Ran/2018 A.Y. 2013-14 Sh. Manoj Kr. Poddar Vs. PCIT, RAN Page 5 u/s 50C of the Act never formed the subject-matter of limited scrutiny as per the CBDT's instructions No. 7 of 2014 dated 26.09.2014. The Assessing Officer had therefore rightly not gone beyond the sole reason of scrutiny and his alleged inaction could not be held as an erroneous one causing prejudice to interest of the Revenue giving rise to exercise of the PCIT's sec. 263 revision jurisdiction in his order under challenge. The same stands reversed therefore. The regular assessment herein dated 1.03.2016 stands restored as the necessary corollary. We order accordingly.
8. This assessee's appeal is allowed.
Order pronounced in the open court 09/12/2020
Sd/- Sd/-
(लेखा सद"य) ($या%यक सद"य)
(J.Sudhakar Reddy) (S.S.Godara)
(Accountant Member) (Judicial Member)
Kolkata,
*Dkp Sr.P.S.
&दनांकः- 09/12/2020 कोलकाता/।
आदे श क त ल प अ े षत / Copy of Order Forwarded to:-
1. अपीलाथ /Appellant-Shri Manoj Kr. Poddar, C/o Ramjidar Parmanand, Jyoti Sangam Lane, Upper Bazar, Ranchi-834001
2. यथ /Respondent-Pr. CIT, Ranchi-834001 ु त रांची / Concerned CIT
3. संब0ं धत आयकर आय3 Ranchi ु त- अपील रांची / CIT (A)
4. आयकर आय3 Ranchi
5. 7वभागीय %त%न0ध, आयकर अपील य अ0धकरण रांची,/ DR, ITAT, Ranchi
6. गाड= फाइल / Guard file.
By order/आदे श से, /True Copy/ वAरBठ %नजी स0चव Sr. Private Secretary, आयकर अपील य अ0धकरण, कोलकाता ।