Commissioner Of Income Tax, Faridabad v. Shri Swaroop Singh, Huf

ITA-569-2008 IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH ITA-569-2008 (O&M) Date of Decision: 12.11.2018 Commissioner of Income Tax, Faridabad Versus ....Appellant. Shri Swaroop Singh, HUF ...Respondent. CORAM:- HON'BLE MR. JUSTICE AJAY KUMAR MITTAL.HON'BLE MRS. JUSTICE MANJARI NEHRU KAUL. PRESENT: Mr. Tajender K. Joshi, Sr. Standing Counsel for the appellant. Mr. Sanjay Bansal, Senior Advocate with Mr. Amit Parshad, Advocate and Mr. B.M. Monga, Advocate for the respondent. *** AJAY KUMAR MITTAL, J. 1.This order shall dispose of two appeals bearing ITA Nos.569and 879 of 2008 as according to learned counsel for the parties, the factsand issues involved therein are relating to the same assessment year. ITA-569-2008 concerns the merits of the addition whereas ITA-879-2008 isregarding imposing of penalty under Section 271(1)(c) of the Act. Forbrevity, the facts are being extracted from ITA-569-2008. 2.ITA-569-2008 has been preferred by the revenue under Section260A of the Income Tax Act, 1961 (in short “the Act”) against the orderdated 29.1.2008 (Annexure A-III) passed by the Income Tax AppellateTribunal, Delhi Bench 'F', New Delhi (hereinafter referred to as “theGURBACHAN SINGH2018.11.26 11:41I attest to the accuracy andTribunal”) in ITA No. 3891/Del/2003, for the assessment year 1997-98,integrity of this document claiming the following substantial questions of law:- i)Whether on the facts and circumstances of thecase, the Hon'ble ITAT was right in law in holdingthat the assessment framed by the AssessingOfficer u/s 143(3)/147 of the Income Tax Act isinvalid and is annulled without appreciating thefact that the assessee filed his return in the status ofHUF and acquired lands were ancestral propertiesdevolved by inheritance and coming by mutationfrom one generation to another and there is noevidence on record suggesting partition of HUF? ii)Whether on the facts and circumstances of the caseand also in the light of the provisions of Section292B of the Income Tax Act, 1961, the Hon'bleTribunal was right in law in holding, incontravention of Jurisdictional High Court'sjudgment in the case of CIT Vs. Rajbir Singh(HUF) 233 ITR 126 (P&H), that notice issuedunder Section 148 of the Act was invalid,especially when the assessee had consciously andintentionally waived his right to object to thedefect in the notice? iii)Whether on the facts and in the circumstances ofthe case and also in the light of clarificatoryprovisions of Section 292BB of the Income TaxAct, when the assessee has appeared in all theproceedings and cooperated in all enquiriesrelating to assessment/reassessment includingproceedings before the Ld. CIT(A), was theHon'ble Tribunal right in law in holding that theassessment framed by the Assessing Officer u/s143(3)/147 of the Income Tax Act is invalid andvoid? ITA-569-2008 -3- narrated therein may be noticed. On 7.2.1997, the assessee sold hisagricultural land situated at village Sukhrali to M/s Pal Motors Limited for asale consideration of ` 2,75,62,500/-. The other land belonging to the fatherof the assessee was acquired on 20.3.1989 by the Haryana UrbanDevelopment Authority. Due to death of his father, the assessee receivedtotal enhanced compensation of ` 70,75,934/- including interest of` 29,69,570/- on 26.10.1996 and 16.3.1998 for the period from 20.3.1989 to15.10.1996. Since the assessee had filed his return of income voluntarily, anotice under Section 148 of the Act was issued. In response thereto, theassessee filed his return of income on 11.3.2003 claiming his status as'HUF'. The Assessing Officer taking the status of the assessee as 'HUF'framed the assessment under Section 143(3)/147 of the Act vide order dated28.3.2003 (Annexure A-I) by making additions/disallowances at` 2,50,25,890/-. The Assessing Officer computed the total income of theassessee as under:- 4.The penalty proceedings under Section 271(1)(c) for concealment of income were also initiated against the assessee. Feelingaggrieved by the assessment order, the assessee filed an appeal before theCommissioner of Income Tax (Appeals) [for brevity “the CIT(A)”]. TheGURBACHAN SINGH2018.11.26 11:41I attest to the accuracy andintegrity of this documentCIT(A) vide order dated 27.6.2003 (Annexure A-II), dismissed the appeal. ITA-569-2008 -4- Still dissatisfied, the assessee filed an appeal before the Tribunal. Theassessee took a new ground before the Tribunal that the assessment framedby the Assessing Officer under Section 143(3)/147 of the Act was withoutjurisdiction and not sustainable in law as the notice issued under Section148 of the Act was against the assessee as an individual whereas thereassessment was framed under Section 143(3)/147 of the Act againstSwaroop Singh 'HUF'. The Tribunal vide order dated 29.1.2008 allowed theappeal and set aside the order of the CIT(A) holding that the assessmentframed under Section 143(3)/147 of the Act was invalid and is annulled.Accordingly, the levy of penalty was also held to be unsustainable.Hence, the present appeals by the revenue. 5.We have heard learned counsel for the parties. 6.The Tribunal had held that as the notices under Section 148 ofthe Act had been issued to the assessee in individual capacity and thereassessment under Section 143(3)/147 of the Act had been framed in thecapacity of 'HUF', the assessment framed by the Assessing Officer was notin accordance with the statutory provisions of the Act and the AssessingOfficer had no jurisdiction to tax the assessee, Shri Swaroop Singh- HUF.On the aforesaid premise, the Tribunal held the assessment framed underSection 143(3)/147 of the Act to be invalid and annulled the same. 7.The fact that the assessee himself had filed the return in thestatus of 'HUF' coupled with the provisions of Section 292BB of the Act,the Tribunal was not right in declaring the assessment as invalid andannulling the same in view of judgment of this Court in CIT, Faridabad v.Shri Mangal Singh, ITA-84-2009 decided on 01.09.2015. Learned counsel for the assessee did not dispute that the matter ITA-569-2008 is required to be re-examined by the Tribunal. However, it was urged thatthe Tribunal while re-examining the issue be also directed to decideregarding assumption of jurisdiction under Section 148 of the Act byexamining the records whether sufficient reasons and sanction ofappropriate authority had been obtained before issuance of notice underSection 147/148 of the Act. 9.In view of the above, the substantial questions of law areanswered in favour of the revenue and against the assessee. The appeal isallowed and the order dated 29.1.2008 (Annexure A-III) is set aside. As aconsequence thereof, the order dated 29.1.2008 (Annexure A-VIII)regarding the penalty levied under Section 271(1)(c) of the Act challengedin ITA-879-2008 is also set aside. The matters are remanded to the Tribunalto adjudicate all the issues arising in the appeal after affording anopportunity of hearing to the parties in accordance with law. Needless tosay anything observed hereinbefore shall not be taken to be an expression ofopinion on the merits of the controversy. (AJAY KUMAR MITTAL) JUDGE November 12, 2018(MANJARI NEHRU KAUL)gbsJUDGE Whether Speaking/ReasonedYes/NoWhether ReportableYes/No