Supreme Court: Air Force Group Insurance Society qualifies as ‘State’ under Article 12  ||  SC: Anganwadi Workers With Degrees Are Eligible For The 29% Quota For Supervisors in Kerala  ||  SC: Giving Accused the Option of Search Before a Police Officer Breaches Section 50 of the NDPS Act  ||  Gujarat HC: Person is Entitled to Compensation For Injury or Death Within Railway Station Premises  ||  Delhi HC: PMLA Can Apply Even if the Scheduled Offence Occurred Before the Law Came Into Force  ||  J&K&L HC: Accused Can Admit Evidence Recorded under Section 299 Crpc After Appearing in Court  ||  J&K&L HC: District Judge Serving as Reference Court under Land Acquisition Act Acts as a Civil Court  ||  Del HC: Subsequent Bail Pleas From Same FIR Should Usually Go Before the Judge Who Denied the First  ||  J&K&L HC: Vaishno Devi Shrine Board, Despite Statutory Status, is Not a ‘State’ under Article 12  ||  SC: Confirmation of an Auction Sale Does Not Bar Judicial Scrutiny of Reserve Price Valuation    

Kusumben Sumant Bhai Patel vs. Income Tax Officer - (Income Tax Appellate Tribunal) (05 May 2021)

AO gets jurisdiction to reopen assessment only after recording the reasons for reopening and thereafter, issuing notice under Section 148 of IT Act within prescribed time

MANU/IH/0149/2021

Direct Taxation

The assessee individual, filed her return of income admitting income of Rs.2,27,890. AO received information that the assessee, along with 4 others, had sold an immovable property for a consideration of Rs.58,00,000 which was registered in SRO, Hyderabad. It was also learnt that, the market value of the property is Rs.1,14,09,000 as per Sub-Registrar on which stamp duty and the registration charges were paid. The AO observed that as per the provisions of Section 50C(1) of the Income Tax Act, 1961 (IT Act), the SRO value should have been adopted while computing the capital gain. Therefore, observing that, the income chargeable to tax under the head 'Long Term Capital Gain' has escaped the assessment within the meaning of Section 147 of the Act, the AO issued notice under Section 148 of the IT Act.

The AO observed that as per Section 50C of the Act, the market value of the property is Rs.1,14,09,000 and therefore, the long term capital gain should be at Rs.96,80,460 and after allowing deduction under Section 54F and 54EC, he worked out the long term capital gain at Rs.62,50,460 and brought it to tax. Aggrieved, the assessee preferred an appeal before the CIT (A) challenging the validity of the reopening of the assessment and also the additions made by the AO. The CIT (A) confirmed the additions made by the AO. Aggrieved, the assessee is in second appeal before the Tribunal.

The AO gets jurisdiction to reopen the assessment only after he records the reasons for reopening and thereafter, issues notice under Section 148 of IT Act within the prescribed time and only on fulfilment of the conditions prescribed therein. None of these conditions have been fulfilled by the AO. Therefore, the re-assessment proceedings were not initiated validly and therefore, the re-assessment order is set aside. Therefore, the assessee's grounds against validity of assessment are allowed.

Tags : RE-ASSESSMENT   INITIATION   VALIDITY  

Share :        

Disclaimer | Copyright 2026 - All Rights Reserved