Sh. Bachan Singh Urf Gurbachan Singh Vs DCIT (ITAT Amritsar)
The ITAT Amritsar heard three appeals relating to different assessees for Assessment Year 2009-10. Since the issues involved were common, the appeals were decided through a common order.
The principal issue raised by the assessees was that the assessments had been framed under Sections 147/148 of the Income Tax Act, whereas the proceedings should have been initiated under Section 153C because the material forming the basis of the assessment was discovered during a search conducted on a third party, namely Shri Neeraj Puri.
The Assessing Officer had reopened the assessment on the ground that the assessee had sold land measuring 811 marlas to D.A.V. College Trust and Management Society, New Delhi, for Rs. 3,44,67,500 and had allegedly not paid tax on capital gains arising from the transaction. A notice under Section 148 was issued and, due to non-appearance by the assessee, a best judgment assessment was completed under Section 144, resulting in an addition of Rs. 3,14,16,437 as unexplained or undisclosed capital gains.
Before the Tribunal, the assessees contended that the sale deeds came to the knowledge of the Department only during a search conducted on Shri Neeraj Puri. The appraisal report prepared after the search specifically referred to the assessees and indicated that they could be covered under Section 153C or Section 147/148. The assessees argued that once documents relating to them were found during the search of another person, proceedings could only be initiated under Section 153C and not under Sections 147/148.
