Joint Lessees of Industrial Estate Vs ITO (ITAT Mumbai)
Facts- The assessee, for the A.Y 2007-08, had not filed the ROI and the A.O. had reason to believe that there is an income escaped the assessment, accordingly, issued the notice u/s 148 of the Act on 27.03.2014 after obtaining the sanction u/s 151 of the Act. Subsequently the notice u/s 143(2) and 142(1) of the Act are issued. In compliance to notice, the assessee has filed the ROI on 02.06.2014. Subsequently, the Ld. AR of the assessee appeared from time to time and submitted the details as called for and the case was discussed. The assessee has filed the objections on the initiation of reassessment proceedings vide letter dated 13.02.2015 and the reply to the objections was provided to the assessee on 18.02.2015.
Conclusion- We considering the facts and circumstances are of the opinion that the reopening is on the wrong assumption of facts and the information received from another assessing officer would not by itself be the basis to have a belief that the income has escaped assessment. Accordingly, we find the reassessment is bad in law and quash the assessment order passed u/s 143(3) r.w.s 147 of the Act.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
The cross appeal is filed by the assessee and revenue against the order of the CIT(A)-32, Mumbai passed u/s 143(3) r.w.s 147 and 250 of the Act.
In ITA No.2797/Mum/2016 the assessee has challenged the validity of reassessment proceedings, being the legal & jurisdictional issue. The assessee has raised the following grounds of appeal.
1. The orders passed by the learned lower authorities are bad in law and bad in facts.
2. The notice issued u/s 148 of the I.T.Act,1961, by the learned Assessing Officer and upheld by the learned CIT(A) is ab-initio void, inasmuch as, no material having live link with the formation of belief, was available on record, prior to issue of impugned notice. Consequently the assessment order passed in pursuance of aforesaid notice is also void ab-initio.
3. The learned lower authorities have grossly erred in construing the general observation of the Honble Income Tax Appellate Tribunal in another assessees case as findings or directions, though there was neither a finding nor a direction given by the Honble Tribunal in the appellate order of another assessee.
4. The assessment order passed by the learned Assessing Officer by recourse to sec 147 r.w.s 150 of the l. T.Act, 1961 and upheld by the learned CIT(A) is ab-initio void , inasmuch as, no opportunity of being heard, in terms of Explanation 3 below section 153 of the I.T.Act,1961 was granted.
5. The notice issued under section 148 is void ab-initio, inasmuch as no satisfaction of the Jt CIT in terms of sec 151(2) of the I.T.Act,1961, was obtained prior to issue of notice u/s 148 of the I. T. Act, 1961.
6. The Learned lower authorities have grossly erred in holding that the status of the appellant was that of an ” Association of Persons instead of Joint Owners’ of separately and distinctly identifiable properties, and have further erred in framing the impugned assessment order.
7. The learned lower authorities have grossly erred in making! upholding an addition of Rs 13,39,433/- in the hands of the appellant, inasmuch as , the appellant was neither a legal owner nor a beneficial owner of the leased properties. The reasons assigned for the impugned additions are wrong and contrary to accepted factual position.
8. The learned lower authorities have grossly erred in making/ upholding an addition of Rs 25.00.015/- in the hands of the appellant even though the learned CIT(A), has categorically held that the appellant was neither a legal owner nor a beneficial owner of the leasehold property. Thus any income accruing or arising in relation to said properties could not have been taxed in the hands of the appellant.
2. The brief facts of the case are that, the assessee is assessed as AOP. The Assessing officer(A.O) has received the information from ITO-6(1)(4), Mumbai, that the Hon’ble ITAT in the case of M/s Industrial Estate Pvt Ltd has passed the order for A.Y 2005-06, 2006-07 & 2007-08 and upheld the CIT(A) decision and dismissed the revenue appeal. The A.O. is of the opinion that, as per the observations of the ITAT, the addition in the hands of M/s Industrial Estate Pvt Ltd is deleted and is taxable in the hands of joint lessees of Industrial Estates(assessee). Whereas, in the assessment of Industrial Estate Pvt Ltd for the A.Y 2007-08, the A.O. has held the following incomes belong to the assessee and not to the joint lessees as under:
