Case Law Details
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.
The Tribunal examined Section 153C, which provides that where documents, books of account, assets, or information relating to a person other than the searched person are found during a search, the Assessing Officer having jurisdiction over such other person shall proceed in accordance with Section 153A after satisfaction is recorded.
The Tribunal relied on its earlier decision in ITO vs. Arun Kumar Kapoor, where it had been held that when incriminating material relating to an assessee is found during the search of a third party, proceedings under Sections 147/148 are not permissible and the assessment can only be made under Section 153C. It was noted that no contrary decision had been placed before the Tribunal.
The Department argued that the issue regarding applicability of Section 153C had been raised for the first time before the Tribunal and that the recorded reasons for reopening did not refer to any search. However, the Tribunal held that the issue was a pure question of law directly connected with the validity of the assessment and could therefore be raised at that stage.
The Tribunal admitted the appraisal report as additional evidence, finding it highly relevant to the issue. The report specifically contained the names of the assessees and details of land transactions connected with Shri Neeraj Puri. It showed that documents relating to the assessees had been found during the search proceedings.
Referring to the decision of the Supreme Court in Manish Maheshwari v. ACIT, the Tribunal observed that failure to follow the procedure prescribed for assessments based on search material renders such proceedings invalid. It further noted that Section 153C specifically overrides the operation of Sections 147 and 148 in circumstances where documents relating to a person other than the searched person are found during a search.
The Tribunal concluded that the incriminating material concerning the assessees had surfaced only during the search conducted on Shri Neeraj Puri. Therefore, the provisions of Section 153C were directly applicable. Since the Department had proceeded under Section 148 instead of Section 153C, the reassessment proceedings were held to be unsustainable in law.
Accordingly, the Tribunal accepted the assessees’ challenge, quashed the assessments framed under Section 148, and allowed all three appeals. In one appeal, a delay of 55 days in filing was condoned after the Tribunal accepted the explanation regarding difficulties in depositing the appeal fee due to non-allotment of PAN.
FULL TEXT OF THE ORDER OF ITAT AMRITSAR
These are the three appeals of different assessees for the assessment year 2009-10, against the different orders, each dated 17.10.2014, passed by the ld. CIT(A), Jalandhar. As the issues involved in all these appeals are common, they were heard together and are being disposed of by this composite order, for the sake of convenience.
2. The Grounds raised in ITA No.16(Asr)/2015, which are similar in other two appeals, are reproduced as under:
“1. That the AO was not justified in issuing a notice u/s 148 of the Income Tax Act on the material on which he recorded his satisfaction which did not pertain to the assessee. The assessment framed under such proceedings therefore should be quashed.
2. That the notice issued u/s 148 is invalid since it is issued after formation of belief which are not relevant to the assessee and also refer to the escapement of income within the meaning of section 147(a) of the I.T.Act which has been abolished w.e.f. 1.4.1989.
3. That the notice issued u/s 148 has been issued to assess the capital gain income of Rs.3,14,16,437/- which has not arisen to the assessee in his individual capacity. Hence, the proceedings initiated by him are not sustainable and should be quashed.
4. That the assessment has been framed u/s 143(30 read with section 144 of the Act and not with 147 of the Act therefore the assessment is barred by limitation.
5. That the assessment was required to be framed u/s 153C of the Act and thus assessment framed u/s 143(3) of the Act is illegal, void abinitio.
6. That CIT(A) was not justified in sustaining the capital gain income to the extent of Rs.72,85,000/- against Nil income working given to the CIT(A).
7. That while sustaining the capital gain stated above the CIT(A) has wrongly restricted the deduction claimed by the assessee u/s 54B amounting to Rs.2,15,62,656/- to Rs.1,01,45,000/- on the grounds that the value of land purchased is to be taken as per the registration deed and not as per the agreement to sell under which the total consideration paid for the purchase of land amounts to Rs.2,15,62,656/-.
8. That the ld. CIT(A) failed to appreciate the facts as per additional evidence relied upon the assessee. He clearly over-looked the withdrawals made by the assessee from his bank account and correlate the same with the agreement to sell for determination of the cost of land purchased by the assessee.”
3. As per Ground no.5, though the assessment was required to be framed u/s 153C of the Act, it has wrongly been framed u/s 143(3) of the Act. In this regard, the brief facts of the case, as per the record, are that the AO observed that the jurisdiction in this matter initially lay with the ITO Ward-IV(2), Jalandhar. Vide order dated 13.06.2013 passed under section 127 of the Act, it was transferred to the ACIT, Central Circle-1, Jalandhar. The completed assessment of the assessee was reopened u/s 147 on the basis of information on record that the assessee had not paid taxes on capital gain income of Rs.3,14,16,437/-, recording the following reasons to believe the escapement of income:
“There is information in my possession that Bachan Urf Gurbachan Singh S/o Bishan Singh, VPO Sarmasatpur, Jalandhar has sold land measuring 811 Marlas to D.A.V. College Trust and Management Society, New Delhi for Rs.3,44,67,500/- .
The assessee has not filed return of income showing this transaction for financial year 2008-09 relevant to assessment year 2009-10. I have reason to belief that the assessee has not paid the tax on capital gain income of Rs.3,14,16,437/- which has escapement assessment within the meaning of section 147(a) of the Income Tax Act. To bring to tax the aforesaid income necessary approval to issue notice u/s 148 of the Act is solicited as per section 151(2) of the I.T. Act, 1961.”
4. Notice u/s 148 was issued on 24.04.2012 and served on 27.04.2012 on the assessee. Notice u/s 143(2) dated 30.08.2013 and detailed show cause letter along with notice u/s 142(1) dated 30.08.2013 was also issued and served on the assessee. Since the assessee did not appear before the AO, the AO completed the assessment as a ‘Best Judgment Assessment’, invoking the provisions of section 144 of the Act, making an addition of Rs.3,14,16,437/-, as unexplained /undisclosed capital gain of sale of land. The ld. CIT(A), while passing the impugned order observed as follows:
“7. I have considered the facts of the case, the arguments of the AR during assessment proceedings as well as appellate proceedings. The comments of the AO during remand proceedings have also been considered. It is seen that the assessee had claimed that an amount of Rs.3,17,60,750/- had been paid to 11 persons for evicting them from the impugned piece of land before the transaction could be finalized for sale. The details regarding the eviction money paid to different persons had been submitted during the appellate proceedings and the AO has verified the contentions of the assessee in this regard to be correct. Since the said amount paid as earnest money had to be paid for ensuring the smooth sale of the impugned property the said amount has to be reduced from the gross sale consideration to work out the net sale consideration for the purposes of computation of Capital Gain. The AO has commented in the remand report that the assessee had claimed to have invested an amount of Rs.2,15,62,656/- on the purchase of agricultural land out of the sale consideration received by him but the perusal of registration deed shows that the amount paid is only Rs.1,01,45,000/-. The AR with reference to this fact made submission that amount mentioned in the registration deed should be ignored and the amount mentioned in the agreement to sell should be taken as amount invested in the purchase of agricultural land. The AR placed reliance on the judgment of Hon’ble Madhya Praesh High Court in the case of CIT vs. Ajit Singh Khajanchi (2007) 211 CTR (MP) 403. I have perused judgment relied upon by the AR and it is quite apparent that facts of the case do not support the interpretation of AR in this regard. The issue in the said case was that whether the assessee should be owner of property for the purposes of section 54 or not and whether registration was in evidence of purchase or there could be other evidences of purchases as well. This is not the issue under consideration at this point of time as agreement to sell without registration has been accepted as evidence of purchase but a situation where registration deed records the sale consideration at an amount less than price agreed to be paid as recoded in the agreement to sell, there is no doubt that for the purposes of purchases and every consequential legal requirement the amount mentioned in the registration deed would be treated as sale consideration. The AR has further drawn our attention to provisions of section 50C wherein Stamp Valuation Authority and not by amount as mentioned in the registration deed. The AR has highlighted the correct provision but interpreted it wrongly to mean that registration deed sale consideration could be ignored for the purposes of section 54B It has been lost sight that section 50 had been specifically enacted to plug the loophole regarding under statement in the registration deed vis-a-vis the market price as determined by the Stamp Duty Authority and the value adopted for stamp duty purposes cannot be taken to be the purchase consideration in the hands of the purchaser which means that as far as the purchaser is concerned, the value as recorded in the registration deed is sacrosanct. The application of section 50C is purely meant to be considered for the purposes of computation of capital gain. This does not in any way belittle the importance of registration deed which is only document that certifies the sale consideration for transfer of property rights passed on from seller to the buyer. The documents like agreement to sell are only meant to ensure the smooth completion of transaction of purchase and sale over a period of time and cannot be substituted for final document i.e. registration deed. Therefore, the amount invested by the assessee for purchase of agricultural land to be considered u/s 54 would be restricted to sale consideration as recoded in the remand report.
8. Further, it is seen that the assessee had worked out the resultant capital gain on the basis of fair market value of the impugned property as on 01.04.1981 at Rs.2923/- per marla. However, no evidence to support the said claim had been filed. The AR was therefore, required to substantiate his claim on the issue. The AR vide his letter dated 14.10.2014 submitted his arguments as under:
‘Kindly refer to the appellate proceedings in the above case and on the last date of hearing your honours had directed the assessee to justify the value adopted at Rs.20 lacs as on 1.4.1981 for working out the indexation. In this context, it is submitted as under:
That the value adopted by assessee as on 1.4.1981 for working out indexation has been Rs.20 lacs which gives a rate per marla @ Rs.2923/- as on 1.4.1981 (Rs.20,00,000/684). To justify the land rate as on 01.04.1981 @ Rs.2923/- per marla kindly find enclosed the certificate of lmbardar of the Village which ingter lia states that the land rate per acre of land at Vill. Samsatpur was Rs.4,50,000/- to Rs.5,00,000/- per acre. If we take the value at Rs.5,00,000/- per acre the per marla value comes to Rs. 3125/-(Rs.5,00,000/160). He has further mentioned in the certificate the following facts:
i) That the land falls on the main G.T.Road, National Highway No. 1, i.e. Jalandhar – Pathankot Road.
ii) That location is 12th mile stone from Jalandhar.
iii) Kishan Garh Chowk is 1 KM from the present location.
iv) The main Hoshiarpur Road passes from the back and the distance from the place is 1 KM app. And
v) The D.A.V. University has been set up because of locational advantage.
That to support the above version of the certificate your honours attention is invited to the rate fixed by the ITAT (Asr0 Bench of the land situated on main Hoshiarpur Road in the case of Basant Metal & Ravi Kumar Jain in ITA Nos. 553 & 560 of 2011 dated 06.08.2012 whose distance from the assessee’s location is about 1 KM. The rate adopted by the CIT(A) on the front was @ Rs.6000/- per marla and on the back @ Rs.4000/- per marla which was u0pheld by the Tribunal as per copies of both orders enclosed herewith. Even if average is taken (6000 + 4000), the rate works out at Rs.5000/- per marla as against Rs.2923/- adopted by the assessee, which is requested to be accepted being on much lower side.
The aforesaid rate and valuation has been accepted by the AO during his remand proceedings and his report is clear on the subject.”
9. I have considered the arguments of the AR on the issue and it is seen that the Fair Market Value as adopted at Rs.2923/- per marla is based upon the report of the local revenue authority which is quite logical and records various facets of the impugned land and its related valuation on the given date. The AR has also brought on record the valuation adopted in respect of similar land in respect of particulars case heard by the Hon’ble ITAT Amritsar wherein the valuation at Rs.5,000/- per marla has been considered. In view of these indisputable facts, the valuation adopted by the appellant at Rs.2923/- per marla as on 01.04.1981 is reasonable and therefore acceptable. The computation of capital gain in view of the above comes to NIL.”
5. Before us, on behalf of the assessee, the following written submissions have been filed, which have been reiterated in the arguments addressed by the ld. Counsel for the assessee:
“The brief facts of the case are that a search took place in the premises of Neeraj Puri s/o Yog Raj Puri on 3.4.2012 and during the search number of sale deeds and power of attorney and bank accounts relating to Mr. Neeraj Puri and other parties were found by the department and a sale deed executed by the assessee was also recovered from the premises of the searched person i.e. Mr. Neeraj Puri and the mention of this sale deed is available in the appraisal report of search available on page 1 of the paper book on page 16,36, 38 & 47 of the paper book which may kindly be referred to. Thus, it is very clear from the appraisal report that the sale deed executed by the assessee came into the knowledge of the department in search proceeding of Mr. Neeraj Puri group. After the search a detailed appraisal report was prepared by the ADI and he recorded his satisfaction that the assessee has not disclosed these sale deeds and therefore on page 14 of the paper book in para 1.7 of the appraisal report the ADI has given a finding that
“The following table gives the particulars of various assessees of this sub group, who may be covered u/s 153C or u/s 147/148 of the Income Tax Act, 1961 upon the satisfaction of the AO.”
In the meanwhile the ADI referred the matter to the concerned AO i.e. Ramji Dass ITO IV(2) Range IV, Jalandhar and the ITO recorded the reasons for issuing a notice u/s 148 copy of the reasons recorded is available on page no.152 of the paper book. After recording the reasons a notice u/1 48 was issued on 24.04.2012 and served on the assessee on 27.04.2012 as is clear from the assessment order.
Thereafter the complete appraisal report was made by the ADI and perusal to the appraisal report the jurisdiction of case of the assessee was transferred by an order u/s 127 dated 13.06.2013 available on page 109 to 115 of the paper book and name of the assessee appears at sl. No.16 at page no.111 wherein jurisdiction of case was transferred from IV(2) to the Center Circle-1 Jalandhar where the case of the search person Mr. Neeraj Puri was being conducted.
Thus, it is clear that the asstt of the assessee was intended to be framed u/s 153C alongwith the block assessment of searched person Mr. Neeraj Puri. It is pertinent to mention here that in the order passed by the CIT u/s 127 such search related cases were transferred to Central Circle-1, Jalandhar.
From the facts stated above it is established on record that the sale deeds executed by 47 persons whose cases were transferred u/s 127 by CIT to CC-!. The assessee would like to challenge the very jurisdiction of issuing the notice u/s 148 on the grounds that it is settled law that where any incriminating documents or material is found at the premises of the searched person then the action against such person lies u/s 153C of the Act deeming him as a person searched and assessment could only be framed u/s 153C and not u/s 143(3) r. w.s.147.
But it is strange that in this case the asstt. Is framed u/s 143(3) r.w.s. 144 which has no existence in the eyes of law.
Now the mute question arises that under such circumstances can the assessment be framed on the basis of notice issued u/s 148 whereas the assessment was to be framed u/s 153C? In this regard your kind attention is drawn towards the judgment of this very Amritsar Bench delivered in the case of ITO vs. Arun Kumar Kapoor re[ported in 140 TTJ 249 copy available on paper book page 103. The Bench has concluded that reassessment u/s 147 on the basis of incriminating material against assessee found in search of third party and forwarded to AO of assessee by the Search Officer was illegal and void abinitio and in such a situation asstt. Could be made only u/s 153C which specifically ousted the application of ss. 147/148.
Even otherwise in the case of other assesses who were also transferred by the CIT alongwith the case of the assessee u/s 127 to the CC-I the asstt. orders passed in such cases have been passed u/s 153C of the Act.
Copies of such orders are available on pages 77 to 100 of the paper book. A clear finding in such asstt. Orders has been given by the same AO that
Since the documents relating to the assessee were found from the residence of Sh. Neeraj Puri Prop. Of Bhagwati Agriculture Farms Jalandhar during the course of search. Notice u/s 153C of the I.T.Act, 1961 were issued.”
In view of the same as a matter of consistency the same AO could not have resorted to two different sections one u/s 153C which is a correct action in the case of other assesses and the other u/s 147/148 against the assessee.
(A) The bench of ITAT must follow the judgment of co-ordinate Bench delivered earlier. In case of disagreement the matter must be referred to the Larger Bench.
i) ACIT vs. Victory Aqua Farm Ltd. (20130 280 CTR (SC) 32
ii) S.S. Roop Lal & Anothers vs. Lt. Governor AIR 2000(SC)594
(b) Consistent view taken in favour of assessee on questions court will not take different view without very convincing reasons.
iii) CIT vs. Excel Industries Ltd. & Mafat Lal (P) Ltd.(2013) 358 ITR (SC) 295.
In view of the same, it is prayed that the assessment framed by the AO u/s 143(3) r.w.s. 144 in pursuance of notice issued u/s 148 may kindly be quashed.”
6. Thus, the grievance of the assessee is that the search having been conducted on the premises of Sh.Neeraj Puri and not on those of the assessee, during which search proceedings it was, that the sale deed executed by the assessee came to the knowledge of the Department, the assessment of the assessee was wrongly framed by invoking the provisions of section 148 of the Act, whereas it should have been framed u/s 153C of the Act. Reliance has been placed on the decision of the ITAT, Amritsar Bench, in the case of ‘Income Tax Officer vs. Arun Kumar Kapoor’, 140 TTJ 249 (Asr). It has further been contended that otherwise, the sale deeds executed by the assessee having been found in the premises of Sh. Neeraj Puri along with other 47 persons and the cases of those other persons having been transferred u/s 127 of the Act, to Central Circle-1 and the assessment orders, in the cases of those other persons having been passed u/s 153C of the Act, there was no reason for the Department to single out the present assessee and to proceed against the assessee by invoking the provisions of section 148 of the Act.
7. On the other hand, countering the above contentions raised on behalf of the assessee, the ld. DR has contended that this issue of invocation of provisions of section 153C of the Act has been raised by the assessee for the first time only before the Tribunal, which is not maintainable; that this issue is not emanating from the impugned order; that the reasons recorded do not talk of any search having been conducted; that the assessment does not refer to any such search; that the belief of escapement of income, as formed by the AO, was not formed on the basis of any such search, but was formed on the basis of information in the possession of the AO; 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/-; that the assessee is basing his grievance on the Appraisal Report (APB 1 to 76); that this appraisal report does not have any relevance whatsoever to the case of the present assessee and it cannot be led in additional evidence as sought by the assessee; and that the assessment has properly been framed by invoking the provisions of section 148 of the Act.
8. Since the provisions of section 153C of the Act have been alleged to be directly applicable, let us see these provisions. Section 153C(1) of the Act reads as follows:
“Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that. .(a) any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs; or . (b) any books of account or documents or assets seized or requisitioned pertaining or pertains to or any information contained therein, relates to a person other than the person referred to in section 153A, then the books of account, or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that the Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for the relevant assessment year or years referred to in sub-section (1) of section 153A.”
9. In ‘Arun Kumar Kapoor’ (supra), a search was conducted in the case of ‘T’. During the course of that search, certain incriminating documents were allegedly seized. The DCIT intimated the AO of the assessee about seizure of certain documents pertaining to the assessee during search and enclosed copy of those documents, requesting him to take appropriate action under sections 153C/148 of the Act. The ITAT held that the ld. CIT(A) had correctly observed that the only the provision in which any assessment could be made against the assessee in the Income Tax Act was section 153C r.w.s. 153; that it was also apparent from the record that that the Officer at Delhi had mentioned in his letter that necessary action may be taken as per law under sections 153C/148; that the provisions of section 153C were clearly applicable when section 153 supersedes the applicability of sections 147 & 148 of the Act; that therefore, the notice u/s 148 and the proceedings u/s 147 were illegal and void ab initio, since in view of the provisions of section 153C, sections 147/148 stand ousted; and that since the procedure provided u/s 153C had not been followed by the AO, the assessment had become invalid and the ld. CIT(A) was fully justified in quashing the reassessment order.
10. No decision contrary to ‘Arun Kumar Kapoor’ (supra) has been placed before us.
11. The only objection raised by the Department is that in the present case, the reasons recorded by the AO do not make mention of any search or of any appraisal report and that the assessment, as made by the AO under the provisions of section 148, is fully justified, not calling for any interference.
12. In ‘Manish Maheshwari vs. ACIT & Anr.’, 289 ITR 341 (SC), it has been observed that if the procedure laid down in section 158BD of the Act is not followed, block assessment proceedings would be illegal. Now, it cannot be disputed that the provisions of section 153C of the Act are exactly in pari materia with those of section 158BD. Therefore, besides the fact that section 153C(1) itself has clearly ousted the applicability of sections 147/148, where conditions are conducive for the applicability of section 153C, as rightly taken note of in ‘Arun Kumar Kapoor’ (supra), section 153C eclipses, nay, obliterates the applicability of section 153C/148 in given circumstances. In the present case, the incriminating material qua the assessee came to light only in the search conducted on the premises of Sh. Neeraj Puri. It is true that the reasons recorded (reproduced hereinabove) to reopen the completed assessment of the assessee do not make mention of either the search conducted on the premises of Sh. Neeraj Puri, nor of the appraisal report in that case. The reason recorded is that the information was in the possession of the AO of the assessee. Now, obviously, it cannot be disputed that this information came to the AO from the Investigation Wing of the Department. In this regard, the appraisal report in the case of Sh. Neeraj Puri becomes all relevant. Though production thereof as additional evidence has been opposed by the Department, we find that to decide the issue at hand, at this juncture, it may be observed that the issue as to whether the assessment framed u/s 148 of the Act, ought, in fact, to have been framed, rather, under section 153C, is a pure question of law. Though, the Department says that this issue does not emanate from the impugned order, the factual matrix of the case, as discussed in the foregoing paragraphs, makes it amply clear that it is an issue directly connected with the assessment of the assessee. Therefore, we are allowing this issue to be raised for the first time. Coming back to the Appraisal Report, a copy of this appraisal report is at pages 1 to 76 of the paper book. The name of the assessee finds mention at page 10 of the said report in the details of the assessees tabulated to be covered u/s 153C of the Act. Against the remarks column of the said table, against the name of the assessee, it has been observed that this person is the principal owner of the land sold to DAVCTMS by Sh. Neeraj Puri. In the chart showing details of registration of sale deed, as appended in the Appraisal Report, at Sl. No.15 (APB 36), the assessee has been shown to have sold about 33 Kanals land situated at Vill. Sarmastpur, Distt. Jalandhar, vide Registry No.663/1 dated 17.09.02008, for Rs.2,80,50,000/- paying stamp duty of Rs.23,25,600/- through his GPA, Bhagwati Agriculture Farm through its proprietor, Sh. Neeraj Puri. Then under item No.23 of this very chart, the assessee is shown to have sold land measuring 1 Kanal 4 Marlas, situated at Vill. Sarmastpur, Distt. Jalandhar, vide registration No.798/1 dated 22.10.2008, for a sum of Rs.10,20,000/-, paying stamp duty of Rs.81,000/-. Further, in the chart showing actual payment made to the principal owner of the land vis-à-vis registry amount, appended as Annexure-II to the appraisal report, under item no.15/15, Bhagwati Agriculture Farm through its proprietor, Sh. Neeraj Puri, as GPA of the assessee, is shown to have made actual payment of Rs.3,27,15,000/-.
13. In view of the above facts, finding the Appraisal Report to be of utmost relevance for the issue at hand, we direct this Appraisal Report to be taken on record by way of additional evidence, to facilitate a just decision.
14. Now, it is evidence from the Appraisal Report in the case of Sh. Neeraj Puri, as noted hereinabove, that the sale deed of the assessee was found only during the search in the case of Sh. Neeraj Puri. That being so, the provisions of section 153C of the Act are directly applicable. To reiterate, the Hon’ble Supreme Court, in the case of ‘Manish Maheshwari’ (supra), has laid down that if the procedure in section 158BD is not followed, block assessment proceedings would be illegal. It is irrefutable that the provisions of section 153C of the Act are in pari materia with those of section 158BD. Therefore, as taken note of, if the procedure laid down in section 153C is not followed and recourse is not taken to section 158BD, the same would be bad in law. ‘Arun Kumar Kapoor’ (supra) is also to the same effect. In accordance therewith, we hold that the proceedings u/s 148 of the Act, as rightly contended on behalf of the assessee, are not sustainable, in view of the presence of section 153C, which obliterate to the operation of the provisions of sections 147/148 of the Act, in given circumstances, which exist in the case of the present assessee also.
15. It may be noted that though vide order dated 17.10.2014, the relevant portion whereof has been reproduced in the preceding portion of this order, the ld. CIT(A) allowed the appeal of the assessee, vide order dated 10.11.2014, the said earlier appeal order was rectified by passing the following rectification order:
“The AO is directed to substitute above figure of Capital Gain at Rs.72,85,000/- instead of Rs.3,14,16,437/-.
16. In view of the above, finding the grievance of the assessee to be justified, the same is accepted. The assessment framed u/s 148 of the Act is quashed.
17. In the result, the appeal is allowed.
18. Now, we take up the appeal of the assessee in ITA No.15(Asr)/2015, for the assessment year 2009-10, in the case of Sh. Gurnam Singh. The facts and circumstances in this appeal are exactly similar, as decided by us, hereinabove, in ITA No.16(ASr)/2016 in the case of Sh. Bachan Singh, Therefore, our observations in ITA No.16(Asr)/2015 shall, mutatis mutandis, equally apply to ITA No.15(Asr)/2015. Thus, the appeal of the assessee is allowed.
19. Now, we take up the appeal of the assessee in ITA No.87(Asr)/2015, for the assessment year 2009-10, in the case of Sh. Palwinder Singh. As per the Registry, there is delay of 55 days in filing the appeal. The assessee had filed an application for condonation of delay along with the appeal, which is also accompanied by an affidavit, stating therein, that the appeal was sent by Speed post on 3.1.2015 as the last date of the same was 11th January, 2015. The assessee, Sh. Pawinder Singh did not have the PAN, as is clear from the assessment order and therefore, the requisite fee of Rs.10,000/- could not be deposited in the Bank, as the system, without PAN does not accept any tax or other payment. Faced with such a peculiar situation the assessee attached a demand draft of Rs.10,000/- as appeal fee with the aforesaid appeal. The appeal was received back by the assessee with a covering letter dated 7.1.2015 of the Asstt. Registrar, showing inability to accept the draft and the same were sent back. Then, the assessee applied for PAN and as and when the PAN was allotted, the assessee immediately deposited the appeal fee of Rs.10,000/-.
20. Considering the above contents of the application for condonation of delay, we are of the view that the assessee was visited with sufficient cause preventing him from filing the appeal in time. Accordingly, the delay in filing the appeal is condoned and we proceed to decide the same.
21. The facts and circumstances in this appeal are exactly similar, as decided by us, hereinabove, in ITA No.16(ASr)/2016 in the case of Sh. Bachan Singh. Therefore, our observations in ITA No.16(Asr)/2015 shall mutatis mutandis equally apply to ITA No.15(Asr)/2015. Thus, the appeal of the assessee is allowed.
22. In the result, all the three appeals are allowed.
Order pronounced in the open court on 23/06/2016.
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