The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has ruled that the actual sale consideration should be taken as the basis for computing the long-term capital gain and upheld the assessee’s long-term capital gain calculation of Rs. 1,28,15,633/-.
The case involves multiple appellants, including S.S. Ahluwalia, Shri Ram Kishan & Others, Satya Pal, Satyabir Singh Yadav, and Shri Rati Ram. They were assessed by different Assessing Officers in different locations, such as New Delhi. The main issue concerns the jurisdiction of the Assessing Officers who issued notices for reassessment under Section 148 of the Income Tax Act, 1961.
The assessees claimed they filed their tax returns with different Assessing Officers in different locations, arguing that the Gurgaon Assessing Officers did not have jurisdiction to issue reassessment notices. They argued that only the original Assessing Officer had jurisdiction unless a transfer order was issued.
The assessees further argued that the notices issued by the Gurgaon Assessing Officers were void ab initio due to lack of jurisdiction, and therefore, the entire reassessment proceedings should be quashed.
The Revenue argued that the Assessing Officers from Gurgaon had the jurisdiction to issue notices for reassessment, possibly based on the grounds of territorial jurisdiction or some other legal interpretation.
The Tribunal referred to the legal principle that only the Assessing Officer who originally assessed the taxpayer has jurisdiction to issue a notice for reassessment unless a valid transfer order under Section 127 of the Income Tax Act was issued transferring the case to another Assessing Officer. Since there was no evidence of such a transfer order, the tribunal concluded that the assumption of jurisdiction by the Gurgaon Assessing Officers was irregular and void.
In Paramjeet Singh vs. CIT (1996), the High Court emphasized that the Income-tax Officer who initially assessed the case has jurisdiction to proceed under Section 147 and Section 148 of the Income Tax Act unless the case has been transferred to another Assessing Officer under Section 127 of the Act. The Two Member Bench comprising Shamim Yahya (Accountant Member) and C. N. Prasad (Judicial Member) held that the Income Tax Officer, Ward 3(4) Gurgaon, had no jurisdiction over the Assessees, and therefore, the notice issued by him for reassessment was illegal and invalid. Consequently, the reassessment orders passed by the Income Tax Officer, Ward 3(4), for the assessment year 2010-11 in all three cases were quashed
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