Sh. Ram Dev, Faridabad V. ITO, Faridabad

CO 242/DEL/2009

• Counselvise Citation: [2010] 122 COUNSELVISE.COM (IT) 4641 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 23 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 04-05-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 04-05-2010
• Assessment Year: 2000-2001
• Appeal Filed On: 12-08-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK SURESH AGGARWAL
• Assessee Lawyers: BANITA DEVI NARGOM
• Keywords: Reopening of assessment; Validity of assessment
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : F NEW DELHI BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMEBR AND SHRI SHAMIM YAHYAM ACCOUNTANT MEMBER I.T.A NO. 170/DEL/09 ASSTT. YEAR 2000-01 INCOME TAX OFFICER, WARD-II (4), FARIDABAD VS. SHRI RAM DEV S/O SHRI YAD RAM VILL. ANKHIR, FARIDABAD. (APPELLANT) (RESPONDENT) C.O. NO. 242/DEL/20 09 ASSTT. YEAR 2000-01 RAM DEV VS. ITO S/O YAD RAM WARD-11(4) VILL. ANKHIR FARIDABAD FARIDABAD. APPELLANT BY: SMT. BANITA DEVI NARGOM, SR. DR RESPONDENT BY: SHRI VIVEK SURESH AGGARWAL, ADVOCAT E ORDER PER RAJPAL YADAV, JM : THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORDE R OF LD. CIT(A) DATED 12 TH NOVEMBER, 2008 PASSED FOR ASSTT. YEAR 2000-01. ON RECEIPT OF NOTICE ASSESSEE HAS FILED CROSS OBJECTION BEARIN G NO. 242/D/09. WITH ITA NO170/DEL/09 & CO. NO. 242/DEL/09 ASSTT. YEAR 2000-01 2 THE ASSISTANCE OF LD. REPRESENTATIVE WE HAVE GONE T HROUGH THE RECORD CAREFULLY. THE ISSUE BEFORE THE LD. FIRST APPELLATE AUTHORITY WAS WHETHER ENHANCED COMPENSATION AND INTEREST RECEIVED BY THE ASSESSEE IS TAXABLE IN THIS ASSTT. YEAR OR NOT BECAUSE APPEALS AGAINST THE DECREE WHICH HAS MADE THE ASSESSEE ENTITLE TO CLAIM ENHANC ED COMPENSATION AND INTEREST WAS PENDING BEFORE THE HONBLE P & H H IGH COURT . THE LD. CIT (A) ON THE STRENGTH OF HONBLE PUNJAB & HARYANA HIGH COURT DECISION IN THE CASE OF CIT VS. PREM SINGH RENDERED IN ITA NO. 695 OF 2005 AND CHANDI RAM VS. CIT FARIDABAD RENDERED IN I TA NO. 427 OF 2005 REPORTED IN 217 CTR (P&H) PAGE 113 HAS HELD TH AT ENHANCED COMPENSATION AS WELL AS INTEREST WOULD BE CHARGEABL E TO TAX U/S 45 (5) (B) OF THE INCOME TAX ACT WHEN THE LITIGATION CHALL ENGING THE AWARD WHICH GIVE RISE SUCH ENHANCEMENT OF COMPENSATION WO ULD ATTAIN FINALITY. IF ANY AMOUNT IS RECEIVED AFTER STAY OF THE AWARD, IN PURSUANCE OF ANY INTERIM ORDER, OR SUBJECT TO THE FINAL RESULT, IT W ILL NOT BE AN AMOUNT RECEIVED AS ENHANCED COMPENSATION U/S 45(5)(B) OF T HE INCOME TAX ACT. THIS DECISION OF THE HONBLE P & H HIGH COURT HAS BEEN REVERSED BY THE HONBLE SUPREME COURT IN THE CASE OF CIT, FARID ABAD VS. GHANSHYAM, HUF & OTHERS (2009) TIOL-84(SC)(IT). ITA NO170/DEL/09 & CO. NO. 242/DEL/09 ASSTT. YEAR 2000-01 3 2. THE LD. COUNSEL FOR THE ASSESSEE AT THE VERY OUT SET CONTENDED THAT ASSESSMENT IN THIS CASE HAS BEEN FRAMED U/S 14 4. THE AO HAS REOPENED THE ASSESSMENT BY ISSUANCE OF A NOTICE U/S 148 WHICH WAS ALLEGED TO HAVE BEEN SENT THROUGH REGISTERED SPEED POST ON 30 TH MARCH, 2007. THIS NOTICE WAS NOT RECEIVED BACK. THE AO SIM ULTANEOUSLY HAD ISSUED NOTICE THROUGH FIXTURE AND CONSTRUED THAT SE RVICE HAS BEEN EFFECTED. THE ASSESSEE HAS CHALLENGED REOPENING OF ASSESSMENT AND THE VALIDITY OF THE ASSTT. ORDER BEFORE LD. CIT(A). GROUND NO. 1 & 2 RAISED BY THE ASSESSEE BEFORE THE LD. FIRST APPELLA TE AUTHORITY SPECIFICALLY RELATED TO THESE ISSUES. THE LD. CIT ( A) FAILED TO TAKE COGNISANCE OF THESE GROUNDS OF APPEAL. HE HAS DECID ED 5 APPEALS BY WAY OF A COMMON ORDER. IT APPEARS THAT SINCE ISSUE WAS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE JURIS DICTIONAL HIGH COURT. LD. FIRST APPELLATE AUTHORITY DID NOT DEEM IT APPRO PRIATE TO CONSIDER THE OTHER LEGAL ISSUES. HE POINTED OUT THAT IN THE CROS S OBJECTION ASSESSEE HAS PLEADED THAT ORDER OF THE LD. CIT(A) BE SET ASI DE ON THESE ISSUES AND THEY HE REMITTED BACK TO THE FILE OF FIRST APPE LLATE AUTHORITY FOR READJUDICATION. HE CONCEDED THAT AS FAR AS THE ISSU E ON MERIT IS CONCERNED IT IS COVERED AGAINST THE ASSESSEE BY THE DECISION IN THE HONBLE SUPREME COURT IN THE CASE OF CIT, FARIDABA D VS. GHANSHYAM, HUF. HE FURTHER CONTENDED THAT UNDER SIMILAR CIRCU MSTANCES TRIBUNAL ITA NO170/DEL/09 & CO. NO. 242/DEL/09 ASSTT. YEAR 2000-01 4 HAS SET ASIDE THE ISSUE IN ITA NO. 169/D/2009 IN TH E CASE OF SHRI BHIM SINGH INDIVIDUAL. HE PLACED ON RECORD COPIES OF THE TRIBUNAL ORDER IN ITA NO. 169/D/2009 IN THE CASE OF ITO VS. SHRI BHIM SIN GH. THE LD. DR ON THE OTHER HAND RELIED UPON THE ORDER OF AO. 3. ON DUE CONSIDERATION OF THE FATS AND CIRCUMSTANC ES WE FIND THAT NOTICE U/S 148 WAS ALLEGED TO HAVE BEEN ISSUED ON 3 0 TH MARCH, 2007. THE ASSESSMENT HAS BEEN PASSED EXPARTE. ON 26,10.20 07 LD. CIT(A) WHILE ADJUDICATING THE ISSUE FAILED TO DECIDE THE G ROUNDS RAISED BY THE ASSESSEE, WHEREBY HE HAS CHALLENGED REOPENING OF TH E ASSTT. IN OUR OPINION LD. FIRST APPELLATE AUTHORITY WAS BOUND TO ADJUDICATE THE LEGAL GROUND ALSO. CONSIDERING ALL THESE ASPECTS WE SET A SIDE THE ORDER OF LD. CIT(A) AND REMAND THE ISSUES BACK TO THE FILE OF FI RST APPELLATE AUTHORITY. THE ASSESSEE WILL BE AT LIBERTY TO PRODU CE ANY EVIDENCE IN SUPPORT TO HIS EXPLANATION. LD. FIRST APPELLATE AUT HORITY SHALL CONSIDER ALL THE ISSUES RAISED BY THE ASSESSEE IN HIS GROUNDS OF APPEAL PARTICULARLY THE VALIDITY OF ASSESSMENT CHALLENGED BY THE ASSESS EE. IT IS NEEDLESS TO SAY THAT OBSERVATIONS MADE BY US WOULD IMPAIR OR I NJURE THE CASE OF AO OR WOULD CAUSE ANY PREJUDICE TO THE DEFENCE OF THE ASSESSEE. 4. IN THE RESULT APPEAL AS WELL CROSS OBJECTIONS AR E ALLOWED FOR STATISTICAL PURPOSES. ITA NO170/DEL/09 & CO. NO. 242/DEL/09 ASSTT. YEAR 2000-01 5 ORDER PRONOUNCED IN THE OPEN COURT ON 4.5.2010. [SHAMIM YAHYA) [RAJPAL YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER VEENA DATED: COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT