Dayashankar Jhunjhunwala, Bangalore V. ITO, Bangalore

CO 91/BANG/2015

• Counselvise Citation: [2016] 112 COUNSELVISE.COM (IT) 4027 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 19 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 24-06-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 15-06-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 05-06-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: TDS; Capital Gains
• Section: 142(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, BANGALORE BEFORE S MT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA NO. 1047 / BANG/20 14 (ASSESSMENT YEAR: 200 5 - 06 ) INCOME - TAX OFFICER, WARD 10(2), BANGALOR E. VS. APPELLANT SHRI D .S. JHUNJHUNWALA, PROP. ROCKWELL INDIA, MAJESTIC RESIDENCY, NO.106, D BLOCK, GROUND FLOOR NEAR LAKSHMI THEATRE, TAVEREKERE, BANGALORE - 560029. PA NO .AAOPJ 1490 P RESPONDENT AND CROSS OBJN.NO.91/BANG/2015 (IN ITA NO.1047/BANG/2014) (ASSESSMENT YEAR: 2005 - 06) (BY ASSESSEE) A SSESSEE BY : SHRI H.N.KHINCHA, CA. RE VENUE BY : SHRI SUNIL KUMAR AGARWAL, JCIT(DR). DATE OF HEARING : 15/06/2016 DATE OF PRONOUNCEMEN T : 24 /06/2016 O R D E R PER I NTURI RAMA RAO, AM : TH E APPEAL FILED BY THE REVENUE AND THE CROSS - OBJECTIONS BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE CIT(A) - V, BANGALORE, DATED 16/12/2013 FOR THE ASSESSMENT YEAR 2005 - 06. ITA NO . 1047 /BANG/201 4 PAGE 2 OF 8 2. THE REVEN UE RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE LD.CIT(A) IS OPPOSED TO THE FACTS OF THE CASE. 2. THE CIT(A) ERRED IN HOLDING THAT THE ASSESSMENT PROCEEDING BY THE DCIT(TDS), CIRCLE 18(2) IS WITHOUT JURISDICTION WHEN CONCURRENT JURISDICTION WAS ASSIGNED TO DCIT 18(2) VIDE NOTIFICATION IN F. NO. CC - 1/ACIT(T) - 1/JURDN/2007 - 08 DTD. 30.8.200 7 AS PER THE INSTRUCTIONS BY CBDT. 3. THE APPELLANT CRAVES FOR PERMISSION TO ADD, MODIFY OR DELETE THE GROUNDS OF APPEAL AT THE TIME OF HEARING THE CASE WITH A P RAYER TO RESTORE THE ORDER OF AO. 3. BRIEFLY, FACTS OF THE CASE ARE THAT THE RESPONDENT - ASSESSEE IS AN INDIVIDUAL. NOTICE U/S 142(1) OF THE INCOME - TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT' FOR SHORT] DATED 13/09/2007 WAS SERVED ON THE RESPOND ENT - ASSESSEE CALLING FOR RETURN OF INCOME FOR THE ASSESSMENT YEAR 2005 - 06. IT IS STATED IN THE ASSESSMENT ORDER THAT DESPITE SERVICE OF NOTICE U/S 142(1), RESPONDENT - ASSESSEE HAD FAILED TO COMPLY. AS THE RESPONDENT - ASSESSEE FAILED TO COMPLY WITH NOTICE I SSUED, THE ASSESSMENT CAME TO BE COMPLETED U/S 144 BRING TO TAX SALE CONSIDERATION OF RS.61,97,000/ - . 4. BEING AGGRIEVED, RESPONDENT - ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WHO, VIDE IMPUGNED ORDER, ALLOWED THE APPEAL HOLDING THAT THE OFFICER WHO PASSED THE ASSESSMENT ORDER VIZ., DCIT, CIRCLE 18(2), BANGALORE, HAD NO JURISDICTION OVER THE RESPONDENT - ASSESSEE. THE CIT(A) HELD AS FOLLOWS: ITA NO . 1047 /BANG/201 4 PAGE 3 OF 8 6. VIDE LETTER DATED 16.9.2008 THE SUBMISSION WAS FORWARDED TO THE ITO WARD - 10(2), BANGALORE FOR REMA ND REPORT. FURTHER VIDE LETTER DATED 3.12.2008, MY PREDECESSOR CONVEYED TO THE ASSESSING OFFICER (ITO WARD 10(2)), BANGALORE) THE CONTENTIONS OF THE ASSESSEE THAT THE ASSESSEE FILED THE RETURN IN HIS WARD FOR AY 2005 - 06 ON 27.10.2005 FOR HIS COMMENTS AND REPORT ON THE AGREEMENT DATED 17.3.2003 AND SALE DEED DATED 4.10.2004, ENCLOSING THE SUBMISSIONS AND DOCUMENTS FILED. 6.2 THE ASSESSING OFFICER IN HIS REPORT DATED 11 .5.2009 CONFIRMED THAT HE HAS OBTAINED THE COPY OF SALE DEED DATED 4.10.2004 FROM THE SENIOR SUB - REGISTRAR, GANDHINAGAR WHICH RELATED TO THE SAME PROPERTY WHICH WAS SUBJECT MATTER OF SALE AGREEMENT DATED 17.3.93 IT WAS ALSO MENTIONED THAT, 'NOWHERE IN THE SALE DEED DTD. 04.10.2004, IS THERE ANY MENTION OF RS.61 , 97,500/ - .' AT THE SAME TI ME IT WAS MENTIONED THAT, 'THE MARKET VALUE AS ON 4.10.2004 IS SHOWN AT RS.61,90,000/ - IN THE DEED ITSELF, AND THAT STAMP DUTY IS PAID ON RS.61 , 97,000/ - ,' NO COPY OF SUCH SALE DEED OBTAINED FROM THE SUB - REGISTRAR OFFICE WAS FORWARDED. THERE IS NO SUBMISSIO N REGARDING THE FACT THAT RETURN WAS FILED ON 27.10.2005, AND WHETHER THE TRANSACTION WAS DISCLOSED IN THE RETURN. IT IS ALSO NOT KNOWN AS TO WHETHER THE ASSESSEE OFFERED ANY CAPITAL GAINS INCOME ON TRANSFER VIDE AGREEMENT DATED 17.3.2003, IN AY 2003 - 04. 6.3 BE THAT AS IT MAY, THERE IS NO DISPUTE THAT THE ASSESSEE FILED HIS RETURN ON 27.10.2005 WITH ITO: WARD - 10(2), BANGALORE WHO HAD THE JURISDICTION OVER THE ASSESSEE. IT IS ALSO SEEN FROM THE COPY OF RETURN THAT NO CAPITAL GAINS INCOME WAS DECLARED BY TH E ASSESSEE. NOTICES U/S 142(1) DATED 13.9.2007 WAS ISSUED BY DCIT, TDS CIRCLE - 16(4), BANGALORE. ANOTHER NOTICE U/S 142(1) DATED 14.9.2007 WAS ISSUED BY ITO WARD - 5(1), BANGALORE WHICH WAS DULY REPLIED ON 27.9.2007 ENCLOSING THE COPY OF RETURN FILED ON 27.10 .2005. SIMILAR REPLY WAS FILED BY THE ASSESSEE ON 10.5.2006 TO THE CCIT, BANGALORE - III IN, REPLY TO LETTER DATED 28.3.2006. 6.4 THE ASSESSMENT ORDER DATED 28.12.2007 DOES NOT EVEN MENTION AS TO HOW THE DCLT, TDS CIRCLE - 16(4) OR THE ITA NO . 1047 /BANG/201 4 PAGE 4 OF 8 DC LT (TDS) CIRCLE - 18( 2), BANGALORE WAS ASSIGNED THE CASE OR CONFERRED JURISDICTION OVER THE ASSESSEE TO ISSUE NOTICE AND MAKE ASSESSMENT. EVEN AFTER THE SUBMISSION OF THE ASSESSEE WAS FORWARDED TO THE ITO, WARD - 10(2), BANGALORE ON 16.9.2008 FOR REPORT AND REMINDER DATED 3.12.2 008, THE ASSESSING OFFICER DID NOT COMMENT ON THE CHALLENGE T O T HE JURISDICTION BY THE APPELLANT. 7. IT IS CLEAR THAT ASSESSEE HAD FILED HIS RETURN OF INCOME BEFORE THE ITO, WARD - 10(2), BANGALORE ON 27.10.2005, AND PURSUANT TO LETTER BY THE CCIT, BAN GALORE - III OFFICE AND NOTICE ISSUED U/S 142(1) BY ITO WARD - 5(1), BANGALORE HAD REPLIED ON 10.5.2006 AND 27.9.2007 RESPECTIVELY CLEARLY STATING THAT HE HAD FILED RETURN AND ALSO MENTIONING HIS PAN NUMBER. THERE IS NOTHING TO SHOW THAT ANY ORDER WAS PASSED C ONFERRING JURISDICTION OVER THE ASSESSEE TO THE DCIT, TDS CIRCLE - 16(4) OR TO THE DCIT (TDS) CIRCLE - 18(2), BANGALORE. IN VIEW OF THIS AND ALSO THE FACT THAT THE ASSESSEE WAS AN EXISTING ASSESSEE, IT IS HELD THAT THE ASSESSMENT PROCEEDING BY THE DCIT (TDS) C IRCLE - 18(2), BANGALORE IS WITHOUT JURISDICTION AND BAD IN LAW. THE ASSESSMENT ORDER IS THEREFORE CANCELLED. GROUND NO.1 OF THE APPEAL IS ALLOWED. 8. IN SO FAR AS THE MISCELLANEOUS PETITION BY THE ASSESSING OFFICER IS CONCERNED, NO DOCUMENT WAS FILE D BY THE ASSESSING OFFICER, EVEN AFTER SPECIFIC QUERY AND OPPORTUNITY GIVEN, TO SHOW THAT THE .MARKET VALUE WAS RS.6197,000/ - . HENCE THERE IS NO MISTAKE APPARENT FROM RECORD, IN THE FINDING GIVEN IN THE APPELLATE ORDER DATED 22.5.2009. IN ANY CASE, THE ISS UE BECOMES ACADEMIC NOW THAT THE ASSESSMENT ORDER IS CANCELLED. 5. BEING AGGRIEVE D , REVENUE IS BEFORE US IN THE PRESENT APPEAL. 5.1 LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT JURISDICTION OVER THE RESPONDENT - ASSESSEE WAS TRANSFERRED TO THE ITA NO . 1047 /BANG/201 4 PAGE 5 OF 8 DCIT, CIRCLE 18(2), BANGALORE, BY NOTIFICATION DATED 30.8.2007 ISSUED BY THE CHIEF COMMISSIONER OF INCOME - TAX, BANGALORE - 1, DATED 30/08/2007 AND HE FILED A COPY OF THE SAID NOTIFICATION BEFORE US. HE FURTHER SUBMITTED THAT THE SAID NOTIFICATION WAS ISSUED UNDER THE PROVISIONS OF SUB - SEC.(2) OF SED.120 OF THE ACT. THEREFORE, HE SUBMITTED THAT THE AO WHO PASSED THE ASSESSMENT ORDER IN THE RESPONDENT - ASSESSEE S CASE HAD A VALID JURISDICTION. THEREFORE, THE CIT(A) WITHOUT CONSIDERING THE NOTIFICATION ISSUED BY THE CHIEF CIT HELD THAT THE DCIT, CIRCLE 18(2), BANGALORE, HAD NO JURISDICTION OVER THE ASSESSEE. THEREFORE, HE PRAYED THAT THE ORDER PASSED BY THE CIT(A) MAY BE QUASHED. 5.2 ON THE OTHER HAND, LEARNED AR OF THE ASSESSEE SUPPORTED THE OR DER OF THE CIT(A). 5.3 WE HEARD RIVAL SUBMISSIONS AND PERUSED MATERIAL ON RECORD. THE ONLY ISSUE TO BE ADJUDICATED IN THE PRESENT APPEAL IS WHETHER THE DCIT, CIRCLE 18(2), BANGALORE HAD A VALID JURISDICTION OVER THE RESPONDENT - ASSESSEE. IT IS ST ATED THAT OSTENSIBLY THE DCIT, CIRCLE 18(2), HAD ASSUMED JURISDICTION ON ACCOUNT OF N OTIFICATION ISSUED BY THE CHIEF CIT WHICH READS AS UNDER: ITA NO . 1047 /BANG/201 4 PAGE 6 OF 8 SUBSEQUENTLY, GUIDELINES HAVE BEEN ISSUED FOR COMPLETION OF THE ASSESSMENT PROCEEDINGS IN CASES WHERE AIR INFOR MATION HAS BEEN RECEIVED. IT WAS SPECIFICALLY MENTIONED IN THE GUIDELINES ISSUE THAT IN CASES WHERE RETURN HAS ALREADY BEEN FILED PRIOR TO ISSUE OF 142(1) NOTICE, THE CASES SHOULD BE SELECTED FOR SCRUTINY MAINLY . IN THIS CASE, ADMITTEDLY RESPONDENT - ASSES SEE IS A REGULAR INCOME - TAX ASSESSEE. EVEN FOR THE YEAR UNDER CONSIDERATION, HE HAD FILED RETURN OF INCOME WITH THE ITO, WARD 10(2), BANGALORE ON 27/10/2005 VIDE ACKNOWLEDGEMENT NO.102000664 WITH PA N O. AAOPJ 1490 P . THE CIT(A) HAD ALLOWED THE APPEAL HOL DING THAT ITA NO . 1047 /BANG/201 4 PAGE 7 OF 8 THERE WAS NO ORDER CONFERRING JURISDICTION OVER THE ASSESSEE TO THE DCIT, TDS CIRCLE. BUT HOWEVER, DURING THE COURSE OF PROCEEDINGS BEFORE US, THE DEPARTMENT HAD PRODUCED THE NOTIFICATION DATED 30/08/2007 ISSUED BY THE CHIEF CIT, BANGALORE - 1. T HERE WAS NO CHALLENGE ON VALIDITY OF THE SAID NOTIFICATION. IN THE CIRCUMSTANCES, WE ARE OF THE CONSIDERED OPINION THAT THE OFFICER WHO PASSED THE ASSESSMENT ORDER HAD A VALID JURISDICTION OVER THE RESPONDENT - ASSESSEE. THEREFORE, THE REASONING ADOPTED BY THE CIT(A) CANNOT BE ACCEPTED. IN THE CIRCUMSTANCES, WE REVERSE THE FINDING OF THE CIT(A) TO THE EXTENT THAT THE AO HAD NO JURISDICTION OVER THE RESPONDENT - ASSESSEE. HOWEVER, WE NOTICE THAT THE ASSESSMENT ORDER WAS PASSED EX - PARTE FOR NON - COMPLIANCE OF N OTICE ISSUED BY THE AO. IN THE CIRCUMSTANCES, WE RESTORE THE ENTIRE ASSESSMENT TO THE FILE OF THE AO FOR DE NOVO ASSESSMENT AFTER AFFORDING DUE OPPORTUNITY TO THE RESPONDENT - ASSESSEE IN ACCORDANCE WITH PROVISIONS OF LAW. 6. THE CROSS OBJECTIONS IS ONLY IN SUPPORT OF THE ORDER OF THE CIT(A) AND ON MERITS OF THE ADDITION. SINCE WE RESTORED MATTER TO THE FILE OF THE AO, CROSS OBJECTIONS BECOME INFRUCTUOUS . HENCE DISMISSED. ITA NO . 1047 /BANG/201 4 PAGE 8 OF 8 7. IN THE RESULT, APPEAL FILED BY THE REVENUE IS PARTLY A LLOWED FOR STATISTICAL PURPOSES AND THE CROSS OBJECTIONS BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNC ED IN THE OPEN COURT ON 24 TH JUNE, 2016 SD/ - SD/ - (SMT.ASHA VIJAYARAGHAVAN) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE : BANGALORE D A T E D : 24 /0 6 /2016 SRINIVASULU, SPS COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A) - II BANGALORE 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE TRIBUNAL BANGALORE