Appeal details
Counselvise Citation
[2016] 133 COUNSELVISE.COM (IT) 0290 (ITAT-BANGALORE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 month(s) 16 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
05-07-2016
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
C
Assessment Year
2003-2004
Appeal Filed On
20-05-2016
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL SMC C BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER ITA NO.1042/BANG/2016 ASSESSMENT YEAR : 2003-04 M/S. KATARIA MANSION, KOPPIKAR ROAD, HUBLI. PAN: AAAAK 5171F VS. THE INCOME TAX OFFICER, WARD 2(2), HUBLI. APPELLANT RESPONDENT APPELLANT BY : SHRI H.N. KHINCHA, CA RESPONDENT BY : SMT. SWAPNA DAS, JT. CIT(DR) DATE OF HEARING : 30.06.2016 DATE OF PRONOUNCEMENT : 05.07.2016 O R D E R THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF CIT(APPEALS), HUBLI DATED 03.11.2015 FOR THE ASSESS MENT YEAR 2003-04 INTER ALIA ON THE FOLLOWING GROUNDS:- 1.1 THE LEARNED CIT(A), HUBLI HAS ERRED IN PASSING THE ORDER IN THE MANNER PASSED BY HIM. THE ORDER PASSED BEING BAD IN LAW LIABLE TO BE QUASHED. ITA NO.1042/BANG/2016 PAGE 2 OF 5 2.1 THE LEARNED CIT(A), HUBLI HAS ERRED IN CONFIRMI NG THE ACTION OF THE LEARNED INCOME TAX OFFICER, WARD 2(2) , HUBLI IN ADDING LONG TERM CAPITAL GAINS ON THE BASIS OF RETU RNED INCOME FILED ON 14.10.2005 PURSUANT TO AN INVALID NOTICE I SSUED UNDER SECTION 148. 2.2 THE NOTICE ISSUED U/S 148 BEING VOID AB INITIO, THE ORDER PASSED PURSUANT THE INVALID NOTICE IS ALSO BAD IN L AW, LIABLE TO BE QUASHED. 3.1 EVEN OTHERWISE, THE LEARNED CTT(A) HAS ERRED IN CONFIRMING THE ORDER OF THE AO ASSESSING THE AOP ON THE SAME INCOME WHICH HAD BEEN OFFERED TO TAX IN THE INDIVID UAL HANDS OF THE MEMBERS OF THE AOP. 4.1 THE LEARNED CIT(A), HUBLI AND INCOME TAX OFFICE R, WARD 2(2), HUBLI HAS ERRED IN NOT FOLLOWING THE CLARIFIC ATION (AT PARA 2) OF HON'BLE TRIBUNAL IN ITS MISCELLANEOUS PETITION O RDER IN MISC NO. 26/BANG/2009 DATED 12.06.2009 OR THE FINDING ON MERITS IN THE MAIN ORDER OF ITAT. 5.1 THE LEARNED CTT(A) HAS ERRED IN CONFIRMING THA T THE THREE CO-OWNERS CONSTITUTED AN AOP. ON THE FACTS AND IN T HE CIRCUMSTANCES OF THE CASE, THE PROPERTY WAS OWNED N OT BY THE AOP BUT BY THE INDIVIDUAL MEMBERS. 6.1 THE LEARNED CIT(A), HUBLI HAS ERRED IN CONFIRMI NG THE ACTION OF THE LEARNED INCOME TAX OFFICER, WARD 2(2) , HUBLI IN NOT REFUNDING THE SELF ASSESSMENT TAX OF RS 96,195/- PA ID ON RETURNED INCOME FILED AGAINST A INVALID NOTICE ISSUED UNDER SECTION 148 FOR THE AY 2003-04. 7.1 THE LEARNED CIT(A), HUBLI HAS ERRED IN CONCLUDI NG THAT IN THE EVENT OF ASSESSMENT BEING ANNULLED THE REFUND S HALL BE ONLY OF THE AMOUNT OF TAXES PAID IN EXCESS OF TAX CHARGEABL E FOR THE TOTAL INCOME RETURNED BY THE ASSESSEE. 8.1 IN VIEW OF THE ABOVE AND OTHER GROUNDS TO BE AD DUCED AT THE TIME OF HEARING, THE APPELLANT PRAYS THAT THE O RDER PASSED BY THE LEARNED CIT(A) BE QUASHED OR IN THE ALTERNATIVE REFUND FOR THE SELF ASSESSMENT TAX OF RS 96,195 PAID ON RETURNED I NCOME FOR THE AY 2003-04 BE GRANTED. THE APPELLANT PRAYS ACCORDINGLY. ITA NO.1042/BANG/2016 PAGE 3 OF 5 2. DURING THE COURSE OF HEARING, THE LD. COUNSEL F OR THE ASSESSEE INVITED MY ATTENTION THAT THE AO HAS MADE AN ADDITI ON ON ACCOUNT OF LONG TERM CAPITAL GAIN EARNED BY THE MEMBERS OF THE AOP IN THE HANDS OF MEMBERS AS WELL AS THE AOP I.E., THE ASSESSEE AFTER REOPENING THE ASSESSMENT. REOPENING OF THE ASSESSMENT IN THE HAN DS OF AOP WAS KNOCKED DOWN BY THE ORDER OF THE TRIBUNAL DATED 18. 8.2006. EVEN ON MERITS, THE ADDITION MADE ON ACCOUNT OF CAPITAL GAI N WAS ALSO DELETED BY THE TRIBUNAL. THEREAFTER, THE AOP APPROACHED THE A SSESSING OFFICER FOR THE REFUND OF INCOME-TAX PAID BY THE ASSESSEE ON TH E CAPITAL GAIN EARNED BY IT IN THE RETURN OF INCOME. THE REQUEST WAS TUR NED DOWN BY THE AO, AGAINST WHICH AN APPEAL WAS FILED AND THE CIT(APPEA LS) HAS ALSO CONFIRMED THE ADDITIONS, AGAINST WHICH AN APPEAL WAS FILED BE FORE THE TRIBUNAL. 3. THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED T HAT SINCE THE INDIVIDUAL MEMBERS OF THE AOP HAVE ALREADY PAID THE INCOME TAX ON THE CAPITAL GAIN EARNED BY THEM, THE SAME INCOME-TAX CA NNOT BE CHARGED FROM THE AOP OR THE ASSESSEE. IF IT IS ALLOWED, IT WILL AMOUNT TO DOUBLE TAXATION. 4. THE LD. DR HAS PLACED RELIANCE UPON THE PROVISIO NS OF SECTION 240(B) OF THE INCOME-TAX ACT, 1961 [THE ACT] WITH THE SU BMISSION THAT INCOME-TAX PAID ON THE RETURNED INCOME CANNOT BE REFUNDED. 5. HAVING CAREFULLY EXAMINED THE ORDER OF LOWER AUT HORITIES, I FIND THAT UNDISPUTEDLY THE MEMBERS OF THE AOP HAVE ALREADY PA ID THE TAXES ON THE ITA NO.1042/BANG/2016 PAGE 4 OF 5 CAPITAL GAIN EARNED BY THEM. UNDER MISCONCEPTION, THE AOP HAS ALREADY PAID THE TAXES ON THE SAME CAPITAL GAIN EARNED BY I TS MEMBERS WHILE FILING THE RETURN OF INCOME. THEREFORE, IT AMOUNTS TO DOU BLE TAXATION. MOREOVER, THE ASSESSMENT IN THE CASE OF THE ASSESSEE HAS ALRE ADY BEEN QUASHED BY THE TRIBUNAL, THEREFORE THERE IS NO LIABILITY OF TA X UPON THE ASSESSEE. 6. I HAVE ALSO CAREFULLY EXAMINED THE PROVISIONS OF SECTION 240 OF THE ACT AND I FIND THAT AS PER CLAUSE (B), THE REFUND O F ANY AMOUNT WHICH BECOME DUE TO THE ASSESSEE SHALL BE PAID BY THE AO, PROVIDED WHERE THE ASSESSMENT IS ANNULLED, THE REFUND SHALL BECOME DUE ONLY ON THE AMOUNT, IF ANY, OF THE TAX PAID IN EXCESS OF THE TAX CHARGEABL E ON THE TOTAL INCOME RETURNED BY THE ASSESSEE. NO DOUBT, THE ASSESSEE HAS OFFERED THE TAX ON THE CAPITAL GAIN EARNED BY ITS MEMBERS WHILE FILING THE RETURN OF INCOME. BUT AFTER THE DECISION OF THIS TRIBUNAL, THE ASSESS EE WAS NOT LIABLE TO PAY TAX ON THE CAPITAL GAIN EARNED BY ITS MEMBERS, AS I T WAS CHARGED FROM THE INDIVIDUAL MEMBERS OF THE AOP. IN LIGHT OF THESE F ACTS, I AM OF THE VIEW THAT THERE SHOULD NOT BE DOUBLE TAXATION IN THE HANDS OF THE ASSESSEE, AS INDIVIDUAL MEMBERS HAVE ALREADY PAID THE TAXES. I THEREFORE SET ASIDE THE ORDER OF THE CIT(APPEALS) AND DIRECT THE AO TO MAKE THE REFUND OF EXCESS TAX PAID BY THE ASSESSEE ON THE CAPITAL GAIN EARNED BY ITS MEMBERS. WHILE DOING SO, THE ASSESSING OFFICER MAY VERIFY FROM THE RECORDS AS TO WHETHER THE DUE TAX ON THE CAPITAL GAIN HAS ALREADY BEEN RE COVERED FROM THE MEMBERS OF THE AOP. ITA NO.1042/BANG/2016 PAGE 5 OF 5 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 5 TH DAY OF JULY, 2016. SD/- (SUNIL KUMAR YADAV ) JUDICIAL MEMBER BANGALORE, DATED, THE 5 TH JULY, 2016. /D S/ COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.
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