Shri V. Raja Reddy, Bangalore V. Income Tax Officer, Ward - 5(3)(1), Bangalore

ITA 1160/BANG/2019

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 0753 (ITAT-BANGALORE)
• Duration Of Justice: 3 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 22-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MURALI MOHAN
• Keywords: Reopening of assessment; Question of law; Tax effect
• Section: 148; 143(3); 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH : BANGALORE BEFORE SHRI. CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA Nos. 1157 to 1160/Bang/2019 Assessment Years : 2008-09 to 2011-12 Shri V. Raja Reddy, No. 5, Nandyalagadda Village, Srinivasa Sandra Post, Bangarpet Taluk, Kolar – 563121. PAN: AMKPR3407L Vs. The Income Tax Officer, Ward – 5 (3) (1), Bangalore. APPELLANT RESPONDENT Assessee by : Shri Muralimohan, CA Revenue by : Dr. Manjunath Karkihalli, CIT DR & Shri Priyadarshi Mishra, Addl. CIT (DR) Date of Hearing : 21-03-2022 Date of Pronouncement : 30-05-2022 ORDER PER BEENA PILLAI, JUDICIAL MEMBER Present appeals are filed by assessee against four independent orders by the Ld.CIT(A)-5, Bangalore, all dated 27.03.2019 for Assessment Years 2008-09 to 2011-12. 2. The issues raised by the assessee for all years under consideration are common. For sake of convenience, we reproduce the grounds raised for A.Y. 2008-09 as under: Page 2 of 5 ITA Nos. 1157 to 1160/Bang/2019 Grounds of Appeal – A.Y. 2008-09 S.No. Grounds of Appeal Tax effect 1. The Ld. Commissioner of Income Tax (Appeals) erred both on facts and in law in upholding the addition made by the AO in the order passed u/s. 143(3) r.w.s. 147 of the Act. General ground. 2. The Ld. CIT (A) ought to have held that the AO erred in reopening the case u/s 147 of the Act, without there being any new tangible material on record basing on which the re- assessment u/s 147 of the Act can be made. General ground. 3. The Ld. CIT (A) has erred in not properly appreciating the fact that when there is no new tangible material available on record an assessment already cannot be re-opened and consequently assessment u /s 147 of the Act cannot be made. Legal ground 4. The Ld. CIT (A) , ought to have also held that the AO erred in making the addition of Rs.7,35,393 towards the closing capital which is not correct, not justified and bad in law. Rs. 1,29,387/ - 5. The Ld. CIT (A) has erred by not fairly considering the documents furnished by the Appellant to show that the assessee has not entered into any business transactions or employment during the A.Y 2008-09. Same as above 6. The Ld. CIT (A) ought to have considered the submission & explanations of the appellant stating that the assessee has no source of income during the A.Y 2008-09, as the assessee Same as above Page 3 of 5 ITA Nos. 1157 to 1160/Bang/2019 was not in employment for the year under consideration. 7. The Ld. CIT (A) ought to have appreciated the fact that the assessee has not filed the return of income as the assessee has not earned any salary income for the year under consideration and that there is no income escapment in this case. Same as above 8. The Appellant may add or alter or amend or modify or substitute or delete and/or rescind all or any of the grounds of appeal at any time before or at the time of hearing of the appeal General ground 2.1 The assessee also raised additional grounds which are also common in nature. The Ld.AR also filed a petition for admission of additional grounds. Additional Grounds of Appeal – A.Y. 2008-09 “9. As per the ratio laid down by the Honourable Supreme Court of India in the case of National Thermal Power Co. Ltd v. CIT (1998) 229 ITR 383 (SC), the Hon'ble ITAT has jurisdiction to examine the question of law which has been taken before the ITAT for the first time though not taken before the first appellate authority. 10. The Ld. CIT(A) ought to have appreciated that the Re- opening of Assessment U/s 148 of the Act is without jurisdiction and hence such failure shall lead to an invalid re-opening of assessment as per the provisions of Income Tax Act,1961 11. The Ld. CIT (A) ought to have appreciated that the approval / sanction obtained U/s 151 of the Act from the Additional Commissioner of Income Tax Range -6(3) is without jurisdiction and hence an improper approval sought to re-open an assessment U/s 148 of the Act shall lead to invalid Re-opening of Assessment. Therefore the Assessment framed U/s 147 of the Act shall be void ab initio Page 4 of 5 ITA Nos. 1157 to 1160/Bang/2019 12. The Ld. CIT (A) ought to have appreciated the fact that there is lack of independent application of mind by the Ld. AO where the re-opening of assessment is made purely in the basis of Information received from investigation wing. Thus, assessment framed U/s 147 of the Act on the basis of borrowed satisfaction shall lead to an invalid Assessment Proceedings and shall be liable to be quashed. 13. The Ld. CIT (A) failed to appreciate that there exists no Live Link (or) Nexus in respect of Reasons Recorded for Re- opening of Assessment with that of Assessment framed U/s 147 of the Act. Such a failure shall invalidate the assessment proceedings made U/s 147 of the Act. 14. The Ld. CIT (A) failed to appreciate the settled position of law being "failure to issue valid notice U/s 143(2) of the Act shall invalidate the assessment Proceedings U/s 147 rws 148 of the Act". 15. The Ld. CIT (A) has erred in confirming the impugned addition made towards Closing Capital of Rs. 7,35,393/- treating it to be Unexplained Income whereas the Ld. AO has made an impugned addition towards Closing Capital of Rs. 7,35,393/- under the head income from other sources. Such a deviation (or) enhancement of assessment without issue of any show cause is not permissible under the provisions of Income Tax Act,1961” 3. Identical petition has been filed by the assessee for all assessment years under consideration. 4. The Ld. A.R. submitted that these additional grounds inadvertently were not raised before the Ld.CIT(A), but all facts relating to these issues are already on record, and these additional grounds may be admitted in the interest of justice. 5. In our opinion, there is merit in the argument of Ld. AR and for adjudication of these additional grounds, there is no necessity to investigate any fresh facts, otherwise on record. 6. Accordingly, these additional grounds raised for all years under consideration are admitted for adjudication. Page 5 of 5 ITA Nos. 1157 to 1160/Bang/2019 7. However, we note that these additional grounds are filed before this Tribunal and the Ld. CIT(A) had no occasion to examine them. Accordingly, we remit these additional grounds to the file of Ld.CIT(A) for his consideration. The Ld.CIT(A) is directed to adjudicate these additional grounds after giving proper opportunity of being heard to the assessee. As these additional grounds raised by the assessee goes to the root of the matter, at this stage, we refrain from going into the main grounds raised by assessee, which are kept open with the liberty to assessee to agitate the same at appropriate stage. In the result, all the four appeals filed by the assessee are partly allowed for statistical purposes. Order pronounced in open court on 30 th May, 2022. Sd/- Sd/- (CHANDRA POOJARI) (BEENA PILLAI) Accountant Member Judicial Member Bangalore, Dated, the 30 th May, 2022. /MS / Copy to: 1. Appellant 4. CIT(A) 2. Respondent 5. DR, ITAT, Bangalore 3. CIT 6. Guard file By order Assistant Registrar, ITAT, Bangalore