Smt Kavitha Tilok , Bangalore V. The Income Tax Officer Ward-9(1), Bangalore

ITA 1182/BANG/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5941 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 22 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 01-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 09-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABIRAMA KARTHIKEYAN IRS
• Assessee Lawyers: VIMALCHAND DHARIWALL
• Keywords: Opportunity of being heard; Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-A BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO S . 1182 & 1183 /BANG/2018 ASSESSMENT YEAR S : 2006 - 07 & 2009 - 10 SMT. KAVITHA TILOK, W/O. S. TILOKCHAND DHARIWALL, PROP: M/S. JINENDRA BANKERS, KAVITHA SADAN, NO. 6, II CROSS, CAMBRIDGE ROAD, HALASURU, BANGALORE 560 008. PAN: AAVPB6535A VS. THE INCOME TAX OFFICER, WARD 9 (1), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI VIMALCHAND DHARIWALL , ADVOCATE RESPONDENT BY : SHRI ABI RAMA KARTHIKEYAN, IRS (DR) DATE OF HEARING : 01 . 0 5 .2018 DATE OF PRONOUNCEMENT : 04 . 0 5 .201 8 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER BOTH THESEAPPEALS ARE FILED BY THE ASSESSEE WHICH A RE DIRECTED AGAINST TWO SEPARATE ORDERS OF LD. CIT(A)-1, BANGALORE BOTH DAT ED 30.01.2018 FOR ASSESSMENT YEARS 2006-07 AND 2009-10. BOTH THESE A PPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS C OMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE GROUNDS RAISED BY THE ASSESSEE FOR ASSESSMEN T YEAR 2006-07 IN ITA NO. 1182/BANG/2018 ARE AS UNDER. 1. THE LEARNED ASSESSING OFFICER HAS ERRED IN PASSI NG THE ORDER IN THE MANNER IT IS PASSED BY HER. THE IMPUGNED ORDER BEING BAD IN LAW, VOID AB INTIO AND REQUIRED TO BE QUASHED. 2. IN ANY CASE, THE CONDITIONS PRECEDENT FOR THE IS SUE OF NOTICE U/S.148 OF THE ACT BEING ABSENT, THE RE-OPENING BEC OMES BAD IN LAW AND CONSEQUENTLY THE ORDER PASSED BEING IS ALSO BAD IN LAW AND IS ITA NOS. 1182 & 1183/BANG/2018 PAGE 2 OF 4 REQUIRED TO BE QUASHED. 3. IN ANY CASE AND THE WITHOUT PREJUDICE THE ORDER HAVING BEEN PASSED IN TOTAL DISREGARD OF AND IN VIOLATION OF THE PRINC IPLES OF NATURAL JUSTICE, MAKES THE ORDER BAD IN LAW AND LIABLE TO B E QUASHED. 4. IN ANY CASE AND THE WITHOUT FURTHER PREJUDICE. T HE ASSESSING OFFICER HAS ERRED IN : A) TAXING THE ENTIRE SALE PROCEEDS AS INCOME OF THE AP PELLENT. B) HAS NOT CONSIDERED THE FACT THAT THE APPELLENT HAS EARNED LONG- TERM CAPITAL GAINS ON SALE OF SHARES. C) WITHOUT ANY BASIS, HELD THE TRANSACTION IN SHRES AS FRAUDULENT. D) HOLDONG THAT THE PROVISIONS OF SEC.68 OF THE ACT, A RE APPLICABLE TO THIS CASE. 5. THE APPELLANT IS REGULARLY DEALING IN SHARES AND THIS TRANSACTION HAS ALSO TO BE ACCEPTED AS SUCH. 6. THE ASSESSING OFFICER HAS ERRED IN MAKING VARIOU S OBSERVATIONS AND COMING TO VARIOUS CONCLUSIONS, WITHOUT ANY PROO F OR EVICENCE. AND SUCH OBSERVATIONS AND CONCLUSIONS NEED TO BE IG NORED, 7. THE APPELLANT DENIES THE LIABILITY TO PAY INTERE ST. THE INTEREST HAVING BEEN LEVIED ERRONEOUSLY IS TO BE DELETED. 8. IN VIEW OF THE ABOVE AND OTHER GROUNDS TO BE ADD UCED AT THE TIME OF HEARING IT IS REQUESTED THAT THE IMPUGNED ORDER BE QUASHED AND THE RETURNED INCOME FROM LONG-TERM CAPITAL GAINS BE ACC EPTED. THE ASSESSMENT OF THE AMOUNT U/S.68 BE DELETED AND THE INTEREST ALSO TO BE DELETED. 3. THE GROUNDS RAISED BY THE ASSESSEE FOR ASSESSMEN T YEAR 2009-10 IN ITA NO. 1183/BANG/2018 ARE AS UNDER. 1. THE LEARNED ASSESSING OFFICER HAS ERRED IN PASSI NG THE ORDER IN THE MANNER IT IS PASSED BY HER. THE IMPUGNED ORDER BEING BAD IN LAW, VOID AB INTIO AND REQUIRED TO BE QUASHED. 2. IN ANY CASE, THE CONDITIONS PRECEDENT FOR THE IS SUE OF NOTICE U/S.148 OF THE ACT BEING ABSENT, THE RE-OPENING BEC OMES BAD IN LAW AND CONSEQUENTLY THE ORDER PASSED BEING IS ALSO BAD IN LAW AND IS REQUIRED TO BE QUASHED. 3. IN ANY CASE AND THE WITHOUT PREJUDICE THE ORDER HAVING BEEN PASSED IN TOTAL DISREGARD OF AND IN VIOLATION OF THE PRINC IPLES OF NATURAL JUSTICE, MAKES THE ORDER BAD IN LAW AND LIABLE TO B E QUASHED. ITA NOS. 1182 & 1183/BANG/2018 PAGE 3 OF 4 4. IN ANY CASE AND THE WITHOUT FURTHER PREJUDICE. T HE ASSESSING OFFICER HAS ERRED IN : A. TAXING THE ENTIRE SALE PROCEEDS AS INCOME OF THE AP PELLENT. B. HAS NOT CONSIDERED THE FACT THAT THE APPELLENT HAS EARNED LONG- TERM CAPITAL GAINS ON SALE OF SHARES. C. WITHOUT ANY BASIS, HELD THE TRANSACTION IN SHRES AS FRAUDULENT. D. HOLDONG THAT THE PROVISIONS OF SEC.68 OF THE ACT, A RE APPLICABLE TO THIS CASE. 5. THE APPELLANT IS REGULARLY DEALING IN SHARES AND THIS TRANSACTION HAS ALSO TO BE ACCEPTED AS SUCH. 6. THE ASSESSING OFFICER HAS ERRED IN MAKING VARIOU S OBSERVATIONS AND COMING TO VARIOUS CONCLUSIONS, WITHOUT ANY PROO F OR EVICENCE. AND SUCH OBSERVATIONS AND CONCLUSIONS NEED TO BE IG NORED, 7. THE APPELLANT DENIES THE LIABILITY TO PAY INTERE ST. THE INTEREST HAVING BEEN LEVIED ERRONEOUSLY IS TO BE DELETED. 8. IN VIEW OF THE ABOVE AND OTHER GROUNDS TO BE ADD UCED AT THE TIME OF HEARING IT IS REQUESTED THAT THE IMPUGNED ORDER BE QUASHED AND THE RETURNED INCOME FROM LONG-TERM CAPITAL GAINS BE ACC EPTED. THE ASSESSMENT OF THE AMOUNT U/S.68 BE DELETED AND THE INTEREST ALSO TO BE DELETED. 4. AT THE VERY OUTSET, IT WAS SUBMITTED BY LD. AR O F ASSESSEE THAT AS PER THE NOTING OF CIT (A) IN PARA 2 OF HIS ORDER, ALTHOUGH THREE N OTICES WERE SENT BY HIM BUT NONE OF THESE NOTICES COULD BE SERVED ON ASSESSEE A ND ALL THESE NOTICES WERE RETURNED BY POSTAL AUTHORITIES WITH REMARKS THAT A DDRESSEE LEFT AND RETURNED TO THE SENDER. HE SUBMITTED THAT DURING THE RELEVANT PERIOD, THE BUILDING WAS UNDER RENOVATION AND ASSESSEE WAS RESIDING JUST OPP OSITE TO THAT BUILDING AND ALL THE OTHER POSTAL MATERIAL WAS BEING SERVED BY P OSTAL DEPARTMENT ON THE ASSESSEE AND THE ORDER OF CIT (A) WAS ALSO DULY SER VED ON THE ASSESSEE BUT THE NOTICES WERE NOT SERVED FOR THE REASONS NOT KNO WN TO THE ASSESSEE. HE SUBMITTED THAT IN THE INTEREST OF JUSTICE, THE MATT ER MAY BE RESTORED BACK TO THE FILE OF CIT(A) FOR FRESH DECISION AFTER PROVIDING A DEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND IF THIS IS DONE, HE UNDER TAKES THAT PROPER COMPLIANCE WILL BE MADE BEFORE CIT(A). THE LD. DR OF REVENUE SUPPORTED THE ORDER OF CIT(A) IN BOTH THE YEARS. ITA NOS. 1182 & 1183/BANG/2018 PAGE 4 OF 4 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. I FIND THAT AS PER PARA 2 OF THE ORDER OF CIT(A), THREE NOTICES WERE SENT BY HIM ON 01.12.201 7, 02.12.2017 AND 04.12.2017 BUT THESE NOTICES WERE RETURNED BACK BY POSTAL AUTHORITIES WITH REMARKS ADDRESSEE LEFT AND RETURNED TO THE SENDER . HENCE IT IS APPARENT THAT NONE OF THE NOTICES WERE ACTUALLY SERVED ON THE ASS ESSEE. REGARDING NON- SERVICE OF NOTICE, THE LD. AR OF ASSESSEE SUBMITTED THAT DURING THE RELEVANT PERIOD, THE ASSESSEE WAS RESIDING JUST OPPOSITE TO THAT BUILDING AND ALTHOUGH OTHER POSTAL ARTICLES WERE BEING SERVED INCLUDING T HE ORDER OF CIT (A) THESE NOTICES WERE RETURNED BACK FOR THE REASON NOT KNOWN TO THE ASSESSEE. UNDER THESE FACTS, I FEEL IT PROPER THAT IN THE INTEREST OF JUSTICE, THE MATTER SHOULD GO BACK TO THE FILE OF CIT (A) FOR FRESH DECISION AFTE R PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO ASSESSEE. I ORDER ACCORDINGLY IN BOTH YEARS. IN VIEW OF THIS DECISION, NO ADJUDICATION IS CALLED FOR REGARDING T HE MERIT OF THE CASE AT THE PRESENT STAGE IN BOTH THE YEARS. 6. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASS ESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 04 TH MAY, 2018. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.