Sh. Harish ChandManchanndi, Jhansi V. I.T.O., Ward-6(1), Jhansi

ITA 130/AGR/2012

• Counselvise Citation: 13020314 RSA 2012
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2003-2004
• Appeal Filed On: 09-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K SHARMA
• Keywords: Salary income; Principle of natural justice; Valuation report
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, SMC, AGRA BEFORE SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NOS.130 & 131/AGR/2012 ASSESSMENT YEAR : 2003-04 & 2004-05 RESPECTIVELY HARISH CHANDRA MANCHANDANI, VS. INCOME TAX OFFICE R, 676, CHAMAN GANJ, WARD 6(1), JHANSI. SIPRI BAZAR, JHANSI. (PAN: ABMPC 3003 C) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI NAVIN GARG, ADVOCATE RESPONDENT BY : SHRI A.K. SHARMA, JR. D.R. DATE OF HEARING : 12.06.2012 DATE OF PRONOUNCEMENT : 12.06.2012 ORDER THESE ARE APPEALS FILED BY THE ASSESSEE AGAINST THE COMMON ORDER DATED 22.11.2011 PASSED BY THE LD. CIT(A)-II, AGRA FOR AS SESSMENT YEARS 2003-04 & 2004-05 RESPECTIVELY. 2. COMMON GROUNDS HAVE BEEN RAISED BY THE ASSESSEE IN BOTH THE APPEALS. FOR THE PURPOSE OF READY REFERENCE, GROUNDS OF APPEAL I N ITA NO.130/AGR/2012 FOR A.Y. 2003-04 ARE REPRODUCED AS UNDER:- 1. BECAUSE IN ANY VIEW, THE LD. CIT(A) HAS GROSSLY ERRED IN NOT ADJUDICATING AND CONSIDERING THE LEGAL GROUND NO.1, (AGAINST PROCEEDING U/S 147). ITA NOS.130 & 131/AGR/2012 A.YS. 2003-04 & 2004-05 2 2. BECAUSE IN ANY VIEW THE LD. CIT(A) HAS ERRED IN NOT ADJUDICATING AND CONSIDERING THE GROUND NO.4. 3.1. BECAUSE IN ANY VIEW THE LD. CIT(A) HAS ERRED I N CONFIRMING THE IMPUGNED GROUND NO.2 & 3 I.E. AGAINST ADDITION RS.1 ,46,534/- EXPARTE. THE APPELLANT WAS UNDER THE BONAFIDE BELI EF THAT THE IMPUGNED APPEAL BEFORE LD. CIT(A), IS BEING DULY RE PRESENTED BY THE COUNSEL ENGAGED. 3.2 BECAUSE IN ANY VIEW, THE LD. CIT(A) HAS ERRED I N CONFIRMING THE ADDITION OF RS.1,46,534/-, AND BY NOT CONSIDERING/C ALLING THE ADJUDICATION IN APPEAL/APPEAL ORDER OF BASE ASSESSM ENT YEAR 2006- 07, W.R.T. THE ADDITION MADE IN RESPECT OF COST OF CONSTRUCTION DETERMINED BY THE DVO, ON THE BASIS OF WHICH THE PR OCEEDINGS U/S 147 WAS INITIATED IN THIS IMPUGNED EARLIER A.Y. 2003-2 004, AS SUBSTANTIAL RELIEF HAS BEEN GIVEN ON THIS ISSUE IN TOTALITY, BY THE LD. CIT(A) IN A.Y. 2006-07, VIDE ORDER DT. 20.04.2010, AND NO FURTHER APPEAL HAS BEEN FILED BY THE DEPARTMENT. 4. BECAUSE IN ANY VIEW, AND WITHOUT PREJUDICE TO TH E ABOVE GROUNDS, ADDITIONS MADE, INTEREST CHARGED, AND THE ASSESSMENT ORDER PASSED ARE WRONG, ILLEGAL, WITHOUT PROPER OPPORTUNI TY, BAD IN LAW AND AGAINST THE FACTS AND LAW OF THE CASE. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E DERIVES INCOME FROM SALARY FROM MANOJ SWEETS AND BUSINESS OF SWEET MAKING IN P RIVATE CATERING. DURING THE ASSESSMENT PROCEEDINGS, IT WAS NOTICED THAT THE ASS ESSEE HAS MADE INVESTMENT IN BUILDING DURING THE A.Y. 2006-07. IT WAS SUBMITTED THAT THERE ARE THREE PERSONS NAMELY INDRA KUMAR, HARISH KUMAR & MANOJ KUMAR WHO ARE JOINT INVESTORS IN THE INVESTMENT OF CONSTRUCTION OF HOTEL BUILDING. THE MATTER WAS REFERRED TO VALUATION CELL FOR VALUATION OF THE HOTEL BUILDING. IT WAS N OTICED THAT THE ASSESSEE HAS DECLARED COST OF CONSTRUCTION FROM F.Y. 2002-03 TO 2006-07. IN A.Y. 2003-04 THE ONE THIRD SHARE OF THE ASSESSEE WHICH COMES TO RS.1 ,46,534/- ON THE BASIS OF ITA NOS.130 & 131/AGR/2012 A.YS. 2003-04 & 2004-05 3 VALUATION REPORT AND IT WAS FOUND THAT THE INVESTME NT WAS MADE OUT OF UNDISCLOSED SOURCES. AFTER RECORDING THE REASONS, THE A.O. ISS UED NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER). THE A.O. MADE ADDITION OF RS.1,46,534/- FOR A.Y. 2003-04 AND RS.1,26,871/- FO R A.Y. 2004-05. THE ADDITIONS MADE BY THE A.O. HAS BEEN CONFIRMED BY THE CIT(A). THE ASSESSEE DID NOT APPEAR BEFORE THE CIT(A). THE CIT(A) PROCEEDED TO DECIDE THESE APPEALS ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 4. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THE ASSESSEE HAS CHALLENGED THE PROCEEDINGS UNDER SECTION 147 OF THE ACT BY GROUND NO.1 BEFORE THE CIT(A), BUT THE CIT(A) DID NOT ADJUDICATE THE SAID LEGAL GROUND. THEREFORE, GROUND NO.1 HAS BEEN RAISED BEFORE THE I.T.A.T. 5. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THE REOPENING OF COMPLETED ASSESSMENT HAS BEEN CHALLENGED BY THE ASS ESSEE ON THE GROUND THAT THE A.O. IS NOT EMPOWERED TO INVOKE SECTION 147 ON THE BASIS OF VALUATION REPORT. HE FURTHER SUBMITTED THAT THERE ARE OTHER CONTENTIONS ALSO FOR CHALLENGING THE AUCTION OF THE A.O. UNDER SECTION 147 OF THE ACT. LD. AUTH ORISED REPRESENTATIVE FURTHER SUBMITTED THAT GROUND NO.4 IS IN RESPECT OF NON-PRO VIDING REASONABLE OPPORTUNITY OF HEARING BY THE CIT(A). IT WAS ALSO SUBMISSION OF T HE LD. AUTHORISED REPRESENTATIVE THAT IN A.Y. 2006-07 THE CIT(A) ALLO WED RELIEF IN QUANTUM ITA NOS.130 & 131/AGR/2012 A.YS. 2003-04 & 2004-05 4 ADDITION. LD. AUTHORISED REPRESENTATIVE ACCORDINGL Y SUBMITTED THAT THE MATTER MAY BE SENT BACK TO THE FILE OF THE CIT(A) FOR ADJU DICATION LEGAL GROUND WELL AS GROUND ON MERIT. 6. THE LD. DEPARTMENTAL REPRESENTATIVE, ON THE OTHE R HAND, RELIED UPON THE ORDER OF CIT(A). 7. I HAVE HEARD THE LD. REPRESENTATIVES OF THE PART IES AND RECORDS PERUSED. I FIND THAT THE ASSESSEE HAS RAISED LEGAL GROUND CHAL LENGING ACTION OF THE A.O. IN INVOKING SECTION 147 OF THE ACT, BUT THE CIT(A) DID NOT ADJUDICATE THIS LEGAL GROUND. IT HAS ALSO BEEN NOTICED THAT THE CIT(A) D ECIDED THE MERIT CONSIDERING THE MATERIAL ON RECORD AS THE ASSESSEE DID NOT PUT HIS PRESENCE BEFORE HIM. THOUGH THE CIT(A) HAS PROVIDED OPPORTUNITY OF HEARING, BUT THE ASSESSEE FAILED TO MAKE COMPLIANCE OF THOSE NOTICES. THE CONTENTION OF THE ASSESSEE WAS THAT THE PRESENCE COULD NOT BE MADE BEFORE THE CIT(A) DUE TO INADVERT ENT MISTAKE WITHOUT BAD INTENTION. HOWEVER, THE ASSESSEE WAS HAVING NO SUF FICIENT REASON FOR NOT APPEARING BEFORE THE CIT(A), BUT CONSIDERING THE PRINCIPLE OF NATURAL JUSTICE, I FIND IT APPROPRIATE TO SEND BACK THE MATTER TO THE FILE OF THE CIT(A) TO ADJUDICATE THE LEGAL GROUND AND ALSO GROUNDS ON MERIT AFRESH IN ACCORDAN CE WITH LAW, AFTER PROVIDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. ITA NOS.130 & 131/AGR/2012 A.YS. 2003-04 & 2004-05 5 8. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASS ESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE OPEN COURT ON 12.06.2012) SD/- (A.L. GEHLOT) ACCOUNTANT MEMBER PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, AGRA BENCH, AGRA 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY