Sh. Amit Gupta, New Delhi V. ACIT, Gurgaon

ITA 1323/DEL/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90927 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 20-04-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 07-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B R R KUMAR
• Keywords: Reopening of assessment; Capital asset; Reasonable cause; Assessment record
• Section: 54F; 234B; 147; 148; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A , NEW DELHI BEFORE SH. N. K. SAINI , AM AND SH. A. T. VARKEY , JM ITA NO. 1323/DEL/2014 : ASSTT. YEAR : 2009 - 10 AMIT GUPTA, C - 65A, S HIVAJI PARK, NEW DELHI VS ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1(1), GURGAON (APPELLANT) (RESPONDENT) PAN NO. AB LPG3025F ASSESSEE BY : SH. K. SAMPATH , ADV. REVENUE BY : SH . B. R. R. KUMAR , SR. DR DATE OF HEARING : 20 . 04 .201 5 DATE O F PRONOUNCEMENT : 22 .04 .2015 ORDER PER N.K . SAINI , A.M. THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 23.12.2013 OF THE L D. CIT(A) , FARIDABAD . 2. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL : - 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), FARIDABAD HAS ERRED IN CONCLUDING THAT THE REOPENING OF THE ASSESSMENT PROCEEDINGS HAVE BEEN LEGAL AND NOT BEYOND THE JURISDICTION OF THE LEARNED ASSESSING OFFICER AS THERE WAS NOTHING FROM THE ASSESSMENT RECOR DS THAT INCOME HAD ESCAPED ASSESSMENT AND THAT THE REOPENING WAS MADE ON THE BASIS OF INFORMATION RECEIVED FROM THE DIRECTORATE OF INVESTIGATION AND HENCE THE REOPENING U/S 147/148 IS BAD IN LAW. ITA NO.1323 /DE L/2014 AMIT GUPTA 2 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), FARIDABAD HAS ERRED IN DENYING THE LEGITIMATE DEDUCTION CLAIMED BY THE APPELLANT U/S 54/54F IN RESPECT ON NEW RESIDENTIAL PROPERTY BOUGHT AGAINST SALE OF COMMERCIAL PROPERTY AS ALLEGED BY THE LEARNED ASSESSING OFFICER. 3. THAT IT IS ACCORDINGLY PRAYED THA T THE EXEMPTIONS DENIED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) MAY KINDLY BE DELETED. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY GROUND OF APPEAL. 3. THE ASSESSEE ALSO RAISED THE FOLLOWING ADDITIONAL GROUNDS: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT(A) ERRED IN REJECTING THE FOLLOWING TWO ADDITIONAL GROUNDS OF APPEAL WHICH WERE SOUGHT TO BE MOVED BEFORE HIM: 1. THE HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. AO HAS ERRED IN LAW AND ON FACTS IN NOT ALLOWING THE DEDUCTION U/S 54F; 2. IN ANY VIEW OF THE MATTER AND IN ANY CASE DEDUCTION U/S 54F OUGHT TO HAVE BEEN ALLOWED TO THE APPELLANT. THE REFUSAL OF THE CIT(A) IN REJECTING THE GROUNDS OF APPEAL IS ARBITRARY, ERRONEOUS AND UNLAWFUL MUST BE QUASHED WITH DIRECTIONS FOR ITS ADMISSION AND ADJUDICATION. ITA NO.1323 /DE L/2014 AMIT GUPTA 3 4 . DURING THE COURSE OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE GROUNDS NOW RAISED AS ADDITIONAL GROUNDS WERE ALREADY INCLUDED IN ORIGINAL GROUND NO. 2 BUT NOW HAS BEEN E LABORATED AND ALSO REQUESTED TO ADMIT THE ADDITIONAL GROUNDS. THE LD. DR ALTHOUGH OPPOSED THE ADMISSION OF ADDITIONAL GROUND BUT COULD NOT CONTROVERT THIS CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE ADDITIONAL GROUNDS ARE PURELY LEGAL IN NATURE . IT IS WELL SETTLED THAT THE LEGAL GROUND CAN BE RAISED ANY TIME AS PER THE RATIO LAID DOWN BY THE HON BLE SUPREME COURT IN THE CASE OF NTPC LTD. VS CIT REPORTED AT 229 ITR 383 , THEREFORE, THESE ARE ADMITTED . 5. THE FACTS OF THE CASE IN BRIEF ARE THAT T HE ASSESSEE FILED THE RETURN OF INCOME ON 29.07.2009 DECLARING AN INCOME OF RS. 56,74,539/ - FROM HOUSE PROPERTY, RS. 2,93,704/ - AS INCOME FROM OTHER SOURCES AND RS. 10,67,16,676/ - AS INCOME FROM LONG TERM CAPITAL GAIN. THE ASSESSEE ALSO CLAIMED DEDUCTION O F RS. 4,83,09,106/ - U/S 54 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). LATER ON, THE AO NOTICED THAT THE CAPITAL ASSETS SOLD WAS AN INDUSTRIAL BUILD ING AND NOT A RESIDENTIAL HOUSE, A S SUCH DEDUCTION CLAIMED U/S 54 OF THE ACT WAS NOT A LLOWABLE. THEREAFTER T HE AO ISSUED NOTICE U/S 148 OF THE ACT ON 18.11.2011 AFTER ITA NO.1323 /DE L/2014 AMIT GUPTA 4 RECORDING THE R E ASONS AND ASSESSED THE INCOME U/S 147 OF THE ACT AT RS. 16,09,94,025/ - BY MAKING A N ADDITION OF RS. 4,83,09,106/ - . THE AO ALSO DID NOT ALLOW THE DEDUCTION U/S 54 OF THE ACT. 6. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND CHALLENGED TH E REOPENING U/S 147 OF THE ACT AND ALSO RAISED THE FOLLOWING ADDITIONAL GROUNDS: 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. AO HAS ERRED IN LAW AND ON FACTS IN NOT ALLOWING THE DEDUCTION U/S 54F. 2. IN ANY VIEW OF THE MATTER AND IN ANY CASE DEDUCTION U/S 54F OUGHT TO HAVE BEEN ALLOWED TO THE APPELLANT. 7 . THE LD. CIT(A) DID NOT ADMIT THE AFORESAID ADDITIONAL GROUN DS BY OBSE RVING IN PARA 2.4, 2.5 , 2.9, 2 . 15 & 2.16 OF THE IMPUGNED ORDER AS UNDER: 2.4 I HAVE CONSIDERED THE FACTS OF THE CASE ALONG WITH THE APPELLANT S RATIONALE FOR ADMISSION OF ADDITIONAL GROUNDS OF APPEAL. THE ADMISSION OF ADDITIONAL GROUNDS OF APPEAL IS DEAL T IN SECTION 250(5) OF THE INCOME TAX ACT, WHICH IS REPRODUCED HEREUNDER: THE (COMMISSIONER (APPEALS)) MAY, AT THE HEARING OF AN APPEAL, ALLOW THE APPELLANT TO ITA NO.1323 /DE L/2014 AMIT GUPTA 5 GO INTO ANY GROUND OF APPEAL NOT SPECIFIED IN THE GROUNDS OF APPEAL, IF THE (COMMISSIONER (APP EALS)) IS SATISFIED THAT THE OMISSION OF THAT GROUND FROM THE FORM OF APPEAL WAS NOT WILLFUL OR UNREASONABLE. 2.5 IN THE LIGHT OF THE PROVISIONS OF THIS SECTION, LET US EXAMINE THE FACTS OF THE CASE FOR DECIDING THE ISSUE OF ADMISSION OF ADDITIONAL GROUN DS SUBMITTED BY THE APPELLANT. 2.6 2.7 2.8 2.9 IN ADDITION TO ITS SUBMISSIONS, THE APPELLANT HAS RELIED UPON A NUMBER OF PROMINENT JUDICIAL PRONOUNCEMENTS. ON A PERUSAL OF THESE CASE LAWS, IT IS EVIDENT THAT THERE ARE SIGNIFICANT DIFFERENCES BETWEEN THE CASE IN QUESTION AND THE CASES RELIED UPON BY THE APPELLANT. FOR INSTANCE, IN THE CASE OF NTPC LTD. VS CIT 229 ITR 383 (SUPREME COURT), THEIR LORDSHIPS DEALT WITH THE POWER OF ITAT IN ADMITTING ADDITIONAL GROUNDS OF APPEAL WHEREAS IN THIS CASE THE ISSUE IS THE CIRCUMSTANCES UNDER WHICH THE CIT(A) CAN ADMIT ADDITIONAL GROUNDS. IT IS WORTHWHILE MENTIONING HERE THAT IN GOETZE INDIA LTD. VS CIT (SUPRA), THE HON BLE APEX COURT HELD THAT THE CASE OF NTPC LTD. IS APPLICABLE ONLY TO THE HON BLE ITAT. FURTHERMORE, IN THE CASE OF NTPC LTD. VS CIT (SUPRA), RELIED UPON BY THE APPELLANT, THE APPELLANT HAD GIVEN COGENT REASONS FOR INCLUDING THE ADDITIONAL GROUNDS OF APPEAL. TO BE MORE PRECISE THE REASON WAS THAT ON ACCOUNT OF TWO ORDERS OF SPECIAL BENCHES OF TRIBUNAL IN THE CASE OF ARASAN ALUMINUM ITA NO.1323 /DE L/2014 AMIT GUPTA 6 INDUSTRIES PVT. LTD. VS FIRST ITO (1 ITD 10 MAD SB) AND CIT VS NAGARJUNA STEELS LTD. (3 ITD 296 HYD . SB), THE ASSESSEE LEARNT THAT THE INTEREST EARNED BEFORE SETTING UP OF BUSINESS WAS NOT TAXABLE AS INCO ME. ON LEARNING ABOUT THE SAID LEGAL POSITION, THE ASSESSEE SOUGHT TO INCLUDE THE ABOVE GROUND IN THE GROUND OF APPEAL. HENCE, THE REASON FOR ADMITTING ADDITIONAL GROUND WAS THAT THE APPELLANT GOT SOME NEW INFORMATION WHICH HE WAS NOT AWARE OF AT THE TIME OF FILING THE APPEAL. IN THE PRESENT CASE, HOWEVER, NO NEW INFORMATION CAME IN THE POSSESSION OF THE APPELLANT WHICH COULD LEAD TO THE CONCLUSION THAT IT WOULD BE REASONABLE TO ADMIT THE ADDITIONAL GROUND OF APPEAL. 2.15 SIMILARLY, IN THE CASE OF S. KUMAR TYRE MANUFACTURING PVT. LTD. VS DCIT (1997) 61 ITD 326 (INDORE), THE APPELLANT COMPANY SOUGHT TO RAISE ADDITIONAL GROUND AGAINST LEVY OF INTEREST U/S 234B BEFORE TRIBUNAL, WHICH WAS NOT AGITATED BEFORE THE CIT(A). IT WAS HELD THAT SINCE NO CONVINCING REAS ON HAD BEEN SHOWN BY THE APPELLANT AS TO WHY AFORESAID GROUND WAS NOT RAISED BEFORE THE COMMISSIONER(APPEALS) AS WELL AS IN MEMORANDUM OF APPEAL BEFORE THE TRIBUNAL, THE ADDITIONAL GROUNDS COULD NOT BE ADMITTED. HENCE, AFTER A CAREFUL CONSIDERATION OF THE FACTS OF THE CASE, THE SUBMISSIONS OF THE LEARNED COUNSEL OF THE APPELLANT AND VARIOUS JUDICIAL PRONOUNCEMENTS, THE ADDITIONAL GROUND RAISED BY THE APPELLANT IS NOT ADMITTED. 2.16 HAVING REJECTED THE ADDITIONAL GROUNDS SUBMITTED BY THE APPELLANT DURING TH E COURSE OF APPELLATE PROCEEDINGS, LET US EXAMINE VARIOUS ITA NO.1323 /DE L/2014 AMIT GUPTA 7 GROUNDS OF APPEAL FILED AT THE TIME OF FILING OF APPEAL. 8 . THE LD. CIT(A) ALSO DID NOT FIND MERIT IN THE ARGUMENTS OF THE ASSESSEE RELATING TO THE REOPENING U/S 147 OF THE ACT. 9 . NOW THE ASSESS EE IS IN APPEAL. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE ADDITIONAL GROUNDS RAISED BY THE ASSESSEE BEFORE THE LD. CIT(A) WERE PURELY LEGAL ISSUES WHICH GO TO THE ROOT OF M ATTER AND DID NOT REQUIRE FRESH FACTS TO BE INVESTIGATED. THEREFORE, THE LD. CIT(A) WAS NOT JUSTIFIED IN NOT ADMITTING THE ADDITIONAL GROUNDS RAISED BY THE ASSESSEE. HE FURTHER SUBMITTED THAT THE LD. CIT(A) ALSO REJECTED THE GROUND S RELATING TO INITIATION OF PROCEEDINGS U/S 147 OF THE ACT BY PASSING A NON - SPEAKING ORDER. OUR ATTENTION WAS DRAWN TOWARDS PARA 4 OF THE IMPUGNED ORDER. 10 . IN HIS RIVAL SUBMISSIONS THE LD. DR STRONGLY SUPPORTED THE ORDER OF THE LD. CIT(A). 11 . WE HAVE CONSIDERED THE SUBMISSION S OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT IS NOTICED THAT THE LD. CIT(A) ITA NO.1323 /DE L/2014 AMIT GUPTA 8 REJECTED THE GROUND S RAISED BY THE ASSESSEE AGAINST THE REOPENING OF ASSESSMENT BY OBSERVING IN PARA 4 OF THE IMPU GNED ORDER AS UNDER: GROUND NOS. 3 AND 4 ARE AGAINST RE - OPENING OF ASSESSMENT U/S 147 OF THE INCOME TAX ACT. AS PER THESE GROUNDS, THE AO DID NOT COMPLY WITH THE MANDATORY CONDITIONS OF SECTION 147 TO 151 OF THE INCOME TAX ACT WHILE INITIATING PROCEEDING S U/S 147 OF THE INCOME TAX ACT AND THUS THE RE - OPENING WAS BAD IN LAW AND BEYOND JURISDICTION. ON A PERUSAL OF THE ASSESSMENT RECORDS TOGETHER WITH A CAREFUL CONSIDERATION OF THE PROVISIONS OF LAW, I DO NOT FIND ANY FORCE IN APPELLANT S CONTENTION. THE AO ON THE BASIS OF INFORMATION RECEIVED FROM THE DIRECTORATE OF INVESTIGATION, GURGAON AND AFTER DUE APPLICATION OF MIND RECORDED REASONS FOR RE - OPENING THE CASE U/S 147 OF THE INCOME TAX ACT AND ACCORDINGLY ISSUED A NOTICE U/S 148 OF THE INCOME TAX ACT ON 1 8.11.2011. SINCE THIS CASE PERTAINS TO ASSESSMENT YEAR 2009 - 10 AND THE NOTICE U/S 148 WAS ISSUED ON 17.11.2011, IT WAS WELL WITHIN THE TIME LIMIT LAID DOWN FOR ISSUING NOTICE U/S 149 OF THE INCOME TAX ACT. SINCE THIS CASE WAS NOT ASSESSED EARLIER U/S 143(3 )/147 AND THE NOTICE HAD BEEN ISSUED WITHIN A PERIOD OF 4 YEARS FROM THE END OF RELEVANT ASSESSMENT YEAR, THE ACIT CIRCLE - I(1), GURGAON WAS COMPETENT ENOUGH TO ISSUE A SAID NOTICE. GROUND NOS. 3 AND 4 HEREBY REJECTED. 12 . FROM THE AFORESAID OBSERVATION, IT IS CLEAR THAT THE LD. CIT(A) JUSTIFIED THE REOPENING FOR ONLY ON THIS BASIS THAT THE NOTICE ISSUED U/S 148 OF THE ACT WAS WITHIN THE TIME ITA NO.1323 /DE L/2014 AMIT GUPTA 9 LIMIT LAID DOWN U/S 149 OF THE ACT AND THAT THE AO RECORDED THE REASON ON THE BASIS OF INFORMATION RECEIVED FROM TH E DIRECTORATE OF INVESTIGATION, GURGAON, HOWEVER, HE NEITHER DISCUSSED THE SUBMISSIONS OF THE ASSESSEE NOR GAV E THE REASONS FOR REJECTING THE SAME . IN OUR OPINION THE ORDER OF THE LD. CIT(A) WHILE REJECTING THE GROUND RAISED BY THE ASSESSEE AGAINST REOPENI NG OF ASSESSMENT U/S 147 OF THE ACT IS A NON - SPEAKING ORDER PARTICULARLY WHEN HE HAS NOT DISCUSSED THE SUBMISSIONS OF THE ASSESSEE AND ALSO DID NOT GIVE THE REASON IN SUPPORT OF HIS CONCLUSION. AS REGARDS TO THE ISSUE RELATING TO THE ADMISSION OF THE LEGAL GROUND S, IT IS NOTICED THAT THE LD. CIT(A) WITHOU T CONSIDERING THIS FACT THAT THOSE GROUNDS RAISED WERE PURELY LEGAL IN NATURE AND GO TO THE ROOT OF THE MATTER , DISMISS ED THE SAME BY STATING THAT THERE WAS NO REASONABLE CAUSE FOR ADDING THE ADDITIONAL GRO UNDS OF APPEAL AT STAGE OF APPELLATE PROCEEDINGS. IN OUR OPINION THE LD. CIT(A) OUGHT TO HAVE ADMITTED THE ADDITIONAL GROUNDS AND THEREAFTER HE SHOULD HAVE DECIDED THE SAME BY CONSIDERING THE SUBMISSIONS OF THE ASSESSEE. WE, THEREFORE, CONSIDERING THE TOTA LITY OF THE FACTS OF THE PRESENT CASE, DEEM IT APPROPRIATE TO SET ASIDE THIS CASE BACK TO THE FILE OF THE LD. CIT(A) TO BE ADJUDICATED AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF BEING ITA NO.1323 /DE L/2014 AMIT GUPTA 10 HEARD TO THE ASSESSEE . HE SHOULD PA SS A SPEAKING ORDER ON THE ADDITIONAL GROUNDS RAISED BEFORE HIM AS WELL AS THE GROUND S AGITATED FOR REOPENING U/S 147 OF THE ACT. 1 3 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . ( ORDER PRON OUNCED IN THE COURT ON 22 /04 / 2015) . SD/ - SD/ - (A. T. VARKEY ) ( N. K. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 22 /04 /2015 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR