Smt. Monaz Burzin Mysorewala, Vadodara V. The Income Tax Officer, Ward-8(4), Baroda

ITA 1335/AHD/2015

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8664 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 14-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRIB P SRIVASTAVA
• Assessee Lawyers: O P SURI
• Keywords: Opportunity of being heard; Principle of natural justice; Additional evidence; Valuation report; Audi alteram partem
• Section: 271(1)(c); 54B; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AHMEDABD BENCHES A BENCH AHMEDABAD BEFORE SHRIO. P. MEENA, ACCOUNTANT MEMBER AND MRS. MADHUMITA ROY, JUDICIAL MEMBER I.T.A. NO. 1335/AHD/2015 & 2643/AHD/2017:ASSESSMENT YEAR: 2011-12 MS. MONAZBURZINMYSOREWALA, 402, RIDDHI SIDDHI3, VARUNDAVAN PARK SOCIETY , OPP. VIDHYANI SCHOOL,SAMA, VADODARA 390008 PAN: ARAPM 7618 M VS. INCOME TAX OFFICER, WARD- 8(4) AAYAKARBHAWAN, VADODARA APPELLANT RESPONDENT ASSESSEE BY SHRIBHAVINMARFATIA, CA, & O.P. SURI, A.R. REVENUE BY SHRIB.P. SRIVASTAVA, SR. D.R. DATE OF HEARING 08.04.2019 DATE OF PRONOUNCEMENT 09.04.2019 ORDER PER O. P. MEENA, AM 1. THESE ARE TWO APPEALS BY THE ASSESSEE WHICH ARE DIRE CTED AGAINST THE TWO SEPARATE ORDERS OF LEARNED COMMISSIONER OF INCOME T AX (APPEALS)-4, VADODARA (IN SHORT THE CIT (A)) DATED 02.02.2015 AND 30.08.2017 RESPECTIVELY PERTAINING TO ASSESSMENT YEAR 2011-12, WHICH IN TURN HAS ARISEN F ROM THE ASSESSMENT ORDER PASSED UNDER SECTION 143 (3) DATED 11.02.2014 AND PENALTY ORDER U/S. 271(1)(C) DATED 22.03.2016 RESPECTIVELY UNDER INCOME TAX ACT , 1961 (IN SHORT THE ACT) BY THE INCOME TAX OFFICER, WARD- 8(4) VADODARA (IN SHORT THE AO). 2. FIRST WE TAKE UP QUANTUM APPEAL IN I.T.A.NO. 1335/AH D/2015/AY 2011-12 3. THE ASSESSEE HAS TAKEN 11 NUMBER OF GROUNDS OF APPEA LS WHICH MAINLY RELATES TO CONFIRMING ADDITION OF RS. 39,69,000 UND ER SECTION 69A DESPITE THE FACTS THAT AMOUNT RECEIVED WAS PERTAINING TO SALE OF CAPI TAL ASSET AND ASSESSABLE AS CAPITAL GAINS UNDER SECTION 45 OF THE ACT AND ALSO DENIAL OF BENEFIT OF DEDUCTION UNDER SECTION 54B OF THE ACT BEING INVESTMENT MADE IN PURCHASE OF RESIDENTIAL HOUSE. GROUND NO. 4 RELATES TO TREATING THE ENTIRE AMOUNT OF RS. 60,69,000 AS MONAZBURZINMYSOREWALA V. ITO 8(4) VADODARA/I.T.A. N O.1335/AHD/2015/ &I.T.A.NO. 2643/AHD/2017 A.Y.11-12 PAGE 2 OF 6 INCOME OF THE ASSESSEE WHEREAS PROPERTY WAS SOLD AS JOINT HOLDER. GROUND NO. 5 STATES THAT LD. CIT (A) HAS ERRED IN REJECTING THE AD DITIONAL EVIDENCES FILED BY THE APPELLANT WITHOUT GIVING PROPER OPPORTUNITY OF BEIN G HEARD TO THE ASSESSEE AND NOT APPRECIATING THAT THE DEPARTMENT HAS NOT ALLEGED / PROVED ANY UNDISCLOSED INCOME IN ANY OF THE YEARS AND UPHELD THE CHARGING OF INTE REST U/S. 234B/C AND INITIATING PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT. 4. AT THE OUTSET, THE LEARNED COUNSEL FOR THE ASSESSEE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS SUBMITTED ADDITIONAL EVIDENCE UNDER RULE 46A OF INCOME-TAX RULES, 1962, DURING THE COURSE OF APPELLATE PROCEED INGS FOR WHICH GROUND NO. 5 OF APPEAL HAS BEEN SPECIFICALLY RAISED BEFORE TRIBUNAL . THE ASSESSEE HAS CLAIMED THAT CASH DEPOSITS IN BANK ACCOUNT ON VARIOUS DATES FROM THE AMOUNTS, OVER AND ABOVE, THE SALE PROCEEDS, RECEIVED ON SALE OF FOUR PROPERT IES. OUT OF TOTAL CASH DEPOSITS, RS. 25 LAKH IS IN RELATION TO SALE OF RESIDENTIAL HO USE AND REST IS IN RELATION SALE OF AGRICULTURAL LAND. OUT OF TOTAL LTCG, 50% THEREOF OF HER SHARE, THE ASSESSEE HAS PURCHASED A RESIDENTIAL HOUSE WORTH RS. 19,10,000 O N 29 TH JULY 2010. FURTHER, OUT OF STATED SALE PROCEEDS, ONLY 50% IS TAXABLE IN HER HANDS, AS SHE ALONG WITH HER SISTER HAS INHERITED THE PROPERTY FOR HER FATHER. T HE LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT THE ASSESSEE IS SALARIED EMP LOYEEAND HAS NO OTHER SOURCE OF INCOME. IT WAS FURTHER CLAIMED THAT EVEN THE AO HAS NOT ESTABLISHED ANY OTHER SOURCE OF INCOME FOR THE ASSESSEE. THE ASSESSEE HAS FURNISH VALUATION REPORT DTD. 08.04.2014 FOR THE FLAT SOLD BY HER. THE VALUATION REPORT WAS OBTAINED AFTER ASSESSMENT ORDER HENCE; IT COULD NOT BE SUBMITTED D URING THE COURSE OF ASSESSMENT PROCEEDINGS. THEREFORE, IT WAS URGED BEFORE THE CIT (A) TO ADMIT THE SAME. HOWEVER, THE CIT (A) OBSERVED THAT WHY THE VALUATION REPORT WAS NOT OBTAINEDBEFORE THE SALE OF PROPERTIES. ACCORDINGLY, THE CIT (A) WAS OF THE VIEW THAT THERE WAS NO SUFFICIENT CAUSE FOR NON-PRODUCTI ON OF ADDITIONAL EVIDENCE DURING THE ASSESSMENT PROCEEDINGS AND SUBMITTED DURING THE COURSE OF APPELLATE PROCEEDINGS, HENCE, THE ADDITIONAL EVIDENCE WERE NO T ALLOWED TO BE ADMITTED UNDER RULE 46A OF INCOME-TAX RULES, 1962. THE LEARNED COUN SEL FOR THE ASSESSEE CONTENDED THAT THESEWERE OBTAINED AFTER THE ASSESSM ENT ORDER MADE, HENCE, SAME MONAZBURZINMYSOREWALA V. ITO 8(4) VADODARA/I.T.A. N O.1335/AHD/2015/ &I.T.A.NO. 2643/AHD/2017 A.Y.11-12 PAGE 3 OF 6 COULD NOT BE SUBMITTED BEFORE THE AO. THEREFORE, IT WAS URGED UPON US TO ADMIT THE ADDITIONAL EVIDENCE AND THE APPEAL BE RESTORED BACK TO THE FILE OF THE AO TO ALLOW PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE I N THE INTEREST OF JUSTICE. 5. PER CONTRA, THE LD. SR. D.R. SUBMITTED THAT IN THIS CASE, THE LD. CIT (A) HAS HELD THAT THE ASSESSEE WAS NOT BROUGHT ON RECORD AN Y REASONS BY WHICH HE WAS PREVENTED TO FURNISH AND FILE THESE EVIDENCES BEFOR E THE AO. THEREFORE, THE LD. SR. D.R. HAS OPPOSED THE ADMISSION OF THE SAME AND SUBM ITTED THAT LD. CIT (A) HAS RIGHTLY NOT ADMITTED THE SAME. 6. WE HAVE CONSIDERED THE ORDERS PASSED BY THE LOWER A UTHORITIES. WE FIND THAT THE ASSESSEE HAS INHERITED THE PROPERTY SOLD BY HER FROM HER FATHER HENCE;ONLY 50% OF THE SALE PROCEEDS EARNED FROM SALE OF PROPERTIES IS REQUIRED TO BE CONSIDERED IN HER CASE. IT IS ALSO CONTENDED BEFORE US THAT THE A SSESSEE IS SALARIED EMPLOYEE AND NO OTHER SOURCE OF INCOME HENCE, THE CASH DEPOSITS IN HER BANK ACCOUNT IS CLAIMED TO BE OUT OF OVER AND ABOVE SALE PROCEEDS FOR SALE OF PROPERTIES. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THAT THE AS SESSEE BE GIVEN ONE MOREOPPORTUNITY HEARING TO PRODUCE CONFIRMATION FR OM THE PURCHASER TO ESTABLISH THAT AMOUNT DEPOSITED IN BANK ACCOUNT IS OUT OF SAL E PROCEEDS. IN SUPPORT OF THIS CLAIM, THE ASSESSEE HAS ALSO FURNISHEDCOPY OF VALUA TION REPORT BEFORE CIT(A). HOWEVER, THE SAME WAS NOT ALLOWED TO BE ADMITTED AS SAME WAS NOT FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. HOWEVER, WE F IND THAT THE VALUATION REPORT WAS OBTAINED LATER ON HENCE, IT WAS NOT AVAILABLE A T THE TIME OF ASSESSMENT PROCEEDING. FURTHER, THE LOWER AUTHORITIES DID NOT EXAMINE THE CLAIM OF THE ASSESSEE OF DEDUCTION UNDER SECTION 54. THUS, WE ARE OF THE C ONSIDERED OPINION THAT THE ADDITIONAL EVIDENCE SUBMITTED BY THE ASSESSEE HAVE AMATERIAL BEARING TO DECIDE THE ISSUE. THEREFORE, THE ASSESSEE IS REQUIRED TO BE GIV ENA FAIR CHANCE AND OPPORTUNITY TO THE ASSESSEE IN THE INTEREST OF NATURAL JUSTICE. UNDER THESE CIRCUMSTANCES, IT WAS INCUMBENT UPON CIT (A) TO CONFRONT THESE EVIDENCES W ITH THE AO BY SEEKING A REMAND REPORT AND TO SEEK HIS COMMENTS. IN ABSENCE OF THE SAME, THE ORDER PASSED BY THE LD. CIT (A) IS PASSED IN VIOLATION OF PRINCIPL ES OF NATURAL JUSTICE. THE PRINCIPLE OF AUDI ALTERAM PARTEM IS THE BASIC CONCEPT OF NATURAL JUSTICE. THE MONAZBURZINMYSOREWALA V. ITO 8(4) VADODARA/I.T.A. N O.1335/AHD/2015/ &I.T.A.NO. 2643/AHD/2017 A.Y.11-12 PAGE 4 OF 6 EXPRESSION AUDI ALTERAM PARTEM IMPLIES THAT A PERSON MUST BE GIVEN AN OPPORTUNITY TO DEFEND HIMSELF. THIS PRINCIPLE IS SINE QUA NON OF EVERY CIVILIZED SOCIETY. THE RIGHT TO NOTICE, RIGHT TO PRESENT CAS E AND EVIDENCE, RIGHT TO REBUT ADVERSE EVIDENCE, RIGHT TO CROSS EXAMINATION, RIGHT TO LEGAL REPRESENTATION, DISCLOSURE OF EVIDENCE TO PARTY, REPORT OF ENQUIRY TO BE SHOWN TO THE OTHER PARTY AND REASONED DECISIONS OR SPEAKING ORDERS. WE FIND THAT THE GUIDANCE FOR RIGHT OF HEARING, AS IS LAID DOWN BY THE HON'BLE SUPREME COU RT IN THE CASE OF MANEKA GANDHI V. UNION OF INDIA, WHEREIN HON'BLE SUPREME C OURT HAS HELD THAT RULE OF FAIR HEARING IS NECESSARY BEFORE PASSING ANY ORDER. WE F IND THAT IT IS PRE-DECISION HEARING STANDARD OF NORM OF RULE OF AUDI ALTERAM PARTEM. AFTER TAKING INTO ACCOUNT ALL THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIN D IT APPROPRIATE TO SEND THIS ISSUE BACK TO THE FILE OF THE AO. THE ASSESSEE SHALL SUBM IT ALL THE EVIDENCES BEFORE THE AO IN SUPPORT OF ITS CLAIM AND SHALL BE FREE TO RAI SE ALL LEGAL AND FACTUAL ISSUES BEFORE THE AO. THE AO SHALL GIVE ADEQUATE OPPORTUNI TY OF HEARING TO THE ASSESSEE AND SHALL DECIDE THE ALL ISSUES AFRESH AFTER CONSID ERING ALL THE DETAILS. THE ASSESSEE MAY PLACE ANY EVIDENCES AND JUDGEMENTS AS HE WANTS TO SUPPORTS HIS CASE. THE AO WILL CONSIDER THE CLAIM OF DEDUCTION UNDER SECTION 54 MADE BY THE ASSESSEE. THE AO WILL ALSO EXAMINE WHETHER THE ENTER RECEIPTS FOR SALE PROCEEDS OF FLATS IS REQUIRED TO BE ASSESSED IN THE HANDS OF THE ASSESSE E OR ONLY 50% BEING HER SHARE IN PROPERTY SOLD UNDER CONSIDERATION. THE ASSESSEE SHA LL ALSO FILE ITS SUBMISSIONS ALONG WITH REQUISITE EVIDENCES WITH REGARD TO ALL T HE REASONS GIVEN BY THE AO IN THE ASSESSMENT ORDER, WHICHSHALL BE DULY CONSIDERED BY THE AO BEFORE DECIDING THIS ISSUE AFRESH. WITH THESE DIRECTIONS, THIS WHOLE ISS UE ARISING IN THE PRESENT APPEAL FROM ASSESSMENTORDER IS SET-ASIDE TO THE FILE OF TH E AO FOR DENOVA CONSIDERATION OF THE ENTIRE ISSUES AS FRESH. ACCORDINGLY, ALL GROUND S OF APPEAL AS PER GROUNDS OF APPEAL OF THE ASSESSEE MAY BE TREATED AS ALLOWED FO R STATISTICAL PURPOSES. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. I.T.A.NO. 2643/AHD/2017/A.Y. 2011-12/PENALTY UNDER SECTION 271(1)(C): 8. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 30.08.2017 OF COMMISSIONER OF INCOME-TAX (APPEALS)-4, VADODARA (IN SHORT CIT(A)) AND MONAZBURZINMYSOREWALA V. ITO 8(4) VADODARA/I.T.A. N O.1335/AHD/2015/ &I.T.A.NO. 2643/AHD/2017 A.Y.11-12 PAGE 5 OF 6 RELATES TO ASSESSMENT YEAR 2011-12, IN CONFIRMING P ENALTY OF RS.11,44,945 UNDER SECTION 271(1)(C) OF THE ACT. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE FIND THAT WE HAVE SET-ASIDE THE QUANTUM ADDITION FOR THIS ASSESSMENT YEAR TO THE FILE OF THE AO VIDE ITA NO. 1335/AHD/201 5/A.Y. 2011-12OF EARLIER PART OF THIS ORDER IN RESPECT OF ITEMS ON WHICH PENALTY WAS LEVIEDFOR FRESH CONSIDERATION.HENCE, THE ISSUE ON WHICH PENALTY IS LEVIED IS NO LONGER SURVIVED; THEREFORE, PENALTY LEVIED IS NOT MAINTAINABLE AS OF NOW. ACCORDINGLY, WE DELETE THE PENALTY SO LEVIED SUBJECT TO CONDITION THAT THE AO IS FREE TO RE-INITIATE PENALTY PROCEEDINGS UNDER SECTION 271 (1) (C) OF THE ACT, O N FINALIZATION OF DENOVA SET- ASIDE ASSESSMENT PROCEEDINGS, IF THE CIRCUMSTANCES SO WARRANT OR HE THINKS FIT. 10. IN THE RESULT, THIS APPEAL OF THE ASSESSEE STANDS A LLOWED. 11. IN THE RESULT, THE APPEAL OF THE QUANTUM APPEAL AS WELL AS PENALTY OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES FOR A. Y.2011-12 IN I.T.A.NO.1335/AHD/2015 &THE APPEAL IN I.T.A.NO. 2643/ AHD/2017 A.Y. 2011- 12 IS ALLOWED. 12. THE ORDER PRONOUNCED IN THE OPEN COURT ON 09.04.20 19 SD/- SD /- (MADHUMITA ROY) (O.P.MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED: 09 TH APRIL, 2019/OPM COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A) / ITAT (DR)/GUARD FILE OF ITAT. BY ORDER ASSISTANT REGISTRAR, AHMEDABAD