Smt Shivamma , Mysore V. The Income Tax Officer Ward-1(2), Mysore

ITA 1422/BANG/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4723 (ITAT-BANGALORE)
• Duration Of Justice: 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 03-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: NARENDRA SHARMA SHRI INDE
• Keywords: Capital asset; Opportunity of being heard; Cost of acquisition; Condonation of delay
• Section: 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC C BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER ITA NOS. A.Y. APPELLANTS V. RESPONDENT 1419/BANG/2018 2008-09 SMT. KEMPAMMA D/O. LATE SRI MOTISIDDEGOWDA PAN: ECNPK 8634R THE INCOME TAX OFFICER, WARD 1(2), MYSURU. 1420/BANG/2018 2008-09 SMT. SAKAMMA D/O. LATE SRI MOTISIDDEGOWDA PAN: GKHPS 8976Q 1421/BANG/2018 2008-09 LATE SMT. MADAMMA L/R BY SRI MAHADEVU PAN: CZ O PM 5889C 1422/BANG/2018 2008-09 SMT. SHIVAMMA, D/O. LATE SRI MOTISIDDEGOWDA PAN: GNGPS 6289Q 1423/BANG/2018 2008-09 SRI MAHADEVU, S/O. LATE SRI MOTISIDDEGOWDA, PAN: BLAPM 9307C 1424/BANG/2018 2008-09 SMT. NINGAMMA, D/O. LATE SRI MOTISIDDEGOWDA PAN: AZNPN 5717F DADADAHALLI, JAYAPURA HOBLI. MYSORE TQ . APP ELLANT BY : SHRI NARENDRA SHARMA, ADVOCATE RESPONDENT BY : SHRI INDER SALANIK , JT.CIT(DR)(ITAT), BENGALURU. DATE OF HEARING : 28 .05.2018 DATE OF PRONOUNCEMENT : 01.06.2018 ITA NOS.1419 TO 1424/BANG/2018 PAGE 2 OF 7 O R D E R THESE APPEALS BY SIX DIFFERENT ASSESSEES ARE AGA INST SIX DIFFERENT ORDERS PASSED BY THE CIT(APPEALS), MYSORE, ALL DATE D 31.10.2017 WHICH RELATE TO ASSESSMENT YEAR 2008-09. ALL THESE APPEA LS ARISE UNDER IDENTICAL FACTS AND CIRCUMSTANCES AND INVOLVE IDENTICAL ISSUE S. THEY WERE HEARD TOGETHER. I DEEM IT CONVENIENT TO PASS A CONSOLIDA TED ORDER. 2. THE FACTS IN ALL THESE CASES ARE THAT THE ASSES SEES OWNED LAND IN THE OUTSKIRTS OF CITY OF MYSORE. ACCORDING TO THE ASSESSEES, LANDS OWNED BY THEM WERE AGRICULTURAL LAND. ALL THESE ASSESSEE S ENTERED INTO AGREEMENT DATED 14.06.2007 FOR SALE OF THEIR LAND W ITH ONE SHRI R. VEERESH, S/O. R.S. RAJASHEKAR, # 4, K. LINGAIAH COL ONY, NAZARBAD, MYSORE [HEREINAFTER REFERRED TO AS THE DEVELOPER] FOR A SALE CONSIDERATION OF RS.8,12,429 EACH. 3. ACCORDING TO THE AO, THE LANDS IN QUESTION WERE SITUATED WITHIN 8 KMS. FROM THE CORPORATION LIMITS OF MYSORE AND WERE CAPITAL ASSETS AS PER SECTION 2(14)(III) OF THE INCOME-TAX ACT, 1961 [TH E ACT] AND THEREFORE THE CAPITAL GAIN ON SUCH SALE WAS LIABLE TO TAX UNDER T HE ACT. SINCE THE AGREEMENT DATED 14.06.2007 WAS ENTERED INTO IN THE PREVIOUS YEAR RELEVANT TO AY 2008-09, THE AO WAS OF THE VIEW THAT THE LONG TERM CAPITAL GAIN ON SALE OF PROPERTY HAD TO BE BROUGHT TO TAX. ACCORDI NGLY, NOTICE U/S. 148 OF THE ACT DATED 10.03.2014 WAS ISSUED BY THE AO IN TH E CASE OF EACH OF THE ASSESSEES. THE ASSESSEES DID NOT FILE ANY RETURNS OF INCOME IN RESPONSE TO SUCH NOTICES. THE AO PROCEEDED TO FRAME ASSESSM ENTS U/S. 144 OF THE ACT TO THE BEST OF HIS JUDGMENT. THE AO IN THE ORD ER OF ASSESSMENT HAS EXTRACTED THE TERMS & CONDITIONS OF THE AGREEMENT B ETWEEN THE OWNERS OF THE PROPERTY AND THE DEVELOPER WHICH IS PARI MATERIA THE SAME IN THE CASE OF ALL THE ASSESSEES. THE AO HAS THEREAFTER CONCLU DED THAT THE ASSESSEES HAVE DELIVERED POSSESSION OF THE PROPERTY IN PART P ERFORMANCE OF THE ITA NOS.1419 TO 1424/BANG/2018 PAGE 3 OF 7 AGREEMENT FOR SALE AND THEREFORE THERE IS A TRANSFE R OF CAPITAL ASSET DURING THE PREVIOUS YEAR IN TERMS OF SECTION 2(47)(V) OF T HE ACT. I HAVE PERUSED THE VARIOUS CLAUSES OF AGREEMENT EXTRACTED IN THE O RDER OF ASSESSMENT BY THE AO AND FIND THAT NONE OF THE CLAUSES SAY THAT P OSSESSION OF THE PROPERTY HAS BEEN HANDED OVER BY THE OWNERS (ASSESS EES) TO THE DEVELOPER. BE THAT AS IT MAY, THE AO THEREAFTER HAS COMPUTED THE LONG TERM CAPITAL GAIN BY VERIFYING THE DATE OF ACQUISITION O F THE PROPERTY AND AFTER GIVING DUE DEDUCTION FOR COST OF ACQUISITION FROM T HE FULL VALUE OF CONSIDERATION RECEIVED ON TRANSFER. THE AO HAS COM PUTED THE LONG TERM CAPITAL GAIN IN THE CASE OF EACH OF THE ASSESSEES A S FOLLOWS:- SALE CONSIDERATION AS DISCUSSED ABOVE RS.81242 9 LESS: INDEXED COST OF THE PROPERTY AS DISCUSSED ABOVE RS. 9711 -------------- LONG TERM TAXABLE CAPITAL GAINS RS.802718 LESS: BASIC EXEMPTION U/S. 112(1) RS.100000 -------------- TOTAL INCOME RS.702718 -------------- 4. AGGRIEVED BY THE ORDERS OF THE AO, EACH OF THE A SSESSEES PREFERRED APPEALS BEFORE THE CIT(APPEALS). THERE WAS A DELAY IN FILING OF THE APPEALS BEFORE THE CIT(APPEALS) WHICH IS AS FOLLOWS:- ITA NOS. NO. OF DAYS OF DELAY IN FILING THE APPEAL BEFORE CIT(A) 1419/BANG/2018 12 DAYS 1420/BANG/2018 4 1 DAYS 1421/BANG/2018 4 1 DAYS 1422/BANG/2018 4 1 DAYS 1423/BANG/2018 09 DAYS 1424/BANG/2018 12 DAYS 5. NONE OF THE ASSESSEES HAD FILED APPLICATION FOR CONDONATION OF DELAY IN FILING THE APPEAL BEFORE THE CIT(A). THE CIT(A) WAS OF THE VIEW THAT SINCE THE APPEALS WERE FILED BELATEDLY AND SIN CE NO APPLICATION FOR ITA NOS.1419 TO 1424/BANG/2018 PAGE 4 OF 7 CONDONATION OF DELAY IN FILING APPEALS WERE FILED, THE APPEALS WERE LIABLE TO BE DISMISSED AS UNADMITTED. BESIDES THE ABOVE, IN THE CASES OF SMT. SAKAMMA, SMT. MADAMMA BY L/R MAHADEVU & SMT. SHIVAM MA, THE CIT(APPEALS) WAS OF THE VIEW THAT THESE ASSESSEES H AD NOT STATED THEIR PAN IN FORM 35 WHICH IS A PRESCRIBED FORM FOR FILIN G APPEAL BEFORE THE CIT(A) IN TERMS OF RULE 46 OF THE INCOME-TAX RULES, 1962 [THE RULES]. IT WAS ALSO NOTICED BY THE CIT(APPEALS) THAT IN TERMS OF SECTION 249(4)(V) OF THE ACT, THESE 3 ASSESSEES WERE LIABLE TO PAY ADVAN CE TAX AND HAD NOT PAID ADVANCE TAX AND THEREFORE THE APPEALS FILED BY THES E ASSESSEES WERE INADMISSIBLE. THESE TWO GROUNDS VIZ., NOT SPECIFYI NG PAN NO AND NOT PAYING ADVANCE TAX, WERE ADDITIONAL GROUNDS FOR DIS MISSING THE APPEALS OF THE AFORESAID 3 ASSESSEES. THE COMMON GROUND ON WH ICH ALL THE APPEALS OF ALL THE ASSESSEES WERE DISMISSED WAS THAT THERE IS A DELAY IN FILING THE APPEAL BEFORE THE CIT(APPEALS) AND NO APPLICATION F OR CONDONING THE DELAY HAS BEEN FILED BY THE ASSESSEE. FURTHER, DESPITE S ERVICE OF NOTICE, NONE APPEARED ON BEHALF OF THE ASSESSEES BEFORE THE CIT( A) ON THE DATE FIXED FOR HEARING. THE CIT(APPEALS) DISMISSED THE APPEAL S OF ALL THE ASSESSEES AS UNADMITTED. 6. AGGRIEVED BY THE ORDERS OF CIT(APPEALS), THE ASS ESSEES HAVE FILED THE PRESENT APPEALS BEFORE THE TRIBUNAL. 7. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEES BROUGHT TO OUR NOTICE THAT SMT. SAKAMMA, SMT. MADAMMA & SMT. S HIVAMMA, THE ASSESSEES IN ITA NOS.1420 TO 1422/BANG/2018 HAVE OB TAINED PAN AND A COPY OF THE PAN CARD WAS FILED BEFORE US AND THE SA ME ARE ALSO PLACED ON RECORD. THE LD. COUNSEL FOR THE ASSESSEE FILED BEF ORE ME AN ORDER OF ITAT RENDERED IN IDENTICAL CIRCUMSTANCES, WHERE THE TRIB UNAL SET ASIDE THE ORDER OF CIT(APPEALS) AND DIRECTED THE CIT(A) TO CONSIDER THE APPEALS OF ASSESSEE AS ADMITTED AND DECIDE IT ON MERITS. THE ORDER DATED 04.05.2018 IN ITA NOS.1050, 1053 TO 1055/BANG/2018 IN THE CASE OF SHRI NAGARAJU & ORS. V. ITO WAS FILED BEFORE ME. IN THAT CASE, THE TRIBUNAL O N THE OBJECTION ITA NOS.1419 TO 1424/BANG/2018 PAGE 5 OF 7 OF THE CIT(APPEALS) ON THE ABSENCE OF PAN CARD AND NOT PAYING ADVANCE TAX HELD AS FOLLOWS:- 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. I F IND THAT AS PER THE ORDER OF CIT(A), HE HAS HELD THAT THE ASSESSEE HAS NOT OBTAINED AND FURNISHED THE PAN IN FORM NO. 35. REGA RDING THIS OBJECTION OF CIT(A), I FIND THAT NOW THE ASSESSEE H AS OBTAINED PAN AND THEREFORE, THIS OBJECTION OF LD. CIT(A) DOE S NOT SURVIVE ANYMORE AND HENCE, IN THE INTEREST OF JUSTICE, THE APPEAL OF THE ASSESSEE SHOULD BE ADMITTED AND DECIDED ON MERIT. 5. THE SECOND OBJECTION OF LD. CIT(A) IS THIS THAT THE ASSESSEE HAS FAILED TO MAKE PAYMENT OF ADVANCE TAX WHICH WAS PAYABLE BY ASSESSEE AS REQUIRED UNDER CLAUSE (B) OF SUB-SECTIO N (4) OF SECTION 249 OF IT ACT. IN THIS REGARD, I FIND THAT EVEN AS PER THE ASSESSMENT ORDER, THERE IS NO OTHER INCOME OF THE A SSESSEE EXCEPT PROFIT ON SALE OF AGRICULTURAL LAND. AS PER THE STA TEMENT OF FACTS AVAILABLE ON RECORD, IT IS SEEN THAT IT IS THE STAN D OF THE ASSESSEE THAT THE AGREEMENT BETWEEN THE ASSESSEE AND DEVELOP ER WAS MADE ON 25.04.2006 AND AS PER THE ASSESSEE, IN FACT, NO POSSESSION WAS GIVEN. WITHOUT HANDING OVER OF POSSESSION AND WITHO UT REGISTRATION OF THE JDA, NO INCOME CAN BE BROUGHT T O TAX ON THIS ACCOUNT BUT THIS IS NOT THE MANDATE OF THE LAW THAT FOR DECIDING THIS ASPECT ON MERIT AFTER HEARING BOTH SIDES, THE ASSESSEE SHOULD BE ASKED TO PAY ADVANCE TAX FIRST ON SUCH TRANSACTI ON AND THEN FILE THE APPEAL ON THIS ASPECT AND THEN THE CIT (A) WILL DECIDE THIS ISSUE. IN MY CONSIDERED OPINION, IN THE FACTS OF TH E PRESENT CASE, THERE IS NO VIOLATION OF SECTION 249(4)(B) OF IT AC T BECAUSE IT HAS NOT BEEN ESTABLISHED THAT THE ASSESSEE WAS LIABLE T O PAY ADVANCE TAX BECAUSE THE ONLY INCOME BROUGHT TO TAX BY THE A O IS IN RESPECT OF SALE ALLEGED OF AGRICULTURAL LAND AND TH E ASSESSEE CLAIMS THAT NO POSSESSION WAS HANDED OVER AND THE JDA WAS NOT REGISTERED. HENCE I FEEL IT PROPER TO RESTORE THE M ATTER BACK TO THE FILE OF CIT (A) FOR DECISION ON MERIT AFTER ADMITTI NG THE APPEAL OF THE ASSESSEE. IN VIEW OF THIS, NO ADJUDICATION IS C ALLED FOR REGARDING THE MERIT OF THE CASE AT THE PRESENT STAG E AND I DO NOT MAKE ANY COMMENT ON THE MERIT OF THE CASE AND MY DE CISION REGARDING THIS ASPECT THAT ADVANCE TAX WAS NOT PAYA BLE BY ASSESSEE SHOULD NOT BE CONSIDERED AS A COMMENT ON M ERIT OF THE CASE. THIS DECISION IS ONLY ON THE LIMITED ASPECT O F ADMISSION OF APPEAL BY REJECTING THE ALLEGED VIOLATION OF SECTIO N 249(4)(B) OF IT ACT. ITA NOS.1419 TO 1424/BANG/2018 PAGE 6 OF 7 8. WITH REGARD TO NOT FILING APPLICATION FOR CONDON ATION OF DELAY, THE LD. COUNSEL FOR THE ASSESSEE HAS PLEADED THAT ALL THE A SSESSEES ARE ILLITERATE PEOPLE AND WERE NOT GUIDED PROPERLY AND THE ASSESSE ES SHOULD BE AFFORDED AN OPPORTUNITY OF BEING HEARD BY THE CIT(APPEALS) A ND ALLOWED TO EXPLAIN THE REASONS FOR DELAY IN FILING THE APPEAL. IN THI S REGARD, I FIND FROM THE RECORD THAT ONLY ONE DATE OF HEARING WAS FIXED BEFO RE THE CIT(APPEALS) AND ON THAT DATE THE CIT(APPEALS) FOUND THAT THERE WAS A DELAY IN FILING THE APPEAL AND WITHOUT CONFRONTING THE ASSESSEE AND CAL LING UPON THE ASSESSEE TO SHOW CAUSE AS TO WHY THE APPEALS SHOULD NOT TREATED AS NOT PROPERLY FILED AND DISMISSED AS UNADMITTED FOR WANT OF APPLICATION FOR CONDONATION OF DELAY IN FILING THE APPEAL, THE CIT( APPEALS) HAS PROCEEDED TO PASS THE IMPUGNED ORDERS. KEEPING IN VIEW ALL T HE FACTS AND CIRCUMSTANCES IN MIND AND TAKING INTO CONSIDERATION THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE, I AM OF THE VIEW THAT THE IMPUGNED ORDERS OF THE CIT(APPEALS) SHOULD BE SET ASIDE. 9. THE OBJECTION FOR NOT OBTAINING THE PAN HAS SINC E BEEN RECTIFIED. SO ALSO THE OBJECTION WITH REGARD TO NON-PAYMENT OF AD VANCE TAX IS HELD TO BE WITHOUT ANY BASIS AS HELD BY THE TRIBUNAL IN THE DE CISION CITED BY THE LD. COUNSEL FOR THE ASSESSEES. THERE IS NO VIOLATION O F SECTION 249(4)(B) OF IT ACT IN THE CASE OF EACH OF THE ASSESSEES IN THESE A PPEALS ALSO BECAUSE IT HAS NOT BEEN ESTABLISHED THAT THE ASSESSEES WERE LI ABLE TO PAY ADVANCE TAX BECAUSE THE ONLY INCOME BROUGHT TO TAX BY THE A O IS IN RESPECT OF SALE OF ALLEGED AGRICULTURAL LAND AND THE ASSESSEE CLAIM S THAT NO POSSESSION WAS HANDED OVER AND THE JDA WAS NOT REGISTERED. WIT H REGARD TO NON-FILING OF APPLICATION FOR CONDONATION OF DELAY, I AM OF TH E VIEW THAT THE ASSESSEES SHOULD BE AFFORDED OPPORTUNITY OF EXPLAINING THE DE LAY IN FILING THE APPEALS BEFORE THE CIT(APPEALS) AND THE CIT(APPEALS) SHOULD BE DIRECTED TO CONSIDER SUCH APPLICATION ON MERITS AND DECIDE THE SAME, AFTER AFFORDING THE ASSESSEES OPPORTUNITY OF BEING HEARD. I HOLD A ND DIRECT ACCORDINGLY. ITA NOS.1419 TO 1424/BANG/2018 PAGE 7 OF 7 CONSEQUENTLY, ALL THE IMPUGNED ORDERS OF THE CIT(AP PEALS) ARE SET ASIDE TO BE DECIDED AFRESH AS INDICATED IN THIS ORDER. 10. FOR STATISTICAL PURPOSES, THE APPEALS OF THE AS SESSEES ARE TREATED AS ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 1 ST DAY OF JUNE, 2018. SD/- ( N.V. VASUDEVAN ) JUDICIAL MEMBER BANGALORE, DATED, THE 1 ST JUNE, 2018. / D ESAI S MURTHY / COPY TO: 1. APPELLANT S 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE.