Sri S Suresha, Mysore V. Income Tax Officer Ward-1(3), Mysore

ITA 1706/BANG/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4629 (ITAT-BANGALORE)
• Duration Of Justice: 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 21-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard
• Section: 148; 144; 10

Judgement Text

I T A NOS.1 706 & 1708/BANG/2018 1424 / B A N G / 2018 P A G E 1 IN TH E I N C O ME T A X A PP E L LAT E T RIB UNA L B ANGALO RE BENCH A B E F O RE S H RI N.V . VA S UD E VAN , JU D ICI A L M E MB E R AND SHRI JASON P BOAZ, ACCOUNTANT MEMBER ITA NO S . A.Y. APPEL L ANTS RESPO N DENT 1 706 /BAN G /2018 200 7 - 08 S HRI S SURESHA, S/O LATE PUTTEGOWDA, GALLAGARA HU NDI VILL., HANCYA POST, KASABA HOBLI, MYSORE TALUK. THE INC O M E TAX OFFICER, W A R D 1( 3 ), M Y SURU. 1 708 /BAN G /2018 20 07 - 08 S M T . THIMAMMA, D /O . L A T E PUTTE G O W D A , GALLAGARA HUNDI VILL., HANCYA POST, KASABA HOBLI, MYSORE TALUK. A P P E L L A N T B Y : S H R I N ARE N D RA S H AR M A, A D V O C A T E RE S P ON D E N T B Y : S MT. D.RENUGA DEVI , J T . CI T ( D R). D A T E O F H EA R I N G : 11.06 . 2 0 1 8 D A T E O F P R O N OU N CE M E N T : 15 . 06 . 2 0 1 8 O R D E R PER SHRI JASON P BOAZ, A.M. : T HE SE A P P EA LS B Y TWO D I FFE R EN T A SS E S S EE S A R E DIRECTED A G A I N S T TWO D I F F E RE N T O R DE R S PA S S E D B Y TH E C I T ( A P P E A LS ) , M Y S O R E , A LL D AT E D 22.9.2017 & 3 1 .1 0 .2 01 7 RESPECTIVELY W H ICH R E L AT E T O A SS E S S M E N T Y EA R 2 0 0 7 - 0 8 . T H E SE TWO AP P EA LS A R ISE UN D E R I DENT I C A L FA C T S A N D CI R C U M S T A N C E S A N D I N V O L V E I DENT I C A L ISS UE S . T HE Y W E R E H E A R D TO G ETHE R AND THEREFORE WE D E E M IT C O N V EN I EN T T O PA SS A C O N S O LI DAT E D O RD E R . I T A NOS.1 706 & 1708/BANG/2018 1424 / B A N G / 2018 P A G E 2 2 . T H E FA C T S IN A LL T H E SE C A S E S A R E TH A T T H E A S S E SS EE S O W NE D L A N D IN TH E O UT SKI R T S O F CI T Y O F M Y S O R E . A CC O R D I N G T O TH E A S S E SS EE S, L AND S O W N E D B Y TH E M W E R E A GR IC U L TU R A L L A ND . THESE TWO ASSESSEES ALONG WITH TWO OTHER PERSONS ENTE R E D I NT O A GR EE M E N T D AT E D 4 . 7 . 2 00 6 F O R S A LE O F THE IR L A N D W I T H ON E SH R I R. VEE R E S H , S /O . R .S . R A J A S HE K A R , # 4 , K . L I N G A I A H C O L O N Y , N A Z A R BAD , M Y S O R E [ HE R E I NA F TE R RE FE RR E D T O A S TH E DE V E L OPE R ] FO R A S A LE C O N SI DE R AT I O N O F RS .8, 75,000 E A C H ; BEING 1/4 TH OF THE TOTAL SALE CONSIDERATION . 3 . A CC O R D I N G T O T H E A O , TH E L AND S IN Q UE S T I O N W E R E SI TUATE D W I TH IN 8 K M S. F RO M TH E C O R PO R A T I O N LI M I T S O F M Y S O R E A N D W E R E C AP I T A L A SS E T S A S P E R S E C T I O N 2 ( 14 )( III) O F TH E IN C OM E - T A X A C T , 19 6 1 [ T H E A C T ] AN D T H E RE FO R E T H E C AP I TA L G A IN O N S U C H S A LE W A S LI AB LE T O TA X UNDE R TH E A C T . S I N CE TH E A GR EE M E N T D AT E D 4.7.2006 W A S EN T E R E D I N T O IN T H E P R E V I OU S Y EA R R E L E V AN T T O A Y 20 0 7 - 08 , T H E A O W A S O F TH E V I E W THA T T H E L O N G TE R M C A P I TA L G A IN O N S A LE O F P RO PE R T Y H A D T O B E B RO U G H T T O T A X . A CC O R D I N G L Y , NOT ICE U/ S . 1 4 8 O F TH E A CT D A TE D 1 0. 0 3. 20 1 4 W A S ISS U E D B Y T H E A O IN T H E C A SE O F BOTH THESE A SS E SS E E S. T H E A S S E SS EE S D I D N O T F ILE AN Y R ETU R N S O F I N C O M E IN R E S P O N SE T O S U CH N O T IC E S. T H E A O P R O C E E D E D T O F RAM E A SS E S S M E NT S U / S. 14 4 O F T H E A CT T O TH E B E ST O F H IS J UD G M E N T . T H E A O IN T H E O R DE R O F A SS E S S M EN T HA S E X T R A C TE D T H E TE R M S & C OND I T I O N S O F T H E A GRE E M E N T B E T W EE N T H E O W NE R S O F T H E P R OPE R T Y A N D T H E D E V E L OPE R W H ICH IS PA R I M ATE R IA TH E S A M E IN T H E C A SE O F BOTH TH E A SS E S S EE S. T H E A O H A S T HE REA F TE R C ON CL U DE D T H A T TH E A S S E SS E E S HA V E DE LI V E R E D P O SS E SSI O N O F T H E P R O P E R T Y IN P A R T P E R F O RM AN C E O F TH E A GR EE M E N T F O R S A LE A N D T HE RE F O R E THE R E IS A T R AN S F E R O F C AP I T A L A S S E T D U R I N G TH E P R E V I OU S Y EA R IN T ER M S O F S E C T I O N 2 (4 7 )( V) O F T H E A C T . WE HA V E P E R U S E D TH E V A R I OU S CL AU S E S O F A GR EE M E N T E X T R A C T E D IN TH E O R DE R O F A SS E S S M E N T B Y TH E A O A N D F I N D TH A T N O N E O F T H E CL A U S E S S A Y TH A T PO SS E SSI O N O F T H E P R OPE R T Y H A S B E E N H AN D E D O V E R B Y T H E O W NE R S ( A SS E SS EE S) T O T H E DE V E L OPE R . B E T HA T A S I T M A Y , TH E A O T HE R E A F T E R HA S C O M PU T E D TH E L O N G TE R M C AP I TA L G A IN B Y V E R I F Y I N G TH E D A T E O F A C Q U ISI T I O N O F TH E P R OPE R T Y A N D A FTE R G I V I N G DU E DE D U C T I O N FO R C O ST O F A C Q U IS I T I O N F RO M T H E FU LL V A L U E O F C ON SI DE RA T I O N R E C E I V E D O N T R AN S FE R . T H E A O HA S C O M P U TE D T H E L O N G TE R M C AP I TA L G A IN IN T H E C A S E O F E A CH O F T H E A SS E S S EE S A S F O LL O W S : - I T A NOS.1 706 & 1708/BANG/2018 1424 / B A N G / 2018 P A G E 3 SALE CONS I DERATION A S DISCUSS E D ABOVE RS.8 ,75,000 LESS: INDE X ED C OST OF THE PROPER T Y AS DISC U SSED A B OVE RS. 17,640 ------------- - LONG TE R M TAXABLE C A PITAL GAINS RS.8 ,57,360 LESS: BASIC EX E M P T ION U/S. 112(1) RS.1 , 00 , 0 0 0 ------------- - TOTAL INC O ME RS.7 ,57,360 -------------- 4 . A GGR I E V E D B Y TH E O R D ER S O F TH E AO , BOTH THE A S S E SS EE S P RE F E RRE D AP P EA LS BE F O R E TH E C I T ( APP E A LS ) , MYSORE WHICH WERE DISMISSED EXPARTE VIDE THE IMPUGNED ORDERS D T.22.9.2017 AND 31.10.2017 FOR ASSESSMENT YEAR 2007 - 08. 5 . A GGR I E V E D B Y TH E O R D ER S O F C I T ( A P P E A LS ) , MYSORE T H E A SS E SS E E S HA V E F IL E D TH E P R E S E N T A PP E A LS B E FO R E T H E T R I B U NA L. 6 . A T T H E T I M E O F H E A R I N G , T H E L D . C O UN S E L F O R T H E A S S E SS EE S B R OU G H T T O OU R NOT ICE TH A T SHRI S. SURESHA AND S M T . THIMAMMA, THE A SS E SS E E S IN I TA N O S . 14 2 0 T O 1 4 22 / BAN G / 20 1 8 HA V E OB T A I N E D P A N AN D A C OP Y O F T H E PA N C A R D W A S F IL E D B E FO R E US AND THE SAME A R E A L S O P L A C E D O N R E C O R D . T H E L D . C O UN S E L F O R T H E A SS E S S E E F IL E D B E FO R E THE BENCH COPY OF A N O RD E R O F I T A T R ENDE RE D IN I DENT I C A L CI R C U M S T A N C E S, W HE R E T H E T R I B U NA L S E T A SI D E T H E O R DE R O F C I T ( AP P EA LS) A N D D I R E C TE D TH E C I T ( A ) T O C ON S I DE R T H E A P PEA LS O F A SS E SS E E A S A D M I TT E D AN D D E CI D E IT O N M E R I T S . T H E O R DE R DA T E D 0 4 . 05. 2 01 8 IN I T A N O S . 1 050 , 1 0 5 3 T O 1 05 5 /B A N G /20 1 8 I N T H E C A SE O F SH R I N A GA R A JU & O R S. V. I TO W A S F IL E D BE F O R E US. I N T HA T C A S E , T H E T R I B U NA L O N T H E O B J E C T I O N O F T H E C I T ( A P P E A LS) O N T H E A B S E N CE O F P A N C A R D A N D N O T P A Y I N G AD V AN C E TA X HE LD A S F O LL O W S : - 4. I HAVE C ONSID ER E D THE RIVAL SU B MISSI O NS. I F IND THAT A S PER THE ORDER OF CIT ( A), HE H AS H E LD T HAT TH E ASSES S EE H A S NOT OBTAINED A ND F URNISHED THE P A N IN FO R M NO. 35. R E GARDING TH I S OBJECTION OF CIT(A), I F IND THAT NOW THE ASSESSEE HAS OBTAINED PAN AND THE R E F ORE, THIS OBJECTION OF LD. CIT ( A) DOES NOT S U RVI V E A N Y MORE A N D HENCE, I N THE INTER E ST OF JUSTI C E, THE APPEAL OF THE ASSESSEE S H OULD BE A D MITTED AND D E CIDED ON MERIT. I T A NOS.1 706 & 1708/BANG/2018 1424 / B A N G / 2018 P A G E 4 5. THE SECOND O B JECTION O F LD. CIT(A) IS THIS THAT THE ASSESS E E HAS F AILED TO M AKE P A YM E NT OF ADVA N CE TAX W HICH WAS P A Y A BLE B Y ASSESSEE AS REQUIR E D U N DER CLAUSE ( B) OF SUB - S E CTION (4) OF SECTI O N 249 OF IT ACT. IN T HIS REGARD, I F IND T H AT EVEN AS PER T HE ASSES S M ENT ORDER, T HERE IS NO OTHER INC O M E OF THE ASSESSEE EXCEPT P RO F IT ON SALE OF AGRI C ULTURAL LAN D . AS PER T H E STAT E M ENT OF F ACTS AVAILABLE ON RECORD, I T IS SEEN THAT IT IS THE S T AND OF THE ASSESSEE THAT THE AGRE E M ENT BE T WEEN THE ASSESSEE AND DEVELOPER WAS M A D E ON 25 . 04.2006 AND AS P ER THE ASSES S EE, I N F ACT, NO POSSE S S ION WAS GIVEN. W ITH O UT HAN D ING OVER OF POSSE S SION AND WIT H OUT REGISTRATION OF THE JD A , NO INC O ME CAN BE B R OUGHT TO TAX ON TH I S ACCOUNT BUT T HIS IS N O T THE M ANDATE OF THE L A W THAT F OR DECIDING THIS ASPECT ON M ERIT A F TER HEARING BOTH SIDES, T HE ASSESSEE SHOU L D BE ASKED TO P A Y ADVAN C E TAX F IRST ON S UCH T R AN S ACTION A N D TH E N F ILE THE APPEAL ON THIS AS P ECT AND THEN T HE CIT ( A) WILL DECI D E TH I S ISSUE. IN M Y CONSI D ER E D OPINION, IN THE F ACTS OF THE PRESENT CASE, THERE IS NO VI O LATION OF SECTION 249 ( 4)(B) OF IT ACT B ECAUSE I T H A S NOT BEEN ESTABL I SHED T H AT THE ASSESSEE WAS LI A BLE TO P A Y A DVAN C E TAX BECAUSE T HE ON L Y INC O M E BR O UGHT TO T A X B Y THE AO IS I N RESPECT OF SALE AL L EGED OF AGRICULTURAL LAND AND THE ASSESS E E CLA I MS THAT NO PO S SESSION W AS HANDED O V ER AND THE JDA W A S NOT REGISTERED. HE N CE I F EEL IT PROPER TO RESTORE T H E M AT T ER BACK TO THE F ILE OF CIT (A) F OR DEC I SION ON M ER I T A F TER ADMITTING THE AP P EAL OF THE ASSESSEE. IN VIEW OF THIS, NO ADJUDICATION IS CALLED F OR REGARDING THE MERIT OF THE CASE AT THE PRE S E NT STAGE AND I DO NOT M A KE A N Y C O MMENT O N THE M ERIT OF THE CA S E AND M Y DECIS I ON REGARDING THIS A S PECT THAT ADVANCE TAX W AS NOT P A Y ABLE B Y ASSESSEE SHOULD NOT BE CONSID E RED A S A C O M M E NT ON M E R IT OF T H E CASE. THIS DECISI O N IS ON L Y O N THE L I M ITED A S PECT OF AD M ISSION OF APPEAL B Y REJE C TING THE ALLEGED VIOLA T ION OF SECTION 249( 4 )(B) OF IT ACT. 7 . T H E O B J E C T I O N F O R NO T O BTA I N I N G T H E P A N HA S S I N CE B E E N R E C T I F I ED . S O A LSO T H E OB J E C T I O N W I T H R E G A R D T O NON - P A Y M E N T O F AD V AN CE TA X IS H E LD T O B E W I THO U T AN Y BA SIS A S HE LD B Y TH E T R I BU N A L I N T H E D E CISI O N CI T E D B Y TH E L D . C OUN S E L FO R T H E A SS E S S EE S. T HE R E IS N O V I O L AT I O N O F S E C T I O N 2 49 ( 4 ) ( B ) O F I T A CT IN TH E C A S E O F E A C H O F T H E A SS E SS E E S IN THE SE AP P EA LS A LSO BE C AU SE IT HA S N O T B E E N E S T A B LIS HE D T HA T T H E A SS E SS EE S W E R E LI AB LE T O PA Y AD V AN CE TA X BE C AU SE TH E ON LY I N C O M E B RO U G H T T O T A X B Y TH E A O IS IN R E S PE C T O F S A LE O F A LL E G E D A GR IC U L TU R A L L AN D AN D T H E A S S E S S E E CL A I M S T H A T N O PO S S E SSI O N I T A NOS.1 706 & 1708/BANG/2018 1424 / B A N G / 2018 P A G E 5 W A S HANDE D O V E R AN D TH E JDA W A S NO T R E G IS TE R ED . WE ARE OF THE VIE W THAT THE IMPUGNED EXPARTE ORDERS OF THE LEARNED CIT (APPEALS) ARE TOBE SET ASIDE AND CONSEQUENTLY RESTORE THE MATTER TO HIS FILE FOR CONSIDERATION AND ADJUDICATION ON MERITS AFTER AFFORDING THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD. WE HOLD AND DIRECT ACCORDINGLY. 8. C ON S E Q UE N T L Y , TH E I M PU GN E D O R DE R S O F TH E C I T ( A P PEA LS) DT.22.9.2017 AND 31.10.2017 FOR ASSESSMENT YEAR 2007 - 08 A R E S E T A SI D E T O B E D E CI D E D A F R E SH A S I ND IC A T E D IN TH IS O R DE R . 9 . TH E A PP E A LS O F T H E A SS E SS EE S FOR A.Y. 2007 - 08 A R E T R EA T E D A S A LL O W ED FOR S TATISTICAL PURPOSES . PR O N O U N C E D I N T H E O P EN C O U RT O N T H I S 15 TH D AY O F J U N E, 2 0 1 8 . SD/ - (N.V. VASUDEVAN) JUDICIAL MEMBER SD/ - (JASON P BOAZ) ACCOUNTANT MEMBER BANGALORE, DT.15.06.2018. *REDDY GP C O P Y TO : 1 . A PP E L L A N T S 2 . RE S P ON D E N T 3 . CI T 4 . CI T ( A ) 5 . D R, I TAT , BA NG A L O R E. 6 . G U ARD F I L E B Y O R D ER SE N I O R P R I V A T E SECR E T ARY I T A T , BA NG A LO R E.