Sri Mahadeva , Mysore V. Income Tax Officer Ward-1(2), Mysore

ITA 1707/BANG/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4625 (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: C
• Assessment Year: 2008-2009
• 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 C 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 70 7 /BAN G /2018 200 8 - 09 S HRI MAHADEVA , S/O LATE MARISHETTY , VAJAMANGAL A VILL., VARUNA HOBLI , MYSORE TALUK. THE INC O M E TAX OFFICER, W A R D 1( 2 ), M Y SURU. 1 70 9 /BAN G /2018 20 08 - 09 S RI SIDDA SETTY, VAJAMANGALA VILL., VARUNA HOBLI, MYSORE TALUK. A PP 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 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 , BOTH D AT E D 22.9.2017 W H ICH R E L AT E T O A SS E S S M E N T Y EA R 2 0 08 - 09 . 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 THEREFORE 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 SE A S S E SS EE S ALONG WITH 7 OTHERS 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 NE D B Y TH E M W E R E A GR IC U L TU R A L L A N D . THESE TWO ASSESSEES ENTERED INTO AGREEMENT DATED 2.4.2007 FOR SALE OF THEIR LAND 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 ]. 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 2.4.2007 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 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 TH 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 FO 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 AT RS.7,57,990. I T A NOS.1 706 & 1708/BANG/2018 1424 / B A N G / 2018 P A G E 3 4 . A GGR I E V E D B Y TH E O R D ER S O F ASSESSMENT FOR A.Y. 2008 - 09, 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 EX - PARTE VIDE THE IMPUGNED SEPARATE ORDERS DT.22.9.2017. 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 DT.22.9.2017 FOR A.Y. 2008 - 09, 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 BOTH SRI SIDDA SETTY AND SRI MAHADEVA, THE A SS E S S E E S IN ITA NOS.1707 & 1709/BANG/2018 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 , BANGALOR E 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 /2 0 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 ONSIDER 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 ADV A 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 PRO F IT ON SALE OF AG RI 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 SION 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 BECAUSE I T H A S NOT B EEN 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. H E 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 PRES 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 THOU 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 I T A NOS.1 706 & 1708/BANG/2018 1424 / B A N G / 2018 P A G E 5 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 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 VIEW THAT THE IMPUGN ED EXPARTE ORDERS OF THE LEARNED CIT (APPEALS) ARE TO BE SET ASIDE AND RESTORE D THE MATTER TO HIS FILE FOR CONSIDERATION AND ADJUDICATION OF THE APPEAL ON MERITS AFTER AFFORDING THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD. WE HOLD AND DIRECT ACCORDIN GLY. 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) , MYSORE FOR A.Y. 2008 - 09 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. 2008 - 09 A R E T R EA T E D A S A LL O W ED FOR STATISTICAL PURPOSES . P R 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 . CIT 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.