Shri Naveen Kumar Dhundashi , Sirsi V. Income TAx officer Ward-1 , Sirsi

ITA 1976/BANG/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4859 (ITAT-BANGALORE)
• Duration Of Justice: 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-04-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 10-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GURUPRASAD
• Assessee Lawyers: PREETHI
• Keywords: Principle of natural justice; Validity of assessment
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-C BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 1976 / BANG/201 7 ASSESSMENT YEAR : 20 10 - 11 SHRI NAVEEN KUMAR DHUNDASHI, C.P. BAZAR, SIRSI. PAN: AAMPD9727B VS. THE INCOME TAX OFFICER, WARD 1, SIRSI. APPELLANT RESPONDENT APPELLANT BY : SMT. PREETHI, ADVOCATE RESPONDENT BY : SHRI GURUPRASAD, ADDL. CIT (DR) DATE OF HEARING : 1 1 . 0 4 .2018 DATE OF PRONOUNCEMENT : 13 . 0 4 .201 8 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THISAPPEAL IS FILED BY THE ASSESSEE WHICH IS DIRECT ED AGAINST THE ORDER OFLD. CIT(A), HUBLI DATED 28.07.2017 FOR ASSESSMENT YEAR 2010-11. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1. THE ORDER OF THE HON'BLE COMMISSIONER OF INCOME TAX (APPEALS) IS OPPOSED TO LAW AND FACTS OF THE CASE. 2. THE HON'BLE COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE HELD THAT THE RE-ASSESSMENT PROCEEDINGS INITIATED U /S 147 AND 148 OF THE ACT ARE AB INITIO VOID. 3. THE HON'BLE COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE HELD THAT THE ASSUMPTION OF JURISDICTION UNDER SECT ION 147 AND 148 OF THE ACT ARE BAD IN LAW. 4. THE HON'BLE COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE HELD THAT THE IMPUGNED ORDER OF ASSESSMENT IS PASSE D IN VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE. 5. THE HON'BLE COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE HELD APPRECIATED THAT THE ASSESSING OFFICER IS OBLI GED TO PROVIDE THE DOCUMENTS/STATEMENT ON THE BASIS OF WHICH HE PROCEE DED TO MAKE ADDITIONS TO THE RETURNED INCOME. ITA NO.1976/BANG/2017 PAGE 2 OF 3 6. THE HON'BLE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN UPHOLDING THE ADDITIONS MADE IN A SUM OF RS.11,15,4 00/- PLACING RELIANCE ON CERTAIN STATEMENTS GIVEN BY THE PERSONS NOT CONNECTED WITH THE APPELLANT AND THE DOCUMENTS FOUND DURING THE CO URSE OF THE SEARCH OF THE THIRD PARTY. 7. THE APPELLANT CRAVES FOR LEAVE TO ADD TO, DELETE FROM OR AMEND THE GROUNDS OF APPEAL. 3. AT THE VERY OUTSET, IT WAS SUBMITTED BY LD. AR O F ASSESSEE THAT AS PER GROUND NOS. 2 AND 3 RAISED BEFORE CIT (A), THIS WAS THE IS SUE RAISED BY ASSESSEE BEFORE CIT (A) THAT THE INITIATION OF PROCEEDINGS U /S. 147 OF IT ACT IS BAD IN LAW BECAUSE THE AO HAD NO JURISDICTION TO ISSUE NOTICE U/S. 148 OF IT ACT. IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT THIS ISSUE WAS NOT DECIDED BY CIT(A) BECAUSE THIS WAS THE MAIN OBJECTION OF THE ASSESSEE THAT IN THE PRESENT CASE, THE REOPENING IS ON THE BASIS OF SEARCH CARRIED OUT IN THE CASE OF RNS INFRASTRUCTURE LTD., GROUP BANGALORE ON 16.02.2012 AND IT IS ALLEGED THAT SOME INCRIMINATING MATERIAL WAS FOUND IN THE COURSE OF T HAT SEARCH RELATING TO THE PRESENT ASSESSEE BUT EVEN IF IT IS SO THEN ALSO, AC TION MIGHT HAVE BEEN TAKEN AS PER LAW U/S. 153C OF IT ACT BUT NOT U/S. 147/148 OF IT ACT. SINCE THE ACTION WAS TAKEN U/S. 147/148, SUCH REOPENING IS BAD IN LAW BU T THERE IS NO DECISION OF CIT (A) ON THIS ASPECT AND THEREFORE, IT SHOULD BE HELD THAT REOPENING IS BAD IN LAW. 4. AT THIS JUNCTURE, IT WAS POINTED OUT BY THE BENC H IF THIS IS THE CLAIM OF THE ASSESSEE THAT THE RELEVANT ASPECT ABOUT VALIDITY OF ASSESSMENT PROCEEDINGS WAS NOT DECIDED BY CIT (A) THEN THE MATTER HAS TO G O BACK TO THE FILE OF CIT (A) FOR DECISION ON THAT ASPECT. IN REPLY, BOTH SIDES AGREED TO THIS PROPOSITION PUT FORWARD BY THE BENCH. HENCE I SET ASIDE THE ORDER OF CIT (A) AND RESTORE THE MATTER BACK TO THE FILE OF CIT (A) FOR FRESH DECISI ON WITH THE DIRECTION THAT HE SHOULD DECIDE THIS ASPECT OF THE MATTER AS TO WHETH ER THE REOPENING IS VALID OR NOT ON THE BASIS OF THIS ALLEGATION THAT SOME INCRI MINATING MATERIAL WAS FOUND IN THE CASE OF SEARCH CONDUCTED IN THE CASE OF A THIRD PARTY. HE HAS TO GIVE CLEAR FINDING AS TO WHETHER THE REOPENING IS ON THE BASIS OF INCRIMINATING MATERIAL FOUND IN THE COURSE OF SEARCH IN CASE OF A THIRD PA RTY AND IF THAT IS SO THEN WHETHER THE REOPENING IS VALID OR ACTION SHOULD HAV E BEEN TAKEN BY THE AO U/S. 153C OF IT ACT AS PER LAW. NEEDLESS TO SAY, ADEQUA TE OPPORTUNITY OF BEING ITA NO.1976/BANG/2017 PAGE 3 OF 3 HEARD SHOULD BE PROVIDED TO BOTH SIDES AND IF REQUI RED, THE CIT (A) CAN OBTAIN REMAND REPORT FROM THE AO. IN VIEW OF THIS DECISIO N, NO ADJUDICATION IS CALLED FOR REGARDING THE MERIT OF THE CASE AT THE PRESENT STAGE. HENCE I DO NOT MAKE ANY COMMENT ON THE MERIT OF THE CASE. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 13 TH APRIL, 2018. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.