M/s Garden City Resorts Private Limited, Bangalore V. DCIT, Bangalore

ITA 218/BANG/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9511 (ITAT-BANGALORE)
• Duration Of Justice: 3 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 28-07-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 15-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A R V SREENIVASAN JT
• Assessee Lawyers: G S PRASHANTH F
• Keywords: Principle of natural justice; Revised return
• Section: 234B; 15; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.218/BANG/2013 ASSESSMENT YEAR : 2007-08 M/S. GARDEN CITY RESORTS PRIVATE LTD., NO.208, WEST MINISTER COMPLEX, 13, CUNNINGHAM ROAD, BANGALORE 560 022. PAN: AACCG 0856H VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(3), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI G.S. PRASHANTH, F.C.A. RESPONDENT BY : SHRI A.R.V. SREENIVASAN, JT. CIT(DR) DATE OF HEARING : 28.07.2016 DATE OF PRONOUNCEMENT : 05.08.2016 O R D E R PER SUNIL KUMAR YADAV, JUDICIAL MEMBER THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(APPEALS), MYSORE DATED 03.12.2012 FOR THE ASSES SMENT YEAR 2007-08 INTER ALIA ON THE FOLLOWING GROUNDS:- 1. THE ORDER OF THE AUTHORITIES BELOW IN SO FAR AS IT IS AGAINST THE APPELLANT, IS OPPOSED TO LAW, WEIGHT OF EVIDENC E, NATURAL JUSTICE, PROBABILITIES, FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE. ITA NO.218/BANG/2013 PAGE 2 OF 6 2. THE APPELLANT DENIES ITSELF TO BE ASSESSED ON A SUM OF RS. 5,66,90,094/- AS AGAINST A SUM OF RS. 1,05,35,680/- AS DECLARED BY THE APPELLANT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE ACTION OF THE CIT-A IN DISMISSING THE APPEAL ON THE GROUND OF NON-PAYMENT OF ADMITTED TAXES WHEN THE AP PELLANT HAD PAID THE TAXES AS PER THE RETURN FILED ON 09.04.200 8 IS AGAINST THE FACTS OF THE CASE AND AGAINST ALL KNOWN CANONS OF R EASONABLENESS AND NATURAL JUSTICE AND PATENTLY ILLEGAL. 4. THE ORDER OF THE AUTHORITIES BELOW IS BAD IN LAW AS THE MANDATORY CONDITIONS TO INVOKE THE JURISDICTION UND ER SECTION 153C OF THE ACT DID NOT EXIST, OR HAVING NOT BEEN C OMPLIED WITH AND CONSEQUENTLY THE ORDERS OF THE AUTHORITIES BELO W IS BAD IN LAW FOR WANT OF REQUISITE JURISDICTION. 5. THE ORDER OF THE LEARNED COMMISSIONER IS BAD IN LAW AS THE APPELLANT WAS DENIED REASONABLE OPPORTUNITY OF BEIN G HEARD WHICH IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 6. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE FINDING ON THE VALIDITY OF THE SEARCH. RELI ANCE IS PLACED ON THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF C RAMAIAH REDDY VS ACIT REPORTED IN 339 ITR 210 AND OF THE JURISDICTIONAL TRIBUNAL IN THE CASE OF DCIT, CENTRA L CIRCLE MANGALORE VS M/S HML AGENCIES IN MP NO. 103/BANGALO RE/ 2010 IN ITA NO. 1209/BANG/2009. 7. THE ORDER OF THE CIT-A IS FURTHER BAD IN LAW AS THE APPELLANT WAS NOT PROVIDED THE COPY OF THE LETTER R ELIED UPON BY THE CIT-A FOR-REBUTTAL BY THE APPELLANT AND THUS TH E ORDER NEEDS TO BE SET ASIDE IN THE INTEREST OF EQUITY AND JUSTI CE. 8. THE APPELLANT DENIES ITSELF LIABLE TO BE LEVIED TO INTEREST UNDER SECTION 234 B OF THE ACT AND FURTHER THE COMP UTATION OF INTEREST UNDER SECTION 234 B WAS NOT PROVIDED TO TH E APPELLANT AS REGARD TO THE RATE, PERIOD AND METHOD OF CALCULATIO N OF INTEREST UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. THE APPELLANT EXPRESSLY URGES THAT THE PERIOD OF LEVY OF INTEREST IS NOT IN ACCORDANCE WITH SECTION 234B OF THE ACT. ITA NO.218/BANG/2013 PAGE 3 OF 6 PRAYER FOR ADMITTING ADDITIONAL GROUNDS OF APPEAL WHICH WERE NOT ORIGINALLY URGED BEFORE THE CIT-A THE ASSESSEE APPELLANT BEGS TO SUBMIT THE UNDER MEN TIONED ADDITIONAL GROUNDS OF APPEAL WHICH WERE NOT URGED S PECIFICALLY IN THE ORIGINAL GROUNDS OF APPEAL FILED BEFORE THE LEA RNED CIT(A). THESE GROUNDS DO NOT INVOLVE ANY INVESTIGATION OF A NY FACTS OTHERWISE ON THE RECORD OF THE DEPARTMENT AND ARE A LSO PURE QUESTIONS OF LAW, WHICH GOES INTO THE VERY ROOT OF THE MATTER OF JURISDICTION AND VALIDITY OF THE ASSESSMENT AND THE REFORE, IT IS PRAYED THAT THE ADDITIONAL GROUNDS MAY KINDLY BE AD MITTED AND DISPOSED OFF ON MERITS FOR THE ADVANCEMENT OF SUBST ANTIAL CAUSE OF JUSTICE. RELIANCE IS PLACED ON THE DECISION OF T HE HON'BLE APEX COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD . VS. CIT REPORTED IN 229 ITR 383. 9. THE ASSESSMENT ORDER PASSED IS NOT VALID IN LAW ON ACCOUNT OF THE FACT THAT THE SAME HAS NOT BEEN PASSED BY A JOINT COMMISSIONER AS MANDATED UNDER SECTION 153D OF THE ACT. 10. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, DE LETE, MODIFY ANY OF THE GROUNDS WHICH ARE URGED ABOVE. 11. FOR THE ABOVE AND SUCH OTHER GROUNDS AS M AY BE URGED AT THE TIME OF HEARING THE APPELLANT PRAYS YOUR HONOUR TO CONSIDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND JUSTICE BE RENDERED. 2. DURING THE COURSE OF HEARING, THE LD. COUNSEL F OR THE ASSESSEE HAS INVITED OUR ATTENTION THAT THE ASSESSEE HAS FILED A RETURN OF INCOME DECLARING CAPITAL GAINS AT RS.48,15,354. LATER ON, A SEARCH WAS CONDUCTED AND IN RESPONSE TO NOTICE, ASSESSEE HAS FILED A LET TER DATED 8.9.2010 TO TREAT ITS RETURN FILED U/S. 139 AS A RETURN U/S. 15 3C OF THE INCOME-TAX ACT, 1961 [THE ACT]. ACCORDINGLY, THE SAID RETURN WAS ACCEPTED AS A RETURN U/S. 153C OF THE ACT. THE ASSESSEE FILED ANOTHER RETURN ON 28.10.2010 DISCLOSING CAPITAL GAINS AT RS.2,75,64,615 AND MARK ING THE RETURN AS A ITA NO.218/BANG/2013 PAGE 4 OF 6 REVISED RETURN U/S. 153C OF THE ACT. IN VIEW OF TH E FACT THAT THE ORIGINAL RETURN HAS ALREADY BEEN ACTED UPON AS A RETURN U/S. 153C, THE RETURN FILED ON 28.10.2010 WAS NOT TREATED TO BE A VALID RETURN BY THE AO. HOWEVER, THE INFORMATION AVAILABLE IN THE RETURN WAS CONSIDE RED FOR THE PURPOSE OF ASSESSMENT OF THE CASE BY THE AO. ACCORDINGLY THE ASSESSMENT WAS FRAMED. 3. AGAINST THE ASSESSMENT ORDER, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(APPEALS) AND THE CIT(APPEALS) HAS RAISED TH E OBJECTION THAT THE ASSESSEE HAD NOT PAID THE TAX ON THE ADMITTED RETUR N OF INCOME; WHEREAS ACCORDING TO THE ASSESSEE, IT HAS ALREADY PAID THE TAX ON THE ADMITTED RETURN OF INCOME AND SINCE REVISED RETURN FILED BY THE ASSESSEE WAS NOT ACCEPTED BY THE AO, THERE WAS NO QUESTION OF PAYMEN T OF TAX ON THE INCOME DECLARED IN THE REVISED RETURN. THE CIT(APP EALS) WAS NOT CONVINCED WITH THIS ARGUMENT AND THE CIT(APPEALS) H AS DISMISSED THE APPEAL OF THE ASSESSEE, WITHOUT DEALING WITH THE IS SUES ON MERIT. NOW THE ASSESSEE IS BEFORE THE TRIBUNAL AND REITERATED ITS CONTENTIONS. 4. HAVING CAREFULLY EXAMINED THE RELEVANT PROVISION S OF THE ACT, WE ARE OF THE VIEW THAT WHILE FILING AN APPEAL BEFORE THE CIT(APPEALS), THE ASSESSEE IS REQUIRED TO PAY THE TAX ON THE ADMITTED RETURN OF INCOME. BUT IN THE INSTANT CASE, ON THE ADMITTED RETURN OF INCO ME, THE ASSESSEE HAS ALREADY PAID THE TAXES. THE ASSESSEE HAS NOT PAID THE TAXES ON THE REVISED RETURN WHICH WAS NOT TREATED TO BE VALID BY THE AO AND WAS NON EST ITA NO.218/BANG/2013 PAGE 5 OF 6 IN LAW. SINCE THE REVISED RETURN WAS TREATED TO BE NON EST IN LAW, THERE WAS NO QUESTION OF MAKING PAYMENT OF TAX ON THE INCOME DECLARED THEREIN. THEREFORE, WE ARE OF THE VIEW THAT THE ASSESSEE HAS ALREADY PAID THE TAX ON THE ADMITTED INCOME DECLARED IN THE ORIGINAL RETURN FILED WHICH WAS ACTED UPON BY THE AO FOR FRAMING THE ASSESSMENT U/S. 153C OF THE ACT. IN THE LIGHT OF THESE FACTS, WE ARE OF THE VIEW THAT THE C IT(APPEALS) WAS WRONG IN DISMISSING THE APPEAL OF THE ASSESSEE. THEREFORE, WE SET ASIDE HIS ORDER AND RESTORE THE MATTER TO HIS FILE WITH A DIRECTION TO READJUDICATE THE APPEAL ON MERITS BY PASSING A REASONED ORDER. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 5 TH DAY OF AUGUST, 2016. SD/- SD/- ( A.K. GARODIA ) (SUNIL KUMAR YA DAV ) ACCOUNTANT MEMBER JUDIC IAL MEMBER BANGALORE, DATED, THE 5 TH AUGUST, 2016. /D S/ ITA NO.218/BANG/2013 PAGE 6 OF 6 COPY TO: 1. APPELLANT 2. RESPONDENTS 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.