Swapnil J. Kothadia, Pune V. Income-tax Officer,

ITA 2230/PUN/2014

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9288 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-02-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 15-12-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR VIVEK AGGARWAL
• Keywords: Capital asset; Assessment record; Reassessment proceedings

Judgement Text

SMC IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, PUNE . , BEFORE SHRI D. KARUNAKARA RAO, AM . / ITA NO.2230/PUN/2014 / ASSESSMENT YEAR : 2008-09 MR. SWAPNIL J, KOTHADIA, H.NO.51/2/1, OPP. PANDIT PETROL PUMP, BEHIND ARCHANA HOTEL, HINJEWADI, TATHAWADE, PUNE 411 033 PAN : ALRPK0755A . /APPELLANT VS. INCOME-TAX OFFICER, WARD-9(2), PUNE . / RESPONDENT / APPELLANT BY : SHRI SUNIL GANOO / RESPONDENT BY : DR. VIVEK AGGARWAL, CIT-DR / DATE OF HEARING : 12.02.2018 / DATE OF PRONOUNCEMENT: 16.02.2018 / ORDER PER D. KARUNAKARA RAO, AM : THIS IS THE APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF CIT(A)-V, PUNE DATED 29-09-2014 FOR THE ASSESSMENT YEAR 2008- 09. 2. ASSESSEE RAISED FOLLOWING GROUNDS OF APPEAL ON M ERITS AND THE SAME ARE EXTRACTED AS UNDER : 1. WRONG TREATMENT OF THE TRANSACTION BEING THE TR ANSACTION HELD AS ADVENTURE IN THE NATURE OF TRADE. ON THE CIRCUMSTANCES AND FACTS OF THE CASE AND IN L AW THE LD.CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.15,75,000/- MADE BY T HE AO IN RESPECT OF SALE OF RURAL AGRICULTURAL LAND BY TREATING IT AS A CAPITAL ASSET BUT THE LD.CIT(A) HAS TREATED THE TRANSACTION AS ADVENTURE IN THE NATURE OF TRADE. RELIEF CLAIMED : THE AO BE DIRECTED TO DELETE THE A DDITION OF THE AMOUNT BEING TREATED AS SHORT TERM CAPITAL GAIN. ITA NO.2230/PUN/2014 SWAPNIL J. KOTHADIA 2 2. WRONG TREATMENT OF NON RECEIPT OF ON-MONEY AS RE CEIPT OF MONEY FROM THE SALE OF RURAL AGRICULTURAL AS PER STATEMENT REC ORDED. ON THE CIRCUMSTANCES AND FACTS OF THE CASE AND IN L AW, THE LD.CIT(A) ERRED IN CONFIRMING THE ADDITION ON ACCOUNT OF RECEIPT OF ON -MONEY FROM THE PURCHASER BY PLACING RELIANCE ON THE STATEMENT OF THE PURCHAS ER RECORDED U/S.132(4) OF THE INCOME TAX ACT, 1961. THE ADDITION MADE IN REL ATION TO THIS ASPECT WAS RS.19,16,666/-. RELIEF CLAIMED : THE ADDITION OF RS.19,16,666/- BEI NG RECEIPT OF ON-MONEY ON SALE OF RURAL AGRICULTURAL LAND BE DELETED. 3. IN ADDITION, THE ASSESSEE HAS ALSO FILED ADDITIO NAL GROUNDS AND SUBMITTED THEY ARE LEGAL IN NATURE. LD. COUNSEL SUBMITTED TH AT THEY RELATE TO SERVICE OF STATUTORY NOTICE U/S.143(2) OF THE ACT BEFORE REASS ESSMENT IS MADE AND SUBMITTED FOR ADMITTING THE SAME. FURTHER, HE SUBM ITTED THAT NO FRESH FACTS OR INVESTIGATION INTO FACTS IS REQUIRED. THEREFORE TH E SAME SHOULD BE ADMITTED AND ADJUDICATED. FOR THE SAKE OF COMPLETENESS, THE SAI D ADDITIONAL GROUNDS ARE EXTRACTED AS UNDER : 1. SINCE THE LD. AO HAS FAILED TO SERVICE ON THE A PPELLANT THE NOTICE U/S.143(2) OF THE I.T. ACT, 1961, THE IMPUGNED REAS SESSMENT PROCEEDINGS ARE BAD IN LAW, VOID AB INITIO, NULL AND VOID AND WITHO UT JURISDICTION AND HENCE THE IMPUGNED REASSESSMENT ORDER MAY PLEASE BE ANNULLED. 2. IN THE ABSENCE OF CONDITIONS PRECEDENT FOR ASSUM PTION OF JURISDICTION, THE IMPUGNED REASSESSMENT PROCEEDINGS, ARE BAD IN L AW, VOID AB INITIO, NULL AND VOID AND WITHOUT JURISDICTION AND HENCE THE IMPUGNE D REASSESSMENT ORDER MAY PLEASE BE ANNULLED. 4. AFTER HEARING BOTH THE SIDES, I PROCEED TO ADMIT AND ADJUDICATE THE SAME AS UNDER. I SHALL TAKE UP THE ADJUDICATION PART IN THE FOLLOWING PARAGRAPHS. 5. BRIEFLY STATED RELEVANT FACTS OF THE CASE INCLUD E THAT THE ASSESSEE IS A CHARTERED ACCOUNTANT BY PROFESSION AND FILED HIS RE TURN OF INCOME DECLARING TOTAL INCOME OF RS.2,14,970/- AND THE SAME IS ACCEP TED U/S.143(1) OF THE ACT. SUBSEQUENTLY, THE AO NOTICED THAT THE ASSESSEE IS A LAND OWNER AND RECEIVED CASH AT THE TIME OF SALE OF THE SAME. FOR TAXING T HE SAME, AO RECORDED THE REASONS AND ISSUED NOTICE U/S.148 OF THE ACT DT. 27 -03-2012. AO ALSO ISSUED ANOTHER NOTICE U/S.142(1) OF THE ACT AND COMPLETED THE ASSESSMENT DETERMINED ITA NO.2230/PUN/2014 SWAPNIL J. KOTHADIA 3 THE ASSESSED INCOME AT RS.37,06,630/- AFTER ALLOWIN G DEDUCTIONS UNDER CHAPTER VIA. EVENTUALLY, AO ADDED HIS SHARE OF 1/6 TH OF RS.1.10 CRORES RECEIVED BY THE ASSESSEE. FURTHER, CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE AND CONFIRMED THE ADDITIONS. AS SUCH, NO LEGAL ISSUE WAS RAISED RELATING TO THE ISSUE AND SERVICE OF STATUTORY NOTICE U/S.143(2) OF THE ACT B EFORE THE CIT(A) AND THE SAME IS RAISED FOR THE FIRST TIME BEFORE ME AS ADDITIONA L GROUNDS. 6. IN CONNECTION WITH THE ADDITIONAL GROUNDS, LD. C OUNSEL FOR THE ASSESSEE SUBMITTED THAT IT IS MANDATORY FOR ISSUE OF NOTICE U/S.143(2) OF THE ACT BEFORE AN ASSESSMENT IS MADE U/S.148 R.W.S. 143(2) OF THE ACT. HE ALSO REFERRED TO VARIOUS OPPORTUNITIES GIVEN TO THE AO TO DEMONSTRA TE THE FACT OF ISSUING AND SERVICE OF THE SAID NOTICE U/S.143(2) OF THE ACT ON THE ASSESSEE BEFORE THE REASSESSMENT U/S.148/147 IS COMPLETED. LD. COUNSEL FOR THE ASSESSEE ALSO DREW MY ATTENTION TO THE NUMBER OF OPPORTUNITIES GR ANTED BY THE TRIBUNAL THROUGH LD. DR FOR THE REVENUE TO DEMONSTRATE THE A BOVE FACTS OF ISSUING AND SERVICE OF THE SAID NOTICE. FURTHER, BRINGING MY A TTENTION TO THE AOS LETTER DATED 09-11-2016, AFTER FILING A COPY OF THE SAME B EFORE THE TRIBUNAL, LD. COUNSEL SUBMITTED THAT AO HAS GONE ON RECORD IN INF ORMING THE ACIT, RANGE-9, PUNE ABOUT THE FACT OF ABSENCE OF SAID NOTICE U/S.1 43(2) OF THE ACT IN THE ASSESSMENT RECORDS. FURTHER, LD. COUNSEL FOR THE A SSESSEE FILED A COPY OF ORDER OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF SH RI DALICHAND H. OSWAL VS. ITO ITA NOS. 2080 TO 2084/PN/2014, ORDER DATED 11 -12-2015 TO DEMONSTRATE THAT FAILURE TO ISSUE AND SERVE THE NOTICE U/S.143( 2) OF THE ACT IS NOT A CURABLE DEFECT U/S.292B OF THE ACT. 7. IN REPLY, LD. DR FOR THE REVENUE SUBMITTED THAT, THE ASSESSMENT RECORDS PLACED BEFORE THE TRIBUNAL REFLECTS THE ABSENCE OF ANY EVIDENCE WITH REGARD TO THE ISSUANCE OR SERVICE OF SAID STATUTORY NOTICE U/ S.143(2) OF THE ACT AS PER THE PROCEDURE. FURTHER, LD. DR DREW MY ATTENTION TO TH E CONTENTS OF THE ORDER ITA NO.2230/PUN/2014 SWAPNIL J. KOTHADIA 4 SHEET AND FAIRLY SUBMITTED THAT THE ABSENCE OF ANY DIRECT EVIDENCE IN FAVOUR OF THE ISSUANCE AND SERVICE OF THE SAID NOTICE ON THE ASSESSEE IS EVIDENT. HOWEVER, LD. DR DID NOT RULE OUT THE ISSUANCE/SERVI CE OF NOTICE BY POST. 8. I HEARD BOTH THE SIDES ON THIS LIMITED LEGAL ISS UE RELATING TO ISSUANCE AND SERVICE OF THE STATUTORY NOTICE U/S.143(2) OF THE A CT. ON PERUSAL OF THE ASSESSMENT RECORDS AND OTHER DOCUMENTS PLACED BEFOR E ME, THERE IS NO DIRECT, INDIRECT OR CONCLUSIVE EVIDENCE TO DEMONSTRATE THE EVENTS OF (1) THE ISSUANCE OF NOTICE U/S.143(2) OF THE ACT ON THE ASSESSEE AS WEL L AS THE (2) SERVICE OF NOTICE ON THE ASSESSEE WITHIN THE TIME LIMITS PROVIDED IN THE STATUTE. I HAVE ALSO CONSIDERED THE LD. DRS SUBMISSION THAT IT MAY BE P OSSIBLE FOR SENDING THE SAID NOTICE THROUGH POST. HOWEVER, THE SAME IS NOT DEMO NSTRATED BY FILING ANY ACKNOWLEDGEMENT DUE. CONSIDERING ALL THESE AVAILAB LE FACTUAL MATRIX, I AM OF THE OPINION THAT THE REASSESSMENT MADE BY THE ASSES SING OFFICER ON 26-03- 2013 IS WITHOUT ISSUANCE OF NOTICE U/S.143(2) OF TH E ACT AND SERVICE OF THE SAME. IT IS THE REQUIREMENT OF THE LAW THAT THE SA ID NOTICE OUGHT TO HAVE BEEN SERVED ON THE ASSESSEE BEFORE THE RE-ASSESSMENT IS DONE. FURTHER, IT IS SETTLED LEGAL PROPOSITION THAT THE ONUS IS ON THE REVENUE T O DEMONSTRATE THE SERVICE OF THE NOTICE ON THE ASSESSEE AS PER THE PROCEDURE LAI D DOWN IN THE STATUTE. IN THIS CASE, THE REVENUE FAILED TO DISCHARGE THE SAME DESPITE THE NUMBER OF OPPORTUNITIES GRANTED BY THE TRIBUNAL. THEREFORE, I AM OF THE VIEW THAT, ON THIS PRELIMINARY ISSUE ITSELF, WHICH IS LEGAL IN NATURE, THE ADDITIONAL GROUNDS RAISED BY THE ASSESSEE HAVE TO BE ALLOWED IN FAVOUR OF THE AS SESSEE. ACCORDINGLY, THE ADDITIONAL GROUNDS RAISED BY THE ASSESSEE ARE ALLOW ED. 9. REGARDING THE OTHER GROUNDS RAISED BY THE ASSESS EE ON MERITS, I FIND ADJUDICATION OF THE SAME CONSTITUTES AN ACADEMIC EX ERCISE IN VIEW OF THE FACT THAT JURISDICTIONAL ISSUE RAISED IN THE ADDITIONAL GROUNDS HAVE BEEN ALLOWED IN ITA NO.2230/PUN/2014 SWAPNIL J. KOTHADIA 5 FAVOUR OF THE ASSESSEE. ACCORDINGLY, THE GROUNDS R AISED BY THE ASSESSEE ON MERIT ARE DISMISSED AS ACADEMIC. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED ON THIS 16 TH DAY OF FEBRUARY, 2018. SD/- (D.KARUNAKARA RAO) / ACCOUNTANT MEMBER / PUNE; DATED : 16 TH FEBRUARY, 2018. SATISH / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A) - V, PUNE 4. / THE CIT - V, PUNE 5. , , SMC / DR SMC, ITAT, PUNE; 6. / GUARD FILE. / BY ORDER, //TRUE COPY// //TRUE COPY// SENIOR PRI VATE SECRETARY , / ITAT, PUNE