Vagadiya Ramaniklal Mavjibhai(HUF) , Bangalore V. The Income Tax Officer Ward-3(2)(3), Bangalore

ITA 2314/BANG/2018

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 0777 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 03-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Principle of natural justice; Accommodation entries
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-A BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER ITA NO. 23 14 /BANG/2018 ASSESSMENT YEAR : 20 0 8 - 0 9 SHRI. VAGADIYA RAMANIKLAL MAVJIBHAI (HUF), NO. 350/1, MYSORE ROAD, NAYANDAHALLI, BENGALURU 560 039. PAN : AAEHV 1817 L VS. INCOME-TAX OFFICER, WARD 3(2)(3), BENGALURU. APPELLANT RESPONDENT ASSESSEE BY : SHRI. SUMAN LUNKAR, CA REVENUE BY : SHRI. PRIYADARSHI MISHRA, JCIT, SPECIAL RANGE - III DATE OF HEARING : 14 .0 8 .2018 DATE OF PRONOUNCEMENT : 15 . 10 .2018 O R D E R PER SUNIL KUMAR YADAV, JUDICIAL MEMBER THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A), INTER ALIA, ON FOLLOWING GROUNDS: 1. THE LEARNED ASSISTANT COMMISSIONER OF INCOME TAX, HAD ERRED IN PASSING THE ORDER IN THE MANNER PASSED BY HIM AND THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE SAME. THE ORDER PASSED IS BAD IN LAW AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE AND IS REQUIRED TO BE QUASHED IN TOTO. 2.1 THE LEARNED CIT(A) HAS ERRED IN DISMISSING THE APPEAL FILED BY THE APPELLANT HOLDING THAT THE APPELLANT IS NOT INTERESTED IN PURSUING THE APPEAL AS THE APPELLANT DID NOT RESPOND TO THE NOTICES OF HEARING ISSUED, THE ACTION OF CIT(A) PASSING THE ORDER EXPARTE BEING BAD IN LAW AND ITA NOS.2314/BANG/2018 PAGE 2 OF 4 AGAINST THE PRINCIPLES OF NATURAL JUSTICE MAKES THE APPELLATE ORDER BAD IN LAW AND SUCH ORDER IS LIABLE TO BE QUASHED. 2.2 IN ANY CASE AND WITHOUT PREJUDICE, THE LEARNED CIT(A) OUGHT TO HAVE DISPOSED OF THE APPEAL ON MERITS OF THE CASE. THE ACTION OF CIT(A) IN NOT DISPOSING THE APPEAL ON MERITS OF THE CASE MAKES THE ORDER BAD IN LAW AND SUCH AN ORDER IS LIABLE TO BE QUASHED. 3.1 IN ANY CASE, THE CONDITIONS PRECEDENT FOR THE ISSUE OF NOTICE U/S. 148 OF THE ACT BEING ABSENT, THE RE-OPENING OF ASSESSMENT BECOMES BAD IN LAW AND CONSEQUENTLY THE ORDER AS PASSED/CONFIRMED BEING ALSO BAD IN LAW IS REQUIRED TO BE QUASHED. 3.2 IN ANY CASE THE ASSESSING OFFICER HAVING NOT COMPLIED WITH LEGAL PROVISIONS / PROCEDURE FOR REOPENING / REASSESSMENT, THE CONSEQUENTIAL ORDER BECOMES BAD IN LAW AND LIABLE TO BE QUASHED. 4.1 IN ANY CASE THE ORDER PASSED IN GROSS VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE AND FAIR PLAY, ESPECIALLY IN THE ABSENCE OF THE CROSS EXAMINATIONS OF THE PERSONS WHOSE AVERMENTS ARE SOUGHT TO BE RELIED UPON BY THE ASSESSING OFFICER WHILE PASSING THE ORDER, MAKES THE ORDER TOTALLY BAD IN LAW AND LIABLE TO BE CANCELLED. 4.2 THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS INSTEAD OF QUASHING THE IMPUGNED ORDER, HAS JUST CONFIRMED THE ORDER OF ASSESSING OFFICER WITHOUT PROPERLY CONSIDERING THE FACT AND CIRCUMSTANCES OF THE CASE, ARGUMENTS OF THE APPELLANT AND THE LAW APPLICABLE. 4.3. IN ANY CASE AND WITHOUT PREJUDICE, THE ORDERS PASSED BY THE AUTHORITIES BELOW BEING CONTRARY TO BINDING DICTUM OF THE JURISDICTIONAL HIGH COURT ARE BAD IN LAW AND ARE LIABLE TO BE QUASHED. 5. THE ASSESSING OFFICER HAD IN ANY CASE, ERRED IN TREATING A SUM OF RS. 8,02,108/- BEING LONG/SHORT TERM CAPITAL GAIN EARNED ON SALE OF SHARES AS 'INCOME FROM OTHER SOURCES' AND THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE SAME. THE ACTION OF AUTHORITIES BELOW HAS NO SUPPORT IN LAW; IS CONTRARY TO FACTS AND EVIDENCE AVAILABLE AND THEREFORE DESERVES TO BE REJECTED. 6.1 IN ANY CASE AND WITHOUT FURTHER PREJUDICE, THE AUTHORITIES BELOW HAVE ERRED IN: ITA NOS.2314/BANG/2018 PAGE 3 OF 4 A) TAXING/CONFIRMING THE SHORT-TERM CAPITAL GAIN EARNED ON SALE OF SHARES AS INCOME UNDER THE HEAD OTHER SOURCES. B) NOT CONSIDERING THE FACT THAT THE APPELLANT' HAD EARNED LONG/ SHORT TERM CAPITAL GAIN(STT SUFFERED) AND CLAIMED EXEMPTION U/S 10(38) OF THE ACT WITH RESPECT TO LTCG AND OFFERED THE STCG FOR TAXATION. C) HOLDING WITHOUT BASIS THAT THE TRANSACTIONS IN SHARES ARE FRAUDULENT D) ALLEGING WITHOUT ANY BASIS THAT THE APPELLANT HAS OBTAINED ACCOMMODATION ENTRIES AND APPELLANT'S OWN MONEY COME BACK IN THE GUISE OF CAPITAL GAINS. THE CONCLUSIONS / OBSERVATIONS OF AUTHORITIES BELOW BEING TOTALLY ERRONEOUS AND WITHOUT BASIS BOTH ON FACTS-AND LAW IS TO BE DISREGARDED. 6.2 THE SEVERAL OBSERVATIONS MADE AND VARIOUS CONCLUSIONS DRAWN BY THE LOWER AUTHORITIES IN THE COURSE OF ORDER ARE WITHOUT BASIS AND. EVIDENCE AND ARE MADE/DRAWN ON SURMISES, PROBABILITIES AND CONJECTURES. SUCH OBSERVATIONS AND CONCLUSIONS BY QUASI-JUDICIAL AUTHORITIES HAVE NO SUPPORT IN LAW AND DESERVE TO BE REJECTED IN TOTO. 7. THE APPELLANT HAD ACTUALLY SOLD SHARES THROUGH DEMAT ACCOUNT AND HAD EARNED CAPITAL GAIN THEREON AND SAME NEEDS TO BE ACCEPTED AS SUCH. 8. THE APPELLANT DENIES THE LIABILITY TO PAY INTEREST. THE INTEREST HAVING BEEN LEVIED ERRONEOUSLY IS TO BE DELETED. 2. DURING THE COURSE OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE HAS INVITED MY ATTENTION THAT CIT(A) HAS DISMISSED THE APPEAL EX-PARTE WITHOUT AFFORDING PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. DESPITE REQUEST OF THE ASSESSEE, THE CIT(A) HAS NOT AFFORDED OPPORTUNITY AND DISPOSED OFF THE APPEAL EX-PARTE THAT TOO NOT ON MERIT. 3. THE LEARNED DR ON THE OTHER HAND PLACED RELIANCE UPON THE ORDER OF CIT(A). 4. HAVING CAREFULLY EXAMINED THE ORDERS OF LOWER AUTHORITIES IN THE LIGHT OF RIVAL SUBMISSIONS, I FIND THAT CIT(A) HAS DISPOSED OFF THE APPEAL ITA NOS.2314/BANG/2018 PAGE 4 OF 4 EX-PARTE WITHOUT AFFORDING PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. I, THEREFORE, SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE MATTER TO HIS FILE WITH A DIRECTION TO READJUDICATE THE GROUNDS RAISED BEFORE HIM ON MERIT, AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 5 TH DAY OF OCTOBER, 2018. SD/- SD/- (A. K. GARODIA) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE. DATE: 5 TH OCTOBER, 2018. /NS/ COPY TO: 1. APPELLANTS 2. RESPONDENTS 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE