Sri H S Ningaiah , Bangalore V. Deputy Commissioner of Income Tax Central Circle-1(4), Bangalore

ITA 2365/BANG/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0122 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 10 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-06-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 23-06-2020
• Assessment Year: 2010-2011
• Appeal Filed On: 13-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K V ARAVIND
• Keywords: Invalid notice; Opportunity of being heard; Principle of natural justice; Additional evidence; Set aside; Capital Gains
• Section: 234B; 250; 153C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE , JUDICIAL MEMBER ITA NO. 2 3 65 /BANG/20 1 8 ASSESSMENT YEAR : 2010-11 SHRI. H. S. NINGAIAH, NO.143, 4 TH BLOCK, RMHBCS LAYOUT, NANDHINI LAYOUT, BENGALURU 560 096. PAN : A B R PN 0220 D VS. THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 1(4), BENGALURU. APPELLANT RESPONDENT ASSESSEE BY : SHRI. PRANAV KRISHNA, ADVOCATE REVENUE BY : SHRI. K. V. ARAVIND, STANDING COUNSEL DATE OF HEARING : 23 .06.2020 DATE OF PRONOUNCEMENT : 26 .0 6 .2020 O R D E R PER A. K. GARODIA, AM: THIS APPEAL IS FILED BY THE ASSESSEE AND THE SAME IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)- 11 BENGALURU, DATED 16.07.2018 FOR ASSESSMENT YEAR 2010-11. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX PASSED UNDER SECTION 250 OF THE ACT IN SO FAR AS IT IS AGAINST THE APPELLANT IS OPPOSED TO LAW, WEIGHT OF EVIDENCE, PROBABILITIES, FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE. 2. THE APPELLANT DENIES HIMSELF LIABLE TO BE ASSESSED ON A TOTAL INCOME OF RS. 75,61,980/- AS AGAINST THE INCOME REPORTED OF ITA NO.2365/BANG/2018 PAGE 2 OF 5 RS. 49,01,984/- BY THE APPELLANT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE LEARNED CIT [A] ERRED IN CONFIRMING THE ORDER U/S. 153C R.W.S. 143 [3] OF THE LEARNED ASSESSING OFFICER WITHOUT ADJUDICATING THE CONTENTIONS TAKEN BY THE APPELLANT ON THE ISSUE OF ASSUMPTION OF JURISDICTION UNDER SECTION 153C OF THE ACT WITHOUT EVEN CALLING, EXAMINING THE RECORDS, ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. THE LEARNED CIT [A) FAILED TO APPRECIATE THAT THE NOTICE ISSUED UNDER SECTION 153C OF THE ACT IS BAD IN LAW, FOR WANT OF REQUISITE JURISDICTION ESPECIALLY THE MANDATORY REQUIREMENTS TO ASSUME JURISDICTION UNDER SECTION 153C OF THE ACT HAVE NOT BEEN COMPLIED WITH AND CONSEQUENTLY THE ASSESSMENT IS LIABLE TO BE CANCELLED ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. THE LEARNED CIT [A] FAILED TO APPRECIATE THAT THE ASSESSMENT IS FURTHER BAD IN LAW AS REASONS FOR ISSUE OF NOTICE UNDER SECTION 1 53 C OF THE ACT HAVE NOT BEEN GIVEN AND THE APPELLANT HAS REASONS TO BELIEVE THAT THE SAME HAS NOT BEEN RECORDED AND CONSEQUENTLY THE ASSESSMENT IS BAD IN LAW, THE APPELLANT SUBMITS THAT MANDATORY CONDITIONS TO ASSUME JURISDICTION IS TO RECORD REASONS AND IN THE ABSENCE OF THE SAME THE ASSESSMENT IS BAD IN LAW AND LIABLE TO BE CANCELLED. 6. THE LEARNED CIT [A] FAILED TO APPRECIATE THAT THE NOTICE ISSUED UNDER SECTION 153C OF THE ACT IS FURTHER BAD IN LAW WHEN LEARNED ASSESSING OFFICER MENTIONED IN THE NOTICE THAT HE PROPOSES TO ASSESS/REASSESS THE INCOME (HIGHLIGHTED PORTION 'ASSESS/REASSESS YOUR INCOME), LEARNED ASSESSING OFFICER ISSUED A NOTICE WITHOUT SPECIFICALLY SPECIFYING BY WHAT HE IS PROPOSING WHETHER HE IS PROPOSING TO ASSESS OR REASSESS AND THERE IS NO SPECIFIC WHAT HE IS PROPOSING IN THE NOTICE AND CONSEQUENTLY THE ENTIRE PROCEEDINGS INITIATED BY THE SAID INVALID NOTICE THE ASSESSMENT ORDER PASSED IS NOT VALID AND VOID-AB-INITIO. 7. THE LEARNED CIT [A] ERRED IN CONFIRMING THE DISALLOWANCE MADE BY THE LEARNED ASSESSING OFFICER RELATING TO THE BROKERAGE EXPENSES IN THE CAPITAL GAINS COMPUTATION OF RS. 14,00,000/- WITHOUT TAKING COGNIZANCE AND APPRECIATING THE WRITTEN SUBMISSIONS FILED BY THE APPELLANT ON THE FACTS AND CIRCUMSTANCES OF THE CASE. ITA NO.2365/BANG/2018 PAGE 3 OF 5 8. THE LEARNED CIT [A] ERRED IN CONFIRMING THE DISALLOWANCE MADE BY THE LEARNED ASSESSING OFFICER RELATING TO THE IMPROVEMENT CHARGES IN THE CAPITAL GAINS COMPUTATION OF RS. 12,60,000/-. WITHOUT TAKING COGNIZANCE AND APPRECIATING THE WRITTEN SUBMISSIONS FILED BY THE APPELLANT ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 9. THE LEARNED CIT [A] ERRED IN PASSING THE APPELLATE ORDER DATED 16/07/2018 WITHOUT TAKING INTO ACCOUNT THE WRITTEN SUBMISSIONS ALONG WITH EVIDENCES AND APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE UNDER RULE 46A OF THE INCOME TAX RULES, 1962. FILED ON 08/06/2018 IN SUPPORT OF THE APPELLANT'S CASE AND THEREBY PASSED A PERVERSE ORDER UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 10. WITHOUT PREJUDICE THE EX-PARTE ORDER PASSED BY THE LEARNED CIT [A] WITHOUT AFFORDING A REASONABLE OPPORTUNITY OF HEARING IS IN GRAVE VIOLATION OF PRINCIPLES OF NATURAL JUSTICE ON THE FACTS AND CIRCUMSTANCES OF THE CASE,. 11. WITHOUT PREJUDICE TO THE RIGHT TO SEEK WAIVER AS PER THE PARITY OF REASONING OF THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF KARANVIR SINGH 349 ITR 692, THE APPELLANT DENIES ITSELF LIABLE TO BE CHARGED TO INTEREST UNDER SECTION 234 B OF THE INCOME TAX ACT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 12. THE CALCULATION OF INTEREST BY THE. LEARNED ASSESSING OFFICER UNDER SECTION 234 B OF THE ACT IS NOT CORRECT. 'AS' THIS IS AN ASSESSMENT MADE UNDER SECTION 153C OF THE ACT FOR THE IMPUGNED ASSESSMENT YEAR 2010-11 BY ISSUANCE OF A NOTICE UNDER SECTION 153C OF THE ACT, THE INTEREST UNDER SECTION 234 B HAS TO BE CALCULATED AS PER THE PROVISIONS OF SUB-SECTION [3] OF SECTION 234B OF THE ACT. 3. IN THE COURSE OF HEARING, IT WAS SUBMITTED BY LEARNED AR OF THE ASSESSEE THAT IN THE IMPUGNED ORDER, LEARNED CIT(A) HAS REPRODUCED THE GROUNDS RAISED BY THE ASSESSEE BEFORE HIM AND THEREAFTER, IT IS STATED BY LEARNED CIT(A) ON PAGE 4 OF HIS ORDER THAT THE CASE WAS POSTED FOR HEARING ON 17.04.2018, BUT NEITHER APPEARED ON BEHALF OF THE ASSESSEE NOR ANY ADJOURNMENT WAS SOUGHT AND THEREFORE, HE HAS PROCEEDED TO DISPOSE OF THE APPEAL EX-PARTE QUA THE ASSESSEE. HE SUBMITTED THAT THE APPEAL WAS FILED BY THE ASSESSEE BEFORE ITA NO.2365/BANG/2018 PAGE 4 OF 5 CIT(A) ON 29.04.2015 AND FOR THE FIRST TIME, THE SAME WAS FIXED FOR HEARING ON 17.04.2018 AND THE IMPUGNED ORDER WAS PASSED BY LEARNED CIT(A) ON 16.07.2018 WITHOUT GIVING ANY FURTHER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IT WAS SUBMITTED THAT UNDER THESE FACTS, IT SHOULD BE ACCEPTED THAT REASONABLE OPPORTUNITY OF BEING HEARD WAS NOT PROVIDED TO THE ASSESSEE AND THEREFORE, THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE CIT(A) FOR A FRESH DECISION AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. LEARNED DR OF THE REVENUE SUPPORTED THE ORDER OF CIT(A). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND IN THE FACTS OF THE PRESENT CASE AS NOTED ABOVE, WE FIND FORCE IN THE SUBMISSIONS OF LEARNED AR OF THE ASSESSEE THAT SUFFICIENT OPPORTUNITY OF BEING HEARD WAS NOT PROVIDED BY LEARNED CIT(A) TO THE ASSESSEE AND THEREFORE, WE SET ASIDE THE ORDER OF CIT (A) AND RESTORE THE ENTIRE MATTER TO THE FILE OF CIT(A) FOR A FRESH DECISION AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO BOTH SIDES. 5. IN VIEW OF THIS DECISION, WE MAKE NO COMMENT ON MERIT OF THE CASE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/- SD/- (PAVAN KUMAR GADALE) (A.K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED: 26 TH JUNE, 2020. /NS/* ITA NO.2365/BANG/2018 PAGE 5 OF 5 COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.