Thatisetti Venkata Appa Rao, Visakhapatnam V. Income Tax Officer, Ward-5(5), Visakhapatnam

ITA 237/VIZ/2021

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 0807 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-10-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: DB
• Next Hearing Date: 11-10-2022
• Assessment Year: 2016-2017
• Appeal Filed On: 16-11-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Opportunity of being heard; Period of limitation; Condonation of delay
• Section: 263; 143(3)

Judgement Text

आयकरअपीलीयअधिकरण, धिशाखापटणम पीठ, धिशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM श्री द ु व्वूरु आर एल रेड्डी, न्याधयक सदस्य एिं श्री एस बालाकृ ष्णन, लेखा सदस्य के समक्ष BEFORE SHRI DUVVURU RL REDDY, HON’BLE JUDICIAL MEMBER & SHRI S BALAKRISHNAN, HON’BLE ACCOUNTANT MEMBER आयकर अपील सं./I.T.A.No.237/Viz/2021 (ननधधारण वर्ा / Assessment Year : 2016-17) Thatisetti Venkata Appa Rao D.No.7-44-126 Thagarapuvalasa Visakhapatnam [PAN : AFLPV3806R] Vs. Income Tax Officer Ward-5(5) Visakhapatnam अपीलधथी की ओर से/ Appellant by : Shri GVN Hari, AR प्रत्यधथी की ओर से / Respondent by : Shri M.N.Murthy Naik, CIT(DR) सुनवधई की तधरीख / Date of Hearing : 12.10.2022 घोर्णध की तधरीख/Date of Pronouncement : 14.10.2022 O R D E R Per Shri Duvvuru RL Reddy, Judicial Member : Condonation of Delay : This appeal is filed by the assessee against the order of the Principal Commissioner of Income Tax [in short, [Pr.CIT], Visakhapatnam-1 in DIN & Letter No.ITBA/COM/F/17/2020-21/1031834904(1) dated 27.03.2021 for the Assessment Year (A.Y.) 2016-17 with the delay of 175 days. The assessee filed petition for condonation of delay, submitting that as per orders of the Hon’ble Supreme Court in SMW(A) No.3 of 2020 dated 23.03.2020, 27.04.2021, 23.09.2021 and 10.01.2022, the period of 2 ITA No.237/Viz/2021, A.Y.2016-17 Thatisetti Venkata Appa Rao, Visakhapatnam limitation for filing appeals under general laws and all special laws falling between 15.03.2020 and 28.02.2022 shall be excluded for calculating the delay. Since the assessee filed the appeal on 17.11.2021 which falls within the period of limitation provided in the said order of the Hon’ble Supreme Court dated 10.01.2022, he pleaded to condone the delay and admit the appeal for hearing. 2. We have heard the Ld.AR, gone through the condonation petition filed and the order of the Hon’ble Supreme Court in SMW(A) No.3 of 2020 dated 10.01.2022. It is an admitted fact that the Hon’ble Supreme Court, keeping in view the impact of the surge of the Corona virus on public health and adversities faced by litigants during COVID-19 pandemic, passed an order, restoring the order dated 23.03.2020 and in continuation of the subsequent orders dated 08.03.2021, 27.04.2021 and 23.09.2021, directed that the period from 15.03.2020 till 28.02.2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi judicial proceedings. Since the assessee filed the appeal on 17.11.2021 which falls within the period of limitation provided in the said order of the Hon’ble Supreme Court dated 10.01.2022, respectfully following the order of the Hon’ble Apex Court, we condone the delay and admit the appeal for hearing. 3 ITA No.237/Viz/2021, A.Y.2016-17 Thatisetti Venkata Appa Rao, Visakhapatnam 3. Brief facts of the case are that the assessee is an individual, filed his return of income for the A.Y.2016-17 on 28.09.2017, admitting total income of Rs.8,49,590/- under the heads “income from house property” and “income from business”. The case was selected for complete scrutiny under CASS to verify the reason “large turnover shown in ITR but Audit Report (3CD Form) not filed”. The assessment was completed u/s 143(3) of the Income Tax Act, 1961 (in short “Act”) on 18.12.2018, assessing the total income at Rs.11,15,810/- by making part disallowance of certain expenditures. Under the powers vested with the Ld.Pr.CIT as per the provisions of section 263 of the Act, the assessment records for the A.Y.2016-17 were called for and examined. The Ld.Pr.CIT noticed that the assessee had purchased a house in Vizianagaram for a consideration of Rs.50 lakhs, whereas the market value of the property as per SRO records was Rs.73,98,000/-. The Ld.Pr.CIT held that, as the market value determined by the Registering Authority in the registered document of the said house is Rs.73,98,000/- and the purchase consideration of Rs.50,00,000/- is less than the stamp duty value of the property, the difference of Rs.23,98,000/- is to be treated as income from other sources as per provisions of section 56(2)(vi)(b) of the Act. The Ld.Pr.CIT observed that the act of the Assessing Officer(AO), completing the scrutiny 4 ITA No.237/Viz/2021, A.Y.2016-17 Thatisetti Venkata Appa Rao, Visakhapatnam assessment, omitting the issue of computation of income u/s 56(2)(vi)(b) of the Act with regard to assessee’s investment in the property rendered the assessment for A.Y.2016-17 not only erroneous but also prejudicial to the interests of revenue in view of Explanation-2 to section 263 of the Act inserted by the Finance Act, 2016 w.e.f. 01.06.2015. Accordingly, the Ld.Pr.CIT directed the AO to pass consequential order giving effect to the revision order u/s 263 of the Act and to recompute the income of the assessee by treating the difference amount of Rs.23,98,000/-, between the stamp duty value and the purchase consideration of the house purchased as income from other sources u/s 56(2)(vi)(b)(ii) of the Act, after affording opportunity of being heard to the assessee. 4. On being aggrieved, the assessee preferred an appeal before the Tribunal and raised the following grounds : 1. The order of the learned Principal Commissioner of Income Tax is contrary to the facts and also the law applicable to the facts of the case. 2. The learned Principal Commissioner of Income Tax is not justified in assuming jurisdiction u/s 263 of the Act in as much as the assessment order dated 18.12.2018 u/s 143(3) of the Act is neither erroneous nor prejudicial to the interests of revenue. 3. The learned Principal Commissioner of Income Tax erred in directing the assessing officer to make addition of Rs.23,98,000/- u/s 56(2)(vi)(b)(ii) of the Act towards the difference between the 5 ITA No.237/Viz/2021, A.Y.2016-17 Thatisetti Venkata Appa Rao, Visakhapatnam consideration actually paid for the property purchased by the appellant and the stamp duty value of the said property. 4. The learned Principal Commissioner of Income Tax ought to have appreciated that the assessing officer initiated enquiries in respect of the above issue and as such it is not a case of “lack of inquiry” to enable the learned Principal Commissioner of Income Tax to invoke the provisions of S.263 of the Act. 5. Any other ground that may be urged at the time of appeal hearing. 5. Ground No.1 and 5 are general in nature, which do not require specific adjudication. 6. Ground No.2 to 4 are related to initiation of revisionary proceedings u/s 263 of the Act by the Ld.Pr.CIT. The Ld.AR argued that the Ld.Pr.CIT is not justified in assuming jurisdiction u/s 263 of the Act and directing the assessing officer to recompute the income without giving any opportunity of being heard to the assessee to explain that the AO has already initiated enquiries in respect of purchase of the property and passed assessment order u/s 143(3) dated 18.12.2018, which is neither erroneous nor prejudicial to the interest of the revenue. He, therefore, pleaded to set aside the order of the Ld.Pr.CIT and also pleaded for one more opportunity of being heard to the assessee before the Ld.Pr.CIT. 7. Per contra, the Ld.DR relied on the order of the Ld.Pr.CIT, requested to uphold the same and dismiss the appeal of the assessee. 6 ITA No.237/Viz/2021, A.Y.2016-17 Thatisetti Venkata Appa Rao, Visakhapatnam 8. We have heard both the parties and perused the material placed on record. It is an admitted fact that the Ld.Pr.CIT has not given sufficient opportunities to the assessee to explain and substantiate the case of the assessee. Therefore, we are of the firm view that the assessee should be given an opportunity to explain his case, in order to meet the principles of natural justice. We therefore, remit the matter back to the file of the Ld.Pr.CIT to give one more opportunity of being heard to the assessee. 9. In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced in the open court on 14 th October, 2022. Sd/- Sd/- (एस बालाकृ ष्णन) (द ु व्वूरु आर.एल रेड्डी) (S.BALAKRISHNAN) (DUVVURU RL REDDY) लेखा सदस्य/ACCOUNTANT MEMBER न्याधयकसदस्य/JUDICIAL MEMBER Dated : 14.10.2022 L.Rama, SPS 7 ITA No.237/Viz/2021, A.Y.2016-17 Thatisetti Venkata Appa Rao, Visakhapatnam आदेश की प्रतितिति अग्रेतिि/Copy of the order forwarded to:- 1. ननधधाऩरती/ The Assessee– Thatisetti Venkata Appa Rao, D.No.7-44-126 Thagarapuvalasa, Visakhapatnam 2. रधजस्व/The Revenue – Income Tax Officer, Ward-5(5), Pratyakshakar Bhavan, MVP Double Road, Visakhapatnam 3. प्रधान आयकर आयुक्त /The Principal Commissioner of Income Tax-1, Visakhapatnam 4. नवभधगीय प्रनतनननध, आयकर अपीलीय अनधकरण, नवशधखधपटणम/ DR,ITAT, Visakhapatnam 5.गधर्ा फ़धईल / Guard file आदेशधनुसधर / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam