Sri Jayakumar Reddy , Bangalore V. Income Tax officer Ward-6(2), Bangalore

ITA 2518/BANG/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5392 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 17-01-2018
• Assessment Year: 2005-2006
• Appeal Filed On: 28-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K N DHANDA
• Assessee Lawyers: SREEHARIKUTTA
• Keywords: Search and seizure; Question of law
• Section: 143(3); 147; 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH A - SMC BEFORE SHRI N.V VASUDEVAN, JUDICIAL MEMBER ITA NO.2518/BANG/2017 (ASST. YEAR - 2005-06) SHRI JAYAKUMAR REDDY, GANIGARAHALLI VILLAGE, CHIKKABANAVARA POST, BENGALURU. . APPELLANT VS. THE INCOME-TAX OFFICER, WARD-6(2), BENGALURU. . RESPONDENT APPELLANT BY : SHRI SREEHARIKUTTA, ADVOCATE RESPONDENT BY : SHRI K.N DHANDAPANI, JCIT DATE OF HEARING : 07-3-2018 DATE OF PRONOUNCEMENT : 28-3-2018 O R D E R PER N.V VASUDEVAN, JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) - 7, BENGALURU DATED 26.10.2017 RELATING TO THE ASSESSMENT YEAR 2005-06. 2. THE ASSESSEE IS AN INDIVIDUAL, WHO DERIVES INCOM E FROM ACTING AS COMMISSION AGENT. THERE WAS A SEARCH AND SEIZURE O PERATION U/S 132 OF THE INCOME TAX ACT, 1961 (ACT) CARRIED OUT IN THE RMD G UTKHA GROUP ON 21/1/2010. IN THE COURSE OF SEARCH IN THE CASE OF RMD GUTKHA, CERTAIN DOCUMENTS WERE SEIZED WHICH REVEALED THAT THE ASSESSEE ACTED AS AN AGENT FOR REAL ESTATE TRANSACTIONS AND RECEIVED COMMISSION INCOME. BASED ON THE MATERIAL FOUND IN THE COURSE OF SEARCH, ASSESSMENT OF THE ASSESSEE FOR ASSESSMENT Y EAR 2005-06 WAS REOPENED BY ITA NO.2518/B/17 2 ISSUING NOTICE ON 23/3/2011 U/S 148 OF THE ACT. TH E AO PASSED AN ORDER U/S 143(3) OF THE ACT R.W.S 148 OF THE ACT IN WHICH HE MADE AN ADDITION OF RS.6,13,156/- AS UNDISCLOSED COMMISSION INCOME. 3. ON APPEAL BY THE ASSESSEE THE ADDITION WAS CONFI RMED BY THE CIT(A). 4. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESS EE HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL 5. THE ASSESSEE HAS FILED AN APPLICATION PRAYING FO R ADMISSION OF THE FOLLOWING ADDITIONAL GROUNDS:- 1. THE LEARNED A.O. IS NOT JUSTIFIED IN RE-OPENING THE ASSESSMENT FOR THE AFORESAID ASSESSMENT YEAR IN AS MUCH AS THE RE WAS NO INCOME ESCAPING ASSESSMENT FOR THE YEAR UNDER APPEA L AND THEREFORE, THE ORDER OF ASSESSMENT PASSED BY THE LE ARNED A.O. INVOKING THE PROVISIONS OF SEC. 147 OF THE ACT DESE RVES TO BE CANCELLED. 2. WITHOUT PREJUDICE TO THE ABOVE, THE ORDER OF RE- ASSESSMENT IS BAD IN LAW AND VOID-AB-INITIO FOR WANT OF REQUIS ITE JURISDICTION ESPECIALLY, THE MANDATORY REQUIREMENTS TO ASSUME JU RISDICTION U/S.148 OF THE ACT DID NOT EXIST AND HAVE NOT BEEN COMPLIED WITH AND CONSEQUENTLY, THE RE-ASSESSMENT REQUIRES TO BE CANCELLED. 3. FOR THE ABOVE AND OTHER GROUNDS THAT MAY BE URGE D AT THE TIME OF HEARING OF THE APPEAL, YOUR APPELLANT HUMBL Y PRAYS THAT THE APPEAL MAY BE ALLOWED AND JUSTICE RENDERED. 6. SINCE THE ADDITIONAL GROUND RELATES TO THE VALID ITY OF INITIATION OF RE- ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS PRAYED FOR ADMISSION OF THE ADDITIONAL GROUNDS AS IT GOES TO THE JURISDICTION OF THE AO TO MAKE THE IMPUGNED ASSESSMENT. 7. I HAVE CONSIDERED THE REQUEST OF THE ASSESSEE AN D I AM OF THE VIEW THAT THE ISSUE WITH REGARD TO VALIDITY OF ASSUMPTION OF JURI SDICTION U/S 147 OF THE ACT BEING ITA NO.2518/B/17 3 A LEGAL ISSUE AND THE FACTS NECESSARY FOR ADJUDICAT ION OF THE LEGAL ISSUE ARE ALREADY AVAILABLE ON RECORD, THE ADDITIONAL GROUND HAS TO B E ADMITTED FOR ADJUDICATION. I AM OF THE VIEW THAT THE DECISION OF THE HONBLE SU PREME COURT IN THE CASE OF NTPC, 229 ITR 383 (SC), WHEREIN IT WAS HELD THAT WH ERE THE QUESTION OF LAW IS REQUIRED TO BE ADJUDICATED FOR PROPER DETERMINATION OF TAX LIABILITY THEN THE ADDITIONAL GROUND RAISED BY AN ASSESSEE SHOULD BE A DMITTED FOR AN ADJUDICATION, SUPPORTS THE PLEA OF THE ASSESSEE FOR ADMISSION OF THE ADDITIONAL GROUND OF APPEAL. 8. THE LD COUNSEL FOR THE ASSESSEE FILED BEFORE ME AN ORDER OF THE TRIBUNAL IN THE CASE OF SHRI PUROHITA SHANTHILAL VS. ITO IN ITA NO.1107/BANG/2017 DATED 24/8/2017. IN THE AFORESAID DECISION SIMILAR PRAYE R FOR ADMISSION OF ADDITIONAL GROUNDS CHALLENGING THE VALIDITY OF ASSUMPTION OF J URISDICTION U/S 148 OF THE ACT WAS RAISED BY THE ASSESSEE. THE TRIBUNAL PERMITTED THE ADDITIONAL GROUNDS TO BE RAISED AND REMANDED THE MATTER TO THE CIT(A) FOR FR ESH CONSIDERATION AND IN DOING SO, THE TRIBUNAL PLACED RELIANCE ON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. SAFETAG INTERNATIONAL INDIA PVT. LTD., IN ITA NO.332 ITR 622 (DEL). THE LD COUNSEL FOR THE ASSESSEE PRAYED THAT SIMILAR DIRECTIONS AS CONTAINED IN THE AFORESAID ORDER SHOULD BE PASSED I N THE PRESENT CASE ALSO. THE LD DR RELIED ON THE ORDERS OF THE CIT(A). 9. I HAVE CONSIDERED THE RIVAL SUBMISSION ON IDENTI CAL PLEA RAISED BY AN ASSESSEE. THIS TRIBUNAL IN THE CASE OF SHRI PUROHI TA SHANTHILAL (SUPRA) HELD AS FOLLOWS:- 5. 1 HAVE CONSIDERED THE RIVAL SUBMISSIONS. FIRST I CONSIDER AND EXAMINE THE APPLICABILITY OF JUDGMENT OF HON'BL E DELHI HIGH COURT CITED BY ID. DR OF REVENUE. IN THAT CASE, IT WAS HELD BY HON'BLE DELHI HIGH COURT THAT ORDER OF TRIBUNAL FOR RESTORING BACK THE MATTER TO THE FILE OF AO WAS NOT JUSTIFIED BUT THE HON'BLE DELHI HIGH COURT HAS ALSO HELD THAT THE MATTER SHOULD GO BACK TO THE FILE OF CIT(A) AND ID. CIT(A) SHALL ENSURE THAT THE REAS ONS RECORDED BY THE AO FOR REOPENING SHOULD BE PROVIDED TO THE ASSE SSEE WITHIN 4 WEEKS FROM THE JUDGMENT OF DELHI HIGH COURT AND AFT ER SUPPLY OF REASONS TO BELIEVE, THE ASSESSEE MAY MAKE SUBMISSIO NS BASED ON THOSE REASONS CHALLENGING THE REASSESSMENT AND CIT( A) SHOULD ITA NO.2518/B/17 4 DECIDE THIS ISSUE ON MERIT AFTER HEARING BOTH PARTI ES. ACCORDINGLY IN THE PRESENT CASE ALSO, I SET ASIDE THE ORDER OF CIT (A) AND RESTORE THE MATTER BACK TO HIS FILE FOR FRESH DECIS ION WITH THE DIRECTION THAT HE SHOULD ENSURE THAT THE REASONS RE CORDED BY THE AO FOR REOPENING ARE PROVIDED BY THE ASSESSEE WITHI N 4 WEEKS FROM THE DATE OF THE PRESENT ORDER AND AFTER SUPPLY OF THE REASONS TO BELIEVE, IT IS OPEN TO THE ASSESSEE TO MAKE SUBM ISSIONS BEFORE THE ID. CIT (A) REGARDING OBJECTION IF ANY AGAINST VALI DITY OF REOPENING BASED ON THOSE REASONS. THEREAFTER, THE CIT (A) SHA LL DECIDE THIS ISSUE ON MERIT AFTER HEARING BOTH SIDES. SINCE THIS MATTER IS BEING RESTORED BACK TO THE FILE OF CIT (A) FOR FRESH DECI SION REGARDING VALIDITY OF REOPENING, I FEEL IT PROPER TO DIRECT T HE CIT (A) THAT IF IT IS HELD BY ID. CIT(A) THAT REOPENING IS NOT VALID T HEN NOTHING REMAINS TO BE DECIDED ON MERIT BUT IF IT IS HELD BY ID. CIT(A) THAT REOPENING IS VALID THEN HE DECIDE THE ISSUE ON MERI T AFRESH BECAUSE AFTER DECISION ON TECHNICAL ASPECT ONLY, THE ISSUE ON MERIT SHOULD BE DECIDED. HENCE NO ADJUDICATION IS CALLED FOR AT THIS STAGE REGARDING THE ISSUE INVOLVED ON MERIT. 10. I AM OF THE VIEW THAT SIMILAR DIRECTIONS IN THE PRESENT CASE WOULD BE JUST AN APPROPRIATE. ACCORDINGLY, I SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE MATTER BACK TO THE FILE OF THE CIT(A) FOR FRESH DEC ISION WITH DIRECTIONS SIMILAR TO THE DIRECTIONS GIVEN BY THE TRIBUNAL IN THE CASE OF SHRI PUROHITA SHANTHILAL (SUPRA).I ALLOW THE APPEAL OF THE ASSESSEE FOR STAT ISTICAL PURPOSES. 11. IN THE RESULT, THE APPEAL BY THE ASSESSEE IS TR EATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH MARCH, 2018. (N.V VASUDEVAN) JUDICIAL MEMB ER BANGALORE DATED : 28/3/2018 VMS ITA NO.2518/B/17 5 COPY TO : 1. THE ASSESSEE 2. THE REVENUE 3.THE CIT CONCERNED. 4.THE CIT(A) CONCERNED. 5.DR 6.GF BY ORDER SR. PRIVATE SECRETARY, ITAT, BANGALORE. ITA NO.2518/B/17 6 1. DATE OF DICTATION 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO SR. P. S... 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER .. 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S. .. 6. DATE OF UPLOADING THE ORDER ON WEBSITE .. 7. IF NOT UPLOADED, FURNISH THE REASON FOR DOING SO .. 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. DATE ON WHICH ORDER GOES FOR XEROX & ENDORSEMENT.. 10. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 11. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 12. THE DATE ON WHICH THE FILE GOES TO DISPATCH SEC TION FOR DISPATCH OF THE TRIBUNAL ORDER . 13. DATE OF DESPATCH OF ORDER. ..