Prafulla Chandra Rout, Ganjam V. ITO, Berhampur

ITA 260/CTK/2011

• Counselvise Citation: 26022114 RSA 2011
• Duration Of Justice: 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2003-2004
• Appeal Filed On: 11-05-2011
• Court: TRIBUNAL
• Department Lawyers: A BHATTACHARJEE
• Assessee Lawyers: K C DASH
• Keywords: Principle of natural justice; Assessment record

Judgement Text

IN THE INCME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE : HONBLE SHRI K.K.GUPTA, ACCOUNTANT MEMBER, AND HONBLE SHRI K.S.S.PRASAD RAO, JUDICIAL MEMBER. ITA NO. 260/CTK/2011 (ASSESSMENT YEAR 2003 - 04) SRI PRAFULLA CHANDRA ROUT, DIGAMURTY S TREET, BERHAMPUR (GANJAM) PAN AAHHP 5785 Q VERSUS INCOME - TAX OFFICER, WARD 2, BERHAMPUR CIRCLE, AMBAPUA, BERHAMPUR (GANJAM) (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI K.C.DASH, AR FOR THE RESPONDENT SHRI A.BHATTACHARJEE, DR ORDER SHRI K.S.S.PRA SAD RAO, JUDICIAL MEMBER : THIS APPEAL IS FILED BY THE ASSESSEE HAVING BEEN AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) DT. 28.3.2011 FOR THE ASSESSMENT YEAR 2003 - 04 IN CASE OF THE ASSESSEE. 2. THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS OF APPEAL. (1) THE LOWER AUTHORITIES WENT WRONG IN CONSIDERING THE VALUERS REPORT DT.20.6.2010 AS THAT OF REPORT OF THE REGISTERED VALUER. (2) THE LOWER AUTHORITIES HAVE FAILED TO CONSIDER THE REGISTERED VALUERS REPORT DT.8.11.2008 WHICH I S COMPREHENSIVE AND SCIENTIFIC AND THEREBY IT IS TO BE ACCEPTED. (3) THE ASSESSING OFFICER IS WRONG IN PASSING THE ASSESSMENT ORDER WITHOUT WAITING FOR THE OPINION OF THE DVO THAT WAS CALLED FOR BY HIMSELF. (4) BOTH THE LOWER AUTHORITIES HAVE NOT APPLIED THEIR MINDS IN PASSING THE IMPUGNED ORDERS. 3. BOTH THE PARTIES WERE HEARD REGARDING THE ISSUES RAISED BY THE ASSESSEE AND THEIR LEGAL IMPLICATIONS. 4. ON CAREFUL CONSIDERATION OF THE MATERIAL MADE AVAILABLE TO THE TRIBUNAL IN THE LIGHT OF THE RIVAL SUBM ISSIONS OF BOTH THE PARTIES AND THE AUTHORITIES RELIED UPON BY THEM, THE UNDISPUTED FACTS RELATING TO THE ISSUES ARE THAT UNDER REGISTERED PARTITION DEED NO.3338/48 DT.24.6.1948 OF SUB - ITA NO.260/CTK/2011 2 REGISTRAR, BERHAMPUR BETWEEN HIMSELF, HIS FATHER AND BROTHERS, THE ASSE SSEE RECEIVED LANDED PROPERTY AS WELL AS HOUSE PROPERTY TOWARDS HIS SHARE WHEN HE WAS A MINOR. THEREAFTER THE ASSESSEE GOT MARRIED AND BLESSED WITH TWO SONS AND TWO DAUGHTERS. THE ASSESSEE DERIVES INCOME FROM AGRICULTURE. THE ASSESSEE CONSTRUCTED A BUILDI NG AT ASKA ROAD OF BERHAMPUR TOWN IN A PIECE OF LAND FELL TO HIS SHARE AS PER THE PARTITION DEED IN 1948 (SUPRA),BY OBTAINING APPROVED PLAN FROM THE CONCERNED AUTHORITIES ON 18.7.2002.HE INVESTED SOME AMOUNTS OF HIS PAST SAVINGS AND SALE PROCEEDS OF AGRICU LTURAL PRODUCES AND LOAN FROM ANDHRA BANK. THE ASSESSEE HAS LET OUT THE PREMISES FOR BUSINESS PURPOSES TO DIFFERENT PERSONS ON RENTAL BASIS. THE ASSESSEE IS FILING RETURNS REGULARLY SINCE THE ASSESSMENT YEAR 2004 - 05 AND WAS ALLOTTED WITH PAN ALSO. THE ASSE SSEE MAINTAINED DETAILS OF EXPENDITURE REGARDING CONSTRUCTION OF BUILDING ITEMWISE IN A BOOK WHICH WAS FILED BEFORE THE ASSESSING OFFICER. ACCORDING TO THAT THE COST OF CONSTRUCTION OF THE BUILDING IS 32,40,052.THE ASSESSEE HAS GOT THE BUILDING VALUED BY A REGISTERED VALUER WHO HAS VALUED IT ON 18.11.2008 AT 32,17,561.THE ASSESSEE HAS CONSTRUCTED THE SAID BUILDING WITHIN A PERIOD OF FIVE YEARS COMMENCING FROM ASSESSMENT YEAR 2004 - 05 TO 2007 - 208 FOR WHICH PERIOD HE HAS FILED RETURNS IN TIME AS REQUIRED UND ER THE LAW APPLICABLE THERETO. 5. THE ASSESSING OFFICER HAS SELECTED THE CASE FOR SCRUTINY FOR THE ASSESSMENT YEAR 2007 - 08 BY ISSUING NOTICES U/S.142(1)/143(2) WHICH WERE DULY COMPLIED BY THE ASSESSEE. THE ASSESSING OFFICER DEPUTED HIS INSPECTOR OF INCOME - TAX FOR SPOT ENQUIRY OF THE HOUSE PROPERTY OF THE ASSESSEE. THE INSPECTOR OF INCOME - TAX FURNISHED HIS REPORT. LATER ON THE ASSESSING OFFICER REFERRED THE MATTER TO THE DVO FOR ASCERTAINING THE VALUE OF THE HOUSE IN QUESTION. THE DVO HAS FILED HIS REPORT O N 30.11.2009. BASING ON THESE, THE ASSESSING OFFICER HAS ISSUE D NOTICE U/S.148 FOR THE ASSESSMENT YEAR 2003 - 04 ITA NO.260/CTK/2011 3 AND PASSED THE ASSESSMENT ORDER AFTER HEARING THE ASSESSE AND CONSIDERING THE MATERIAL MADE AVAILABLE WITH HIM BY ADDING 21,19,967 AS UNEXPLAINE D INVESTMENT U/S.69 OF THE I.T.ACT,1961. AGGRIEVED BY THIS, THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A) AND THE LEARNED CIT(A) AFTER HEARING THE ASSESSEE AND CONSIDERING THE MATERIAL AVAILABLE IN THE ASSESSMENT RECORD HAS CONCLUDED THAT THE ASSESSING OFF ICER HAS NOT HEARD THE ASSESSEE REGARDING THE OBJECTION IN THE DVOS REPORT OF THE ASSESSEE BEFORE PASSING THE ORDER. HENCE, HE DIRECTED THE ASSESSING OFFICER TO ESTIMATE THE INVESTMENT IN THE CASE OF CONSTRUCTION OF BUILDING BY REDUCING 20% FROM THE COST ESTIMATED BY THE ASSESSING OFFICER TO MEET THE ENDS OF JUSTICE AND THUS OBSERVING, HE PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. STILL AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 6. ON CAREFUL ANALYSIS OF THE MATERIAL MADE AVAILABLE TO THE TR IBUNAL IN THE LIGHT OF THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AS WELL AS THE IMPUGNED ORDERS PASSED BY THE LOWER AUTHORITIES, IT IS FOUND THAT THE ASSESSING OFFICER HAS NOT GIVEN OPPORTUNITY TO THE ASSESSEE TO SUBMIT HIS OBJECTION, IF ANY , AGAINST THE D VOS REPORT. THIS AMOUNTS TO VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. THE LEARNED CIT(A) HAS RELIED ON THE DVOS REPORT WHICH WAS NOT AT ALL CONSIDERED IN THE LIGHT OF THE OBJECTION OF THE ASSESSEE AS NO SUCH OPPORTUNITY WAS GIVEN TO THE ASSESSEE BUT HE HAS ALLOWED 20% OUT OF THE INVESTMENT TO BE REWORKED BY THE ASSESSING OFFICER IN THE SAID BUILDING IN ORDER TO MEET THE ENDS OF JUSTICE. ON CAREFUL CONSIDERATION OF THE OBSERVATIONS OF BOTH THE LOWER AUTHORITIES, WE ARE OF THE CONSIDERED VIEW THAT THE AUT HORITIES UNDER THE ACT ARE REQUIRED TO STRICTLY FOLLOW THE PRINCIPLES OF NATURAL JUSTICE WHICH HAS NOT BEEN DONE BY THE ASSESSING OFFICER IN THE PRESENT CASE IN HAND AND THE LEARNED CIT(A) HAS UPHELD THE ORDER OF THE ASSESSING OFFICER PASSED WITHOUT FOLLOWING THE PRINCIPLES OF NATURAL JUSTICE ITA NO.260/CTK/2011 4 THOUGH HE HAS ALLOWED 20% DEDUCTION TO REWORK THE ESTIMATION OF INVESTMENT MADE BY THE ASSESSING OFFICER . THEREFORE, UNDER THESE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED VIEW THAT IT IS A FIT CASE TO BE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR COMPREHENSIVE CONSIDERATION OF THE REPORT OF THE REGISTERED VALUER FURNISHED BY THE ASSESSEE AND ALSO ALLOW THE AS SESSEE TO SUBMIT HIS OBJECTION O N DVOS REPORT AND THEN REWORK THE ALLEGED INVESTMENT OF THE ASSESSEE IN THE BUILDING IN QUESTION, OF COURSE STRICTLY FOLLOWING THE PRINCIPLES OF NATURAL JUSTICE AND PASS NECESSARY CONSEQUENTIAL ORDER AS PER LAW. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN OPEN COURT ON DT. 5 TH AUGUST, 2011 S D/ - S D/ - (K.K.GUPTA) ACCOUNTANT MEMBER (K.S.S.PRASAD RAO) JUDICIAL MEMBER DATE: 5 TH AUGUST, 2011 H.K.PADHEE, SENIOR PRIVATE SECRETARY. COPY OF THE ORDER FORWAR DED TO : 1. THE APPELLANT: SRI PRAFULLA CHANDRA ROUT, DIGAMURTY STREET, BERHAMPUR (GANJAM) 2. THE RESPONDENT: INCOME - TAX OFFICER, WARD 2, BERHAMPUR CIRCLE, AMBAPUA, BERHAMPUR (GANJAM) 3. THE CIT, 4. THE CIT(A), 5. THE DR, CUTTACK 6. GUARD FILE (IN D UPLICATE) TRUE COPY, BY ORDER, SENIOR PRIVATE SECRETARY.