Smt Sushama Rajesh Rao , Bangalore V. Deputy Commissioner of Income Tax Circle-5(2)(1) , Bangalore

ITA 2734/BANG/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5615 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 15-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PADMA MEENAKSHI
• Assessee Lawyers: B S BALACHANDRAN; P DINESH S
• Keywords: Sale consideration of property below Jantri Value; Opportunity of being heard; Principle of natural justice
• Section: 143(3); 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH B BEFORE SHRI JASON P BOAZ , ACCOUNTANT MEMBER AND SHRI LALIT KUMAR, JUDICIAL MEMBER I.T . A. NO. 2734 /BANG/20 17 S.P. NO.2/BANG/2018 (ASSESSMENT YEAR : 20 12 - 13 ) SMT. SUSHAMA RAJESH RAO, NO.159, P RIYADARSHINI, MLA LAYOUT, RT NAGAR MAIN ROAD, BENGALURU - 560 032 . APPELLANT /PETITIONER . VS. DY. COMMISSIONER OF INCOME TAX, CIRCLE 5(2)(1), BANGALORE. .. RESPONDENT. APPELLANT /PETITIONER BY : SHRI B.S. BALACHANDRAN & SHRI P. DINESH, ADVOCATES. RESPONDENT BY : SMT. PADMA MEENAKSHI, JCIT (D.R) DATE OF H EARING : 19.01.2018. DATE OF P RONOUNCEMENT : 24 .01 .201 8 . O R D E R PER SHRI JASON P BOAZ, A .M . : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 6 , BANGALOR E DT. 22.09.2017 FOR THE ASSESSMENT YEAR 20 12 - 13. THE ASSESSEE HAS ALSO FILED A STAY PETITION NO.2/BANG/2018 SEEKING STAY ON RECOVERY OF DEMAND RAISED. 2 IT A NO. 2734 /BANG/201 7 & S.P. NO.2/BANG/2018 2. BRIEFLY STATED, THE FACTS RELEVANT FOR DISPOSAL OF TH IS APPEAL ARE AS UNDER : - 2.1 THE ASSESSEE FILED HER RETURN OF INCOME FOR ASSESSMENT YEAR 2012 - 13 ON 30.08.2012 DECLARING INCOME OF RS.33,71,480 FROM RENTAL INCOME, CAPITAL GAINS, INCOME FR O M HOUSE PROPERTY AND INCOME FROM OTHER SOURCES. THE ASSESSEE SUBSEQUENTLY FILED A REVI SED RETURN ON 5.8.2013 DECLARING INCOME OFRS.39,70,830 . THE RETURN WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT') AND CASE WAS SUBSEQUENTLY TAKEN UP FOR SCRUTINY. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT VIDE ORDER DT.20.03.2015 WHEREIN THE ASSESSEE'S INCOME WAS DETERMINED AT RS.8,83,93,818 AS AGAINST THE RETURNED INCOME OF RS.39,70,830 AND THEREBY RAISING A HUGE DEMAND OF RS.2,36,91,685; IN VIEW OF THE FOLLOWING ADJUSTMENTS / ADDITIONS : - I. DISALL OWANCE OF DEDUCTION CLAIMED U/S.80C : RS.1,00,000. II. INCOME FROM HOUSE PROPERTY RECOMPUTED AT : RS.17,58,312. III. LTCG COMPUTED AT : RS.8,41,64,181. IV. INCOME FROM OTHER SOURCES : RS.24,71,325. 2.2 AGGRIEVED BY THE ORDER OF ASSESSMENT DT.20.3.2015 F OR ASSESSMENT YEAR 2012 - 13 THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (APPEALS) 6, BANGALORE WHO DISMISSED THE ASSESSEE'S APPEAL VIDE THE IMPUGNED ORDER DT.22.09.2017. 3 IT A NO. 2734 /BANG/201 7 & S.P. NO.2/BANG/2018 3. THE ASSESSEE, BEING AGGRIEVED BY THE ORDER OF THE CIT (APPEALS) 6, BANGAL ORE DT.22.9.2017 FILED THIS APPEAL BEFORE THE TRIBUNAL, RAISING THE FOLLOWING GROUNDS : 4 IT A NO. 2734 /BANG/201 7 & S.P. NO.2/BANG/2018 4. GROUND N O S.1 TO 3 . 4.1 .1 IN THESE GROUNDS (SUPRA) THE ASSESSEE HAS ASSAILED THE IMPUGNED ORDER OF THE LEARNED CIT (APPEALS) AS BEING UNSUSTAINABLE IN TH E EYE OF LAW AS IT HAS BEEN PASSED IN HASTE AND WITHOUT APPLICATION OF MIND. IT IS CONTENDED THAT THE IMPUGNED ORDER IS PASSED WITHOUT EVEN PROPERLY LOOKING INTO THE GROUNDS RAISED ON ALL ADDITIONS MADE, ADDRESSING THE ISSUES RAISED AND CONFIRMING THE ADD ITIONS MADE BY THE ASSESSING OFFICER WITHOUT EVEN ADDRESSING THEM. IT IS ARGUED THAT WHEN ALL 4 ADDITIONS / DISALLOWANCES MADE BY THE ASSESSING OFFICER WERE CLEARLY CHALLENGED BY THE ASSESSEE IN THE GROUNDS RAISED BEFORE THE LEARNED CIT (APPEALS), THE AS SESSEE IS AGGRIEVED THAT THE LEARNED CIT (APPEALS) CONSIDERED ONLY ONE 5 IT A NO. 2734 /BANG/201 7 & S.P. NO.2/BANG/2018 ISSUE, IGNORED THE OTHER THREE ISSUES RAISED AND PROCEEDED TO DISMISS THE ASSESSEE'S APPEAL WITHOUT CONSIDERING THE DETAILS, EXPLANATIONS AND WRITTEN SUBMISSIONS PUT FORTH BY THE ASSESS EE IN A PERVERSE MANNER ; WHICH IS OPPOSED TO THE PRINCIPLES OF NATURAL JUSTICE. 4.1.2 IN SUPPORT OF THE AFORESAID GROUNDS RAISED (SUPRA) THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO THE ORDER OF ASSESSMENT FOR ASSESSMENT YEAR 2012 - 13 ( THE YEAR UNDER CONSIDERATION ) DT.20.03.2015 TO SHOW THAT WHILE COMPLETING THE ORDER OF ASSESSMENT, THE ASSESSING OFFICER HAD MADE THE 4 ADDITIONS AS LISTED OUT IN PARA 2.1 OF THIS ORDER (SUPRA). HE FURTHER DREW THE ATTENTION O F THE BENCH TO THE GROUNDS OF APPEAL (S. NOS.1 TO16) FILED BEFORE THE LEARNED CIT (APPEALS), WHICH THE LEARNED CIT (APPEALS) HAD EXTRACTED AT PARA 4 ON PAGES 3 TO 5 OF THE IMPUGNED ORDER TO SHOW THAT THE ASSESSEE HAD RAISED GROUNDS WITH REGARD TO THE FOLL OWING FOUR ISSUES : I. ADDITION OF RS.2,26,866 UNDER THE HEAD INCOME FROM HOUSE PROPERTY . II. ADDITION OF CAPITAL GAINS OF RS.8,36,25,000. III. ADDITION U/S.50C OF THE ACT RS.1,14,37,500. IV. DISALLOWANCE OF CLAIM U/S.80C OF THE ACT RS.1,00,000. 4.1.3 THE LEARN ED AUTHORISED REPRESENTATIVE, IN SUPPORT OF THE ASSESSEE'S CONTENTIONS DREW OUR ATTENTION TO PARA 7 O F THE IMPUGNED ORDER. THEREIN , THE LEARNED CIT (APPEALS) A FTER STATING THAT THE ASSESSEE'S GROUNDS OF APPEAL, STATEMENT OF FACTS, WRITTEN SUBMISSIONS 6 IT A NO. 2734 /BANG/201 7 & S.P. NO.2/BANG/2018 HAV E BEEN DULY CONSIDERED, WENT ON TO STATE THAT THE ONLY ISSUE TO BE ADJUDICATED IN THE APPEAL BEFORE HER WAS THE ADDITION OF RS.55,39,181 BEING THE DIFFERENCE IN SALE PROCEEDS UNDER SECTION 50C OF THE ACT . THE CIT (APPEALS) THEN PROCEEDED TO CONFIRM THIS I SSUE RAISED, AND RENDERED A FINDING THAT NO INTERFERENCE IS CALLED FOR IN THE ORDER OF THE ASSESSING OFFICER, WITHOUT IN ANY WAY DISCUSSING THE ASSESSEE'S SUBMISSIONS EVEN ON THIS ISSUE OF ADDITION UNDER SECTION 50C OF THE ACT AND DISMISSED THE ASSESSEE'S APPEAL. THE LEARNED AUTHORISED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT IN VIEW OF THE FACTS OF THE CASE AS BROUGHT OUT IN PARAS 4.1.1 TO 4.1.3 OF THIS ORDER (SUPRA), IT IS AMPLY CLEAR THAT THE IMPUGNED ORDER OF THE LEARNED CIT (APPEALS) IS PERVERSE ; IN ABSOLUTE VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE ; PASSED WI THOUT ANY APPLICATION OF MIND; ABSOLUTELY IGNORING TO ADDRESS, CONSIDER AND ADJUDICATE THE GROUNDS RAISED BY THE ASSESSEE ON MERITS OF THE ADDITIONS MADE BY THE ASSESSING OFFICER AND TH EREFORE BEING UNSUSTAINABLE IN LAW , OUGHT TO BE SET ASIDE. 4.2 THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. HOWEVER ON BEING QUERIED BY THE BENCH IN RESPECT OF THE GRAVE LAPSES IN THE IMPUGNED ORD ER OF THE LEARNED CIT (APPEALS), AS BROUGHT OUT BY THE LEARNED AUTHORISED REPRESENTATIVE (SUPRA), WAS UNABLE TO CON TRAVENE ANY OF THE CONTENTIONS PUT FORTH BY THE ASSESSEE. IT WAS FAIRLY CONCEDED THAT THE FACTS ON RECORD ESTABLISH THAT THE LEARNED CIT (A PPEALS) HAD FAILED TO ADJUDICATE ON THE 7 IT A NO. 2734 /BANG/201 7 & S.P. NO.2/BANG/2018 GROUNDS RAISED BY THE ASSESSEE ON MERITS IN RESPECT OF THE ADDITIONS MADE. 4.3.1 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD. ON A PERU S AL OF THE ORDER OF ASSESS MENT AND THE COMPUTATION OF INCOME THEREIN, IT IS SEEN THAT THE ASSESSING OFFICER WHILE DETERMINING THE ASSESSEE'S INCOME AT RS.8,83,93,818 , AS AGAINST RET URNED INCOME OF RS.39,70,830 , RAISING A DEMAND OF RS.2,36,91,685 , HAD MAKE AD D ITIONS / DISALLOWANCE IN RESPECT OF THE FOLLOWING 4 ISSUES. I. DISALLOWANCE OF DEDUCTION CLAIMED U/S.80C : RS.1,00,000. II. INCOME FROM HOUSE PROPERTY RECOMPUTED AT : RS.17,58,312. III. LTCG COMPUTED AT : RS.8,41,64,181. IV. INCOME FROM OTHER SOURCES : RS.24,71,325. 4.3.2 ON APPEAL, BEFORE THE LEARNED CIT (APPEALS), THE ASSESSEE IN THE 16 GROUNDS OF APPEAL RAISED CHALLENGED THE ASSESSING OFFICER S ORDER, ON MERITS, ON THE FOLLOWING 4 ISSUES : - I. ADDITION OF RS.2,26,866 UNDER THE HEAD INCOME FROM HOUSE PROPERTY . II. ADDITION OF CAP ITAL GAINS OF RS.8,36,25,000. III. ADDITION U/S.50C OF THE ACT RS.1,14,37,500. IV. DISALLOWANCE OF CLAIM U/S.80C OF THE ACT RS.1,00,000. 8 IT A NO. 2734 /BANG/201 7 & S.P. NO.2/BANG/2018 THIS IS EVIDENTLY CLEAR FROM A PERUSAL OF THE GROUNDS OF APPEAL EXTRACTED BY THE LEARNED CIT (APPEALS) AT PARA 4 ON PAGES 3 TO 5 OF THE IMPUGNED ORDER. WE FIND THAT STRANGELY THE LEARNED CIT (APPEALS) STATES AT THE INCEPTION OF THE PARAGRAPH 4 THAT THE ASSESSEE IS AGGRIEVED BY THE AFORESAID PENALTY ORDER OF THE A.O. ; WHICH IS FACTUALLY INCORRECT, AS IT IS THE ORDER OF ASSE SSMENT THAT THE ASSESSEE WAS AGGRIEVED BY AND WAS BEFORE THE LEARNED CIT (APPEALS) FOR ADJUDICATION. 4.3.3 WE FIND THAT AFTER EXTRACTING THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE AND THE STATEMENT OF FACTS FILED BY THE ASSESSEE AT PARAS 4 TO 8 AT P AGES 3 TO 10 OF THE IMPUGNED ORDER, THE LEARNED CIT (APPEALS) HAS DISMISSED THE ASSESSEE'S APPEAL ON ONLY ONE ISSUE STATING AT PARA 9 THEREOF THAT THE SOLITARY ISSUE TO BE ADJUDICATED IN THE INSTANT APPEAL CONCERN ADDITION OF RS.55,39,181 BEING DIFFERENCE IN SALE PROCEEDS AS CALCULATED BY A.O. INVOKING SECTION 50C OF THE ACT. FROM THE DETAILS ON RECORD AND AS LAID OUT AT PARAS 4.1.1 TO 4.3.3 OF THIS ORDER, IT IS AMPLY CLEAR THAT THE ASSESSEE HAD PREFERRED THE APPEAL ON 4 ISSUES LISTED AT PARA 4.3.2 (S UPRA) AS GLEANED OUT BY US FROM GROUND NO.3 RAISED BY THE ASSESSEE BUT THE LEARNED CIT (APPEALS) HAD ADDRESSED ONLY ONE ISSUE AND DID NOT ADDRESS THE OTHER THREE. 4.3.4 IN THE FACTS AND CIRCUMSTANCES OF THE CASE, AS DISCUSSED IN PARAS 4.1 TO 4.3.3 OF T HIS ORDER (SUPRA), WE ARE OF THE OPINION AND FIND THAT THE IMPUGNED ORDER OF THE LEARNED CIT (APPEALS) IS UNSUSTAINABLE EITHER IN LAW OR ON FACTS IN ITS PRESENT FORM FOR THE SIMPLE REASON THAT SHE HAS 9 IT A NO. 2734 /BANG/201 7 & S.P. NO.2/BANG/2018 FAILED TO ADJUDICATE ON THE GROUNDS RAISED BY THE ASSES SEE ON MERITS IN RESPECT OF ALL ISSUES; EXCEPT THE ADDITION U/S.50C OF THE ACT. WE CONCUR WITH THE CONTENTION OF THE ASSESSEE THAT THE LEARNED CIT (APPEALS) GROSSLY ERRED IN CONFIRMING THE ADDITIONS / DISALLOWANCES MADE BY THE ASSESSING OFFICER WITHOUT EV EN CONSIDERING THE GROUNDS RAISED AND STATING AT PARA 9 OF THE ORDER THAT THERE WAS ONLY A SOLITARY ISSUE TO BE DECIDED, EVEN THOUGH SHE EXTRACTED THE SAME IN HER ORDER AND STATED THEREIN THAT SHE HAD CONSIDERED THE GROUNDS RAISED, THE STATEMENT OF FACTS A ND WRITTEN SUBMISSIONS, ETC. FILED BY THE ASSESSEE. IN THAT VIEW OF THE MATTER, WE ARE OF THE OPINION THAT SINCE THE NEGLIGENT, FLIPPANT AND IRRESPONSIBLE APPROACH OF THE LEARNED CIT (APPEALS) HAS INDEED CAUSED HARDSHIP AND INJUSTICE TO THE ASSESSEE, IN THE INTEREST OF SUBSTANTIAL JUSTICE THE IMPUGNED ORDER OF THE LEARNED CIT (APPEALS) IS SET ASIDE AND RESTORED TO HER FILE FOR FRESH EXAMINATION, VERIFICATION AND ADJUDICATI ON IN RESPECT OF THE ISSUE S AND GROUNDS RAISED BY THE ASSESSEE, ON MERITS, AS SET OU T BY US IN THIS ORDER (SUPRA). IN THIS REGARD, THE LEARNED CIT (APPEALS) IS DIRECTED TO AFFORD THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD AND TO FILE DETAILS / SUBMISSIONS REQUIRED , WHICH SHALL BE DULY CONSIDERED BEFORE ADJUDICATING THE ISSUES REMA NDED TO HER FILE BY WAY OF A REASONED AND SPEAKING ORDER IN ACCORDANCE WITH LAW. WE HOLD AND DIRECT ACCORDINGLY. 5. SINCE WE HAVE DISPOSED OFF THE ASSESSEE'S APPEAL FOR ASSESSMENT YEAR 2012 - 13 AFTER CONSIDERING THE TECHNICAL OBJECTIONS OF THE ASSESSE E ON GROUNDS OF NON - ADJUDICATION BY THE LEARNED CIT (APPEALS) OF GROUNDS 10 IT A NO. 2734 /BANG/201 7 & S.P. NO.2/BANG/2018 OF APPEAL RAISED BY THE ASSESSEE, WE DECLINE TO ADJUDICATE THE OTHER GROUNDS RAISED ON MERITS, ETC. BY THE ASSESSEE IN THIS APPEAL. 6. SINCE WE HAVE DISPOSED OF THE ASSESSEE'S APP EAL, THE STAY PETITION NO.2/BANG/2018 IN THE CASE ON HAND IS RENDERED INFRUCTUOUS AND IS ACCORDINGLY DISMISSED. 7. IN THE RESULT, THE ASSESSEE'S APPEAL FOR ASSESSMENT YEAR 2012 - 13 IS ALLOWED FOR STATISTICAL PURPOSES AS INDICATED ABOVE AND THE STAY PETIT ION FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 24TH DAY OF JAN., 201 8 . SD/ - ( LALI T KUMAR ) JUDICIAL MEMBER SD/ - ( JASON P BOAZ ) ACCOUNTANT MEMBER BANGALORE, DT. 24 .01.2018. *REDDY GP COPY TO : 1 APPELLANT 4 CIT(A) 2 RESPONDENT 5 DR. ITAT, BANGALORE 3 CIT 6 GUARD FILE SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL BANGALORE.