L. Nagamani, Bengaluru V. Income Tax Officer, Ward-1(2)(3), Bengaluru

ITA 2923/BANG/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 2806 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 21-02-2019
• Assessment Year: 2012-2013
• Appeal Filed On: 29-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K BIJU
• Assessee Lawyers: N RAMARAJU
• Keywords: Business income; Principle of natural justice; Reasonable cause
• Section: 143(3); 54F; 142(1); 143(1); 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, BENGALURU BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO.2923/BANG/2017 (ASSESSMENT YEAR: 2012-13) L.NAGAMANI, NO.30, GURUMURTHY STREET, ULSOOR, BENGALURU-560 0008. PAN:AFFPN 2354 A VS. APPELLANT INCOME-TAX OFFICER, WARD 1(2)(3), BENGALURU. RESPONDENT APPELLANT BY : S/SHRI SURESH MUTHUKRISHNAN & N.RAMARAJU, CA. RESPONDENT BY : SHRI M.K.BIJU, ADDL.CIT(DR) DATE OF HEARING: 21/02/2019 DATE OF PRONOUNCEMENT: 28/02/2019 O R D E R PER PAVAN KUMAR GADALE, JM : THE ASSESSEE HAS FILED THE APPEAL AGAINST THE ORDER OF THE CIT(A)-1, BENGALURU, PASSED U/S 143(3) AND 250 OF THE INCOME-TAX ACT,1961 ['THE ACT' FOR SHORT] DATED 31/08/2017. 2. THE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE IMPUGNED ORDERS PASSED BY THE LEARNED COMMISSIONER OF INCOME-TAX UNDER THE PROVISIONS OF SECTION 250 OF THE ACT IS OPPOSED TO LAW, WEIGHT OF EVIDENCE, PROBABILITIES. FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE. ITA NO.2923/BANG/2017 PAGE 2 OF 6 2. WHETHER THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-1, IS JUSTIFIED IN DISMISSING THE APPEAL UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE? 3. WITHOUT PREJUDICE THE WHETHER THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-1. IS JUSTIFIED IN UPHOLDING THE ORDER OF THE LEARNED ASSESSING OFFICER DESPITE THE APPELLANT HAVING COMPLETED HE CONSTRUCTION OF THE NEW RESIDENTIAL WITHIN THE MEANING OF THE PROVISIONS OF SECTION 54F OF THE ACT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE? 4. WITHOUT FURTHER PREJUDICE WHETHER THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-1, IS JUSTIFIED IN HOLDING THAT THE APPELLANT, IS NOT ENTITLED FOR THE BENEVOLENCE OF THE PROVISIONS OF SECTION 54F, IN THE ABSENCE OF DEPOSITION OF THE SALE PROCEEDINGS IN CAPITAL GAINS ACCOUNT SCHEME UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE? 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, DELETE, AMEND OR SUBSTITUTE ANY OR ALL OF THE ABOVE GROUNDS OF APPEAL AS MAY BE NECESSARY AT THE TIME OF HEARING. 6. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING OF APPEAL, THE WRITTEN SUBMISSION AS PRAYED TO BE SUBMITTED DURING THE COURSE OF HEARING OF THE APPEAL, THE APPELLANT PRAYS THAT THE APPEAL MAY BE ALLOWED FOR THE ADVANCEMENT OF SUBSTANTIAL CAUSE OF JUSTICE AND EQUITY. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS IN THE BUSINESS OF RUNNING WINE STORE AND FILED THE RETURN OF INCOME ELECTRONICALLY ON 28/07/2012 WITH TOTAL INCOME OF RS.8,03,260/- DISCLOSING INCOME FROM HOUSE PROPERTY AND BUSINESS INCOME AND INCOME FROM OTHER SOURCES. THE ASSESSEE IS PROPRIETRIX OF M/S.WINI VERITIS AND DERIVING INCOME FROM BUSINESS. THE RETURN OF INCOME WAS PROCESSED U/S 143(1) OF THE INCOME-TAX ACT,1961 ['THE ACT' FOR SHORT] ON 20/02/2013. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND NOTICE U/S 143(2) AND 142(1) OF THE ACT WERE ISSUED. THE ITA NO.2923/BANG/2017 PAGE 3 OF 6 ASSESSING OFFICER, ON PERUSAL OF THE RETURN OF INCOME FOUND THE ASSESSEE HAS CLAIMED EXEMPTION OF LONG-TERM CAPITAL GAINS UNDER SEC.54D. WHEREAS THE ASSESSEE HAS FILED A LETTER DATED 12/2/2015 REVISING THE CLAIM U/S 54F AGAINST THE CLAIM MADE U/S 54D WHICH WAS WRONGLY MENTIONED AND FURTHER SUBMITTED THAT SHE HAS RECEIVED THE COMPENSATION FROM KIADB TOWARDS LAND ACQUIRED FOR METRO RAIL PROJECT AND SAID COMPENSATION DEPOSITED IN BANK AS FIXED DEPOSITS. 4. WHEREAS THE ASSESSEE HAS UTILIZED THE MONEY FOR CONSTRUCTION OF HOUSE PROPERTY BEFORE DUE DATE OF FILING OF RETURN. THEREFORE, THE SAME COULD NOT BE DEPOSITED UNDER CAPITAL GAINS ACCOUNT SCHEME. THE ASSESSEE FILED ANOTHER LETTER DATED 19/2/2015 AND SUBMITTED THAT THE COMPENSATION WAS UTILIZED FOR INVESTMENT IN RESIDENTIAL PROPERTY AND THEREFORE EXEMPTION U/S 54F WAS CLAIMED. BUT THE AO, TAKING INTO CONSIDERATION THE FACTS AND THE SUBMISSIONS OF THE ASSESSEE, FOUND THAT THE ASSESSEE HAS NOT FURNISHED DETAILS OF INVESTMENT IN RESIDENTIAL PROPERTY AND ALSO CONSIDERATION WAS NOT DEPOSITED WITHIN DUE DATE OF FILING OF RETURN OF INCOME U/S 139(1) IN CAPITAL GAINS ACCOUNT SCHEME AND DENIED EXEMPTION AND DISALLOWED RS.77,40,004/- AND ASSESSED THE TOTAL INCOME OF RS.85,43,270/- BY ORDER DATED 28/02/2015. ITA NO.2923/BANG/2017 PAGE 4 OF 6 5. AGGRIEVED BY THE ORDER, THE ASSESSEE HAS FILED AN APPEAL WITH THE CIT(A). IN THE APPELLATE PROCEEDINGS, THE CIT(A) HAS ISSUED NOTICES TO THE ASSESSEE ON VARIOUS DATES AS REFERRED AT PAGE 1 OF THE ORDER. SINCE THERE WAS NO REPRESENTATION BY THE ASSESSEE, THE CIT(A) CONSIDERED THE FINDINGS OF THE AO AND CONFIRMED THE ACTION OF THE AO AND DISMISSED THE ASSESSEES APPEAL. AGGRIEVED BY THE ORDER, THE ASSESSEE HAS FILED AN APPEAL BEFORE THE TRIBUNAL. 6. AT THE TIME OF HEARING, THE LEARNED AR SUBMITTED THAT THE CIT(A) ERRED IN DISMISSING THE APPEAL WITHOUT CONSIDERING THE MERITS OF THE CASE AND DETAILS IN THE COURSE OF ASSESSMENT PROCEEDINGS AND PRAYED THAT AN OPPORTUNITY BE PROVIDED TO THE ASSESSEE TO REPRESENT ITS CASE WITH EVIDENCES SUPPORTING THE RETURN OF INCOME AND PRAYED FOR ALLOWING THE APPEAL. CONTRA, THE LEARNED DR OBJECTED TO THE SUBMISSIONS OF THE LEARNED AR AND MENTIONED THAT THE ASSESSEE WAS PROVIDED SUFFICIENT OPPORTUNITIES OF HEARING BEFORE THE FIRST APPELLATE AUTHORITY. HENCE, THE ASSESSEES APPEAL BE DISMISSED. 7. WE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. BEFORE GOING INTO THE MERITS OF THE CASE, WE CONSIDER IT APPROPRIATE TO DEAL WITH REASONS FOR DISMISSAL OF APPEAL BY THE CIT(A) FOR NON-APPEARANCE. THE LEARNED AR SUBMITTED THAT THE ASSESSEE COULD NOT APPEAR FOR VARIOUS REASONS BEFORE THE ITA NO.2923/BANG/2017 PAGE 5 OF 6 CIT(A). WHEREAS THE LEARNED DR VEHEMENTLY OBJECTED AND SUBMITTED THAT THE ASSESSEE WAS PROVIDED WITH ADEQUATE OPPORTUNITIES. WE FIND THAT THE ASSESSEE WAS PROVIDED HEARING BY THE APPELLATE AUTHORITY THROUGH NOTICES ON 02/06/2016, 26/10/2016, 10/11/2016, 03/03/2017, 20/03/2017, 28/03/2017, 16/06/2017, 19/06/2017, 19/08/2017 AND 28/08/2017. 8. WE FOUND STRENGTH IN THE SUBMISSIONS OF THE LEARNED DR. THE CIT(A) HAS GRANTED SUFFICIENT OPPORTUNITIES. WHEN A QUERY WAS RAISED TO THE LEARNED AR BEING THE REASONABLE CAUSE AND REASONS FOR NON-APPEARANCE, THE EXPLANATIONS AND SUBMISSIONS OF LEARNED AR ARE NOT SATISFACTORY AND ARE NOT SUPPORTED WITH ANY EVIDENCE. WE, CONSIDERING THE PRINCIPLES OF NATURAL JUSTICE AND THE REASONS ENVISAGED BY LEARNED AR ARE NOT SUPPORTIVE TO THE CASE, WE CONSIDER IT APPROPRIATE TO RESTORE THE ENTIRE DISPUTED ISSUE TO THE FILE OF THE CIT(A) BUT CONSIDERING THE FACTS ON RECORD WITH RESPECT TO NON-APPEARANCE OF THE ASSESSEE OR LEARNED AR IN SPITE OF ISSUING NOTICES ON VARIOUS DATES IN APPELLATE PROCEEDINGS WHICH CANNOT BE OVERLOOKED. THEREFORE, WE ARE OF THE SUBSTANTIVE OPINION THAT THE ASSESSEE SHOULD BE PROVIDED AN OPPORTUNITY OF HEARING BUT WITH PAYMENT OF COST OF RS.5,000/- TO THE INCOME-TAX DEPARTMENT WITHIN A PERIOD OF ONE MONTH FROM THE DATE OF RECEIPT OF THIS ORDER. SUBJECT TO THE PAYMENT OF ABOVE COST, WE RESTORE THE ENTIRE DISPUTED ISSUE ITA NO.2923/BANG/2017 PAGE 6 OF 6 TO THE FILE OF THE CIT(A) TO CONSIDER THE MATTER AFRESH AND ADJUDICATE ON MERITS. FURTHER, THE ASSESSEE SHALL SUBMIT PROOF OF PAYMENT OF COST THROUGH CHALLAN COPY WITH TRIBUNAL AND APPELLATE AUTHORITY. IT IS NEVERTHELESS TO MENTION THAT THE CIT(A) SHOULD PROVIDE REASONABLE OPPORTUNITY TO THE ASSESSEE TO FILE EVIDENCES AND DOCUMENTS IN SUPPORT OF CASE AND THE ASSESSEE SHALL ALSO CO-OPERATE IN SUBMITTING THE INFORMATION AS EXPEDITIOUSLY FOR EARLY DISPOSAL OF THE APPEAL AND WE ORDER ACCORDINGLY. 8. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH FEBRUARY, 2019. SD/- SD/- (B.R. BASKARAN) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE : BENGALURU D A T E : 28/02/2019 SRINIVASULU, SPS COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A)- 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL BANGALORE