Ramesh Chander Chadha, New Delhi V. ITO, New Delhi

ITA 3127/DEL/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7436 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 07-10-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 18-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T VASUDEVAN
• Keywords: Sale consideration of property below Jantri Value
• Section: 50C; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH SMC-2 NEW DELHI) BEFORE SHRI I.C. SUDHIR: HONBLE JUDICIAL MEMBER ITA NO. 3127/DEL/2015 ASSESSMENT YEAR: 2009-10 RAMESH CHANDER CHADHA, VS. ITO, 6/13, WEA, KAROL BAGH, WARD-33(2), NEW DELHI. NEW DELHI. (PAN: AAGPC4345N) (APPELLANT) (RESPONDENT) ASSESSEE BY: S/SHRI RAJEE V SABHARWAL, CA & PIYUSH KUMAR KAMAL, ADV. DEPARTMENT BY: SHRI T. VASUDEVA N, SR. DR DATE OF HEARING : 08.10.2015 DATE OF PRONOUNCEMENT: 06:01.2016 ORDER THE FIRST APPELLATE ORDER UPHOLDING THE ADDITION O F RS.6 LACS UNDER SEC. 50C OF THE INCOME-TAX ACT, 1961 AND NON-DEDUCT ION OF COST OF IMPROVEMENT OF RS.35,000 HAS BEEN QUESTIONED ON SEV ERAL GROUNDS. BESIDES, IN GROUND NO.3, THE ASSESSEE HAS QUESTIONED VALIDIT Y OF ASSESSMENT ORDER IN ABSENCE OF SUPPLY OF REASONS FOR REOPENING. 2. SINCE THE ISSUE RAISED IN GROUND NO.3 GOES TO TH E ROOT OF THE MATTER, I PREFER TO ADJUDICATE UPON IT FIRST. AN IDENTICAL IS SUE WAS ALSO RAISED BEFORE THE LEARNED CIT(APPEALS) VIDE GROUND NO.3 BUT THE L EARNED CIT(APPEALS) HAS NOT ALLOWED THAT GROUND. THE LEARNED CIT(APPEAL S) IN PARA NO. 5.4 OF 2 THE FIRST APPELLATE ORDER HAS MENTIONED THAT AS PER THE RECORDS, THE ASSESSING OFFICER BY CALLING THE ASSESSEES EXPLANA TION ON LONG TERM CAPITAL HAD COMMUNICATED THE REASONS TO THE ASSESSEE BEFORE THE COMPLETION OF THE ASSESSMENT. 3. IN SUPPORT OF GROUND NO.3, THE LEARNED AR SUBMIT TED THAT VIDE LETTER DATED 15.8.2012 FILED ON 11.9.2012 BEFORE THE ASSES SING OFFICER, THE ASSESSEE HAD REQUESTED TO PROVIDE COPY OF REASON FO R REOPENING OF THE ASSESSMENT, WHICH WAS NEVER SUPPLIED DURING THE COU RSE OF ASSESSMENT PROCEEDINGS BY THE ASSESSING OFFICER. SINCE THE COP Y OF REASONS TO BELIEVE WAS NOT SUPPLIED TO THE ASSESSEE, THE ASSESSEE WAS HAVING NO OCCASION TO RAISE OBJECTIONS AGAINST THE SAID REASONS TO BELIEV E BEFORE THE ASSESSING OFFICER. THE LEARNED CIT(APPEALS) HAS ALSO NOT DECI DED THE ISSUE WITH SPECIFIC MENTION AS TO WHEN THE REASONS WAS SUPPLIE D TO THE ASSESSEE BY THE ASSESSING OFFICER. THE LEARNED AR PLACED RELIANCE O N THE FOLLOWING DECISIONS WITH THIS CONTENTION THAT IN ABSENCE OF S UPPLY OF REASONS, THE NOTICE ISSUED UNDER SEC. 148 AND THE ASSESSMENT FRAMED IN FURTHERANCE TO ARE INVALID AND THE SAME BE QUASHED AS SUCH: I) GKN DRIVESHAFT (INDIA) LTD. VS. ITO 259 ITR 19 (S.C); II) FERROUS INFRA-STRUCTURE (P) LTD. VS. DCIT WP (C) 5229/2014, JUDGMENT DATED 21.5.2015 (DEL.); III) CIT VS. VIDESH SANCHAR NIGAM LTD. (2012) 34 0 ITR 66 (BOM.). 3 4. THE LEARNED SENIOR DR ON THE OTHER HAND REFERRED CONTENTS OF PARA NO. 5.4 AT PAGE NO. 8 OF THE FIRST APPELLATE ORDER WITH THIS SUBMISSION THAT ON VERIFICATION OF RECORD, THE LEARNED CIT(APPEALS) HAS FOUND THAT THE ASSESSING OFFICER BY CALLING THE ASSESSEES EXPLANA TION ON LONG TERM CAPITAL HAD COMMUNICATED THE REASONS TO THE ASSESSEE BEFORE THE COMPLETION OF THE ASSESSMENT AND SINCE THE ASSESSEE HAD NOT CHALLENGE D THE REOPENING, THEREFORE, THE RATIOS LAID DOWN IN THE CASE OF GKN DRIVESHAFT (SUPRA) DOES NOT APPLY HERE. HE PLACED RELIANCE ON THE FOLLOWING DECISIONS: I) SEHKARI KHAND UDYOG MANDAL LTD. VS. ACIT SPEC IAL CIVIL APPLICATION NO. 3955 OF 2014 ORDER DATED 31.3.2 014 (GUJ.); II) M/S. DEEPAK AGR. FOODS VS. ST. OF RAJASTHAN- C IVIL APPEAL NO. 4327-28 OF 2008 JUDGMENT DATED 11.7.2008. 5. CONSIDERING THE ABOVE SUBMISSION, I FIND THAT TH E ASSESSING OFFICER THOUGH HAS MENTIONED ABOUT THE REQUEST OF THE ASSES SEE VIDE LETTERS DATED 15.8.2012 RECEIVED ON 11.9.2012 REGARDING THE REQUE ST TO PROVIDE COPY OF REASONS FOR REOPENING OF THE ASSESSMENT UNDER SEC. 148 OF THE ACT, AT THE BOTTOM OF PAGE NO. 1 OF THE ASSESSMENT ORDER BUT TH E ASSESSING OFFICER HAS NOT MENTIONED ABOUT COMPLIANCE OF THIS REQUEST OF T HE ASSESSEE BY HIM. AGAIN THE LEARNED CIT(APPEALS) IN PARA NO. 5.4 OF T HE FIRST APPELLATE ORDER ON THE GRIEVANCE OF THE ASSESSEE THAT THE ASSESSING OFFICER HAD NOT GIVEN THE 4 REASONS FOR REOPENING THE ASSESSMENT, HAS MENTIONED THAT AS PER THE RECORDS THE ASSESSING OFFICER BY CALLING THE ASSESSEES EXP LANATION ON LONG TERM CAPITAL GAIN HAD COMMUNICATED THE REASONS TO THE AS SESSEE BEFORE THE COMPLETION OF THE ASSESSMENT. HE HAS MENTIONED FURT HER THAT THE ASSESSEE HAD NOT CHALLENGED THE REOPENING AND, THEREFORE, RA TIO LAID DOWN IN THE CASE OF GKN DRIVESHAFT (SUPRA) DOES NOT APPLY. THERE I S VAGUENESS IN THE FINDING OF THE LEARNED CIT(APPEALS) ON THE SUPPLY O F REASONS TO BELIEVE BY THE ASSESSING OFFICER TO THE ASSESSEE DURING THE AS SESSMENT PROCEEDINGS. WHEN AN SPECIFIC GROUND REGARDING NON-SUPPLY OF REA SONS WAS RAISED BY THE ASSESSEE BEFORE THE LEARNED CIT(APPEALS) AND THERE IS MENTION OF A SPECIFIC REQUEST MADE BY THE ASSESSEE VIDE LETTER DATED 15.8 .2012 RECEIVED BY THE ASSESSING OFFICER ON 11.9.2012 FOR SUPPLY OF THE RE ASONS, MENTIONED AT THE BOTTOM OF PAGE NUMBER 1 OF THE ASSESSMENT ORDER, TH E LEARNED CIT(APPEALS) OUGHT TO HAVE GIVEN A SPECIFIC FINDING BY MENTIONIN G DATE AS TO WHEN THE REASONS WAS SUPPLIED TO THE ASSESSEE BY THE ASSESSI NG OFFICER. THE VERY PURPOSE OF SUPPLY OF REASONS BY THE ASSESSING OFFIC ER TO THE ASSESSEE IS TO AFFORD OPPORTUNITY TO THE ASSESSEE TO RAISE OBJECTI ONS, IF ANY, AGAINST THE SAID REASONS AND AGAINST THE INITIATION OF REOPENING PRO CEEDINGS. HON'BLE SUPREME COURT IN THE CASE OF GKN DRIVESHAFT (SUPRA) HAS BEEN PLEASED TO CLARIFY AS UNDER: 5 HOWEVER, WE CLARIFY THAT WHEN A NOTICE UNDER SEC. 148 OF THE INCOME-TAX ACT, 1961 IS ISSUED, THE PROPER COURSE O F ACTION FOR THE NOTICEE IS TO FILE RETURN AND IF HE SO DESIRES TO S EEK REASONS FOR ISSUING NOTICES. THE ASSESSING OFFICER IS BOUND TO FURNISH REASONS WITHIN A REASONABLE TIME. ON RECEIPT OF REASONS, THE NOTICEE IS ENTITLED TO FILE OBJECTIONS TO ISSUANCE OF NOTICE AND THE ASSESSING OFFICER IS BOUND TO DISPOSE OFF THE SAME BY PASSING A SPEAKING ORDER IN THE INSTANT CASE, AS THE REASONS HAVE BEEN DISCLOSED IN THESE PROCEED INGS, THE ASSESSING OFFICER HAS TO DISPOSE OFF THE OBJECTIONS , IF FILED, BY PASSING A SPEAKING ORDER, BEFORE PROCEEDING WITH THE ASSESS MENT IN RESPECT OF THE ABOVE SAID FIVE ASSESSMENT YEARS. 6. FOLLOWING THE ABOVE DECISION OF THE HON'BLE SUPR EME COURT AND OTHERS, THE HON'BLE JURISDICTIONAL HIGH COURT OF DE LHI IN THE CASE OF FERROUS INFRA-STRUCTURE PVT. LTD. VS. DCIT (SUPRA) IN ITS R ECENT JUDGMENT DATED 21.5.2015 HAS BEEN PLEASED TO HOLD THAT THE ASSESSI NG OFFICER HAS TO PASS AN SPEAKING ORDER DISPOSING OFF THE OBJECTIONS BEFORE PROCEEDING WITH THE ASSESSMENT. HON'BLE HIGH COURT OBSERVED FURTHER THA T IN THE CASE BEFORE IT, A SEPARATE SPEAKING ORDER WAS NOT PASSED AND THE OBJE CTIONS HAD BEEN DEALT WITH, IF AT ALL, IN THE REASSESSMENT ORDER ITSELF. ON THIS GROUND ALSO, THE PETITIONER IS LIABLE TO SUCCEED, HELD THE HON'BLE H IGH COURT. THE NOTICE ISSUED UNDER SEC. 148 AND PROCEEDINGS PURSUANT TO T HE SAID NOTICE WAS ACCORDINGLY QUASHED. BEING LATEST DECISION OF THE H ON'BLE JURISDICTIONAL HIGH 6 COURT OF DELHI IN THE ABOVE CASE, THE DELHI BENCH O F THE ITAT IS BOUND TO FOLLOW THIS DECISION. THE CASE OF THE PRESENT ASSES SEE BEFORE US IS ON THE BETTER FOOTING AS IN THE PRESENT CASE DESPITE SPECI FIC REQUEST MADE BY THE ASSESSEE VIDE LETTER DATED 15.8.2012 RECEIVED BY TH E ASSESSING OFFICER ON 11.9.2012 ( A COPY OF WHICH HAS BEEN MADE AVAILABLE AT PAGE NO. 1 OF THE PAPER BOOK , THE ASSESSING OFFICER DID NOT BOTHER T O SUPPLY COPY OF REASONS TO THE ASSESSEE GIVING HIM AN OPPORTUNITY TO RAISE OBJECTION, IF ANY, AGAINST THE SAID REASONS. THE DECISION OF HON'BLE SUPREME C OURT IN THE CASE OF M/S. DEEPAK AGR. FOOD VS. STATE OF RAJASTHAN (SUPRA) I S RELATED TO THE RAJASTHAN SALES-TAX ACT, 1994,HENCE, IT IS NOT RELEVANT AND H ELPFUL TO THE REVENUE IN THE PRESENT CASE. I THUS RESPECTFULLY FOLLOWING THE RATIOS LAID DOWN BY THE HON'BLE JURISDICTIONAL HIGH COURT OF DELHI IN THE C ASE OF FERROUS INFRA- STRUCTURE PVT. LTD. VS. DCIT (SUPRA) HOLD THAT THE NOTICE ISSUED UNDER SEC. 148 OF THE ACT WAS NOT VALID AND THE SAME IS QUASHE D AS SUCH SO ALSO ALL PROCEEDINGS PURSUANT TO THE SAID NOTICE UNDER SEC. 148. THE GROUND NO.3 IS ACCORDINGLY ALLOWED. 7. IN VIEW OF THE ABOVE FINDING WHEREIN THE VERY AS SESSMENT ORDER FRAMED UNDER SEC. 147/143(3) OF THE INCOME-TAX ACT, 1961 HAS BEEN QUASHED, THE ISSUES RAISED IN OTHER GROUNDS QUESTIO NING THE MERIT OF ADDITIONS 7 MADE IN THE ASSESSMENT ORDER AND UPHELD BY THE LEAR NED CIT(APPEALS) DO NOT SURVIVE AND THESE DISPOSED OFF AS HAVING BECOME INFRUCTUOUS. 8. THE APPEAL IS ACCORDINGLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 06.01.2016 SD/- ( I.C. SUD HIR ) JUDICIAL MEMBER DATED: 06/01/2016 MOHAN LAL COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR DATE DRAFT DICTATED ON COMPUTER 06.01.2016 DRAFT PLACED BEFORE AUTHOR DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. APPROVED DRAFT COMES TO THE SR.PS/PS 06.01.2016 KEPT FOR PRONOUNCEMENT ON 06.01.2016 FILE SENT TO THE BENCH CLERK 06.01.20 16 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.