Sri.M.Munirathna, Bangalore V. Income-Tax Officer, Bangalore

ITA 345/BANG/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7400 (ITAT-BANGALORE)
• Duration Of Justice: 8 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 15-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMER SINGH MEENA BENGALURU
• Assessee Lawyers: V SRINIVASAN
• Keywords: Capital asset
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.345/BANG/2017 ASSESSMENT YEAR : 2009-10 SHRI M. MUNIRATHNA, # 376, MUNESHWARANAGAR, ULLALU MAIN ROAD, BENGALURU 560 056. PAN: APLPM 2080A VS. THE INCOME TAX OFFICER, WARD 3(2)(3) [FORMERLY WARD 9(1)], BENGALURU. APPELLANT RESPONDENT APPELLANT BY : SHRI V. SRINIVASAN, ADVOCATE RESPONDENT BY : SHRI SUMER SINGH MEENA, ADDL. CIT(DR)(ITAT), BENGALURU DATE OF HEARING : 12.10.2017 DATE OF PRONOUNCEMENT : 31.10.2017 O R D E R PER SUNIL KUMAR YADAV, JUDICIAL MEMBER THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST T HE ORDER OF THE CIT(APPEALS) INTER ALIA ON THE FOLLOWING GROUNDS:- 1. THE ORDERS OF THE AUTHORITIES BELOW IN SO FAR A S THEY ARE AGAINST THE APPELLANT ARE OPPOSED TO LAW, EQUITY, W EIGHT OF EVIDENCE, PROBABILITIES, FACTS AND CIRCUMSTANCES OF THE CASE. ITA NO.345/BANG/2017 PAGE 2 OF 5 2. THE ORDER OF RE-ASSESSMENT IS BAD IN LAW AND VO ID-AB-INITIO FOR WANT OF REQUITE JURISDICTION ESPECIALLY, THE MA NDATORY REQUIREMENTS TO ASSUME JURISDICTION U/S 148 OF THE ACT DID NOT EXIST AND HAVE NOT BEEN COMPLIED WITH AND CONSEQUEN TLY, THE RE- ASSESSMENT REQUIRES TO BE CANCELLED. 2.1 THE LEARNED CIT[A] IS NOT JUSTIFIED IN UPHOLDI NG THE VALIDITY OF THE ASSESSMENT THAT WAS RE-OPENED U/S. 147 OF THE ACT WITHOUT ACCEDING TO THE PRAYER OF THE APPELLANT TO FURNISH THE REASONS RECORDED BY THE ASSESSING OFFICER AND THUS, THE RE- OPENING OF THE ASSESSMENT THAT HAS BEEN SUSTAINED W ITHOUT CONSIDERING THE OBJECTIONS OF THE APPELLANT IS IMPR OPER AND THE SAME REQUIRED TO BE VACATED. 3. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED CIT [A] IS NOT JUSTIFIED IN SUSTAINING THE ASSESSMENT OF LONG TERM CAPITAL GAINS OF RS.86,09,030/- HOLDING THAT THE APPELLANT HAS TRANS FERRED HIS PROPERTY TO HIS WIFE AND SON IN TERMS OF THE SALE D EED DATED 14/05/2008 UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE. 3.1 THE LEARNED CIT[A] OUGHT TO HAVE APPRECIATED T HAT THE APPARENT WAS NOT REAL AS THE APPELLANT HAD ESTABLIS HED THE CIRCUMSTANCES UNDER WHICH THE APPELLANT EXECUTED TH E SALE DEED DATED 14/05/2008 AND THERE WAS NO CASE TO HOLD THAT THERE WAS A TRANSFER OF THE CAPITAL ASSET UNDER THE FACTS AND I N THE CIRCUMSTANCES OF THE APPELLANT'S CASE. 3.2 THE LEARNED CIT[A] OUGHT TO HAVE FURTHER APPRE CIATED THAT THE APPELLANT HAD SHOWN THAT HIS TITLE TO THE PROPE RTY ITSELF WAS UNDER QUESTION AND HENCE, HE OUGHT TO HAVE VACATED THE ASSESSMENT OF CAPITAL GAINS UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE. 4. WITHOUT PREJUDICE TO THE RIGHT TO SEEK WAIVER W ITH THE HON'BLE CCIT/DG, THE APPELLANT DENIES HIMSELF LIABL E TO BE CHARGED TO INTEREST U/S. 234-A AND 234- B OF THE AC T, WHICH UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT 'S CASE DESERVES TO BE CANCELLED. ITA NO.345/BANG/2017 PAGE 3 OF 5 5. FOR THE ABOVE AND OTHER GROUNDS THAT MAY BE URG ED AT THE TIME OF HEARING OF THE APPEAL, YOUR APPELLANT HUMBL Y PRAYS THAT THE APPEAL MAY BE ALLOWED AND JUSTICE RENDERED AND THE APPELLANT MAY BE AWARDED COSTS IN PROSECUTING THE APPEAL AND ALSO ORDER FOR THE REFUND OF THE INSTITUTION FEES AS PART OF THE C OSTS. 2. DURING THE COURSE OF HEARING, THE LD. COUNSEL F OR THE ASSESSEE HAS CONTENDED THAT THE AO OR THE CIT(APPEALS) HAVE NOT SUPPLIED THE REASONS FOR REOPENING OF THE ASSESSMENT. IN THE ABSENCE OF AVAILABILITY OF REASONS, THE ASSESSEE COULD NOT DEFEND HIS CASE EFFECTIVELY. IT WAS FURTHER CONTENDED BEFORE THE CIT(APPEALS) THAT ASSESSEE HAS RAISED A SPECIFIC OBJECTION WITH REGARD TO REASONS RECORDED FOR REOPE NING OF THE ASSESSMENT AND ALSO SOUGHT THE REASONS FROM THE CIT(APPEALS), BUT IT WAS NOT MADE AVAILABLE TO THE ASSESSEE. THE CIT(APPEALS) REJECT ED THE CLAIM OF THE ASSESSEE, HAVING NOTED THAT IT WAS NOT SOUGHT FROM THE AO. 3. NOW BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE HAS CATEGORICALLY OBJECTED THAT THE ASSESSEE HAS A RIGHT TO KNOW THE REASONS FOR REOPENING OF THE ASSESSMENT, THEREFORE REASONS MAY BE SUPPLIED T O HIM SO THAT HE COULD FILE PROPER OBJECTIONS AND BEFORE PROCEEDING WITH T HE MATTER, REASONS FOR REOPENING OF THE ASSESSMENT SHOULD BE DISPOSED OF B Y PASSING A SPEAKING ORDER. ITA NO.345/BANG/2017 PAGE 4 OF 5 4. THE LD. DR, ON THE OTHER HAND, HAS SUBMITTED THA T THE ASSESSEE HAS NOT SOUGHT THE REASONS FOR REOPENING THE ASSESSMENT BEFORE THE AO, THEREFORE HE HAS NO RIGHT TO CLAIM IT AT THE BELATE D STAGE, THAT TOO, IN SECOND APPEAL. 5. HAVING CAREFULLY EXAMINED THE ORDERS OF THE AUTH ORITIES BELOW IN THE LIGHT OF RIVAL SUBMISSIONS, WE FIND THAT THE ASSESS EE HAS A RIGHT TO KNOW THE REASONS FOR REOPENING OF THE ASSESSMENT. UNDISPUTE DLY HE HAS NOT RAISED A SPECIFIC DEMAND FOR SUPPLY OF REASONS BEFORE THE AO. BUT A SPECIFIC DEMAND WAS RAISED BEFORE THE CIT(APPEALS) AND THE C IT(APPEALS) INSTEAD OF SUPPLYING COPY OF THE REASONS, HAS REJECTED THE CLAIM OF ASSESSEE. THIS ACTION OF THE CIT(APPEALS) IS NOT IN ACCORDANCE WIT H THE LAW. WHEN THE ASSESSEE HAS A RIGHT TO KNOW THE REASONS FOR REOPEN ING OF THE ASSESSMENT, THE SAME SHOULD HAVE BEEN SUPPLIED AS AND WHEN DEMA ND IS RAISED. THEREFORE, WE ARE OF THE VIEW THAT THE CIT(APPEALS) FIRST ADJUDICATE THE REASONS FOR REOPENING OF THE ASSESSMENT AND THEREAF TER PROCEED TO DECIDE THE APPEAL ON MERITS. WE ACCORDINGLY SET ASIDE THE ORDER OF THE CIT(APPEALS) AND RESTORE THE MATTER TO HIS FILE WIT H A DIRECTION TO FIRST SUPPLY THE COPY OF REASONS FOR REOPENING OF THE ASSESSMENT AND AFTER OBTAINING THE OBJECTIONS FROM THE ASSESSEE, FIRST DISPOSE OF THE REASONS FOR REOPENING OF THE ASSESSMENT BY PASSING A SPEAKING ORDER AND T HEREAFTER DECIDE THE APPEAL ON MERITS AFRESH, AFTER AFFORDING OPPORTUNIT Y OF BEING HEARD TO THE ASSESSEE. ITA NO.345/BANG/2017 PAGE 5 OF 5 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 31 ST DAY OF OCTOBER, 2017. SD/- SD/- ( A.K. GARODIA ) ( SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE, DATED, THE 31 ST OCTOBER, 2017. / D ESAI S MURTHY / COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE.