Mahesh Agarwal , Hyderabad V. Income Tax Officer, Ward-5(2), Hyderabad

ITA 365/Hyd/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8762 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 08-07-2019
• Assessment Year: 2009-2010
• Appeal Filed On: 19-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEELU GUPTA
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Sale consideration of property below Jantri Value; Tangible material; Assessment record; Set aside
• Section: 50C; 5(2); 147; 148

Judgement Text

ITA NO 365 OF 2019 MAHESH AGARWAL HYDERABAD. PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO.365/HYD/2019 (ASSESSMENT YEAR: 2009-10) SHRI MAHESH AGARWAL HYDERABAD PAN: ABZPM2986M VS INCOME TAX OFFICER WARD 5(2) HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI P. MURALI MOHAN RAO FOR REVENUE : SMT. NEELU GUPTA, DR O R D E R PER SMT. P. MADHAVI DEVI, J.M. THIS IS ASSESSEES APPEAL FOR THE A.Y 2009-10 AGAIN ST THE ORDER OF THE CIT (A)-4, HYDERABAD, DATED 28.02. 2019. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. THE LEARNED CIT (A) ERRED IN DISMISSING THE AP PEAL WHICH IS AGAINST THE PRINCIPLES OF LAW AND JUSTICE. 2. THE LEARNED CIT (A) OUGHT TO HAVE APPRECIATED AN D HELD THAT AO HAS ERRED IN NOT ISSUING THE NOTICE U/ S 143(2) OF THE AT WHICH IS MANDATORY FOR COMPLETING THE ASSESSMENT UNDER THE PROVISIONS OF ACT. 3. THE LEARNED CIT (A) OUGHT TO HAVE APPRECIATED AN D HELD THAT THE AO ERRED IN REOPENING THE ASSESSMENT U/S 147 WITHOUT THERE BEING ANY NEW TANGIBLE MATERIAL BEFORE HIM. 4. THE LEARNED CIT (A) ERRED IN NOT ADJUDICATING TH E GROUND RAISED ON THE ORDER PASSED BY AO, THAT AS TH E AO HAS MADE AN ADDITION U/S 50C AMOUNTING TO DATE OF HEARING : 08.07.2019 DATE OF PRONOUNCEMENT : .07.2019 ITA NO 365 OF 2019 MAHESH AGARWAL HYDERABAD. PAGE 2 OF 5 RS.38,13,750/- WITH REFERRING THE ISSUE FOR VALUATI ON BY DVO. 5. THE LEARNED CIT (A) OUGHT TO HAVE HELD THE FACT THAT THE ASSESSEE HAS FILED HIS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION DISCLOSING, THE INCOME FROM SHO RT TERM CAPITAL GAINS AND THAT THERE IS NO FAILURE ON THE PART OF THE ASSESSEE TO FILE THE ROI OR WAS THERE N O WITHHOLDING OF INFORMATION ON THE PART OF THE ASSES SEE, AND THERE IS NO CASE OF FURNISHING OF UNTRUE PARTIC ULARS LEADING TO ESCAPEMENT OF INCOME. 6. THE LEARNED CIT (A) OUGHT TO HAVE APPRECIATED TH E FACT THAT THE PROPERTY COULD NOT FETCH MORE THAN TH E RECORDED VALUE FIXED BY SRO FOR STAMP DUTY PURPOSE AS THE PROPERTY IS UNDER LITIGATION AND OCCUPIED BY TE NANTS FOR A LONG PERIOD OF TIME. 7. THE APPELLANT MAY ADD OR ALTER OR AMEND OR MODIF Y OR SUBSTITUTE OR DELETE AND/OR RESCIND ALL OR ANY O F THE GROUNDS OF APPEAL AT ANY TIME BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. 2. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEES ADDRESS IS 4-4-287/21 INDERBAGH HYDE RABAD 500095 AND THAT THE ASSESSEE HAS ALSO FILED THE RET URN OF INCOME FOR THE A.Y 2009-10 WITH THE SAID ADDRESS. HE SUBMI TTED THAT THIS IS ALSO THE ADDRESS GIVEN IN HIS PAN CARD AND ACCOR DING TO THESE TWO DETAILS, THE ASSESSEE IS UNDER THE JURISDICTION OF THE AO, WARD 5(1) HYDERABAD. HE SUBMITTED THAT THE ITO WARD 5 (2 ), HYDERABAD HAD ISSUED A NOTICE U/S 148 TO THE ASSESSEE WITH TH E ADDRESS 5-5- 527, FLAT NO.211, JAMUNA ARCADE, JAMBAGH, HYDERABAD , FOR BRINGING TO TAX THE CAPITAL GAINS ARISING OUT OF TH E SALE OF A PROPERTY AND BY APPLYING THE PROVISIONS OF SECTION 50C OF THE ACT. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE AO WHO HAS EXERCISED THE JURISDICTION OVER THE ASSESSEE IS NOT THE AO WHO HAS JURISDICTION OVER HIM. HE SUBMITTED THAT THE ITA NO 365 OF 2019 MAHESH AGARWAL HYDERABAD. PAGE 3 OF 5 OFFICER NOT HAVING JURISDICTION OVER HIM CANNOT ISS UE AND COMPLETE THE ASSESSMENT AND THAT THOUGH THE ASSESSE E HAS RAISED A GROUND OF APPEAL BEFORE THE CIT (A) ON THIS ISSUE , THE CIT (A) HAS FAILED TO ADJUDICATE THE SAID GROUND OF APPEAL. HE ALSO PLACED RELIANCE UPON THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL AT LUCKNOW IN THE CASE OF MOHD. RIZWAN VS. ITO (2015) 65 TAXMANN.COM 160 (LUCKNOW.TRIB). THEREFORE, ACCOR DING TO HIM, THE ASSESSMENT ITSELF IS INVALID AND HAS TO BE SET ASIDE ACCORDINGLY. 4. THE LEARNED DR WAS ALSO HEARD, WHO SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT AS PER THE ADDRESS GIVEN IN THE SALE DEED, THE AO HAS EXERCISE D JURISDICTION AND THEREFORE, THE ASSESSMENT WAS SUSTAINABLE. 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, WE FIND THAT IN THE CASE OF MOHD. RIZWAN VS. ITO (SUPRA), THE COORDINATE BENCH WAS CONSIDERING THE C ASE OF AN ASSESSEE WHERE ONE OF THE ITO WAS DESIGNATED TO COL LECT THE AIR INFORMATION AND TO MAKE NECESSARY INQUIRY AND THE D ESIGNATED OFFICER HAS RECEIVED THE AIR INFORMATION AND ISSUED NOTICE U/S 148 OF THE ACT TO THE ASSESSEE AND MADE ATTEMPT TO FRAME ASSESSMENT OVER THE ASSESSEE. WHEN THE ASSESSEE RAI SED OBJECTION ABOUT HIS JURISDICTION OVER HIM, THE DESIGNATED OFF ICER TRANSFERRED THE FILE TO THE AO HAVING JURISDICTION OVER THE ASS ESSEE AND THE JURISDICTIONAL AO FRAMED THE ASSESSMENT WITHOUT ISS UING A FRESH NOTICE U/S 148. THE TRIBUNAL HELD THAT SUCH A NOTIC E WAS INVALID AND CONSEQUENTLY THE ASSESSMENT FRAMED WAS QUASHED. WE FIND ITA NO 365 OF 2019 MAHESH AGARWAL HYDERABAD. PAGE 4 OF 5 THAT THIS DECISION WAS RENDERED AFTER VERIFYING AND EXAMINING THE ASSESSMENT RECORDS OF THE ASSESSEE THEREIN. WE FIND THAT THE JURISDICTION OVER THE ASSESSEE BEFORE US IS OF THE AO, WARD 5 (1) HYDERABAD, WHEREAS THE AO WHO HAS EXERCISED JURISDI CTION IS THE AO, WARD 5 (2), HYDERABAD. ITO WARD 5(2) HAS ISSUED NOTICE, DATED 23.03.2016 TO THE ASSESSEE U/S 148 OF THE ACT , BUT IT WAS RETURNED UNSERVED AND THEREAFTER, IT WAS SERVED BY AFFIXTURE AT THE ADDRESS OF THE PROPERTY WHICH WAS SOLD BY THE ASSES SEE IN THE FINANCIAL YEAR 2008-09. EVEN THE NOTICE FOR HEARING WAS SERVED BY AFFIXTURE ON 14.10.2016 ON THE ADDRESS OF THE PROPE RTY WHICH WAS SOLD IN FINANCIAL YEAR 2008-09. OBVIOUSLY, THE ASSE SSEE WOULD NOT BE RESIDING IN THE PROPERTY HE HAS ALREADY SOLD EVE N AFTER 8 YEARS OF SALE. THE AO, WHO RECEIVED THE AIR INFORMATION O UGHT TO HAVE VERIFIED THE CORRECT ADDRESS OF THE ASSESSEE FROM T HE RETURN OF INCOME FILED BY THE ASSESSEE OR THE ADDRESS AVAILAB LE IN THE PAN CARD. BUT HE PROCEEDED TO COMPLETE THE ASSESSMENT E X-PARTE THE ASSESSEE. SINCE THE NOTICE U/S 148 WAS NOT SERVED O N THE ASSESSEE, THE ASSESSEE DID NOT HAVE THE OPPORTUNITY TO OBJECT TO THE SAME BEFORE THE AO AND THEREFORE, HAS RAISED IT BEFORE THE CIT (A) FOR THE FIRST TIME. SINCE, THE EXERCISE OF JURI SDICTION IS A LEGAL ISSUE AND IF IT IS NOT EXERCISED BY THE RIGHT PERSO N, THE ASSESSMENT IS LIABLE TO BE SET ASIDE, AND ON GOING THROUGH THE ASSESSMENT ORDER BEFORE US, WE FIND THAT THE CIT (A) HAD NOT A DJUDICATED THE ISSUE, WE DEEM IT FIT AND PROPER TO REMAND THE ISSU E TO THE FILE OF THE CIT (A), WITH A DIRECTION TO VERIFY WHETHER THE AO WHO HAS COMPLETED THE ASSESSMENT HAD JURISDICTION OVER THE ASSESSEE. THE CIT (A) SHALL DECIDE THE ISSUE IN ACCORDANCE WITH L AW AND ALSO AFTER TAKING INTO CONSIDERATION THE JUDICIAL PRECED ENTS ON THE ISSUE AFTER AFFORDING THE ASSESSEE A FAIR OPPORTUNITY OF HEARING AND IF IT ITA NO 365 OF 2019 MAHESH AGARWAL HYDERABAD. PAGE 5 OF 5 IS FOUND THAT THE AO HAD NO JURISDICTION OVER THE A SSESSEE, THE ASSESSMENT SHALL BE DECLARED AS NULL AND VOID. SINC E WE HAVE SET ASIDE THE APPEAL OF THE ASSESSEE TO THE FILE OF THE CIT (A), ON THE JURISDICTION OF THE AO WHICH GOES TO THE ROOT OF TH E MATTER, THE OTHER GROUNDS OF APPEAL ARE NOT DECIDED AT THIS STA GE. THE APPEAL OF THE ASSESSEE IS ACCORDINGLY TREATED AS ALLOWED F OR STATISTICAL PURPOSES. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH JULY, 2019. SD/- SD/- (S.RIFAUR RAHMAN) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 12 TH JULY, 2019. VINODAN/SPS COPY TO: 1 SHRI MAHESH AGARWAL C/O P. MURALI & CO. C.AS, 6-3 -655/2/3 SOMAJIGUDA, HYDERABAD 500082 2 ITO WARD 5(2) HYDERABAD 3 CIT (A)-4 HYDERABAD 4 PR. CIT 4 HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER