Sri P V Chikka Krishnappa (HUF) , Bangalore V. Income Tax Officer Ward-6(3)(2) , Bangalore

ITA 376/BANG/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3875 (ITAT-BANGALORE)
• Duration Of Justice: 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 26-08-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 01-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PADMA MEENAKSHI
• Assessee Lawyers: V SRINIVASAN
• Keywords: Recovery proceedings; Opportunity of being heard; Principle of natural justice; Condonation of delay; Set aside; Capital Gains
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE- PRESIDENT AND SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER I T A NO. 376 /BANG/201 9 ASSESSMENT YEAR : 20 11 - 12 SHRI P.V. CHIKKA KRISHNAPPA [HUF], BEHIND MARAMMA TEMPLE, B.B. ROAD, AMRUTHAHALLI, BANGALORE 560 092. PAN: AAOHP1924J VS. THE INCOME TAX OFFICER, WARD 6 [3] [2], BANGALORE. APPELLANT RESPONDENT ASSESSEE BY : SHRI V. SRINIVASAN, ADVOCATE REVENUE BY : SMT. PADMA MEENAKSHI, JCIT (DR) DATE OF HEARING : 26 . 08 .2019 DATE OF PRONOUNCEMENT : 22 . 1 1 .2019 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE AND THE SAME IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-6, BANGALORE DATED 07.12.2018 FOR ASSESSMENT YEAR 2011-12. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1. THE ORDERS OF THE AUTHORITIES BELOW IN SO FAR AS THEY ARE AGAINST THE APPELLANT ARE OPPOSED TO LAW, EQUITY, WEIGHT OF EVIDENCE PROBABILITIES, FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE. 2. THE LEARNED CIT[A] ERRED IN LAW AND ON FACTS IN DISMISSING THE APPEAL OF THE APPELLANT BY REFUSING TO CONDONE THE DELAY OF 375 DAYS IN FILING THE APPEAL BEFORE THE LEARNED COMMISSIONER OF INCOME-TAX [APPEALS], AS PER SECTION 249[3] OF THE ACT WITHOUT GOING INTO THE MERITS OF THE CASE OF THE APPELLANT. 2.1 THE LEARNED CIT[A] IS NOT JUSTIFIED IN HOLDING THAT THE EXPLANATION TENDERED BY THE APPELLANT FOR THE DELAY OF 375 DAYS IN FILING THE APPEAL WAS NOT SATISFACTORY AND CANNOT BE CONSIDERED AS SUFFICIENT CAUSE UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE. ITA NO. 376/BANG/2019 PAGE 2 OF 5 2.2 THE LEARNED CIT[A] OUGHT TO HAVE APPRECIATED THAT THE APPELLANT WAS GUIDED BY HIS AUTHORIZED REPRESENTATIVE WHO HAD ADVISED AGAINST FILING AN APPEAL DUE TO THE JUDGEMENT OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF DR. T.K.DAYALU AND THE AGREED NATURE OF THE ASSESSMENT AND HENCE, THE APPELLANT ACTING ON THE SAID ADVICE HAD NOT TAKEN ANY STEPS TO FILE AN APPEAL AGAINST THE ASSESSMENT ORDER WITHIN THE TIME ALLOWED UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE. 2.3 THE LEARNED CIT[A] OUGHT TO HAVE APPRECIATED THAT THE APPELLANT REALIZED THAT THERE WERE OTHER GROUNDS WITH REGARD TO THE EXTENT OF CAPITAL GAINS ASSESSED AS WELL AS THE EXTENT OF EXEMPTION U/S.54F OF THE ACT THAT OUGHT TO HAVE BEEN URGED IN THE APPEAL AND THE APPELLANT UNDERSTOOD THIS POSITION ONLY WHEN ANOTHER CHARTERED ACCOUNTANT WHO WAS CONSULTED IN CONNECTION WITH RECOVERY PROCEEDINGS EXPLAINED THE SAME AND THEREUPON IMMEDIATE STEPS WERE TAKEN TO FILE THE APPEAL BEFORE THE LEARNED CIT[A]. 2.4 THE LEARNED CIT[A] OUGHT TO HAVE REGARDED THE AFORESAID EXPLANATION TENDERED BY THE APPELLANT AS REASONABLE AND SUFFICIENT CAUSE FOR THE DELAY IN FILING THE APPEAL, WHICH DELAY WAS CAUSED SOLELY ON ACCOUNT OF ERRONEOUS PROFESSIONAL ADVICE RECEIVED BY THE APPELLANT IN FIRST INSTANCE ESPECIALLY WHEN IT WAS CLEAR THAT THE APPELLANT HAD NOT EITHER DELIBERATELY OR INTENTIONALLY DELAYED IN FILING THE APPEAL AND CONSEQUENTLY, THE LEARNED CIT[A] OUGHT TO HAVE CONDONED THE DELAY IN FILING THE APPEAL AND ADMITTED THE SAME AND DISPOSED OFF ON MERITS UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE. 2.5 THE LEARNED CIT[A] FAILED TO APPRECIATE THE BONAFIDE REASONS GIVEN BY THE APPELLANT FOR NOT PREFERRING THE STATUTORY APPEAL IN TIME AND DENIED THE APPELLANT OF BEING HEARD ON ITS MERITS MERELY ON GROUNDS OF TECHNICALITIES, WHICH IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 2.6 THE LEARNED CIT[A] FAILED TO APPRECIATE THAT THE APPELLANT OUGHT NOT HAVE BEEN DENIED REMEDY BY WAY OF APPEAL ON MERE TECHNICALITIES IN VIEW OF THE LANDMARK SUPREME COURT JUDGEMENT IN COLLECTOR, LAND ACQUISITION VS. MST. KATIJI REPORTED IN 167 ITR 471[1987] AND OUGHT TO HAVE EXERCISED THE DISCRETION VESTED AS PER THE PROVISIONS OF SECTION 249 [3] OF THE ACT IN THE MOST JUDICIOUS MANNER TO PROMOTE AND UPHOLD THE SUBSTANTIAL CAUSE OF JUSTICE ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. WITHOUT PREJUDICE TO THE ABOVE, THE ORDER OF RE-ASSESSMENT IS BAD IN LAW AND VOID-AB-INITIO FOR WANT OF REQUISITE JURISDICTION ESPECIALLY; THE MANDATORY REQUIREMENTS TO ASSUME JURISDICTION U/S 148 OF THE ACT DID NOT EXIST AND HAVE NOT BEEN COMPLIED WITH AND CONSEQUENTLY, THE RE- ASSESSMENT REQUIRES TO BE CANCELLED. 4. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED CIT[A] IS NOT JUSTIFIED IN NOT DISPOSING OFF THE GROUNDS RAISED BY THE APPELLANT WITH REGARD TO THE ITA NO. 376/BANG/2019 PAGE 3 OF 5 ASSESSING A SUM OF RS. 2,55,25,600/- AS INCOME FROM LONG TERM CAPITAL GAINS AS AGAINST A SUM OF RS.1,92,28,400/- REPORTED BY THE APPELLANT UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE. 5. THE LEARNED CIT[A] OUGHT TO HAVE DISPOSED OFF THE GROUNDS RAISED BY THE APPELLANT WITH REGARD TO THE ASSESSING A SUM OF RS.5,00,000/-, BEING THE NONREFUNDABLE DEPOSIT RECEIVED BY THE APPELLANT, UNDER THE HEAD 'INCOME FROM OTHER SOURCES' UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE. 6. WITHOUT PREJUDICE TO THE ABOVE, THE EXTENT OF CAPITAL GAINS ASSESSED IN THE HANDS OF THE APPELLANT IS HIGHLY EXCESSIVE AND IS LIABLE TO BE REDUCED SUBSTANTIALLY. 7. WITHOUT PREJUDICE TO THE ABOVE GROUNDS URGED, THE AUTHORITIES BELOW ARE NOT JUSTIFIED IN RESTRICTING THE EXEMPTION CLAIMED U/S.54F OF THE ACT, TO RS.24,79,400/- AS AGAINST THE SUM OF RS.2,85,04,953/- ALLOWABLE U/S.54F OF THE ACT, UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE. 8. WITHOUT PREJUDICE TO THE RIGHT TO SEEK WAIVER BEFORE THE HON'BLE DG/CCIT, THE APPELLANT DENIES THEMSELVES LIABLE TO BE CHARGED TO INTEREST U/S.234A, 234-B AND 234C OF THE ACT, WHICH REQUIRES TO BE CANCELLED UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE. 9. FOR THE ABOVE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING OF THE APPELLANT, YOUR APPELLANT HUMBLY 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 COSTS. 3. IN COURSE OF HEARING, IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT IN THIS CASE, THERE WAS DELAY OF 375 DAYS IN FILING THE APPEAL BEFORE LD. CIT(A) AND AS PER THE IMPUGNED ORDER, THE LD. CIT(A) HAS NOT CONDONED THIS DELAY OF 375 DAYS AND HE HAS DISMISSED THE APPEAL OF THE ASSESSEE AS NOT ADMISSIBLE WITHOUT ANY DECISION ON MERIT. IT WAS SUBMITTED THAT UNDER SIMILAR FACTS IN THE CONNECTED CASE OF SHRI P.V. KRISHNAPPA [HUF] FOR THE SAME ASSESSMENT YEAR, THE APPEAL IS ALREADY HEARD BY A BENCH OF THE TRIBUNAL ON 08.07.2019 IN ITA NO. 380/BANG/2019 BUT THE ORDER IS STILL AWAITED. HE SUBMITTED THAT THE FACTS IN DISPUTE ARE IDENTICAL AND THEREFORE, THE PRESENT APPEAL CAN BE DECIDED IN LINE WITH THIS TRIBUNAL ORDER TO BE PRONOUNCED. THE LD. DR OF REVENUE ALTHOUGH SUPPORTED THE ORDER OF LD. CIT(A) BUT SHE HAD NO OBJECTION REGARDING THIS PROPOSITION PUT FORWARD BY THE LD. AR OF ASSESSEE THAT THE PRESENT APPEAL MAY ITA NO. 376/BANG/2019 PAGE 4 OF 5 BE DECIDED ON SIMILAR LINE AS PER THE DECISION OF THE TRIBUNAL IN ITA NO. 380/BANG/2019. 4. IN THE CASE OF SHRI P.V. KRISHNAPPA [HUF] IN ITA NO. 380/BANG/2019 FOR ASSESSMENT YEAR 2011-12, THE APPEAL WAS DECIDED BY THE TRIBUNAL AS PER ITS ORDER PRONOUNCED ON 28.08.2019 AND WE HAVE OBTAINED A COPY OF THIS TRIBUNAL ORDER AND KEPT THE SAME ON RECORD. AS PER PARA NO. 4.4 OF THIS TRIBUNAL ORDER, THE TRIBUNAL HAS CONDONED THE DELAY OF 375 DAYS IN THAT CASE IN FILING THE APPEAL BEFORE LD. CIT(A) AND RESTORED THE MATTER BACK TO THE FILE OF LD. CIT(A) FOR A DECISION ON MERIT. PARA NO. 4.4 OF THIS TRIBUNAL ORDER IS REPRODUCED HEREINBELOW FOR READY REFERENCE. 4.4 WE HAVE HEARD AND CONSIDERED THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD IN RESPECT OF THE MATTER OF NON-CONDONATION OF DELAY OF 375 DAYS IN FILING THE APPEAL BEFORE THE CIT(A)-6, BANGALORE. IT IS APPARENT THAT THE CIT(A) HAS NOT ADJUDICATED THE ASSESSEE'S APPEAL ON MERITS, BUT DISMISSED IT, IN LIMINE, BY NOT CONDONING THE DELAY IN FILING THE APPEAL. THE ULTIMATE OBJECT OF ASSESSMENT PROCEEDINGS IS THAT THE TRUE AND CORRECT INCOME OF THE ASSESSEE BE BROUGHT TO TAX. IT IS UNLIKELY THAT THE ASSESSEE WOULD HAVE DELIBERATELY OR INTENTIONALLY FILED THE APPEAL BEFORE THE CIT(A), BELATEDLY, ESPECIALLY WHEN IT IS SADDLED WITH TAX DEMAND OF RS.1,08,29,512/-. TAKING INTO ACCOUNT THE PRINCIPLES LAID DOWN BY THE HON'BLE APEX COURT IN THE CASE OF MST KATIJI AND OTHERS (SUPRA), WHEREIN THE HON'BLE APEX COURT LAID DOWN THE PRINCIPLES FOR DEALING WITH MATTERS RELATING TO CONDONATION OF DELAY; THE DECISION OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF ISRO SATELLITE CENTRE (SUPRA); THE DECISION OF THE CO-ORDINATE BENCH IN THE CASE OF SHAKUNTALA HEGDE L/R. K. HEGDE (SUPRA) AND THE REASONS ADDUCED BY THE ASSESSEE IN ITS PETITION SEEKING CONDONATION OF DELAY (SUPRA), WE ARE OF THE VIEW THAT THE ASSESSEE WAS PREVENTED BY REASONABLE AND SUFFICIENT CAUSE FROM FILING THE APPEAL FOR ASSESSMENT YEAR 2011-12 ON TIME BEFORE THE CIT(A)-6, BANGALORE. IN THIS VIEW OF THE MATTER AND RESPECTFULLY FOLLOWING THE PRINCIPLES LAID DOWN BY THE HON'BLE APEX COURT IN THE CASE OF MST KATIJI AND OTHERS (SUPRA), WE CONDONE THE DELAY OF 375 DAYS BY THE ASSESSEE IN FILING THE APPEAL BEFORE THE CIT(A). SINCE IT IS EVIDENT THAT THE ASSESSEE'S APPEAL HAS BEEN DISMISSED BY THE CIT(A) ONLY ON TECHNICAL GROUNDS; BY NON-CONDONATION OF DELAY IN FILING THE APPEAL; AND NOT ADJUDICATED THE MERITS OF THE ISSUES RAISED IN THE APPEAL BEFORE HER, THE IMPUGNED ORDER OF CIT(A)-6, BANGALORE DATED 07.12.2018 FOR ASSESSMENT YEAR 2011-12 IS SET ASIDE AND THE MATTER IS RESTORED TO THE FILE OF THE CIT(A) FOR ADJUDICATION ON MERITS. NEEDLESS TO ADD, THE CIT(A) SHALL AFFORD THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD AND TO FILE SUBMISSIONS / DETAILS REQUIRED; WHICH SHALL BE DULY CONSIDERED BEFORE DECIDING THE APPEAL. IT IS ACCORDINGLY ORDERED. CONSEQUENTLY, THE OTHER GROUNDS RAISED ON MERITS IN THIS APPEAL (SUPRA) ARE NOT REQUIRED TO BE ADJUDICATED AT THIS STAGE. ITA NO. 376/BANG/2019 PAGE 5 OF 5 5. RESPECTFULLY FOLLOWING THIS TRIBUNAL ORDER, IN THE PRESENT CASE ALSO, WE CONDONE THE DELAY OF 375 DAYS BY THE ASSESSEE IN FILING THE APPEAL BEFORE LD. CIT(A) AND SINCE, THERE IS NO DECISION ON MERIT BY LD. CIT(A), WE RESTORE THE ENTIRE MATTER BACK TO THE FILE OF LD. CIT(A) FOR DECISION ON MERIT AS PER LAW AFTER AFFORDING ADEQUATE OPPORTUNITY OF BEING HEARD TO BOTH SIDES. IN VIEW OF THIS DECISION, NO ADJUDICATION ON MERIT IS CALLED FOR AT THE PRESENT STAGE. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/- SD/- (N.V. VASUDEVAN) (ARUN KUMAR GARODIA) VICE-PRESIDENT ACCOUNTANT MEMBER BANGALORE, DATED, THE 22 ND NOVEMBER, 2019. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.