SHARDA DEVI KATTA, JAIPUR V. ITO WARD 6(1), JAIPUR, JAIPUR

ITA 379/JPR/2022

AI Insights

This case involves an appeal by Smt. Sharda Devi Katta against the order of the ld. CIT(A) National Faceless Appeal Centre, Delhi, dated 26-08-2022, for the assessment year 2011-12. The primary issues in the appeal included the legality of the assessment order under sections 144 and 148 of the Income Tax Act, 1961, the adequacy of the opportunity provided to the assessee to be heard, and the correctness of the additions made to the assessee's income. The Income Tax Officer (ITO) had made certain additions to the assessee's income, which were confirmed by the CIT(A). The assessee contested these additions, citing various legal and factual inaccuracies. The Tribunal found that the assessee had not been given a fair opportunity to present her case and thus restored the matter to the CIT(A) for a fresh decision.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 132389 (ITAT-JAIPUR)
• Duration Of Justice: 7 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-05-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 12-04-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 19-10-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Principle of natural justice; Cost of acquisition; Valuation report
• Section: 147; 148; 144; 234B

Judgement Text

vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC” JAIPUR MkWa- ,l-lhrky{eh] U;kf;d lnL; ,oa Jh jkBksM deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA. No. 379/JP/2022 fu/kZkj.k o"kZ@Assessment Years : 2011-12 Smt. Sharda Devi Katta W/o Kanhaiya Lal Katta H. No. 9/2, Malviya Nagar, Jaipur. cuke Vs. ITO, Ward-6(1), Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AEDPK 4307 H vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Shrawan Kumar Gupta, Adv. jktLo dh vksj ls@ Revenue by : Mrs Monisha Choudhary, Addl.CIT lquokbZ dh rkjh[k@ Date of Hearing 13/04/2023 mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 29/05/2023 vkns'k@ ORDER PER: DR. S. SEETHALAKSHMI, J.M. This appeal is filed by the assessee against the order of the ld. CIT(A) National Faceless Appeal Centre, Delhi [hereinafter referred as “NFAC”] dated 26-08-2022 for the assessment year 2011-12 wherein the assessee has raised the following grounds of appeal. “1.The impugned assessment order u/s 144 rws 148 dated 18.12.2018 as well as the notice u/s 148 and the action taken by the Id. AO u/s 147 are bad in law and on facts of the case, for want of jurisdiction, barred by limitation, without proper approval or satisfaction and various other reasons and hence the same may kindly be quashed. The Id. AO also erred in law as well 2 ITA NO. 379/JP/2022 SHARDA DEVI KATTA VS ITO, WARD 6(1), JAIPUR as on the facts of the case in not providing the adequate and reasonable opportunity of being heard in the gross breach of law. 2. The Id. CIT(A) has erred in passing the order without taking in to consideration the material and facts and without providing adequate and reasonable opportunity of being heard in the gross breach of law. Hence the additions so made by the Id. AO may kindly be quashed and delete. 3. Rs.8,25,080/-: The Id. CIT(A) has grossly erred in law as well as on the facts of the case in confirming the addition of Rs.8.25.080/- on account of Short term capital Gain Long, the Id. AO and CIT(A) both are also erred in taking the sale consideration at Rs. 12.25,080/- as per DLC rate in pace of actual sale consideration of Rs.6,00,000/- shown or received by the assessee, and also erred in not giving the credit of Rs.2,00,000/- on account of cost of construction. Hence the addition so made by the AO and confirmed by the Id. CIT(A) is being totally contrary to the provisions of law and facts on the record and hence the addition may kindly be deleted in full. 4. Rs.3,93,000/-: The Id. CIT(A) has grossly erred in law as well as on the facts of the case in confirming the addition of Rs.3.93,000/- u/s 69 on account of alleged unexplained investment in purchases of shares and also erred in not giving the credit or setoff of sale consideration received on sale of above properly and also erred in not giving the credit or setoff of the addition made on account of STCG. Hence the addition so made by the AO and confirmed by the Id. CIT(A) is being totally contrary to the provisions of law and facts on the record and hence the addition may kindly be deleted in full. 5. The ld. AO has grossly erred in law as well as on the facts of the case in charging interest u/s 234A, 234B and 234C/ The appellant totally denies it liability of charging of any such interest. The interest, so charged, being contrary to the provisions of law and facts, may kindly be deleted in full.’ 2.1 At the outset of the hearing, the ld. AR of the assessee prayed that the ld. CIT(A) has confirmed the action of the AO and thus passed the ex-parte order 3 ITA NO. 379/JP/2022 SHARDA DEVI KATTA VS ITO, WARD 6(1), JAIPUR without providing adequate opportunity of being heard to the assessee and the assessee should be provided one more opportunity to contest the case before the ld. CIT(A). 2.2 On the other hand, the ld. DR supported the order of the ld. CIT(A) that the assessee was provided several opportunities to represent her case on 22-10-2019, 31-12-2020 and 28-07-2022 and thus nothing was advanced by the assessee before the ld. CIT(A). Consequently, the ld.CIT(A) dismissed the appeal of the assessee concurring with the finding of the AO. 2.3 We have heard both the parties and perused the materials available on record. It is noted from the ld. CIT(A)’s order wherein ld. CIT(A) passed the ex- parte order in the case of the assessee for the reason that in spite of providing several opportunities by the ld.CIT(A) on 22-10-2019, 31-12-2020 and 28-07- 2022, nothing had been heard from the assessee on the question raised before him. The facts as emerges from the order of the ld. CIT(A) at para 4 and 5 of his order is reproduced hereunder. 4. AO's Findings: In the assessment order dated 18 12 2018 passed u/s 147/144 of the Income Tax Act, 1961,AO stated that as per information on record it was gathered that the assesse has sold an immovable property of Rs. 6,00,000/- which was valued at Rs.) 12,25,080/- for the purpose of charging stamp duty which pertains 4 ITA NO. 379/JP/2022 SHARDA DEVI KATTA VS ITO, WARD 6(1), JAIPUR to the year under consideration. AO further stated that since as per system no return of income has been filed for the A.Y. 2011-12 so the above transaction was not verifiable. In view of the above facts and circumstances there were sufficient reasons to believe that an amount of Rs. 12,25,080/ has escaped assessment within the meaning of section 147 of the Income Tax Act, 1961. Accordingly, AO issued notice u/s, 148 dated 26.03.2018 which was served upon the assesse. In compliance assesse has not filed return of income. Subsequently, notice u/s 142(1) along with questionnaire was issued on 20.08.2018, in response no submission was filed. Another notice was issued on 02.11.2018 but the same was returned back. However, the same was served to the A/R of the assesse Shri Sudhakar Goyal on 19.11.2018, in response to same, no reply was submitted by the A/R of the assesse. Therefore, AO issued final show cause notice on 22.11.2018 but the notice was returned back as it was not claimed therefore the same was affixed on 13.12.2018. In compliance to final show cause notice the A/R of the assesse has filed a reply on dak which was perused by the AO. In the reply, the A/R has submitted copy of ITR with computation for A.Y. 2011- 12. However, the assesse has not e-verified the ITR filed u/s. 148 therefore the case was completed ex-parte. In the computation of income assessee has declared income from business or profession at Rs 1,81,327/-, income from short term capital gain of Rs. 2,670/- and income from other sources of Rs. 3,838/-. In the computation of short term capital gain the assesse has claimed acquisition cost of Rs. 3,75,000/ registration expenses of Rs. 22,330/- and construction cost of Rs. 2,00,000/-, In support of acquisition cost of Rs. 3,75,000/- and registration expenses of Rs. 22,320/- the assesse has submitted purchase deed dated 12.11.2008. Thus the same was allowed to the assessee. But the AO disallowed Rs. 2,00,000/- on account of construction cost as the assesse could not submit any bills/ vouchers regarding construction material and valuation report upon the property in question. The assesse has sold the property situated at H.No. 5 ITA NO. 379/JP/2022 SHARDA DEVI KATTA VS ITO, WARD 6(1), JAIPUR 3/757, Malviya Nagar, Jaipur to Smt. Sudha Bhatnagar for Rs. 6,00,000/- on 27.10.10. However, the Sub-Registrar had: enhance the value of the property at Rs 12,25,080/- Therefore the sale value in the above matter was taken at Rs. 12,25,060/-. Accordingly. AO calculated short term capital gain at Rs. 8,27,750/- by allowing acquisition cost of Rs. 3,75,000 and registration expenses of Rs. 22,320/-. Accordingly, penalty proceedings u/s 271(1) (c) was also initiated by the AO As per the ITS details AO further found that during the period under consideration the assesse has paid Rs. 1,98,000/- and Rs. 1,95,200/- for purchasing of shares of Punjab and Sindh bank and Tata Steel Ltd. The assesse has said nothing in her reply regarding the above investment therefore the source of investment of Rs. 3,93,000/- remained unsubstantiated. Accordingly. AO made addition of Rs 3,93,000/- u/s. 69 of the Income Tax Act, 1961 to the total income of the assessee, In view of the above, AO computed total income at Rs 14.05.920/- and accordingly levied tax and charged interest u/s. 234A, 2358 of the Act 5. Decision:- The appellant has been given several opportunities to represent her case on 22.10.2019, 31.12.2020 and 28.07.2022. In fact till date nothing has been heard from the appellant on the questions raised. No explanation whatsoever has been offered by the appellant to justify her claims. Thus, it appears that the appellant is not interested in proceeding with the appeal filed. Therefore, having considered the facts of the case and evidences available on record, the addition made by the AO is sustained, while dismissing all grounds of appeal. 6 ITA NO. 379/JP/2022 SHARDA DEVI KATTA VS ITO, WARD 6(1), JAIPUR 6. Thus, the appeal is dismissed.’’ Hence, the ld. CIT(A) dismissed the appeal of the assessee keeping in mind the assessment order of the AO as well as facts & evidences available on record. During the course of hearing, the ld. AR of the assessee submitted that he had filed an adjournment application dated 8 th Aug. 2022 before the ld. CIT(A) to grant the adjournment upto 27 th Aug. 2022 but he had not entertained the same. To this effect, the ld. AR filed Annexure B containing screen short of an adjournment application which has been drawn out through e-mail which indicates that the ld. CIT(A) adjudicated upon the case without rejecting the adjournment application of the assessee. Hence, the Bench noted that the assessee is deprived off to substantiate his arguments on merits before the ld. CIT(A) at the time of hearing, however, the ld. AR of the assessee prayed that the assessee be provided one more opportunity to contest the case before the ld. CIT(A). In this view of the matter and with a view to providing natural justice to the assessee, the request of the ld. AR of the assessee is acceded to by the Bench and the appeal of the assessee is restored to the file of the ld. CIT(A) to decide it afresh by providing one more opportunity of hearing, however, the assessee will not seek any adjournment on frivolous ground and remain cooperative during the 7 ITA NO. 379/JP/2022 SHARDA DEVI KATTA VS ITO, WARD 6(1), JAIPUR course of assessment proceedings before the ld. CIT(A) Thus the appeal of the assessee is allowed for statistical purposes. 2.6 Before parting, we may make it clear that our decision to restore the matter back to the file of the ld. CIT(A) shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by ld. CIT(A) independently in accordance with law. 3.0 In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 29/05/2023. Sd/- Sd/- ¼ jkBksM deys'k t;UrHkkbZ ½ ¼ MkWa-,l-lhrky{eh½ (RATHOD KAMLESH JAYANTBHAI) (Dr. S. Seethalakshmi) ys[kk lnL; @Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 29/05/2023. *Mishra vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 1. vihykFkhZ@The Appellant- Smt. Sharda Devi Katta, Jaipur. 2. izR;FkhZ@ The Respondent- ITO, Ward-6(1), Jaipur. 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur. 6. xkMZ QkbZy@ Guard File { ITA No. 379/JPR/2022} vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar