Kishore Chandra Patel, Sundergarh V. DCIT, Sambalpur

ITA 500/CTK/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65181 (ITAT-CUTTACK)
• Duration Of Justice: 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2012
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 1998-1999
• Appeal Filed On: 15-10-2012
• Court: TRIBUNAL
• Department Lawyers: S C MOHANTY
• Assessee Lawyers: P R MOHANTYD K SWAINARS
• Keywords: Principle of natural justice; Fair market value; Valuation report

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK ( ) BEFORE . . , , HONBLE SHRI K.K.GUPTA, ACCOUNTANT MEMBER. /AND . . . , H ONBLE SHRI K.S.S.PRASAD RAO, JUDICIAL MEMBER / I.T.A.NO. 500/CTK/2012 / ASSESSMENT YEAR 1998 - 99 KISHORE CHANDRA PATEL, L/H OF LATE VESAJ PATEL, MISSIONCHOUK, SUNDARGARH. PAN: ACXPP 3212 C - - - VERSUS - DCIT, CIRCLE 1(1) , SAMBALPUR. ( /APPELLANT ) ( / RESPONDENT ) / FOR THE APPELLANT : / SHRI P.R.MOHANTY/D.K.SWAIN, ARS / FOR THE RESPONDENT: / SHRI S.C.MOHANTY, DR / DATE OF HEARING: 27.11.2012 / DATE OF PRONOUNCEMENT: 30.11.2012 / ORDER . . , , SHRI K.K.GUPTA, ACCOUNTANT MEMBER . THE ASSESSEE IS IN APPEAL AGAINST THE ORDER DT.22.08.2012 PASSED BY THE LEARNED CIT(A) REJECTING THE PETITION U/S.154 INCOME - T AX ACT DT. 5.5.2012 FILED BY THE ASSESSEE BEFORE HIM SEEKING RECTIFICATION OF THE APPELLATE ORDER DT.24.02.2012 PERTAINING TO THE ASSESSMENT U/S.143/254 FOR THE ASSESSMENT YEAR 1998 - 99. 2. IN THE PRESENT CASE, WHILE MAKING ASSESSMENT U/S.143(3)/254, THE AS SESSING OFFICER COMPUTED THE CAPITAL GAIN ON SALES OF CUT AND POLISHED DIAMONDS BY TAKING THE INITIAL COST OF RAW & UNCUT DIAMONDS AS DECLARED BY THE ASSESSEE FOR VDIS PURPOSE BY MISINTERPRETING THE DECISION OF THE ITAT, SPECIAL BENCH, CUTTACK AT KOLKATA I N THE CASE OF HIRALAL LOKCHANDANI V. ITO IN I.T.A.NO.555/CTK/2002 DT.17.11.2006, WHEREIN, THE ITAT, SPECIAL BENCH HAS RESTORED THE MATTER TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO RECOMPUTE THE CAPITAL GAIN AFTER CONSIDERING THE VALUATION RE PORT OF ROUGH I.T.A.NO. 500/CTK/2012 2 DIAMONDS AS BASIS FOR DETERMINING FAIR MARKET VALUE OF RAW AND UNCUT DIAMOND AS ON 1.4.1981, WHICH ORDER REQUIRED TO HAVE BEEN FOLLOWED BY THE ASSESSING OFFICER IN THE CASE OF THE PRESENT ASSESSEE, AS DIRECTED BY THE TRIBUNAL IN ITS APPEAL. O N APPEAL, THE LEARNED CIT(A) VIDE ORDER DT.24.02.2012 CONFIRMED THE ACTION OF THE ASSESSING OFFICER. AGAINST THE SAID ORDER, THE ASSESSEE FILED A PETITION U/S.154 DT.5.5.2012. , WHICH HAS BEEN REJECTED BY THE LEARNED CIT(A) AND THE ASSESSEE IS IN APPEAL AGA INST THE SAID ORDER BEFORE THE TRIBUNAL. 3. THE LEARNED AR OF THE ASSESSEE CONTENDED THAT THE LEARNED CIT(A) HAS PASSED THE IMPUGNED ORDER EXPARTE WITHOUT CONSIDERING THE PETITION FILED BY THE ASSESSEE SEEKING ADJOURNMENT OF HEARING FIXED BY HIM, AND BY S IMPLY OBSERV ING THAT THERE IS NO MISTAKE APPARENT FROM RECORD. HE CONTENDED THAT ON THE FACTS AND CIRCUMSTANCES, THE PASSING OF THE IMPUGNED ORDER IS IN VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE. HE FURTHER CONTENDED THAT EVEN IF HE HAS PASSED THE EX PARTE ORDER, HE HAS NOT DISCUSSED ANYTHING ABOUT THE GROUNDS TAKEN IN THE APPEAL MEMO WHILE DISMISSING THE PETITION U/S.154 FILED BY THE ASSESSEE. 4. THE LEARNED DR, ON THE OTHER HAND, SUPPORTED THE IMPUGNED ORDER OF THE LEARNED CIT(A) AND CONTENDED THAT S INCE ON THE DATE FIXED FOR HEARING BY THE LEARNED CIT(A) ON 30.7.2012 AND 21.8.2012 THE ASSESSEE SOUGHT ADJOURNMENT, THE LEARNED CIT(A) IS JUSTIFIED IN PASSING THE EXPARTE ORDER. 5. WE HAVE HEARD BOTH THE PARTIES. THE UNDISPUTED FACTS ARE THAT THE ASSESSEE FILED A PETITION U/S.154 ON 5.5.2012 SEEKING RECTIFICATION IN THE ORDER PASSED BY THE LEARNED CIT(A) DT.24.2.2011 WHEN THE ASSESSING OFFICER DID NOT FOLLOW THE DIRECTION OF THE TRIBUNAL AS STATED ABOVE. IN THE ASSESSEES CASE THE ASSESSING OFFICER OUGHT T O HAVE FOLLOWED THE DIRECTION OF THE TRIBUNAL TO DECIDE THE ISSUE IN THE LIGHT OF THE DECISION OF THE SPECIAL BENCH I.T.A.NO. 500/CTK/2012 3 IN THE CASE OF HIRALAL LOKCHANDANI V. ITO (SUPRA) , WHEREIN THE TRIBUNAL HAS GIVEN SPECIFIC WHICH READS AS UNDER: 21. IN VIEW OF ABOVE FACT UAL/LEGAL POSITION IN OUR OPINION, IT WOULD MEET THE ENDS OF JUSTICE IF THE ORDER OF THE LOWER AUTHORITIES ON THIS POINT IS SET ASIDE AND MATTER IS RESTORED BACK TO THE FILE OF A.O. THE ASSESSEE IS DIRECTED TO PRODUCE THE VALUATION REPORT OF RAW AND UNCUT DIAMOND BEFORE THE A.O. THEREAFTER THE A.O. WILL RE - COMPUTE THE CAPITAL GAIN AFTER CONSIDERING SUCH VALUATION REPORT AS BASIS FOR DETERMINING FAIR MARKET VALUE OF RAW AND UNCUT DIAMOND AS ON 1.4.1981. THE A.O. WILL ALLOW ADEQUATE OPPORTUNITY TO THE ASSESSE E WHILE GIVING EFFECT TO THIS ORDER. THE LEARNED COUNSEL OF THE ASSESSEE CONTENDED THAT THE ORDER OF THE SPECIAL BENCH OF THE TRIBUNAL IS VERY CLEAR THAT SUCH A DIRECTION WAS MADE AS PER THE SUGGESTION OF THE DEPARTMENT ONLY AS PER THE OBSERVATION MADE IN PARAGRAPH 20 OF THE SAID ORDER DT.17.11.2006. THEREFORE, AS PER THAT DIRECTION, THE ASSESSING OFFICER OUGHT TO HAVE CONSIDERED THE VALUATION REPORT SUBMITTED BY THE ASSESSEE AS THE BASIS FOR DETERMINING FAIR MARKET VALUE OF RAW AND UNCUT DIAMOND AS ON 1.4 .81. THE ASSESSEE HA S MADE AVAILABLE TO THE ASSESSING OFFICER THE VALUATION REPORT OF RAW AND UNCUT DIAMONDS AS ON 1.4.1981, BUT WITHOUT TAKING THE SAME AS THE BASIS FOR COMPUTATION OF CAPITAL GAINS AS PER THE DIRECTION OF THE TRIBUNAL, THE ASSESSING OFFIC ER COMPUTED THE CAPITAL GAINS ON ITS OWN INTERPRETATION OF FACTS WHICH IN FACT HAD BEEN CONSIDERED BY THE ITAT, SPECIAL BENCH IN THE CASE OF HIRALAL LALCHANDANI (SUPRA). THESE FACTS WERE BROUGHT BEFORE THE LEARNED CIT(A) AT THE TIME OF HEARING OF APPEAL BU T WITHOUT CONSIDERING THE SAME IN ITS PROPER PERCEPTIVE, THE LEARNED CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE VIDE ORDER DT.24.2.2012 , WHICH THE ASSESSEE POINTED OUT AS A MISTAKE APPARENT ON RECORD IN ITS PETITION U/S.154 FILED ON 5.5.2012. WE MAY M ENTION HERE THAT FOR NON - COMPLIANCE TO THE DIRECTION OF THE TRIBUNAL BY THE I.T.A.NO. 500/CTK/2012 4 ASSESSING AUTHORITIES AMOUNTS A MISTAKE APPARENT FROM RECORD AS HAS BEEN HELD BY US IN A RECENT GROUP CASES IN ITA NOS.153 TO 160/CTK/2012 DT.9.11.2012 IN THE CASE OF SHYAM SUNDAR PODDAR & OTHERS V. ITO (RELIED ON BY THE LEARNED COUNSEL FOR THE ASSESSEE). HOWEVER, AS STATED ABOVE, THE LEARNED CIT(A) HAS PASSED THE IMPUGNED ORDER EXPARTE WITHOUT DISCUSSING THE MERITS OF THE GROUNDS RAISED IN THE PETITION FILED BY THE ASSESSEE U/S.154 . SINCE THE ASSESSEE MOVED TIME PETITION ON THE MEDICAL GROUND ON 18.8.2012 TO ADJOURN THE HEARING FIXED ON 21.8.2012, THE NON - CONSIDERATION THE SAME AND PASSING OF THE ORDER EXPARTE , IN OUR CONSIDERED VIEW, IS IN VIOLATION TO THE PRINCIPLES OF NATURAL JUS TICE. THEREFORE, WE SET ASIDE THE IMPUGNED ORDER OF THE LEARNED CIT(A) AND RESTORE THE MATTER TO HIS FILE FOR CONSIDERING THE PETITION U/S.154 FILED BY THE ASSESSEE AFRESH IN THE LIGHT OF DISCUSSIONS MADE ABOVE, AFTER GIVING PROPER OPPORTUNITY TO THE ASSES SEE OF BEING HEARD. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. SD/ - SD/ - ( . . . ) , (K.S.S.PRASAD RAO), JUDICIAL MEMBER ( . . ) , , (K.K.GUPTA), ACCOUNTAN T MEMBER. ( ) DATE: 30.11.2012 - COPY OF THE ORDER FORWARDED TO: 1 . / THE APPELLANT : KISHORE CHANDRA PATEL, L/ H OF LATE VESAJ PATEL, MISSIONCHOUK, SUNDARGARH. 2 / THE RESPONDENT: DCIT, CIRCLE 1(1), SAMBALPUR. 3 . / THE CIT, 4 . ( )/ THE CIT(A), 5 . / DR, CUTTACK BENCH 6 . GUARD FILE . / TRUE COPY, / BY ORDER, ( ), (H.K.PADHEE), SENIOR.PRIVATE SECRETARY. I.T.A.NO. 500/CTK/2012 5 APPENDIX XVII SEAL TO BE AFFIXED ON THE ORDER SHEET BY THE SR. P.S./P. S. AFTER DICTATION IS GIVEN 1. DATE OF DICTATION 27.11.2012 . 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 29.11.2012 OTHER MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT.... 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S . 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 30.11.2012 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER ................ 9. DATE OF DESPATCH OF THE ORDER ..