Becon Buildmart (P) Ltd., New Delhi V. DCIT, New Delhi

ITA 5442/DEL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4960 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 20-10-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: T VASANTHAN
• Assessee Lawyers: UDAIBIR SINGH KOCHAR
• Keywords: Opportunity of being heard; Reason to believe
• Section: 143(3); 2(14); 142(1); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES SMC : DELHI SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA.NO.5442/DEL./2016 ASSESSMENT YEAR 2008-2009 BECON BUILDMART (P) LTD., D- 118, BASEMENT, SAKET, NEW DELHI 110 017. PAN AADCB0873A VS. THE DCIT, CIRCLE-4(2) C.R. BUILDING NEW DELHI. (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI UDAIBIR SINGH KOCHAR, ADVOCATE. FOR REVENUE : SHRI T. VASANTHAN, SR. D.R. DATE OF HEARING : 17.08.2017 DATE OF PRONOUNCEMENT : 24.08.2017 ORDER THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-35, NEW DELHI, DATED 18 TH AUGUST, 2016 FOR THE A.Y. 2008-2009. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT ASSESSE E FILED RETURN OF INCOME DECLARING LOSS OF RS.11,57,531 WHI CH WAS PROCESSED UNDER SECTION 143(1) OF THE I.T. ACT, 196 1. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY UNDER SECTIO N 143(3) AND THE SAME WAS DECIDED ON 26.11.2010 ASSESSING LOSS A T NIL INCOME. AN INFORMATION WAS RECEIVED FROM THE O/O AS SESSING OFFICER, WARD-2(4), GHAZIABAD ALONG WITH A COPY OF THE DEED IN 2 ITA.NO.5442/DEL./2016 BECON BUILDERS (P) LTD., NEW DELHI. RESPECT OF PROPERTY PURCHASED BY M/S. BEACON BUILDM ART PVT. LTD., (ASSESSEE) ON 20 TH AUGUST, 2007. THE SAME WAS PERUSED AND TAKING NOTE OF THE SAME, THE A.O. REOPENED THE ASSE SSMENT UNDER SECTION 148 OF THE I.T. ACT. THE REASONS ARE REPROD UCED IN THE ASSESSMENT ORDER IN WHICH THE A.O. AFTER VERIFYING THE FACTS AND MATERIAL ON RECORD AND INFORMATION HAD A REASON TO BELIEVE THAT THE INCOME TO THE TUNE OF RS.37,12,903 HAS ESCAPED ASSESSMENT IN THE CASE OF THE ASSESSEE-COMPANY FOR THE ASSESSM ENT YEAR UNDER APPEAL. NOTICE UNDER SECTION 148 WAS SERVED U PON THE ASSESSEE AND THE REASONS WERE PROVIDED TO THE ASSES SEE. THE ASSESSEE FILED OBJECTIONS TO THE VALIDITY OF INITIA TION OF THE PROCEEDINGS UNDER SECTION 147 OF THE ACT. SAME WERE DULY DISPOSED OF VIDE ORDER DATED 28 TH JANUARY, 2016. THE ASSESSEE WAS ASKED TO FILE COMPLETE DETAILS AS PER QUESTIONN AIRE DATED 15 TH DECEMBER, 2015. HOWEVER, THE ASSESSEE DID NOT MAKE ANY COMPLIANCE. AGAIN NOTICE HAVE BEEN ISSUED TO ASSESS EE MAKING COMPLIANCE BUT DESPITE REPEATED NOTICES, THE ASSESS EE DID NOT MAKE ANY COMPLIANCE. THEREFORE, A.O. HAD NO OPTION EXCEPT TO PASS EX-PARTE ASSESSMENT ORDER UNDER SECTION 144/14 7/143(3) OF THE I.T. ACT, 1961. THE A.O. COMPUTED THE CAPITAL G AINS AT RS.37,12,903 AND ADDED TO THE INCOME OF THE ASSESSE E. 3 ITA.NO.5442/DEL./2016 BECON BUILDERS (P) LTD., NEW DELHI. 3. THE ASSESSEE CHALLENGED THE INITIATION OF THE R E- ASSESSMENT PROCEEDINGS AND ADDITION ON MERIT BEFORE LD. CIT(A). THE LD. CIT(A) NOTED THAT APPEAL WAS FIXED FOR HEAR ING WHICH WAS ADJOURNED ON THE REQUEST OF THE ASSESSEE AND THEREA FTER, THERE WERE NO COMPLIANCE. MANY NOTICES WERE ISSUED TO THE ASSESSEE BUT NONE HAVE BEEN COMPLIED WITH. THE LD. CIT(A) NO TED THAT ASSESSEE CHALLENGED THE RE-ASSESSMENT PROCEEDINGS B UT NOTHING HAS BEEN PRODUCED BEFORE HIM TO CHALLENGE THE SAME. THE ASSESSEE DID NOT FURNISH ANY EVIDENCE TO ESTABLISH THE CONTENTION RAISED IN THE STATEMENT OF FACTS. LD. CIT(A) NOTED THAT NOTICE UNDER SECTION 148 SHALL HAVE TO BE ISSUED WITHIN TH E PRESCRIBED STATUTORY LIMIT. THE EVIDENCE ON ISSUE OF THE SAME EXIST AS IT WAS SENT BY SPEED POST. FIRST NOTICE RETURNED UN-SERVED BY THE POSTAL AUTHORITIES WHILE TWO LATER NOTICES WERE SERVED BY AFFIXTURE AT THE ADDRESS OF THE ASSESSEE. THE ASSESSEE RECOGNISED SE RVICE BY FILING A LETTER DATED 17 TH DECEMBER, 2015. THE ASSESSEE DID NOT FILE ANY WRIT AGAINST THE REJECTION OF THE OBJECTION AGAINST REOPENING. AS REGARDS JURISDICTION, THE JURISDICTION IS PAN BASED AND CONSEQUENT TO RESTRUCTURING IN 2001, NOTIFIED JURIS DICTION GIVEN CONCURRENT JURISDICTION OF A.OS. IN THE RANGE. THE INCOME CLASSIFICATION IS FOR ADMINISTRATIVE REASONS. MOREO VER, THE NOTICE 4 ITA.NO.5442/DEL./2016 BECON BUILDERS (P) LTD., NEW DELHI. UNDER SECTION 148 WAS ISSUED AFTER APPROVAL OF CIT WHO HAS ASSIGNED JURISDICTION TO THE SUBORDINATE OFFICERS. THEREFORE, ALL THE GROUNDS RELATED TO VALIDITY OF REOPENING OF ASS ESSMENT WERE DISMISSED. THE LD. CIT(A) IN THE ABSENCE OF ANY INF ORMATION TO THE NOTICE UNDER SECTION 143(2) AND 142(1) DISMISSE D THE APPEAL OF ASSESSEE ON MERIT AS WELL. THE APPEAL WAS ACCORD INGLY DISMISSED. 4. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE A SSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN THE CASE OF ASSESSEE THE JURISDICTION WAS WITH THE ITO. THEREFORE, NO ASSESSMENT ORDER CA N BE PASSED BY DCIT. LEARNED COUNSEL FOR THE ASSESSEE HAS HOWEV ER, ADMITTED THAT HE DID NOT FILE ANY OBJECTION CHALLEN GING THE JURISDICTION OF THE A.O. EITHER AT THE ASSESSMENT S TAGE OR AFTER RECEIPT OF NOTICE UNDER SECTIONS 143(2) OR 142(1) O F THE I.T. ACT. 4. ACCORDING TO SECTION 124(3) OF THE I.T. ACT, NO PERSON SHALL BE ENTITLED TO QUESTION THE JURISDICTION OF T HE A.O. WHERE HE HAS MADE A RETURN UNDER SECTION 139(1) AFTER EXPIRY OF ONE MONTH FROM THE DATE OF WHICH HE WAS SERVED WITH NOTICE UN DER SECTION 5 ITA.NO.5442/DEL./2016 BECON BUILDERS (P) LTD., NEW DELHI. 142(1) OR 143(2) OR AFTER COMPLETION OF THE ASSESSM ENT WHICHEVER IS EARLIER. 5. FURTHER, LEARNED COUNSEL FOR THE ASSESSEE IS NO T ABLE TO EXPLAIN AS TO HOW THE JURISDICTION IN THE CASE O F THE ASSESSEE LIES WITH THE ITO. ASSESSEE DID NOT PRODUCE ANY EVI DENCE OR MATERIAL TO CHALLENGE THE JURISDICTION OF THE A.O. ASSESSEE PRACTICALLY REMAIN EX-PARTE BEFORE A.O. AS WELL AS REMAIN EX-PARTE BEFORE THE LD. CIT(A). THEREFORE, IN THE ABSENCE OF ANY MATERIAL ON RECORD AND IN VIEW OF PROVISIONS OF SECTION 124(3) OF THE I.T. ACT, I DO NOT FIND ANY MERIT IN THE CONTENTION OF LEARNED COUNSEL FOR THE ASSESSEE. THE CONTENTION OF LEARNED COUNSEL FOR THE ASSESSEE IS ACCORDINGLY REJECTED. 6. LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBMIT TED THAT A.O. HAS NOT MENTIONED IN THE REASONS FOR REOP ENING OF THE ASSESSMENT THAT INCOME CHARGEABLE TO TAX HAS ESCAP ED ASSESSMENT. HOWEVER, THE REASONS ARE REPRODUCED IN THE ASSESSMENT ORDER WHICH CLEARLY REVEAL THAT ON THE B ASIS OF THE FACTS AND INFORMATION AVAILABLE TO THE A.O, HE HAS REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR THE ASSESSMENT YEAR UNDER APPEAL AND SAME FACTS HAVE BEEN 6 ITA.NO.5442/DEL./2016 BECON BUILDERS (P) LTD., NEW DELHI. MENTIONED IN THE ASSESSMENT ORDER. THEREFORE, THIS CONTENTION OF LEARNED COUNSEL FOR THE ASSESSEE IS ALSO REJECTED. 7. LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBMIT TED THAT THE NOTICE UNDER SECTION 148 HAVE NOT BEEN SER VED UPON THE ASSESSEE. HOWEVER, THE A.O. HAS SPECIFICALLY MENTIO NED THAT NOTICE HAS BEEN SERVED UPON THE ASSESSEE THROUGH AF FIXTURE WHICH WAS RESPONDED BY ASSESSEE AND ASSESSEE STATED BEFORE A.O. THAT RETURN OF INCOME ALREADY FILED, MAY BE TR EATED AS RETURN OF INCOME FILED UNDER SECTION 148 OF THE I.T. ACT. THE ASSESSEE WAS PROVIDED COPY OF THE REASONS AND ASSESSEE FILED OBJECTIONS FOR THE SAME WHICH HAVE BEEN DISPOSED OF SEPARATELY. TH EREFORE, THE CONTENTION OF LEARNED COUNSEL FOR THE ASSESSEE IS R EJECTED THAT NO NOTICE UNDER SECTION 148 HAVE BEEN SERVED UPON T HE ASSESSEE. 8. LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBMIT TED THAT A.O. IN THEIR REASONS HAS NOTED THAT AGRICULTU RAL LAND HAVE BEEN SOLD BY ASSESSEE ON WHICH CAPITAL GAIN ARISE. HE HAS SUBMITTED THAT ON AGRICULTURAL LAND NO CAPITAL GAIN WOULD ARISE. THE CONTENTION OF LEARNED COUNSEL FOR THE ASSESSEE HAS NO MERIT BECAUSE PROVISO TO SECTION 2(14) HAVE BEEN PROVIDED TO DEAL WITH SUCH SITUATION AS TO THE AVAILABILITY OF THE AGRICU LTURAL LAND 7 ITA.NO.5442/DEL./2016 BECON BUILDERS (P) LTD., NEW DELHI. WITHIN THE AREA OF THE MUNICIPALITY WHICH DEFINED C APITAL ASSET. THEREFORE, ALL THE AGRICULTURAL LANDS WOULD NOT BE EXEMPT FROM CAPITAL GAIN TAX. AT THE STAGE OF REOPENING OF THE ASSESSMENT, THE A.O. HAS TO MAKE OUT A PRIMA FACIE CASE FOR REOPENING OF THE ASSESSMENT WHICH THE A.O. IN THIS CASE HAS CORRECTL Y DONE ON THE BASIS OF INFORMATION AND MATERIAL AVAILABLE ON RECO RD. REOPENING IS THEREFORE, JUSTIFIED. THE CONTENTION OF LEARNED COUNSEL FOR THE ASSESSEE HAS THUS, NO MERIT AND THE SAME IS ACCORDI NGLY REJECTED. 9. LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBMIT TED THAT ASSESSEE FILED THE APPEAL BEFORE LD. CIT(A) MA NUALLY. HOWEVER, ASSESSEE WAS REQUIRED TO FILE THE APPEAL E LECTRONICALLY. THEREFORE, LD. CIT(A) SHOULD NOT HAVE DECIDE THE AP PEAL OF ASSESSEE. HOWEVER, LEARNED COUNSEL FOR THE ASSESSEE WAS NOT ABLE TO EXPLAIN AS TO WHAT PREJUDICE WOULD BE CAUSE D TO THE ASSESSEE, IF LD. CIT(A) DECIDE THE APPEAL FILED BEF ORE HIM MANUALLY. MAY BE PROCEDURE IS PROVIDED FOR THE ASSE SSEES TO FILE APPEAL ELECTRONICALLY IN CERTAIN CASES, BUT IF THE LD. CIT(A) DID NOT RAISE OBJECTION IN THIS REGARD AS WELL AS THE A.O. DID NOT RAISE ANY OBJECTION BEFORE LD. CIT(A), IT HAS NO BEARING ON T HE DECISION TAKEN BY THE LD. CIT(A) ON THE APPEAL FILED MANUALL Y. IT APPEARS THAT SINCE THE ASSESSEE DID NOT APPEAR BEFORE LD. C IT(A) AND 8 ITA.NO.5442/DEL./2016 BECON BUILDERS (P) LTD., NEW DELHI. APPEAL OF ASSESSEE HAS BEEN DISMISSED ON MERIT, THE REFORE, ASSESSEE HAS TAKEN THIS FRIVOLOUS OBJECTION FOR GET TING A FAVOURABLE ORDER. IF THE ASSESSEE WAS SERIOUS THAT MANUAL APPEAL SHOULD NOT BE ENTERTAINED BY LD. CIT(A) AND LATER O N HE HAS FILED APPEAL ELECTRONICALLY, THE ASSESSEE SHOULD HAVE BRO UGHT THESE FACTS TO THE NOTICE OF LD. CIT(A) IN WRITING AND SH OULD HAVE REQUESTED THE LD. CIT(A) TO DECIDE THE APPEAL OF AS SESSEE AS WAS FILED ELECTRONICALLY INSTEAD OF ENTERTAINING THE AP PEAL FILED MANUALLY. THE CONTENTION OF LEARNED COUNSEL FOR THE ASSESSEE HAS NO MERIT AND ACCORDINGLY REJECTED. 9. CONSIDERING THE ABOVE DISCUSSION, I DO NOT FIND ANY MERIT IN THE APPEAL OF ASSESSEE AND ALL THE LEGAL G ROUNDS SO RAISED BEFORE TRIBUNAL IN THE GROUNDS OF APPEAL OF ASSESSE E TO THAT EXTENT IS DISMISSED. 10. HOWEVER, AS REGARDS THE ADDITION ON ACCOUNT OF CAPITAL GAINS TO THE TUNE OF RS.37,12,903 MADE UNDER SECTIO N 45 OF THE I.T. ACT ON MERIT, ASSESSEE HAS RAISED THIS GROUND BEFORE LD. CIT(A). HOWEVER, LD. CIT(A) WITHOUT GIVING ANY REAS ONS FOR DECISION ON THE SAME, DISMISSED THE APPEAL OF ASSES SEE ON MERIT BECAUSE THE ASSESSEE DID NOT FURNISH ANY INFORMATIO N FROM HIS 9 ITA.NO.5442/DEL./2016 BECON BUILDERS (P) LTD., NEW DELHI. SIDE. THIS GROUND IS THEREFORE, NOT DECIDED BY LD. CIT(A) AS PER LAW. I, ACCORDINGLY, SET ASIDE THE ORDER OF LD. CIT (A) TO THAT EXTENT AND RESTORE THE APPEAL OF ASSESSEE TO THE FILE OF L D. CIT(A) WITH A DIRECTION TO DECIDE THE ADDITION OF RS.37,12,903 MA DE UNDER SECTION 45 OF THE I.T. ACT ON MERITS BY GIVING REAS ONS FOR DECISION IN THE APPEAL ORDER BY GIVING REASONABLE, SUFFICIEN T OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 11. IN THE RESULT, APPEAL OF ASSESSEE IS TREATED A S PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DELHI, DATED 24 TH AUGUST, 2017 VBP/- COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT SMC BENCH, DELHI 6. GUARD FILE // ASST. REGISTRAR // ITAT : DELHI BENCHES : DELHI.