Surja Sekhar Ganguly, Hooghly V. ITO, WD-17(3), KOLKATA, Kolkata

ITA 572/KOL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1626 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 05-06-2017
• Assessment Year: 2002-2003
• Appeal Filed On: 01-04-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Opportunity of being heard
• Section: 154; 15

Judgement Text

1 ITA NOS. 572 & 573/KOL/2016 SHR9I SURJA SEKHAR GANG ULY A.Y.2002-03 & 2003-04 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH D KOL KATA [BEFORE HONBLE SHRI A.T.VARKEY, JM & SHRI M.BALA GANESH, AM ] ITA NOS.572 & 573/KOL/2016 ASSESSMENT YEARS : 2002-03 & 2003-04 SHRI SURJA SEKHAR GANGULY -VERSUS- I.T.O., WARD-1 7(3), KOLKATA KOLKATA (PAN: AGDPG 0524 E) (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI SOMNATH GHOSH, ADVOCATE FOR THE RESPONDENT: NONE DATE OF HEARING : 05.06.2017. DATE OF PRONOUNCEMENT : 14.06.2017. ORDER PER M.BALAGANESH, AM 1. THESE APPEALS OF THE ASSESSEE ARISE OUT OF THE O RDERS OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -16 [IN SHORT LD CITA] VIDE APPEAL NOS. 29-30/CITA- 16/KOL/2014-15/W-53(4) DATED 14.1.2016 AGAINST THE ORDERS OF ASSESSMENT FRAMED BY THE LEARNED INCOME TAX OFFICER , WARD -17(3), KOLKA TA (HEREINAFTER REFERRED TO AS THE LD AO) U/S 154 OF THE INCOME TAX ACT, 1961 (HEREINA FTER REFERRED TO AS THE ACT). AS IDENTICAL ISSUES ARE INVOLVED IN BOTH THE APPEALS, THEY ARE TAKEN UP TOGETHER AND DISPOSED OFF BY THIS COMMON ORDER FOR THE SAKE OF C ONVENIENCE. THE FACTS OF ASST YEAR 2002-03 ARE TAKEN UP FOR ADJUDICATION AND DECI SION RENDERED THEREON WOULD APPLY WITH EQUAL FORCE FOR ASST YEAR 2003-04 ALSO E XCEPT WITH VARIANCE IN DATES AND FIGURES. 2. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD CITA WAS JUSTIFIED IN UPHOLDING THE ACTION OF THE LD AO IN D ENYING THE EXEMPTION U/S 10(17A) OF THE ACT TO THE ASSESSEE , IN THE FACTS AND CIRCUMST ANCES OF THE CASE. 2 ITA NOS. 572 & 573/KOL/2016 SHR9I SURJA SEKHAR GANG ULY A.Y.2002-03 & 2003-04 3. THE BRIEF FACTS OF THIS ISSUE IS THAT THE ASSESS EE, AN INDIVIDUAL, IS AN INTERNATIONALLY ACCLAIMED CHESS PLAYER REPRESENTING INDIA IN WORLD CHAMPIONSHIPS AND HAS EARNED THE DISTINCTION OF GRAND MASTER FROM WORLD CHESS FEDERA TION. THE ASSESSEE HAS BEEN WINNING LOT OF PRIZES IN THE INTERNATIONAL TOURNAME NTS AS WELL AS IN THE NATIONAL CIRCUIT. THE ASSESSEE FILED HIS RETURN OF INCOME U/S 139(4) OF THE ACT FOR THE ASST YEAR 2002- 03 ON 19.3.2003 DISCLOSING A TOTAL INCOME OF RS 56, 000/-. IN THE SAID RETURN, THE ASSESSEE CLAIMED EXEMPTION U/S 10(17A) OF THE ACT I N RESPECT OF THE FOLLOWING RECEIPTS :- AWARD / PRIZE FOR CHAMPIONSHIP 11.7.2001 WEST BENGAL GOVERNMENT 1,00,000 31.7.2001 LOCAL FOR REIMBURSEMENT OF EQUIPMENT PURCHASED 7,200 24.9.2001 ASIAN INDIVIDUAL CHESS 2,71,580 4.2.2002 NATIONAL AWARD 12,000 14.2.2002 WORLD CHAMPION 2,69,710 -------------- -- 6,60,490 --------------- THE SAID RETURN WAS SUMMARILY ASSESSED U/S 143(1) O F THE ACT ON 24.9.2003. LATER THE LD AO ISSUED NOTICE U/S 154 OF THE ACT ON 27.9.2004 TO WITHDRAW THE EXEMPTION GRANTED IN THE SUM OF RS 6,60,490/- CLAIMED U/S 10( 17A) OF THE ACT AND ACCORDINGLY PASSED AN ORDER ON 16.6.2005 WITHDRAWING THE EXEMPT ION AS NO DETAILS FOR CLAIM OF EXEMPTION WERE FILED BY THE ASSESSEE BEFORE THE LD AO. THEREAFTER THE ASSESSEE FILED A RECTIFICATION PETITION U/S 154 OF THE ACT BEFORE THE LD AO ON 31.8.2005 INTIMATING THE PRIZE MONIES RECEIVED BY HIM TOGETHER WITH THE DETA ILS THEREON, WHICH WAS REJECTED BY THE LD AO. ON APPEAL, THE LD CITA-XIII, KOLKATA VI DE HIS ORDER IN APPEAL NO. 98/CIT(A)-XIII/ACIT CIR-17/05-06 DATED 31.1.2008, R EMITTED THE ISSUE TO THE FILE OF 3 ITA NOS. 572 & 573/KOL/2016 SHR9I SURJA SEKHAR GANG ULY A.Y.2002-03 & 2003-04 THE LD AO FOR VERIFICATION OF THE CLAIM OF ASSESSEE IN RESPECT OF EXEMPTION U/S 10(17A) OF THE ACT AS WELL AS DEDUCTION U/S 80RR OF THE ACT . THE ASSESSEE DID NOT APPEAR BEFORE THE LD AO IN THE SECOND ROUND OF ASSESSMENT PROCEEDINGS AS HE WAS AWAY FROM INDIA AS HE HAD TO PARTICIPATE IN HIS GAME. THE L D AO DENIED THE EXEMPTION U/S 10(17A) OF THE ACT IN THE SUM OF RS 1,12,000/- AND DEDUCTION CLAIMED U/S 80RR OF THE ACT IN THE SUM OF RS 5,41,290/- , VIDE ORDER U/S 15 4/251 OF THE ACT DATED 17.12.2008 DETERMINING THE TOTAL INCOME AT RS 7,16,590/- . T HE ASSESSEE PREFERRED AN APPEAL AGAINST THIS ORDER BEFORE THE LD CITA WHO OBSERVED AS UNDER:- 3. THIS APPEAL IS AGAINST ORDER U/S 154 PASSED BY T HE AO. THE CONTENTION OF THE A.O. IS IN PURSUANCE TO THE ORDER OF THE LD. CIT(A) -XIII. THE ASSESSEE WAS REQUIRED TO FILE DOCUMENT IN SUPPORT OF HIS CLAIM O F EXEMPTION U/S 10(17A) AND DEDUCTION U/S 80RR, BUT NO SUCH DETAILS WERE FILED. THE A.R. FILED WRITTEN SUBMISSION DT 28.01.2014. R EMAND REPORT WAS SENT TO THE A.O. AGAIN THAT ONE MORE OPPORTUNITY MAY KINDLY BE GIVEN TO THE ASSESSEE. THE A.O. SENT REMAND REPORT DT. 12.03.2014 , WHERE IT WAS EXPALIEND THAT DESPITE OPPORTUNITIES GIVENM, NO DOCUMENTS WERE FIL ED. HENCE, IT IS CLEAR THA THE ASSESSEE HAS FAILED TO AVAIL OF THE OPPORTUNITI ES GIVEN TIME AND AGAIN. HENCE, THE APPEAL OF THE ASSESSEE IS DISMISSED AND THE ADDITION OF THE A.O. IS CONFIRMED. 4. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US O N THE FOLLOWING GROUNDS:- 1. FOR THAT THE LD. COMMISSIONER OF INCOME TAX (AP PEALS)-16, KOLKATA WAS WHOLLY IN ERROR IN UPHOLDING THE ACTION OF THE LD. INCOME TAX OFFICER. WARD 17(3). KOLKATA IN PASSING THE SPECIOUS ORDER U/S 15 4/251 OF THE ACT WITHOUT COMPLYING WITH THE DIRECTIONS CONTAINED IN THE APPE LLATE ORDER PASSED U/S. 251 OF THE ACT DATED 31-01-2008 AND THE PURPORTED ACTION T AKEN ON THAT BEHALF IS ABINITIOVOID. ULTRA VIRES AND EX-FACIE NULL IN LAW. 2. FOR THAT THE LD. COMMISSIONER OF INCOME TAX (APP EALS)-16, KOLKATA FAILED TO APPRECIATE THAT THE ASSUMPTION OF JURISDICTION U /S. 154 OF THE ACT ON THE INTIMATION PASSED U/S. 143( 1) OF THE ACT DATED 29- 09-2003 TO WITHDRAW THE EXEMPTION CLAIMED U/S. 10(17A) OF THE ACT WAS DEVOI D OF ANY LEGAL AUTHORITY IN THIS RESPECT AND THE IMPUGNED ORDER FRAMED BY HIM I S THUS OPPOSED TO LAW. 3. FOR THAT THE LD. COMMISSIONER OF INCOME TAX (APP EALS)-16, KOLKATA ERRED IN 'UPHOLDING THE PURPORTED ADDITION OF RS. 1.12,00 0/- RESORTED TO BY THE LD. INCOME TAX OFFICER. WARD 17(3). KOLKATA BY DISALLOW ING THE CLAIM OF EXEMPTION MADE U/S. 10(17A) OF THE ACT ON EXTRANEOUS PARAMETE RS NOT GERMANE TO THE ISSUE 4 ITA NOS. 572 & 573/KOL/2016 SHR9I SURJA SEKHAR GANG ULY A.Y.2002-03 & 2003-04 AND THE IMPUGNED FINDING ON THAT ACCOUNT IS WHOLLY ILLEGAL. INVALID AND INFIRM IN LAW. 4. FOR THAT ON A TRUE AND PROPER INTERPRETATION OF THE SCOPE OF THE PROVISIONS OF S. 80RR OF THE INCOME TAX ACT. 1961. THE LD. COM MISSIONER OF INCOME TAX (APPEALS)-16. KOLKATA WAS REMISS IN UPHOLDING THE A LLEGED DENIAL OF DEDUCTION IN THE AMOUNT OF RS. 5.48.489/- MADE BY THE LD. INCOME TAX OFFICER WARD 17(3). KOLKATA WITHOUT CONSIDERING THE FACTUAL MATRIX OF T HE INSTANT CASE AND THE SPECIOUS FINDING ON THE BASIS OF SUCH WRONG ASSUMPT ION IS WHOLLY ARBITRARY. UNREASONABLE AND PERVERSE. 5. THE LD AR PLACED RELIANCE ON THE CIRCULAR ISSUED BY THE CBDT VIDE CIRCULAR NO. 447 DATED 22.1.1986 WHEREIN IT HAD BEEN CLARIFIED B Y THE CBDT THAT AWARDS RECEIVED BY AN AMATEUR SPORTSMAN WILL NOT BE LIABLE TO TAX I N HIS / HER HANDS AS IT WOULD NOT BE IN THE NATURE OF INCOME. HE ALSO FAIRLY STATED THA T THIS CIRCULAR HAS BEEN SUPERSEDED BY ANOTHER CIRCULAR NO. 2/2014 DATED 20.1.2014 , BUT T HE REVISED CIRCULAR IS EFFECTIVE ONLY FROM 1.4.2005 AND HENCE IS NOT APPLICABLE FOR THE A SST YEARS 2002-03 AND 2003-04 (I.E THE YEARS UNDER APPEAL). THE ASSESSEE ALSO PLACED RELIANCE ON THE DECISION OF THE CO- ORDINATE BENCH OF DELHI TRIBUNAL IN THE CASE OF ABH INAV BINDRA VS DCIT REPORTED IN (2013) 59 SOT 87 (DELHI-TRIB) DATED 26.7.2013 WHER EIN THE OLD CIRCULAR NO. 447 DT 22.1.1986 WAS FOLLOWED. NONE APPEARED FOR THE REV ENUE AND EVEN AN ADOURNMENT PETITION WAS NOT MOVED BY THE REVENUE BEFORE US ON THE DATE OF HEARING. HENCE WE PROCEED TO DISPOSE OFF THE APPEAL ON HEARING THE LD AR. 6. WE HAVE HEARD THE LD AR AND PERUSED THE MATERIAL S AVAILABLE ON RECORD. WE FIND THAT THE CIRCULAR NO. 447 DT 22.1.1986 AND THE DECI SION OF DELHI TRIBUNAL APPARENTLY SUPPORTS THE CASE OF THE ASSESSEE. BUT WE ARE NOT INCLINED TO ACCEPT THE SAME DIRECTLY AS AT THE OUTSET, WE FIND THAT THE LOWER AUTHORITI ES HAD NOT EXAMINED THE DETAILS OF PRIZE MONIES RECEIVED BY THE ASSESSEE. THE ASSESSE E HAD FILED VARIOUS CERTIFICATES OBTAINED FROM GOVERNMENT AND OTHER AGENCIES IN SUPP ORT OF RECEIPT OF PRIZE MONIES AND CERTIFICATE FROM BANK FOR FOREIGN REMITTANCES E TC. BUT THERE IS NO FINDING IN THE ORDERS OF THE LOWER AUTHORITIES TO THIS EFFECT. FI RST THE VERACITY OF THESE DOCUMENTS ARE TO BE EXAMINED AND A FINDING IN THE ORDERS OF THE L OWER AUTHORITIES ARE REQUIRED. HENCE WE DEEM IT FIT AND APPROPRIATE, IN THE INTERE ST OF JUSTICE AND FAIRPLAY, TO SET ASIDE 5 ITA NOS. 572 & 573/KOL/2016 SHR9I SURJA SEKHAR GANG ULY A.Y.2002-03 & 2003-04 THESE APPEALS TO THE FILE OF THE LD AO, TO DECIDE T HE SAME AFRESH, IN ACCORDANCE WITH LAW. NEEDLESS TO MENTION THAT THE ASSESSEE BE GIV EN REASONABLE OPPORTUNITY OF BEING HEARD. THE ASSESSEE IS ALSO DIRECTED TO CO-OPERATE WITH THE SET ASIDE PROCEEDINGS BY SUBMITTING THE NECESSARY DETAILS IN SUPPORT OF HIS CONTENTIONS BEFORE THE AUTHORITIES. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE A LLOWED FOR STATISTICAL PURPOSES. O RDER PRONOUNCED IN THE COURT ON 14.06.2017. SD/- SD/- [A.T.VARKEY] [ M.BALAGANESH ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 14.06.2017. [RG PS] COPY OF THE ORDER FORWARDED TO: 1.SHRI SURJA SEKHAR GANGULY, C/O S.N.GHOSH & ASSOCI ATES, ADVOCATES, SEBEN BROTHERS LODGE P.O.BUROSHIBTALA, P.S.CHINSURAH, DI ST. HOOGHLY, PIN-712 105. 2.I.T.O., WARD-17 (3), KOLKATA.. 3. CIT(A)-16, KOLKATA. 4. CIT-18, KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER, SENIOR PRIVATE SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHES 6 ITA NOS. 572 & 573/KOL/2016 SHR9I SURJA SEKHAR GANG ULY A.Y.2002-03 & 2003-04