Smt. Rashmi Kishor Baipai, Lucknow V. Income Tax Officer, Lucknow

ITA 610/LKW/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 87719 (ITAT-LUCKNOW)
• Duration Of Justice: 2 year(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 19-11-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 17-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K C MEENA
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 143(3); 148

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.610/LKW/2012 ASSESSMENT YEAR:2003 - 04 INCOME TAX OFFICER - V(3), LUCKNOW. VS SMT. RASHMI KISHORI BAJPAI, 102/24, SHIVAJI MARG, LUCKNOW. PAN:AERPB1760P (RESPONDENT) (APPELLANT) SHRI R. N. SHUKLA, ADVOCATE APPELLANT BY SHRI K. C. MEENA, D. R. RESPONDENT BY 19/11/2014 DATE OF HEARING 07 / 01 /201 5 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THIS IS AN ASSESSEES APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT(A) - II, LUCKNOW DATED 15/10/2012 FOR THE ASSESSMENT YEAR 2003 - 2004. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1. BECAUSE THE COURT BELOW HAS ERRED IN CONFIRMING THE ORDER OF THE ASSESSING AUTHORITY AND NOT ACCEPTING RETURNED INCOME, AND DETERMINING TAXABLE INCOME AT RS.21,27,230.00 AS AGAINST THE RETURNED INCOME FOR THE A.Y. 2003 - 04 U/S 143(3)/148/147 OF INCOME TAX ACT 1961 AND LEVYIN G A TAX OF RS.8,18,006 / - WHICH IS ARBITRARY, BAD AND ILLEGAL. 2. BECAUSE THE COURTS BELOW HAVE TRAVELLED BEYOND JURISDICTION TO PROCEED U/S 148/147 OF INCOME TAX ACT 1961, HENCE THE ORDER IS BAD, ARBITRARY AND ILLEGAL. 2 3. BECAUSE THE COURTS BELOW HAVE CO MPLETELY IGNORED THE CIRCUMSTANCES, WHICH WERE BROUGHT TO THEIR KIND NOTICE IN RESPECT OF DESPERATE SALE OF THE PROPERTY IN QUESTION, HENCE THE QUESTION OF FURTHER LEVY OF CAPITAL GAINS DOES NOT ARISE. THE APPELLANT HAS ALREADY INVESTED RECL BONDS, AS SPEC IFIED UNDER THE ACT REGARDING PURCHASE OF BONDS FOR THE AMOUNT OF CAPITAL GAINS WHICH ACTUALLY AROSE TO THE APPELLANT. (COPY ENCLOSED ALONG WITH WORKING SHEET SUBMITTED TO THE DEPARTMENT) THE COURT BELOW HAS ALSO IGNORED THAT THE PROPERTY IN QUESTION WAS RENTED ONE AND WAS IN POSSESSION OF NOTORIOUS AND MAFIA PERSONS, HENCE WAS A DESPERATE SALE BECAUSE THE APPELLANT IN LIVING IN LUCKNOW WITH HER FAMILY AND PROPERTY IS SITUATED IN KANPUR AND WAS NOT UNDER CONTROL OF THE APPELLANT, HENCE THE MATERIAL FACT H AS BEEN IGNORED AND NOT JUDICIALLY CONSIDERED WHILE PASSING ORDER. (B) BECAUSE THE COURT BELOW HAS NOT CONSIDERED THE DATES OF AGREEMENT TO SALE AND ACTUAL DATE OF REGISTRATION. AGREEMENT TO SELL WAS MADE ON 21 - 03 - 2002, WHILE THE SALE AGREEMENT WAS EXECUT ED ON 28 - 06 - 2002. (C) BECAUSE THE CIRCLE RATE AND MARKET RATE VARIED IN THIS PERIOD, WHICH MAKES A SUBSTANTIAL DIFFERENCE AS IT WAS ALSO A LEASE HOLD LAND, HENCE VALUATION AND CIRCLE RATE, MARKET RATE WILL MAKE A LOT OF VARIATION IN VALUE. (D) BECAUSE TH E WRITTEN OBJECTION, AND THE CIRCUMSTANCES OF TENANCY OF PROPERTY AND DISTRESS SALE WAS A MAIN REASONS FOR SALE OF PROPERTY ON THE BASIS OF AGREEMENT TO SELL ON A RATE AS AGREED AND OFFERED BY TENANTS. (E) BECAUSE HOUSE WAS AN OLD PROPERTY AND WAS NOT A P LOT. CIRCLE RATES ARE MEANT FOR PLOT AND VACANT LAND ONLY. (F) BE CAUSE THE LOWER AUTHORITY HAS TRAVELLED BEYOND JURISDICTION TO INITIATE PROCEEDING U/S 147/148 OF INCOME TAX ACT 1961, HENCE THE IMPUGNED ORDER AS WELL AS THE ASSESSMENT PROCEEDING AND ORDER IS BAD IN LAW AND CONTRARY TO THE PROVISIONS OF INCOME TAX ACT 1961. 4. BECAUSE THE ISSUANCE OF NOTICE U/S 148 READ WITH 147 HAS BEEN ARBITRARILY USED WHEN ALL FACTS OF PURCHASE SALE AND 3 VALUE OF PROPERTY WERE BROUGHT TO THE NOTICE OF THE AUTHORITIES BEL OW. 5. BECAUSE THE COMPUTATION SHEET ANNEXED WITH THE INCOME TAX RETURN SHOWS A COMPLETE PICTURES OF VALUE OF PROPERTY MONEY RECEIVED AND AMOUNT OF SALE CONSIDERATION AND DEPOSIT OF CAPITAL GAIN TAX IN RECL BONDS. 6. BECAUSE THE ASSESSMENT ORDER AS WELL AS APPELLATE ORDER SUFFERS FROM MANIFEST ERROR OF LAW AND NON JUDICIAL APPLICATION OF MIND WHILE PASSING IMPUGNED ORDERS. 7. BECAUSE THE APPELLANT IS A REGULAR ASSESSEE AND HAS FILED RETURN IN TIME AND PROCEEDINGS U/S 143(1) WERE COMPLETED, HENCE ISSUANCE OF NOTICE 148 TIME BEING PROCEEDINGS UNDER THE CIRCUMSTANCES WAS NOT WARRANTED, AND IN CONTRARY TO THE PROVISIONS OF LAW AND BASIC PRINCIPLE NATURAL JUSTICE. 8. BECAUSE THE IMPUGNED ORDER IS ARBITRARY, ILLEGAL, AGAIN ST THE SPIRIT OF LAW AND ALSO AGAINST THE TOTALITY OF FACTS, MERIT, CIRCUMSTANCES AND LEGAL ASPECTS OF THE CASE, AS THE PROCEEDINGS ARE TIME BARRED AND BEYOND LIMITATION. 9. BECAUSE ANY OTHER GROUNDS TAKEN AT THE TIME OF HEARING OF THIS APPEAL. AS PERFE CTS MERITS, CIRCUMSTANCES & LEGAL ASPECT OF THE CASE THE IMPUGNED ORDER IS PRAYED TO BE QUASHED AND APPEAL BE ALLOWED OR SUCH OTHER RELIEF GRANTED AS THIS HON'BLE COURT DEEMS TO BE FIT AND PROPER UNDER THE CIRCUMSTANCES OF THE CASE. 3. IT WAS SUBMITTED B Y LEARNED A.R. OF THE ASSESSEE THAT THE REASONS RECORDED BY ASSESSING OFFICER FOR ISSUING NOTICE U/S 148 ARE AVAILABLE ON PAGE NO. 20 OF THE PAPER BOOK. HE ALSO SUBMITTED THAT THE OBJECTIONS FILED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER AGAINST REOPE NING ARE AVAILABLE ON PAGES 29 TO 30 OF THE PAPER BOOK. HE ALSO SUBMITTED THAT THESE OBJECTIONS ARE DATED 27/10/2012. THEN HE PLACED RELIANCE ON THE JUDGMENT OF HON'BLE APEX COURT RENDERED IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD. VS. INCOME 4 TAX OFFICE R & OTHERS [2003] 259 ITR 19 (SC) AND CONTENDED THAT AS PER THIS JUDGMENT, IF THE OBJECTIONS ARE RAISED BY THE ASSESSEE AGAINST REOPENING, THE ASSESSING OFFICER SHOULD DISPOSE OF THE OBJECTIONS BY WAY OF SEPARATE ORDER BEFORE PROCEEDINGS TO MAKE ASSESSMENT IF HE DOES NOT FIND ANY MERIT IN THE OBJECTIONS. HE SUBMITTED THAT THAT THE OBJECTIONS OF THE ASSESSEE WERE NOT DISPOSED OF BY THE ASSESSING OFFICER BY WAY OF SEPARATE ORDER AND THEREFORE, ASSESSMENT ORDER IS NOT VALID. 4. AS AGAINST THIS, LEARNED D.R. OF THE REVENUE SUPPORTED THE ORDER OF CIT(A). HE ALSO SUBMITTED THAT EVEN AS PER THIS JUDGMENT OF HON'BLE SUPREME COURT , THE MATTER WAS RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER FOR DISPOSING OF THE OBJECTIONS AND THEN PASS A FRESH ASSESSMEN T ORDER IF IT IS FOUND THAT THE OBJECTIONS ARE NOT VALID. HE SUBMITTED THAT HENCE, IN THE PRESENT CASE ALSO, THE MATTER MAY BE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH DECISION AS PER THIS JUDGMENT OF HON'BLE APEX COURT. 5. WE HAVE CO NSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT IN THE PRESENT CASE, A CLEAR FINDING IS GIVEN BY CIT(A) THAT PROVISO TO SECTION 147 IS NOT APPLICABLE BECAUSE THE ORIGINAL ASSESSMENT WAS NOT COMPLETED U/S 143(3) OF THE ACT. HE HAS ALSO GIVEN A FINDING THAT R EASONS WERE RECORDED PROPERLY AND THEREFORE, THE REOPENING IS VALID BUT WE FIND FORCE IN THIS SUBMISSION OF LEARNED D.R. OF THE REVENUE THAT SINCE THE OBJECTIONS WERE RAISED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER , AS PER THIS JUDGMENT OF APEX COURT, THE ASSESSING OFFICER WAS REQUIRED TO FIRST DISPOSE OF THE OBJECTIONS RAISED BY THE ASSESSEE BY WAY OF PASSING SEPARATE SPEAKING ORDER BEFORE PROCEEDINGS WITH THE ASSESSMENT. HOWEVER, REGARDING THIS CONTENTION THAT SINCE THE ASSESSING OFFICER HAS NOT DISP OSED OF THE OBJECTIONS BY WAY OF A SEPARATE ORDER, THE ASSESSMENT IS NOT VALID, WE DO NOT FIND ANY MERIT AND WE HOLD THAT IN THIS SITUATION , THE MATTER SHOULD GO BACK TO ASSESSING OFFICER FOR FRESH DECISION. 5 THE ASSESSING OFFICER SHOULD FIRST DISPOSE OF T HE OBJECTIONS OF THE ASSESSEE AGAINST REOPENING BY WAY OF PASSING SPEAKING ORDER AND IF IT IS FOUND BY HIM THAT THE OBJECTIONS OF THE ASSESSEE ARE VALID THEN OBVIOUSLY NO ASSESSMENT ORDER HAS TO BE FRAMED AND IN CASE , IT IS FOUND THAT THE OBJECTIONS ARE NO T VALID THEN HE SHOULD RE FRAME THE ASSESSMENT ORDER. ACCORDINGLY, WE SET ASIDE THE ORDER OF CIT(A) AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR FRESH DECISION IN THE LIGHT OF JUDGMENT OF HON'BLE APEX COURT AND IN VIEW OF ABOVE DISCUSSIO N. NEEDLESS TO SAY, THE ASSESSING OFFICER SHOULD PROVIDE REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. IN VIEW OF OUR DECISION IN THE ABOVE PARA , THE ISSUE ON MERIT DO NOT CALL FOR ANY ADJUDICATION AT THIS STAGE . 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 07 / 01 /201 5 . *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR