Sri.A.K.Prabath, Cochin V. DCIT, Ernakulam

ITA 679/COCH/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73799 (ITAT-COCHIN)
• Duration Of Justice: 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2014
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 05-11-2013
• Court: TRIBUNAL
• Department Lawyers: LATHA V KUMAR
• Keywords: Principle of natural justice; Application of stay
• Section: 54B; 54F

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A. NO. 678-679/COCH/2013 ASSESSMENT YEAR: 2008-09 SHRI A.K. PRABATH, MALLIKA, ILLAM ROAD, BEHIND BTH, ERNAKULAM, KOCHI-682016. [PAN: ASIPP 1374J] VS. THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1, ERNAKULAM. (ASSESSEE -APPELLANT) (REVENUE-R ESPONDENT) ASSESSEE BY SHRI ANIL D. NAIR, ADV. REVENUE BY SMT. LATHA V. KUMAR, JR. DR DATE OF HEARING 02/01/2014 DATE OF PRONOUNCEMENT 03/01/2014 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: BOTH THE APPEALS HAVE BEEN FILED BY THE ASSESSEE C HALLENGING THE ORDERS PASSED BY LD CIT(A)-I, KOCHI AND THEY RELATE TO THE ASSESS MENT YEAR 2008-09. THE APPEAL NUMBERED AS ITA 679/COCH/2013 IS RELATED TO THE QUA NTUM APPEAL AND THE OTHER APPEAL IS RELATED TO PENALTY LEVIED U/S 271(1)(C) OF THE A CT. 2. WE SHALL FIRST TAKE UP THE QUANTUM APPEAL. THE LD A.R SUBMITTED THAT THE ASSESSEE SOLD AN AGRICULTURAL LAND DURING THE YEAR RELEVANT TO THE ASSESSMENT YEAR 2008-09. THE ASSESSEE CLAIMED DEDUCTION U/S 54B AN D ALSO U/S 54F OF THE ACT. THE AO, HOWEVER, REJECTED THE CLAIM FOR DEDUCTION U/S 5 4B OF THE ACT MAINLY BY PLACING RELIANCE ON THE LETTER DATED 27.12.2010 ISSUED BY T HE VILLAGE OFFICER AND ALSO THE REPLY GIVEN BY THE AGRICULTURAL OFFICER. THE LD COUNSEL SUBMITTED THAT THE HEARING WAS COMPLETED ON 22.12.2010, WHICH THE AO HIMSELF HAS M ENTIONED IN THE CAPTION PORTION I.T.A. NOS.678&679/COCH/2013 2 OF HIS ORDER. HOWEVER, THE AO HAS PLACED RELIANCE ON A LETTER RECEIVED BY HIM SUBSEQUENT TO THE COMPLETION OF THE HEARING AND THE SAID LETTER WAS NOT PUT TO THE ASSESSEE FOR SEEKING COMMENTS. THE LD COUNSEL SUBM ITTED THAT THE REPLY GIVEN BY THE AGRICULTURAL OFFICER WAS ALSO NOT CORRECT. THE LD C OUNSEL SUBMITTED THAT THE ASSESSEE HAD FURNISHED, VIDE HIS LETTER DATED 17.12.2010, A CERTIFICATE OBTAINED FROM VILLAGE OFFICER, MARADU AND ONE MORE CERTIFICATE OBTAINED F ROM THE AGRICULTURAL OFFICER TO SUBSTANTIATE HIS CONTENTION THAT THE LAND SOLD BY H IM WAS USED FOR AGRICULTURAL PURPOSES. BUT THE AO HAS REJECTED BOTH THE CERTIFI CATES BY PLACING RELIANCE ON THE LETTER RECEIVED FROM THE VILLAGE OFFICER SUBSEQUENT TO THE DATE OF COMPLETION OF HEARING AND ALSO ON THE REPLY GIVEN BY THE AGRICULTURAL OFFICER , WITHOUT CONFRONTING THE SAME TO THE ASSESSEE. 3. THE LD COUNSEL FURTHER SUBMITTED THAT THE AS SESSEE APPEARED BEFORE LD CIT(A) IN CONNECTION WITH THE STAY APPLICATION FILED BY HIM. HOWEVER, THE LD CIT(A) HAS DISPOSED OF THE APPEAL ITSELF, EVEN THOUGH THE ASSESSEE WAS NOT READY AT THAT POINT OF TIME. ACCORDINGLY, THE LD A.R SUBMITTED THAT THE ASSESSEE WAS NOT GIVEN SUFFICIENT OPPORTUNITY TO COUNTER THE VIEW ENTERTAINED BY THE ASSESSING OFFICER. ACCORDINGLY, HE SUBMITTED THAT THE ASSESSEE SHOULD BE GIVEN NECESSA RY OPPORTUNITY AND ACCORDINGLY PRAYED THAT THE MATTER MAY BE SET ASIDE TO THE FILE OF THE ASSESSING OFFICER. 4. ON THE CONTRARY, THE LD D.R SUBMITTED THAT THE R EPLY RECEIVED FROM THE VILLAGE OFFICER IS ONLY CLARIFICATORY IN NATURE AND NO PREJ UDICE WOULD BE CAUSED TO THE ASSESSEE. THE LD D.R SUBMITTED THAT THE DEDUCTION CLAIMED U/S 54B OF THE ACT WAS RIGHTLY REJECTED BY THE AO, SINCE THE ASSESSEE HAS FAILED T O PROVE THE FACT OF USE OF LAND FOR AGRICULTURAL PURPOSES. 5. WE HAVE HEARD RIVAL CONTENTIONS AND CAREFULLY PE RUSED THE RECORD. A PERUSAL OF THE ASSESSMENT WOULD SHOW THAT THE HEARING OF THE C ASE WAS COMPLETED BY THE ASSESSING OFFICER ON 22.12.2010. THE REPLY LETTER GIVEN BY THE VILLAGE OFFICER WAS DATED 27.12.2010. ADMITTEDLY, THE LETTER FROM THE VILLAG E OFFICER WAS RECEIVED SUBSEQUENT TO THE COMPLETION OF THE HEARING. THE CONTENTION OF T HE ASSESSEE THAT IT WAS NOT PUT TO I.T.A. NOS.678&679/COCH/2013 3 HIM WAS NOT DISPROVED BY THE DEPARTMENT. ON A PERU SAL OF THE ASSESSMENT ORDER, WE NOTICE THAT THE AO HAS PLACED RELIANCE ON THE LETTE R DATED 27.12.2010 OF THE VILLAGE OFFICER, CITED ABOVE AND ALSO ON THE REPLY GIVEN BY THE AGRICULTURAL OFFICER IN ORDER TO REJECT THE CERTIFICATES FURNISHED BY THE ASSESSEE E ARLIER. ACCORDING TO LD A.R, THE REPLY OF THE AGRICULTURAL OFFICER WAS NOT CORRECT AND THE ASSESSING OFFICER HAS FAILED TO EXAMINE THE SAID CONTENTION OF THE ASSESSEE. IN OU R VIEW, IN THE INTEREST OF NATURAL JUSTICE, THE AO SHOULD HAVE CONFRONTED THE LETTER D ATED 27.12.2010 GIVEN BY THE VILLAGE OFFICER AND ALSO THE REPLY GIVEN BY THE AGRICULTURA L OFFICER TO THE ASSESSEE BEFORE TAKING DECISION ON THE ISSUE. ACCORDING TO LD A.R, THE AS SESSEE APPEARED BEFORE THE LD CIT(A) IN CONNECTION WITH THE STAY APPLICATION FILED BEFOR E HIM AND HE WAS NOT READY TO ARGUE THE APPEAL. UNDER THESE CIRCUMSTANCES, WE FIND MER IT IN THE PRAYER OF THE ASSESSEE. ACCORDINGLY, WE ARE OF THE VIEW THAT THE IMPUGNED I SSUE REQUIRES RECONSIDERATION AT THE END OF THE ASSESSING OFFICER AFTER AFFORDING NECESS ARY OPPORTUNITY TO THE ASSESSEE TO FURNISH HIS OBJECTIONS TO THE MATERIALS THAT WERE R ELIED UPON BY THE AO TO REJECT THE CLAIM FOR DEDUCTION U/S 54B OF THE ACT. ACCORDINGL Y, WE SET ASIDE THE ORDER OF LD CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF T HE ASSESSING OFFICER WITH THE DIRECTION TO EXAMINE THIS ISSUE AFRESH AFTER AFFORDING NECESS ARY OPPORTUNITY TO THE ASSESSEE TO FURNISH HIS OBJECTIONS TO THE MATERIALS THAT WERE R ELIED UPON BY THE AO AND ALSO AFTER CONSIDERING ANY OTHER INFORMATION AND EXPLANATIONS THAT MAY BE OFFERED BY THE ASSESSEE AND DECIDE THE ISSUE IN ACCORDANCE WITH TH E LAW. 6. THE OTHER APPEAL IS RELATED TO THE PENALTY LE VIED U/S 271(1)(C) OF THE ACT UPON DISALLOWANCE OF CLAIM FOR DEDUCTION MADE U/S 54B OF THE ACT. SINCE THE MAIN ISSUE IS RESTORED TO THE FILE OF THE AO, WE ARE RESTORING TH E PENALTY MATTER ALSO TO HIS FILE FOR CONSIDERATION OF THE SAME AFRESH. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD CIT(A) ON THE PENALTY ALSO. I.T.A. NOS.678&679/COCH/2013 4 7. IN THE RESULT, BOTH THE APPEALS FILED BY TH E ASSESSEE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED ACCORDINGLY ON 03-03-2 014. SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 3 RD JANUARY, 2014 GJ COPY TO: 1. SHRI A.K. PRABATH, MALLIKA, ILLAM ROAD, BEHIND B TH, ERNAKULAM, KOCHI-682016. 2.THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL C IRCLE-1, ERNAKULAM. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS)-I, KOCHI . 4. THE COMMISSIONER OF INCOME-TAX, CENTRAL, KOCHI 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T, COCHIN I.T.A. NOS.678&679/COCH/2013 5