M/s. S.S. Family Trust , Bangalore V. The Deputy Commissioner of Income Tax, Circle-1(1), Bangalore

ITA 727/BANG/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 0299 (ITAT-BANGALORE)
• Duration Of Justice: 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 10-12-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Capital Gains
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES SMC-A, BANGALORE BEFORE SHRI GEORGE GEORGE K, JUDICIAL MEMBER ITA NO.727/BANG/2020 : ASST.YEAR 2006-2007 M/S.S.S.FAMILY TRUST C/C AHMED & BROTHERS NO.37/7, ULSOOR ROAD, YELLAPPA CHETTY LAYOUT BANGALORE 560 042. PAN : AAJPA1779R. V. THE DY.COMMISSIONER OF INCOME-TAX, CIRCLE 1(1) BANGALORE. (APPELLANT) (RESPONDENT) APPELLANT BY : SRI.RAJEEV C NULVI, ADVOCATE RESPONDENT BY : SRI.GANESH R.GHALE, STANDING COUNSEL DATE OF HEARING : 28.12.2020 DATE OF PRONOUNCEMENT : 29.12.2020 O R D E R THIS APPEAL AT THE INSTANCE OF THE ASSESSEE IS DIRECTED AGAINST CIT(A)S ORDER DATED 11.04.2018. THE RELEVANT ASSESSMENT YEAR IS 2006-2007. 2. TWO ISSUES ARE RAISED IN THIS APPEAL, VIZ., (I) NOTICE U/S 148 OF THE I.T.ACT IS BARRED BY LIMITATION; (II) THE CIT(A) DISMISSED THE APPEAL IN LIMINE FOR NON- PROSECUTION WITHOUT DECIDING THE CASE ON MERITS, WHICH IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE AND JURISPRUDENCE. 3. THE BRIEF FACTS OF THE CASE ARE AS FOLLOW: THE ASSESSEE IS A PRIVATE FAMILY TRUST. FOR THE ASSESSMENT YEAR 2006-2007, THE ASSESSING OFFICER ISSUED NOTICE DATED 26.03.2013 U/S 148 OF THE I.T.ACT, 1961. IN RESPONSE TO THE ITA NO.727/BANG/2020 M/S.S.S.FAMILY TRUST 2 SAID NOTICE, THE ASSESSEE-TRUST VIDE LETTER DATED 25.04.2013 CONTENDED THAT THE SAID NOTICE ISSUED U/S 148 OF THE I.T.ACT WAS SERVED ONLY ON 09.04.2013 AND IT IS TIME BARRED FOR REOPENING THE ASSESSMENT FOR ASSESSMENT YEAR 2006-2007. ON MERITS IT WAS CONTENDED THAT THE LIABILITY TO CAPITAL GAINS ARISES ONLY WHEN THE ASSESSEE / OWNER SELLS THE SHARE OF THE BUILDING AND SINCE THERE WAS NO SALE OF SUPER BUILT UP AREA BY THE ASSESSEE, THERE CAN BE NO LIABILITY FOR CAPITAL GAIN IN RELEVANT ASSESSMENT YEAR. THE ASSESSING OFFICER DID NOT ADJUDICATE UPON THE VALIDITY OF THE NOTICE ISSUED U/S 148 OF THE I.T.ACT. THE A.O. PASSED AN ORDER U/S 143(3) R.W.S. 147 OF THE I.T.ACT ON 29.03.2014 BY DETERMINING THE TAXABLE INCOME AT RS.5,32,526. 4. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED APPEAL TO THE FIRST APPELLATE AUTHORITY. THE CIT(A) DISMISSED THE ASSESSEES APPEAL IN LIMINE FOR NON-PROSECUTION BY THE ASSESSEE-TRUST. 5. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE CIT(A) HAS ERRED IN DISMISSING THE APPEAL IN LIMINE SINCE NO HEARING NOTICE WAS SERVED ON THE ASSESSEE-TRUST. IT WAS SUBMITTED THAT THE ORDER OF THE CIT(A) WAS NOT SERVED ON THE ASSESSEE-TRUST AND THE ASSESSEE-TRUST CAME TO KNOW ABOUT THE PASSING OF THE SAID ORDER ONLY WHEN IT RECEIVED A LETTER DATED 12.11.2020 FROM THE ASSISTANT COMMISSIONER OF INCOME-TAX, FOR INTIMATING THE ASSESSEE-TRUST ABOUT THE DIRECT TAX VIVAD SE VISWAS SCHEME. ITA NO.727/BANG/2020 M/S.S.S.FAMILY TRUST 3 A COPY OF THE SAID LETTER IS PLACED ON RECORD. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE-TRUST APPROACHED TAX CONSULTANT AND DOWNLOADED THE ORDER FROM THE INCOME TAX PORTAL ONLY ON 12.11.2020, HENCE, THE EFFECTIVE DATE OF SERVICE OF CIT(A) ORDER IS ONLY ON 12.11.2020. ON MERITS IT WAS CONTENDED THAT THE ORDER PASSED U/S 143(3) R.W.S. 147 OF THE I.T.ACT IS BARRED BY LIMITATION SINCE THE NOTICE ISSUED U/S 148 OF THE I.T.ACT WAS BEYOND THE PRESCRIBED TIME. 6. THE LEARNED STANDING COUNSEL SUPPORTED THE ORDERS OF THE INCOME TAX AUTHORITIES. 7. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. ADMITTEDLY, THE CIT(A)S ORDER HAS NOT CONSIDERED THE ISSUE ON MERITS AND HAS DISMISSED THE APPEAL IN LIMINE FOR WANT OF PROSECUTION OF APPEAL BY THE ASSESSEE- TRUST. IT IS THE CLAIM OF THE ASSESSEE THAT HEARING NOTICE BEFORE THE CIT(A) WAS NOT SERVED. I FIND ONLY ONE HEARING WAS GIVEN TO THE ASSESSEE BEFORE THE CIT(A) (I.E. ON 11.04.2018). IN THE INTEREST OF JUSTICE AND EQUITY, I AM OF THE VIEW THAT ONE MORE OPPORTUNITY SHOULD BE GRANTED TO THE ASSESSEE. ACCORDINGLY, THE ISSUES RAISED IN THIS APPEAL ARE RESTORED TO THE FILES OF CIT(A). THE ASSESSEE IS DIRECTED TO COOPERATE WITH THE REVENUE AUTHORITIES AND SHALL NOT SEEK UNNECESSARY ADJOURNMENT. THE CIT(A) IS DIRECTED TO TAKE DECISION IN ACCORDANCE WITH LAW, AFTER AFFORDING A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. IT IS ORDERED ACCORDINGLY. ITA NO.727/BANG/2020 M/S.S.S.FAMILY TRUST 4 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 29 TH DAY OF DECEMBER, 2020 . SD/- ( GEORGE GEORGE K ) JUDICIAL MEMBER BANGALORE; DATED : 29 TH DECEMBER, 2020. DEVADAS G* COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(A)-2, BENGALURU. 4. THE PR.CIT-1, BENGALURU. 5. THE DR, ITAT, BENGALURU. 6. GUARD FILE. ASST.REGISTRAR/ITAT, BANGALORE