SANDEEP A SHAH, MUMBAI V. ASST CIT WD 32(3), MUMBAI

ITA 745/MUM/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4251 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2007-2008
• Appeal Filed On: 02-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATISH CHANDRA RAJORE
• Keywords: Reopening of assessment; Unexplained investment; Capital Gains
• Section: 143(3); 250; 68; 148

Judgement Text

1 IN THE INCOME-TAX APPELLATE TRIBUNAL G BENCH MUMB AI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI N.K. PRADHAN, ACCOUNTANT MEMBER ITA NO. 745/MUM/2017 (ASSESSMENT YEAR 2007-08 ) SHRI SANDEEP A. SHAH, 303, ANKUR, 7 TH ROAD, TPS ROAD, BORIVALI (WEST), MUMBAI-400092 . PAN: ALUPS8071J VS. ACIT-32(3) MUMBAI. APPELLANT RESPONDE NT APPELLANT BY : SHRI RAJESH KOTHARI (C.A.) RESPONDENT BY : SHRI SATISH CHANDRA RAJORE (DR) DATE OF HEARING : 13.03.2019 DATE OF PRONOUNCEMEN T : 13.03.2019 ORDER UNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER; 1. THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORD ER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-44, HEREINAFTER REFERRED AS LD CIT (A), MUMBAI DATED 11.11.2016 FOR ASSESSMENT YEAR 2007-08. THE A SSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: (1) ADDITIONAL OF RS. 76,23,440/- U/S.68 OF THE ACT AS AN UNEXPLAINED INVESTMENT MADE BY THE LEARNED ASSISTANT COMMISSION ER OF INCOME TAX-32(3), MUMBAI AND WHICH WAS UPHELD BY THE LEARN ED COMMISSIONER OF INCOME TAX (APPEAL)-44, MUMBAI BE D ELETED IN TOTALITY. 2. THE ASSESSEE VIDE APPLICATION DATED 22.06.2018 RAIS ED THE FOLLOWING ADDITIONAL GROUNDS OF APPEAL: ITA NO . 745 MUM 2017-SHRI SANDEEP A. SHAH. 2 THE ABOVE REFERRED APPEAL IS AGAINST THE ORDER PASS ED U/S. 143(3) RWS 147 AND IT IS FIXED FOR HEARING ON 27.06.2018 BEFOR E YOUR HONOUR. I WOULD REQUEST YOUR HONOUR TO ALLOW ME TO SUBMIT A DDITIONAL GROUNDS OF APPEAL AS GIVEN BELOW IN ADDITION TO THE GROUNDS SUBMITTED EARLIER. VALIDITY OF REOPENING OF ASSESSMENT SINCE NOTICE U/ S. 149 WAS ISSUED BEYOND PRESCRIBED TIME LIMIT GROUND NO. 3 'THE LEARNED ITO ERRED IN REOPENING THE ASSESSMENT BY ISSUING NOTICE U/S. 149 BEYOND FOUR YEARS FROM THE END OF THE RELE VANT ASSESSMENT YEAR THOUGH THE INCOME WHICH HAS ESCAPED ASSESSMENT IS NIL AND IT IS EVIDENT FROM THE FACT THAT THE ASSESSED INCOME AND REASSESSED INCOME IS SAME AND THEREFORE, REOPENING OF ASSESSMENT IS B AD IN LAW.' VALIDITY OF REOPENING OF ASSESSMENT BECAUSE OF CHAN GE OF OPINION GROUND NO. 4 'THE LEARNED ACIT ERRED IN REOPENING THE ASSESSMENT WHICH IS EARLIER COMPLETED U/S.143(3) MERELY BECAUSE OF CHANGE IN OP INION SINCE HE HAS ALREADY VERIFIED AND EXAMINED THE SHARE TRANSAC TION AND ALREADY ASSESSED CAPITAL GAINS TO TAX AND THEREFORE, REOPEN ING OF ASSESSMENT IS BAD IN LAW.' 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME FOR ASSESSMENT YEAR 2007-08 ON 03.08.2017 DECLARING TOT AL INCOME OF RS. 76,70,390/-. THE ASSESSMENT WAS COMPLETED UNDER SEC TION 143(3) ON 11.11.09 ASSESSING THE TOTAL INCOME OF RS. 77,70,39 0/-. SUBSEQUENTLY, THE ASSESSMENT WAS RE-OPENED UNDER SECTION 147 ON 11.03 .2014. NOTICE UNDER SECTION 148 WAS ISSUED AND SERVED UPON THE AS SESSEE. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) R.W.S . 147 ON 27.03.2014. THE ASSESSING OFFICER WHILE PASSING THE ASSESSMENT ORDER TREATED THE CAPITAL GAIN OF RS. 76,23,440/- AS UNEX PLAINED CASH CREDIT ITA NO . 745 MUM 2017-SHRI SANDEEP A. SHAH. 3 UNDER SECTION 68 OF THE ACT. THE ASSESSMENT WAS COM PLETED WITHIN 16 DAYS OF RE-OPENING ON 11.03.2014. ON APPEAL BEFORE THE LD. CIT(A), THE ACTION OF ASSESSING OFFICER WAS CONFIRMED IN EX-PAR TE ORDER DATED 11.11.2016. THE LD. CIT(A) DISMISSED THE APPEAL OF ASSESSEE HOLDING THAT DESPITE ISSUING NOTICE AND GIVING OPPORTUNITY, NONE APPEARED ON BEHALF OF ASSESSEE. THE LD. CIT(A) DISMISSED THE APPEAL WI THOUT DISCUSSING MERIT OF THE CASE. FURTHER, AGGRIEVED BY THE ORDER OF LD. CIT(A), THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. 4. WE HAVE HEARD THE SUBMISSIONS OF THE LD. AUTHORIZED REPRESENTATIVE (AR) OF THE ASSESSEE AND LD. DEPARTMENTAL REPRESENT ATIVE (DR) FOR THE REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECOR D. THE LD. AR OF THE ASSESSEE SUBMITS THAT THE ASSESSEE RAISED GROUNDS O F APPEAL AGAINST THE VALIDITY OF RE-OPENING AS WELL AS ON MERIT OF THE C ASE. THE LD. AR OF THE ASSESSEE ALSO SUBMITS THAT THE APPEAL OF ASSESSEE W AS DISMISSED BY FIRST APPELLATE AUTHORITY (FAA) WITHOUT GIVING SUFFICIENT AND FAIR OPPORTUNITY TO THE ASSESSEE. THE LD. CIT(A) HAS NOT PASSED THE ORDER ON MERIT. THE LD. AR OF THE ASSESSEE SUBMITS THAT THE ASSESSEE HAS RE ASONABLE CAUSE FOR NON-APPEARANCE BEFORE THE LD. CIT(A). THE LD. AR FI LED AFFIDAVIT OF ASSESSEE. IN THE AFFIDAVIT, THE LD. AR BROUGHT OUR ATTENTION TO PARA-4 OF AFFIDAVIT. IN PARA-4 OF AFFIDAVIT, THE ASSESSEE HAS CONTENDED/DEPOSED THAT THE APPEAL BEFORE THE FIRST APPELLATE AUTHORITY (FA A) WAS FIXED ON 08.09.2016, 13.10.2016 AND 11.11.2016. THE NOTICE F OR HEARING WAS SENT ITA NO . 745 MUM 2017-SHRI SANDEEP A. SHAH. 4 AT HIS OLD ADDRESS WHERE HIS MOTHER IS RESIDING. DU E TO OLD AGE, ILL HEALTH AND IGNORANCE OF THE NOTICE, THE NOTICES WERE NOT F ORWARDED TO THE ASSESSEE AT NEW ADDRESS I.E. AT 401/402, AURA BIPLE X HABITAT, S,V. ROAD, BORIVALI (W), MUMBAI. IT IS FURTHER DEPOSED THAT TH E ASSESSEE WAS NOT AWARE ABOUT THE ISSUANCE OF NOTICE AND FIXING THE D ATE OF HEARING. THE LD. AR FURTHER SUBMITS THAT THE ASSESSEE HAS GOOD CASE ON MERIT AND LIKELY TO SUCCEED IN CASE THE APPEAL IS DECIDED ON MERIT. 5. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SUBMI TS THAT THE ASSESSEE HAS APPEARED BEFORE THE LD. CIT (A), DESPITE SERVIC E OF THREE CONSECUTIVE NOTICES. THE LD. DR SUBMITS THAT THE CONDUCT OF THE ASSESSEE SHOWS THAT HE WAS NOT SERIOUS IN PERUSING HIS APPEAL BEFORE LD . CIT (A), THEREFORE, THE ASSESSEE DOES NOT DESERVE ANY LENIENCY. THE LD DR SUBMITS THAT THE ASSESSEE HAS NO CASE ON MERIT. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF THE PART IES AND HAVE GONE THROUGH THE ORDERS OF LD. CIT(A). WE HAVE NOTED T HAT THE LD. CIT(A) ISSUED NOTICE FOR HEARING OF APPEAL FOR 08.09.2016 , 13.10.2016 AND FOR 10.11.2016. ALL THE NOTICES WERE ISSUED WELL WITHIN TIME. WE HAVE NOTED THAT THE ASSESSEE HAS NOT DISPUTED THAT ISSUANCE OF NOTICE. THE CONTENTION OF LD. AR OF THE ASSESSEE IS THAT THE NOTICES WERE RECEIVED BY HIS OLD AGED MOTHER AND DUE TO ILL HEALTH AND IGNORANCE OF CONSE QUENCES OF THE NOTICES, SHE DID NOT FORWARD THE NOTICES TO THE ASS ESSEE, WHICH RESULTED IN NON-APPEARANCE BEFORE FAA. FACT REMAINS THE SAME TH AT THE APPEAL OF ITA NO . 745 MUM 2017-SHRI SANDEEP A. SHAH. 5 THE ASSESSEE WAS DECIDED WITHOUT HEARING THE ASSESS EE. THE PERUSAL OF ORDER PASSED BY LD. CIT(A) SHOWS THAT NO FACTS RELA TED WITH THE GROUNDS OF APPEAL WAS DISCUSSED IN THE IMPUGNED ORDER. THE IMPUGNED ORDER IS NOT IN ACCORDANCE WITH THE MANDATE OF SECTION 250(6 ) OF THE I.T. ACT. SUB-SECTION (6) OF SECTION 250 MANDATE THAT THE ORD ER OF LD. CIT(A) SHALL STATE THE POINT OF DETERMINATION, DECISION THEREON AND REASONS FOR SUCH DECISION. ALL THREE INGREDIENTS AS MANDATED BY STAT UTE ARE MISSING IN THE IMPUGNED ORDER. THEREFORE, CONSIDERING THE CONTENTI ON OF LD. AR OF THE ASSESSEE THAT THE ASSESSEE HAS SUFFICIENT CAUSE FOR NO-APPEARANCE BEFORE LD. CIT(A) AND THAT THE ORDER PASSED BY LD CIT(A) I S NOT IN ACCORDANCE WITH THE MANDATE OF SECTION 250(6) OF THE ACT, WE D EEM IT APPROPRIATE TO RESTORE ALL THE GROUNDS OF APPEAL TO THE FILE OF LD . CIT(A) TO DECIDE ALL THE ISSUE AFRESH IN ACCORDANCE WITH LAW. THE ASSESSEE I S ALSO GIVEN LIBERTY TO RAISE ALL LEGAL AND FACTUAL ISSUE BEFORE THE LD. CI T(A). THE ASSESSEE IS FURTHER O DIRECTED TO BE VIGILANT IN ATTENDING THE PROCEEDING BEFORE THE LD. CIT(A) AND TO FURNISH ALL DOCUMENTARY EVIDENCES AND INFORMATION AND SHALL FILL HIS FRESH ADDRESS FOR SERVICE OF NOTICE AND OTHER COMPLIANCE. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 13/03/2019, W HILE HEARING THE APPEAL. SD/- SD/ - N.K. PRADHAN, PAWAN SINGH ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 13.03.2019 SK ITA NO . 745 MUM 2017-SHRI SANDEEP A. SHAH. 6 COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. DR J BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR ITAT, MUMBAI