Smt. Santosh Jain, Kanpur V. Dy. Commissioner of Income Tax-V, Kanpur

ITA 765/LKW/2013

• Counselvise Citation: 76523714 RSA 2013
• Duration Of Justice: 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 03-12-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R K RAM
• Assessee Lawyers: S K GARG SHRI P K KAPOOR
• Keywords: Sale consideration of property below Jantri Value; Principle of natural justice; Valuation report; Reason to believe
• Section: 143(3); 50C

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.765/LKW/2013 A.Y.:2004 - 2005 SMT. SANTOSH JAIN, H - 1/10, KIDWAI NAGAR, KANPUR. PAN:ABVPJ8620R VS. DY.C.I.T. - V, KANPUR. (APPELLANT) (RESPONDENT) APPELLANT BY SHRI S. K. GARG, ADVOCATE SHRI P. K. KAPOOR, C.A. RESPONDENT BY SHRI R. K. RAM, D.R. DATE OF HEARING 06/01/2014 DATE OF PRONOUNCEMENT 3 0 /01/2014 O R D E R PER A. K. GARODIA, A.M. THIS IS ASSESSEES APPEAL DIRECTED AGAINST THE ORDER OF LEARNED CIT ( A) - I, KANPUR DATED 30/09/2013 FOR THE ASSESSMENT YEAR 2004 - 05. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1. BECAUSE ON A DUE CONSIDERATION OF FACTS AND CIRCUMSTANCES OF THE CASE AND AVERMENTS MADE DURING THE COURSE OF APPELLATE PROCEEDINGS, TO THE EFFECT THAT (A) NOTICE DATED 15.09.2005, PURPORTED TO HAVE BEEN ISSUED 'NO NOTICE' IN THE EYES OF LAW AS THE SAME HAD NOT BEEN SERVED EITHER ON THE 'APPELLANT' HER SELF OR ANYONE AUTHORISED BY HER TO RECEIVE SUCH NOTICE; AND (B) IN ANY CASE AFTERWARDS, PRECISELY ON 31.03.2006 INTIMATION UNDER SECTION 143(1) WAS ISSUED WHICH HAD ALL THE ATTRIBUTES OF AN ASSESSMENT, THE CIT (A) SHOULD HAVE 2 ANNULLED THE ASSESSMENT ORDER DA TED 22.12.2006 WHICH WAS SUBJECT MATTER OF APPEAL BEFORE HIM. WITHOUT PREJUDICE TO THE AFORESAID 2. BECAUSE THE CIT ( A), AFTER HAVING DELETED THE ADDITION OF RS.14,34,599/ AS HAD BEEN MADE UNDER THE HEAD 'LONG TERM CAPITAL GAIN' ON THE GROUND THAT THERE WAS INHERENT ILLEGALITY EMBEDDED THEREIN (VIDE PARA 4 OF THE APPELLATE ORDER), COULD NOT HAVE GIVEN DIRECTIONS TO THE A SSESSING OFFICER 'TO MAKE A REFERENCE TO THE VALUATION CELL UNDER SECTION 55A' AND TO MAKE ASSESSMENT AS PER PROVISIONS OF SECTION 50C OF THE ACT. 3. BECAUSE THE DIRECTIONS AS CONTAINED IN PARA 4.1 OF THE APPELLATE ORDER, ARE BEYOND THE APPELLATE JURISDIC TION, IF THE ISSUE INVOLVED IN THE APPEAL HAD BEEN DECIDED IN FAVOUR OF THE 'APPELLANT'. 4. BECAUSE THE ORDER APPEALED AGAINST IS CONTRARY TO THE FACTS, LAW AND PRINCIPLES OF NATURAL JUSTICE. 3. IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT GROUND NO. 1(A) IS NOT PRESSED AND ACCORDINGLY THE SAME IS REJECTED AS NOT PRESSED. 4. REGARDING OTHER GROUNDS, THE LEARNED A.R. OF THE ASSESSEE SUBMITTED THAT AS PER PARA 4 OF HIS ORDER, THE LEARNED CIT(A) HAS DELETED THE ADDITION MADE BY THE ASSESSING OFFICER U/S 50C OF THE ACT ON THE BASIS THAT THE ORDER OF THE ASSESSING OFFICER SUFFERS FROM INFIRMITY IN AS MUCH AS IGNORING THE PROVISIONS OF SECTION 50C(2) OF THE ACT. T HEREAFTER, IN PARA 4.1 OF HIS ORDER, THE LEARNED CIT(A) HAS INVOKED THE PROVISIONS OF SECTION 251(1)(C) OF THE ACT AND DIRECTED THE ASSESSING OFFICER TO REFER THE MATTER TO VALUATION OFFICER U/S 55A. HE SUBMITTED THAT THE PROVISIONS OF 251(1)(C) ARE NOT A PPLICABLE IN THE PRESENT CASE BECAUSE IN THE PRESENT CASE , THE APPEAL IS RAISED OUT OF THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER AND, THEREFORE, THE 3 PROVISIONS OF SECTION 251(1)(A) ARE APPLICABLE AND NOT SECTION 251(1)(C) AND, THEREFORE, THE ORD ER OF LEARNED CIT(A) SHOULD BE SET ASIDE. 5. THE LEARNED D.R. OF THE REVENUE SUPPORTED THE ORDER OF LEARNED CIT(A). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT IT IS ADMITTED POSITION OF FACT THAT AS PER THE PROVISIONS OF SECTION 251(1)(A) O F THE ACT, THE CIT(A) CAN CONFIRM, REDUCE, ENHANCE OR ANNUL THE ASSESSMENT WHERE THE APPEAL IS AGAINST THE ORDER OF ASSESSMENT. MERELY BECAUSE THE SECTION MENTIONED BY CIT(A) IN PARA 4.1 OF IS ORDER IS A WRONG SECTION AS 251(1)(C) IN PLACE OF 251(1)(A) OF THE ACT, IT CANNOT BE SAID THAT THE ORDER OF CIT(A) IS WRONG AND NOT SUSTAINABLE. IT IS A SETTLED POSITION OF LAW THAT MENTIONING OF WRONG SECTION ALONE DOES NOT VITIATE THE ORDER PASSED BY CIT(A) OR ASSESSING OFFICER AND THE TRIBUNAL CAN REPLACE THE WRO NG SECTION BY A CORRECT SECTION. NOW THE QUESTION IS WHETHER THE DIRECTION GIVEN BY LEARNED CIT(A) IN PARA 4.1 CAN BE CONSIDERED VALID U/S 251(1)(A) OR NOT. IN OUR CONSIDERED OPINION, THE RESULT OF THE DIRECTIONS OF LEARNED CIT(A) WILL BE EITHER CONFIRMI NG OF THE ASSESSMENT OR REDUCING OF THE SAME BECAUSE IF AFTER OBTAINING THE VALUATION REPORT FROM THE D.V.O., THE SAME AMOUNT IS CONFIRMED BY HIM THEN THE ASSESSMENT WILL STAND CONFIRMED AND IF HE REPORTS A LOWER AMOUNT THEN IT WILL STAND REDUCED AND IF HE REPORTS HIGHER AMOUNT, IT WILL STAND ENHANCED. IN OUR CONSIDERED OPINION, THE DIRECTION GIVEN BY LEARNED CIT(A) IS PERFECTLY ALL RIGHT AS PER THE PROVISIONS OF SECTION 251(1)(A) ALSO AND MERELY BECAUSE WRONG DRAFTING OF THE ORDER BY LEARNED CIT(A), THE O RDER OF CIT(A) CANNOT BE SET ASIDE. A PROPER DRAFTING OF THE ORDER SHOULD HAVE BEEN THAT SUCH ADDITION IS NOT SUSTAINABLE BUT THE MATTER HAS TO BE RE - EXAMINED AFTER REFERRING THE MATTER TO D.V.O. U/S 55A OF THE ACT AND 50C OF THE ACT. WE, THEREFORE, CONF IRM THE FINAL FINDING OF LEARNED CIT(A) ALTHOUGH WITH SOME VARIATIONS IN HIS DRAFTING OF THE ORDER. THERE MAY BE AN ARGUMENT THAT CIT(A) CANNOT SET 4 ASIDE THE MATTER TO ASSESSING OFFICER BUT THEN THE TRIBUNAL HAS THIS POWER AND HENCE, WE MODIFY THE ORDER O F CIT(A) AND RESTORE THE MATTER TO THE ASSESSING OFFICER FOR DECIDING THE ISSUE AFRESH AFTER REFERRING THE MATTER TO D.V.O. AS PER THE PROVISIONS OF SECTION 50C/55A OF THE ACT. 7. THERE IS ONE MORE ARGUMENT MADE BY LEARNED A.R. OF THE ASSESSEE IN RESPECT O F GROUND NO. 1(B) THAT SINCE THE INTIMATION WAS ISSUED BY THE ASSESSING OFFICER U/S 143(1) ON 31/03/2006 AFTER ISSUE OF NOTICE U/S 143(2) OF THE ACT ON 15/09/2005, THE ASSESSMENT STOOD CONCLUDED ON THAT DATE I.E. ON 31/0 3 /2006 AND, THEREFORE, THE IMPUGNED ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) ON 22/12/2006 SHOULD BE ANNULLED. HE SUBMITTED THAT THIS IS A SETTLED POSITION OF LAW THAT THE INTIMATION PASSED BY ASSESSING OFFICER IS ALSO AN ASSESSMENT AND THEREFORE, THE ASSESSING OFFICER CANNOT MAKE T WO ASSESSMENTS AFTER ISSUE OF NOTICE U/S 143(2) OF THE ACT. 8. LEARNED D.R. OF THE REVENUE SUBMITTED THAT WHEN THE NOTICE IS ISSUED U/S 143 (2) , THE ASSESSMENT HAS TO BE COMPLETED U/S 143 (3) OF THE ACT AND INTIMATION U/S 143(1) WILL NOT SATISFY THE REQUIR EMENT OF ASSESSMENT AFTER ISSUE OF NOTICE U/S 143(2) OF THE ACT. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON THIS ASPECT ALS O AND WE DO NOT FIND ANY MERIT I N THIS SUBMISSION OF LEARNED A.R. OF THE ASSESSEE. WHEN WE GO THROUGH THE PROVISIONS OF SECTION 143(1) OF THE ACT, WE FIND THAT AS PER THE PROVISIONS OF THIS SECTION, THE ASSESSING OFFICER CAN MAKE ONLY THOSE A DJUSTMENTS WHICH ARE REQUIRED TO BE MADE ON ACCOUNT OF ANY ARITHMETICAL ERROR IN THE RETURN OR IN RESPECT OF ANY INCORRECT CLAIM, IF SUCH INCO RRECT CLAIM IS APPARENT FROM ANY INFORMATION IN THE RETURN. AS AGAINST THIS, AS PER THE PROVISIONS OF SECTION 143(2) OF THE ACT, SUCH NOTICE IS ISSUED BY THE ASSESSING OFFICER WHERE HE HAS REASON TO BELIEVE THAT ANY CLAIM OF LOSS, EXEMPTION, DEDUCTION, AL LOWANCE OR RELIEF MADE IN THE RETURN IS INADMISSIBLE. HENCE, THE 5 SCOPE OF ASSESSMENT OF BOTH THESE SECTIONS ARE DIFFERENT. WHEN THE ASSESSMENT IS COMPLETED BY WAY OF INTIMATION U/S 143(1) OF THE ACT, THE ASSESSING OFFICER CAN MAKE ADJUSTMENT IN THE ARITH METICAL ERROR OR INCORRECT CLAIM, IF SUCH INCORRECT CLAIM IS APPARENT. AS AGAINST THIS, AFTER ISSUE OF NOTICE U/S 143(2) OF THE ACT, THE ASSESSING OFFICER HAS TO PASS ORDER U/S 143 (3) AFTER HEARING THE ASSESSEE AND AFTER TAKING INTO ACCOUNT SUCH EVIDENCE S AS THE ASSESSEE MAY PRODUCE BEFORE HIM AND IN SUCH ORDER , HE CAN MAKE ANY OTHER ADJUSTMENT ALSO WHICH IS NOT PERMISSIBLE IN INTIMATION U/S 143(1). THEREFORE, IN OUR CONSIDERED OPINION, THE INTIMATION ISSUED BY THE ASSESSING OFFICER U/S 143(1) CANNOT BE CONSIDERED AS ASSESSMENT AFTER ISSUE OF NOTICE U/S 143(2) AND, THEREFORE, THIS ARGUMENT IS ALSO REJECTED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS PARTLY 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: 3 0 T H JANUARY, 2014. *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