SHRI. SUNIL A SHAH, MUMBAI V. ITO (IT) 4(2)(1), MUMBAI

ITA 7705/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 1761 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 16-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY J SETHI
• Section: 147; 144

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 7705 //2019 (. . 2011-12 ) ITA NO.7705/MUM/2019 (A.Y.2011-12) SHRI SUNIL A. SHAH C/O VIMAL PUNMIYA & CO. CHARTERED ACCOUNTANTS, 501, NARIMAN POINT, 99, MARINE DRIVE, MUMBAI-400002. PAN: HVNPS5321F ...... ) / APPELLANT VS. ITO (IT) -4(2)(1) ROOM NO. 1728, AIR INDIA BUILDING, NARIMAN POINT, MUMBAI-400021. ..... *,/ RESPONDENT . 7706 //2019 (. . 2011-12 ) ITA NO.7706/MUM/2019 (A.Y.2011-12) SMT. RITA SHAH C/O VIMAL PUNMIYA & CO. CHARTERED ACCOUNTANTS, 501, NARIMAN POINT, 99, MARINE DRIVE, MUMBAI-400002. PAN: DJGPS8073B ...... ) / APPELLANT VS. ITO (IT)-4(2)(1) ROOM NO. 1728, AIR INDIA BUILDING, NARIMAN POINT, MUMBAI-400021 ..... *,/ RESPONDENT 2 . 7705 //2019 (. .2011-12 ) ITA NO.7705/MUM/2019 (A.Y.2011-12) . 7706 //2019 (. .2011-12 ) ITA NO.7706/MUM/2019 (A.Y.2011-12) ) -/ APPELLANT BY : SH. VIMAL PUNMIYA *, -/ RESPONDENT BY : SH. SANJAY J. SETHI . / DATE OF HEARING : 01/06/2021 . / DATE OF PRONOUNCEMENT : 10/06/2021 / ORDER PER VIKAS AWASTHY, J.M: THESE TWO APPEALS BY TWO DIFFERENT ASSESSES (RELATE D TO EACH OTHER) ARE DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOM E TAX (APPEALS)-58, MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] FO R THE ASSESSMENT YEAR (AY) 2011-12 IN THEIR RESPECTIVE CASES. THE IMPUGNED ORD ERS IN BOTH THESE APPEALS ARE OF EVEN DATE I.E. 29.10.2019. SINCE, THE ISSUE INVOLVED IN BOTH THE APPEAL IS GERMINATE FROM SAME SET OF FACTS AND IDENTICAL GROU NDS HAVE BEEN RAISED IN THE APPEALS, THESE APPEALS ARE TAKE UP TOGETHER FOR ADJ UDICATION AND ARE DECIDED BY THIS COMMON ORDER. 2. SHRI VIMAL PUNMIYA APPEARING ON BEHALF OF THE AS SESSES SUBMITTED THAT BOTH THESE ASSESSES ARE NRI AND ARE NOT RESIDING IN INDIA. THE ASSESSES COULD NOT APPEAR BEFORE THE ASSESSING OFFICER (AO) IN ASS ESSMENT PROCEEDINGS AS THE NOTICES ISSUED BY THE AO ON THE ASSESSES ADDRESS IN INDIA WERE NEVER SERVED ON THE ASSESSEES. IT WAS ONLY THE FINAL NOTICE SERVED BY THE AO THROUGH EMAIL THAT WAS SERVED ON THE ASSESSEE. THE ASSESSEES RESPONDED TO THAT NOTICE AND FURNISHED THE DETAILS IN RESPECT OF RESIDENTIAL PRO PERTY SOLD IN INDIA, HOWEVER, THE AO FAILED TO TAKE NOTICE OF THE DOCUMENTS FURNI SHED AND PASSED THE ASSESSMENT ORDER UNDER SECTION 144 READ WITH SECTIO N 147 OF THE INCOME TAX 3 . 7705 //2019 (. .2011-12 ) ITA NO.7705/MUM/2019 (A.Y.2011-12) . 7706 //2019 (. .2011-12 ) ITA NO.7706/MUM/2019 (A.Y.2011-12) ACT, 1961 [HEREINAFTER REFERRED TO AS THE ACT]. T HEREAFTER, THE ASSESSES FILED APPEAL IN THEIR RESPECTIVE CASES AGAINST THE ASSESS MENT ORDER. AGAIN IN FIRST APPELLATE PROCEEDINGS, THE NOTICES ISSUED BY THE CI T(A) WERE NEVER RECEIVED BY THE ASSESSES AS THE ASSESSEES WERE NOT RESIDING ON THE ADDRESS IN INDIA ON WHICH THE NOTICES WERE BEING SENT. THE ASSESSES RES PONDED TO THE NOTICE RECEIVED THROUGH EMAIL. HOWEVER, THE CIT(A) REJECTE D THE SUBMISSIONS MADE BY ASSESSES THROUGH EMAIL AND PASSED THE IMPUGNED ORDE R IN THE CASE OF BOTH THE ASSESSES WITHOUT APPRECIATING THE FACTS AND DOCUMEN TS. THE LD. AR PRAYED THAT IF, AN OPPORTUNITY IS GRANTED TO THE ASSESSES AND T HE MATTER IS RESTORED TO AO, THE ASSESSEE WOULD FURNISH ALL NECESSARY DOCUMENTS IN RESPECT OF RESIDENTIAL PROPERTY SOLD WHICH WAS JOINTLY OWNED BY BOTH THE A SSESSES. THE ASSESSES HAVE OFFERED CAPITAL GAIN ON SALE OF RESIDENTIAL FLAT AS LTCG. THE AO/CIT(A) HAVE HELD THE SAME TO BE STCG. THE ASSESSES HAVE PRIMA FACIE GOOD CASE IN THEIR FAVOUR. THE LD. AR SUBMITTED THAT ALL THE RELEVANT DOCUMENT S IN RESPECT OF THE PROPERTY HAVE BEEN FILED BEFORE THE TRIBUNAL IN THE FORM OF PAPER BOOK. 3. ON THE OTHER HAND, SHRI SANJAY SETHI REPRESENTIN G THE DEPARTMENT VEHEMENTLY DEFENDED THE IMPUGNED ORDER. THE LD. DR SUBMITTED THAT THE ASSESSEES NEITHER APPEARED BEFORE THE AO NOR BEFORE THE CIT(A), NO DOCUMENTS WERE FURNISHED BY THE ASSESSEE BEFORE THE LOWER AUTHORITIES TO SUBSTANTIATE THEIR CLAIM, THEREFORE ON THE BASIS OF INFORMATION AVAILABLE THE AO AND CIT(A) HAVE RIGHTLY TREATED THE GAIN ON SALE OF FLAT AS STCG AS THE FLAT WAS HELD BY THE ASSESSEES FOR A PERIOD LESS THAN 36 MON THS. 4 . 7705 //2019 (. .2011-12 ) ITA NO.7705/MUM/2019 (A.Y.2011-12) . 7706 //2019 (. .2011-12 ) ITA NO.7706/MUM/2019 (A.Y.2011-12) 4. BOTH SIDES HEARD, ORDERS OF AUTHORITIES BELOW EX AMINED. I FIND THAT THE ASSESSMENT ORDER AND THE ORDER OF CIT(A) HAS BEEN P ASSED IN AN EX-PARTE PROCEEDINGS. THE ASSESSEES ARE STATED TO BE RESIDEN T OF USA. OSTENSIBLY, REPEATED NOTICES SENT BY THE AO ON THE ADDRESS OF T HE ASSESSES IN INDIA WERE NEVER SERVED/COMMUNICATED TO THE ASSESSES. HENCE, T HE AO PASSED THE ASSESSMENT ORDER AFTER INVOKING THE PROVISIONS OF S ECTION 144 OF THE ACT. DURING FIRST APPELLATE PROCEEDINGS, APPARENTLY THE FATE OF NOTICES SENT BY THE CIT(A) TO THE ASSESSES ON ADDRESS IN INDIA WERE SAM E. HOWEVER, IN RESPONSE TO NOTICE SERVED THROUGH EMAIL, THE ASSESSES FILED DOC UMENTS TO SUPPORT THEIR CLAIM. PURPORTEDLY, THE CIT(A) REFUSED TO TAKE NOTE OF THE DOCUMENTS FURNISHED BY THE ASSESSEE THROUGH MAIL. TAKING INTO CONSIDERA TION THE FACT THAT THE ASSESSEES COULD NOT PLEAD THEIR CASE BEFORE THE AO AND CIT(A) AND WERE DEPRIVED OF FAIR OPPORTUNITY OF HEARING, WITHOUT CO MMENTING ON THE MERITS OF GROUNDS RAISED IN APPEAL, I DEEM IT APPROPRIATE T O RESTORE BOTH THESE APPEALS BACK TO THE FILE OF AO FOR DENOVO ADJUDICATION. THE AO SHALL CONSIDER DOCUMENTS FILED BY THE ASSESSES IN PAPER BOOK BEFOR E THE TRIBUNAL AND SHALL DECIDE THE ISSUE AFRESH AFTER AFFORDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSES, IN ACCORDANCE WITH LAW. 5. SHRI VIMAL PUNMIYA UNDERTAKES TO APPEAR ON BEHAL F OF THE ASSESSEES BEFORE THE AO ON RECEIPT OF NOTICE. THE AO SHALL IS SUE NOTICE TO THE ASSESSEES ON THE ADDRESS FURNISHED IN FORM NO. 36 BEFORE THE TRIBUNAL. 5 . 7705 //2019 (. .2011-12 ) ITA NO.7705/MUM/2019 (A.Y.2011-12) . 7706 //2019 (. .2011-12 ) ITA NO.7706/MUM/2019 (A.Y.2011-12) 6. IN THE RESULT, IMPUGNED ORDERS IN THE RESPECTIVE APPEALS ARE SET-ASIDE AND THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSE . ORDER PRONOUNCED IN THE OPEN COURT ON THURSDAY , THE 10 TH DAY OF JUNE, 2021. SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, 3/ DATED: 10/06/2021 SK, PS * 4 * 4 * 4 * 4 COPY OF THE ORDER FORWARDED TO : 1. ) / THE APPELLANT , 2. *, / THE RESPONDENT. 3. 5 ( )/ THE CIT(A)- 4. 5 CIT 5. * , . . . , / DR, ITAT, MUMBAI 6. 9 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI