Krishna Rao Keshav, Sec'bad, Hyderabad V. ITO, Ward-10(4), Hyderabad, Hyderabad

ITA 773/HYD/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2510 (ITAT-HYDERABAD)
• Duration Of Justice: 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 11-05-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 15-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K J RAO
• Keywords: Sale consideration of property below Jantri Value
• Section: 148; 144; 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B (SMC), HYDERABAD BEFORE SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER I.T.A. NO. 773/HYD/2016 ASSESSMENT YEAR: 2005-06 KIRSHNA RAO KESHAV, SECUNDERABAD. PAN AFAPK3131P VS INCOME-TAX OFFICER, WARD 10(4), HYDERABAD. (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI K.C. DEVDAS FOR REVENUE : SHRI K.J. RAO DATE OF HEARING : 11-05-2017 DATE OF PRONOUNCEMENT : 12-05-2017 O R D E R THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-9, HYDERABAD, DATED 31-03-2016 FOR THE A.Y. 2005-06 WHEREIN THE ASSESSE E HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE HON'BLE CIT(A) IS ERRONEOUS IN LAW AS WELL AS FACTS OF THE CASE. 2. THE HON'BLE CIT(A) DISPOSED THE APPEAL EX-PARTE WITHOUT ALLOWING PROPER OPPORTUNITY TO THE APPELLANT AND TH EREFORE THE ORDER IS LIABLE TO BE DELETED. 3. THE ASSESSING AUTHORITY AS WELL AS APPELLATE AUT HORITY WITHOUT OBSERVING THAT THE ASSESSEE WAS ONLY A GPA HOLDER I N RESPECT OF THE TRANSACTION OF IMMOVABLE PROPERTY VIDE DOCUMENT DATED 23.06.2004 PROCEEDED TO ASSESS THE CAPITAL GAINS TO TAX IN HIS HANDS WHICH IS NOT LEGALLY CORRECT AND THEREFORE TH E ADDITION IS LIABLE TO BE DELETED. 4. THE HON'BLE CIT(A) OUGHT TO HAVE OBSERVED THAT T HE COMPUTATION OF CAPITAL GAIN MADE BY THE ASSESSING O FFICER WAS ERRONEOUS AND THEREFORE THE OUGHT TO HAVE DELETED T HE SAME. I.T.A. NO. 773/HYD/2016 KIRSHNA RAO KESAV :- 2 -: 5. THE HON'BLE CIT(A) OUGHT TO HAVE OBSERVED THAT T HE ASSESSING OFFICER PROCEEDED TO COMPUTE THE CAPITAL GAIN BY IN VOKING PROVISIONS OF SECTION 5OC OF THE IT ACT WITHOUT BRI NGING ANY MATERIAL ON RECORD AND THEREFORE THE ADDITION OUGHT TO HAVE BEEN DELETED. 2. I HAVE HEARD THE PARTIES AND PERUSED THE MATERIA L FACTS ON RECORD. I FIND THAT IN ASSESSEES WIFES CASE UNDER SIMILAR FACTS AND CIRCUMSTANCES, THE COORDINATE BENCH IN ITA NOS. 927 & 928/HYD/2016, VIDE ORDER DATED 16/11/2016 HAS HELD AS UNDER ( FOR THE SAKE OF CLARITY, ENTIRE ORDER IS REPRODUCED): BOTH THESE APPEALS PERTAIN TO THE SAME ASSESSEE FO R AY. 2005-06. APPEAL IN ITA NO. 928/HYD/2016 IS ON THE ASSESSMENT ORDER PASSED U/S. 144 OF THE INCOME TAX ACT [ACT] AND APPEAL IN ITA NO. 927/HYD/ 2016 IS ON PENALTY ORDER U/S 271(1)(C). 2. BRIEFLY STATED, ASSESSEE HAS NOT FILED RETURN OF INCOME FOR THIS YEAR AND IS NOT AN ASSESSEE ON RECORD. THE ITO, WARD-10(4) CAME TO KNOW THAT ASSESSEE ALONG WITH OTHERS, SOLD HOUSE PROPERTY OF LAND ADMEASURING 808.59 SQ. YDS., FOR RS. 15 LAKHS DURING THE YEAR. ASSESSEES SHARE IN PROPERTY WAS 200 SQ. YDS. THE ASSESSING OFFICER (AO ) NOTED THAT MARKET VALUE OF THE PROPERTY WAS AT RS. 56,03,220/- FOR ST AMP DUTY PURPOSES AND VALUE OF ASSESSEES SHARE WORKED OUT TO RS. 13,85,9 20/- AS PER SECTION 50C OF THE ACT. AO HAS TREATED THE ENTIRE AMOUNT AS LONG TERM CAPITAL GAIN OF ASSESSEE AND BROUGHT THE AMOUNT OF RS. 13,8 5,920/- AS INCOME OF ASSESSEE. ASSESSEE HAS PREFERRED THE APPEAL BEFORE THE LD.CIT(A). IN THE FORM 35, IT WAS MENTIONED THAT THE ASSESSMENT ORDER WAS SERVED ON 15- 04-2013 AND APPEAL WAS PREFERRED ON 27-02-2014. THE RE WAS DELAY IN FILING THE APPEAL. ACCORDINGLY, THE CONDONATION LETTER WAS FILED BEFORE THE LD.CIT(A) ON THE DATE OF HEARING BEFORE THE CIT(A). IN THE MEAN TIME, AO HAS ALSO FINALISED THE PENALTY PROCEEDINGS INITIATE D IN THE ASSESSMENT AND LEVIED PENALTY U/S. 271(1)(C) OF THE ACT. THE ORDER OF WHICH WAS SERVED ON 19-09-2013. ASSESSEE PREFERRED APPEAL ON THIS ORDER ON THE SAME DATE I.E., 27- 02-2014. 2.1. BOTH THE APPEALS WERE TAKEN UP TOGETHER BY LD. CIT(A) AND IT SEEMS THE COUNSEL HAS FILED ONLY ONE CONDONATION PETITION . THE SAME WAS CONSIDERED IN APPEAL AGAINST THE ORDER U/S. 144, IN WHICH LD.CIT(A) HAS EXTRACTED THE SUBMISSIONS DT. 23-03-2016 IN PARA 4. 1. HOWEVER, LD.CIT(A) WAS OF THE OPINION THAT ASSESSEE IS CALLOUS AND CAS UAL TOWARDS INCOME TAX MATTERS. IN VIEW OF THAT, CONDONATION WAS REJECTED STATING THAT THERE IS NO SUFFICIENT CAUSE WITHIN THE MEANING OF THE PROVISIO NS OF SECTION 249(3) OF THE ACT. I.T.A. NO. 773/HYD/2016 KIRSHNA RAO KESAV :- 3 -: 3. WITH REFERENCE TO OTHER APPEAL ON PENALTY U/S. 2 71(1)(C), LD.CIT(A) STATED THAT THERE IS NO CONDONATION PETITION. HENCE , THE DELAY CANNOT BE CONDONED. 4. AFTER HEARING THE LD. COUNSEL AND THE LD. DR AND PERUSING THE ORDERS ON RECORD, I AM OF THE OPINION THAT LD.CIT(A) HAS ERRE D IN REJECTING THE CONDONATION. LD.CIT(A) NOTED THAT THERE WERE TEN MO NTHS DELAY IN FILING THE APPEAL IN QUANTUM. ASSESSEE HAS EXPLAINED THAT SHE WAS AGED MORE THAN 60 YEARS WITH AILMENTS AND WAS NOT CONVERSANT WITH THE INCOME TAX PROVISIONS. THERE WAS NO COMMUNICATION ALSO FROM TH E DEPARTMENTAL AUTHORITIES. SHE HAS EXPLAINED THAT ONLY AFTER THE PURCHASER ADVISED, A TAX PRACTITIONER WAS CONSULTED AND THE APPEAL WAS FILED AFTER DELAY OF TEN MONTHS. CONSIDERING THAT ASSESSMENT PROCEEDINGS ARE DONE EX-PARTE AND AS ASSESSEE CONTENDS THAT NO NOTICES WERE SERVED ON HER, IT MAY BE POSSIBLE THAT ASSESSEE IS TOTALLY IGNORANT ABOUT TH E PROCEEDINGS. THERE IS NO RESPONSE/EXPLANATION IN THE PENALTY PROCEEDINGS AS WELL. AS SEEN FROM THE ASSESSMENT ORDER ITSELF, THESE PROCEEDINGS ARE INITIATED AFTER THE LD.CIT(A) HAS CANCELLED THE ORIGINAL PROCEEDINGS CO MPLETED ON 12-12-2007 U/S. 144, WHEREIN THE ENTIRE VALUE OF RS. 56,03,220 /- WAS ASSESSED IN THE HANDS OF ASSESSEE. WHETHER ONCE ASSESSMENT HAS BEEN CANCELLED, SEPARATE PROCEEDINGS ON THE SAME ISSUE CAN BE INITI ATED HAS NOT BEEN EXAMINED AT ALL EITHER BY THE AO OR BY THE CIT(A). THE EARLIER ORDER OF LD. CIT(A) IS NOT ON RECORD TO EXAMINE ON WHAT REASONS THE EARLIER PROCEEDINGS ARE HELD BAD IN LAW. THIS INDICATES THAT ASSESSEE I S TOTALLY IGNORANT AND HAS NOT BEEN PROPERLY ADVISED ABOUT HER RIGHTS AND DUTI ES. KEEPING THE FACT THAT ASSESSEE IS OLD AND MATTER IS ALSO PERTAINING TO AY . 2005-06, I AM OF THE OPINION THAT LD.CIT(A) COULD HAVE CONDONED THE DELA Y. I AM INFORMED THAT ONLY ONE CONDONATION PETITION WAS FILED WHEN BOTH T HE APPEALS ARE TAKEN UP BY THE LD.CIT(A). SINCE THE ORDER U/S. 271(1)(C) WA S PASSED AFTER SIX MONTHS OF COMPLETING THE ASSESSMENT, THERE SEEMS TO BE SOME ERROR IN NOTING DOWN THE DELAY OF SIX MONTHS IN THE ORDER OF LD.CIT(A), ABOUT THE DELAY. WHEN THE MAIN APPEAL WAS TEN MONTHS DELAY, T HERE CANNOT BE SIX MONTHS DELAY IN THE PENALTY ORDER, WHEN PENALTY ORD ER ITSELF HAS PASSED SIX MONTHS LATER. IT SEEMS THE DELAY WAS COUNTED, WITHO UT EXCLUDING THE TIME GIVEN TO ASSESSEE FOR FILING THE APPEAL UNDER THE S TATUTE. THE DELAY SHOULD HAVE BEEN CALCULATED CORRECTLY WHEN THE CONDONATION IS BEING CONSIDERED. BE THAT AS IT MAY, I AM OF THE OPINION THAT ASSESSE E HAS SUFFICIENT CAUSE IN FILING THE APPEALS BELATEDLY. THEREFORE, THE DELAY BEFORE THE LD.CIT(A) SHOULD HAVE BEEN CONDONED AND APPEALS SHOULD HAVE B EEN HEARD ON MERITS. LD.CIT(A) IS DIRECTED TO DISPOSE-OFF THE AP PEALS ON MERITS BY GIVING DUE OPPORTUNITY TO ASSESSEE AND ALSO EXAMINE WHETHE R ASSESSEE WAS SERVED WITH ANY NOTICES OR NOT AND IF SO, WHETHER A NY EXPLANATION WAS GIVEN BY ASSESSEE EITHER IN THESE PROCEEDINGS OR IN EARLI ER PROCEEDINGS. ASSESSEE IS FREE TO RAISE ANY GROUNDS OR CONTENTION S INCLUDING ANY ADDITIONAL GROUNDS BEFORE THE LD.CIT(A). WITH THESE OBSERVATIONS, THE ORDERS OF THE LD.CIT(A) ARE MODIFIED BY ALLOWING TH E CONDONATION PETITION AND APPEALS ARE RESTORED TO THE FILE OF CIT(A) ADJU DICATING ON MERITS. I.T.A. NO. 773/HYD/2016 KIRSHNA RAO KESAV :- 4 -: 2.1 THE ASSESSEE HAS FILED AN AFFIDAVIT FILED BEFOR E ME WHEREIN IT WAS STATED AS UNDER: 1) I KESHAV KRISHNA RAO, SON OF, SRI K NARAYANA, R ESIDING AT HOUSE NO. 6-1-101/1, PANCHASHEELA AVENUE, PADMARAO NAGAR, SECUNDERABAD, DO SOLEMNLY AFFIRM AND STATE AS UNDER - 2) I AM AN INDIVIDUAL, AGED ABOVE 69 YEARS WITH AGE RELATED AILMENTS. 3) I AM ASSESSED TO INCOME TAX UNDER PA NO: AFAPK31 31P. 4) MOREOVER, EVEN MY WIFE SMT K. VIJAYA, AGED ABOVE 60 YEARS WAS NOT KEEPING GOOD HEALTH. 5) FOR THE ASSESSMENT YEAR 2005-06 I FILED MY RETUR N OF INCOME ON 21.12.2005 DECLARING TOTAL INCOME AT RS.1,01,290 /-. SUBSEQUENTLY, THE LD. ASSESSING OFFICER, ON VERIFIC ATION OF THE RECORDS, OBSERVED THAT I AM THE GPA HOLDER FOR SRI M .RAMANA, SMT JHANSI RANI ALONG WITH MY WIFE, SMT K.VIJAYA, S OLD PROPERTY FOR A CONSIDERATION OF RS.15 LAKHS WHEREAS THE MARK ET VALUE OF THE PROPERTY AT RS.56,03,220/-. ACCORDINGLY, NOTICE U/S 148 OF THE INCOME TAX ACT, 1961 WAS ISSUED. 6) DUE TO MY WIFE SMT K.VIJAYA'S HEALTH AND MY HEAL TH I WAS UNABLE TO COLLATE THE REQUISITE INFORMATION AS REQU ESTED BY THE LD. ASSESSING OFFICER. 7) MY ASSESSMENT WAS COMPLETED UNDER SECTION 144 ON 28.03.2013 AND AN INCOME OF RS.42,17,300 WAS DETERM INED AS LONG TERM CAPITAL GAIN AND MY TOTAL INCOME WAS ASSE SSED AT RS.42,57,300/-. 8) I PREFERRED AN APPEAL ON 04.03.2014 BEFORE THE H ON'BLE COMMISSIONER OF INCOME TAX (APPEALS)-VI, HYDERABAD. WHILE I HAD MANAGED TO GET THE APPEAL FILED THROUGH MY AUTH ORISED REPRESENTATIVE, THE HEARINGS WERE UNATTENDED TO AND I COULD NOT PERSONALLY GIVE MY TIME NOR FOLLOW UP DUE TO MY HEA LTH. 9) THEREFORE, IT IS MY HUMBLE REQUEST TO BE GIVEN A NOTHER OPPORTUNITY TO JUSTIFY MY GROUNDS. 2.2 IN VIEW OF THE ABOVE, I AM IN AGREEMENT WITH TH E DECISION OF ITAT IN ASSESSEES WIFES CASE AND HOLD THAT THE DELAY BEFORE THE LD.CIT(A) SHOULD HAVE BEEN CONDONED AND APPEAL SHOULD HAVE BE EN HEARD ON MERITS. LD.CIT(A) IS DIRECTED TO DISPOSE-OFF THE APPEAL ON MERITS BY GIVING DUE I.T.A. NO. 773/HYD/2016 KIRSHNA RAO KESAV :- 5 -: OPPORTUNITY TO ASSESSEE AND ALSO EXAMINE WHETHER AS SESSEE WAS SERVED WITH ANY NOTICES OR NOT AND IF SO, WHETHER ANY EXPLANATI ON WAS GIVEN BY ASSESSEE EITHER IN THESE PROCEEDINGS OR IN EARLIER PROCEEDIN GS. ASSESSEE IS FREE TO RAISE ANY GROUNDS OR CONTENTIONS INCLUDING ANY ADDITIONAL GROUNDS BEFORE THE LD.CIT(A). WITH THESE OBSERVATIONS, THE ORDER OF TH E LD.CIT(A) IS MODIFIED BY ALLOWING THE CONDONATION PETITION AND APPEAL IS RES TORED TO THE FILE OF CIT(A) ADJUDICATING ON MERITS. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 12 TH MAY, 2017. SD/- (ASHA VIJAYARAGHAVAIN) JUDICIAL MEMBER HYDERABAD, DATED: 12 TH MAY , 2017. KV COPY TO 1 KRISHNA RAO KESHAV, C/O B. NARSING RAO & CO., CAS ., PLOT NO. 554, ROAD NO. 92, JUBILEE HILLS, HYD 36. 2 ITO, WARD 10(4), , HYDERABAD. 3 CIT (A) - 9, HYDERABAD. 4 PR. CIT 6, HYDERABAD. 5 THE DR, ITAT HYDERABAD 6 GUARD FILE