Shri Ravi Chandy, Kochi V. The ACIT, Non-Corporate Circle 1(1), Kochi, Kochi

ITA 792/COCH/2022

AI Insights

The case involves an appeal by the assessee, Ravi Chandy, against the order of the National Faceless Appeal Centre, Delhi, which dismissed his appeal concerning an assessment under section 147 r/w s.144B of the Income-tax Act, 1961 for the assessment year 2014-15. The primary issue was the valuation of a property for the purpose of deduction under section 54F, where the assessee claimed a higher amount than what was stated in the conveyance deed. The CIT(A) dismissed the appeal on the grounds that the assessee had settled a previous tax dispute under the Direct Tax Vivad Se Vishwas Act, 2020, which the Tribunal found to be unrelated to the current proceedings.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 115414 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 1 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 16-08-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 20-07-2022
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Assessee Lawyers: ATHUL M.V.
• Keywords: Search and seizure; Opportunity of being heard; Set aside
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN Before Shri Sanjay Arora, AM &Shri Manomohan Das, JM ITA No.792/Coch/2022: Asst.Year:2014-2015 Ravi Chandy 28/89 Kalluvettamkulathil House, Janatha Road, Vytilla Kochi – 682 019. [PAN: ADRPC6869R] vs. The Assistant Commissioner of Income-tax, Non-Corporate Circle 1(1) Kochi. (Appellant) (Respondent) Appellant by: Sri.Athul M.V., Advocate Respondent by: Smt.J.M.Jamuna Devi, Sr.DR Date of Hearing : 18.08.2023 Date of Pronouncement: 31.08.2023 O R D E R Per Sanjay Arora, AM: This is an appeal by the Assessee directed against the order dated 23.5.2022 by the National Faceless Appeal Centre, Delhi (CIT(A)), dismissing the assessee’s appeal contesting his assessment under section 147 r/ws.144B of the Income-tax Act, 1961 (`the Act’) dated 28.3.2022 for assessment year (AY) 2014-15. 2. Explaining the facts of the case, it was submitted by Shri Athul, the learned counsel for the assessee, that the assessment in the first instance was framed on 19.9.2016 (copy on record), denying the assessee deduction u/s.54F, claimed with reference to investment in a residential house at Rs.2,05,74,406, to the extent of 50% thereof inasmuch as the said investment was in the joint names of the assessee and his daughter, Sara Jake Punnan, marked as purchaser no.2 in the sale deed dated 16.10.2015, so that she was an equal owner of the said property. The assessee carried the matter in appeal. However, before the same could be disposed of, he settled his dispute under Direct Tax Vivad Se Vishwas Act, 2020 (DSV Act), paying the disputed tax at Rs.7,15,410. The ld. CIT(A), vide order dated 12.3.2021 (Ann. ITA No.792/Coch/2022 (AY 2014-2015) R av i C h a nd y v . As s t . C I T 2 1),accordingly, dismissed the assessee’s appeal as infructuous, making reference to certificate in Form 5 issued under DSV Act on 05.3.2021 (copy on record). Subsequently, notice u/s.148(1) was issued on 31.3.2021, proposing to restrict the deduction u/s.54F, as against the investment of Rs.205.74 lakh, to the value stated in the conveyance deed, i.e., Rs.62.93 lakh. Assessment was made accordingly on 28/3/2022. In appeal, vide the impugned order the ld. CIT(A) dismissed the assessee’s appeal as the assessee had, as per the Revenue’s system data base, settled the tax dispute under DSV Act. The issue arising in the instant proceedings is entirely different, and there is no question of the same having been resolved. The same, it was prayed, be accordingly set aside, and the appeal restored to the file of the first appellate authority for a decision on merits. 3. We have heard the parties, and perused the material on record. 3.1 The appellate order under challenge, we are afraid, is wholly unmaintainable in law. It is firstly, an ex parte order. We say so as there is no reference therein to any hearing opportunity being extended to the assessee, or of his submissionsbeing, despite the said opportunity, having not been made. Two, it does not address the grounds of appeal raised before the first appellate authority. It, treating the appeal as withdrawn, fails to consider that while the assessee opted for Vivad Se Vishwas Scheme on 19.6.2020, paying tax on 05.3.2021 on its acceptance, the instant proceedings were initiated only at the instance of the Revenue vide notice u/s.148(1) dated 31.3.2021. If the matter had been, as claimed, settled under DSV Act, it is the notice u/s.148(1) and the ensuing proceedings that stand to be cancelled/quashed, and not the assessee’s appeal preferred on being aggrieved by such notice, and the proceedings initiated thus. In fact, both the notice and the proceedings are valid, and sois the assessee’s appeal, being qua a wholly different matter, i.e., which of the two values, as stated in the conveyance deed, or in the Agreement between the parties, is to be considered for the purpose of deduction u/s. 54F, which speaks of ‘cost of the asset’; the assessee claiming to have paid a higher sum.The facts as recorded by the ITA No.792/Coch/2022 (AY 2014-2015) R av i C h a nd y v . As s t . C I T 3 AO at para 6 of his order,also being qua the issue of valuation, agree with that stated by the assessee. That is, the impugned order is de hors the assessment order. 3.2 The assessee on being asked by the Bench during hearing to make out a prima facie case, adduced a receipt dated 04/2/2014 from the Builder, M/s. Kent Constructions (P.) Ltd., for a sum of Rs.2,05,74,06, further clarifying that the value stated in the conveyance deed is with reference to the stamp value. 4. In view of the foregoing, we, setting aside the impugned order, restore the appeal back to ld. CIT(A) for a decision, issuing clear findings, on merits, in accordance with law, allowing the assessee a reasonable opportunity of being heard. We may though clarify that we may not be construed as having in any manner expressed any view in the matter. We decide accordingly. 5. In the result, the assessee’s appeal is allowed for statistical purposes. Order pronounced on August 31, 2023 under Rule 34 of The Income Tax (Appellate Tribunal) Rules, 1963 Sd/- (Manomohan Das) Sd/- (Sanjay Arora) Judicial Member Accountant Member Cochin; Dated: August 31, 2023 Devadas G* Copy to: 1. The Appellant. 2. The Respondent. 3. The Pr. CIT concerned. 4. The Sr. DR, ITAT, Cochin. 5. Guard File. Assistant Registrar ITAT, Cochin