BAKIR B JAVERI, MUMBAI V. ITO RG 8(1)(1), MUMBAI

ITA 8078/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3611 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-04-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2003-2004
• Appeal Filed On: 01-12-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: S S AGARWAL
• Keywords: Difference of opinion; Change of opinion
• Section: 143(3); 54F; 148

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL MUMBAI -B BENCH MUM BAI . . , / , BEFORE S/SH. B R MITTAL, JUDICIAL MEMBER & RAJENDRA , ACCOUNTANT MEMBER . / ITA.NO. 8078/M/2011 ! ! ! ! ' ' ' ' / ASSESSMENT YEAR 2003-04 BAKIR B. JAVERI, 3 RD FLOOR, FLAT NO. 7, ALZUVE HRAT, N.S. ROAD, JUHU JVPD, MUMBAI-400 049. VS. I.T.O. 8(1)(1), MUMBAI- PAN: AAAPJ 6490 K ( #$ / APPELLANT) ( %&#$ / RESPONDENT) #$ ' / APPELLANT BY : SHRI S.S. AGARWAL %&#$ ) ' /RESPONDENT BY : SHRI MANJUNATH KARKIHALLI ! ) *+ / DATE OF HEARING : 18-04-2013 ,-' ) *+ / DATE OF PRONOUNCEMENT : 18-04-2013 ORDER U/S.254(1) OF THE INCOME-TAX ACT,1961(ACT) ! ! ! ! ) )) ) , 1961 ) )) ) 254(1) *.* *.* *.* *.* / / / / PER RAJENDRA, A.M. THE PRESENT APPEAL IS DIRECTED AGAINST THE ORDER DT . 04-09-2011 PASSED BY THE CIT(A)- 16, MUMBAI. FOLLOWING GROUNDS OF APPEAL HAVE BEEN R AISED BY THE ASSESSEE: 1.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LEARNED CIT(A) ERRED IN LAW AND IN FACTS IN NOT DISPOSING THE GROUNDS 1 TO 3 OF YOUR APPELLANT WHERE IN THE NOTICE ISSUED U/S. 148 AND THE ASSESSMENT THEREAFTE R WAS CHALLENGED IN VIEW OF THE COMPLETION OF ORIGINAL ASSESSMENT U/S. 143(3). 2.THE NOTICE ISSUED U/S. 148 FOR CAPITAL GAIN WAS C ONSIDERED AT THE TIME OF ORIGINAL ASSESSMENT PASSED U/S. 143(3) AND THE RE-OPENING OF THE ASSESSMENT IS NOTHING BUT CHANGE OF OPINION AND MIND AND HENCE THE NOTICE ISS UED U/S. 148 IS VOID ABINITIO SHOULD THEREFORE BE CANCELLED. 3.THE LEARNED ASSESSING OFFICER AS WELL AS CIT(A) E RRED IN LAW BY NOW ALLOWING THE DEDUCTION U/S. 54F(1) WHEN YOUR APPELLANT INVES TED AN AMOUNT OF RS. 9,55,000/- AS AGAINST CAPITAL GAIN OF RS. 8,87,104/- AND RATHE R INSISTED UPON THE PROVISIONS OF SECTION 54F(4) AND THEREBY DISALLOWING THE CLAIM OF YOUR APPELLANT FOR EXEMPTION OF CAPITAL GAIN. 4.THE LEARNED ASSESSING OFFICER HAS ERRED IN LAW AN D IN FACTS IN DETERMINING THE CAPITAL GAINS OF RS. 8,87,104/- AND NOT ALLOWING TH E DEDUCTION AS PRESCRIBED AND CLAIMED BY YOUR APPELLANT U/S. 54F(1) OF THE INCOME TAX ACT, 1961. ITA NO. 8078/MUM/2011 BAKIR B. JAVERI, 2 2. ASSESSEE,AN INDIVIDUAL, FILED HIS RETURN OF INCOME ON 28-02-2007 DECLARING TOTAL INCOME OF RS.1.60 LAKHS. ASSESSMENT WAS FINALISED B Y THE ASSESSING OFFICER (AO) ON 01-10-2010 U/S. 143(3) R.W.S. 147 OF THE ACT DETER MINING TOTAL INCOME OF THE ASSESSEE AT RS. 10.47 LAKHS. FACTS OF THE CASE : 3. IN THIS CASE,AFTER ORIGINAL ASSESSMENT ORDER WAS PA SSED, AO NOTICED THAT THE APPELLANT HAD SOLD A PLOT OF LAND AT VALSAD FOR A T OTAL CONSIDERATION OF RS. 12,00,000/-, THAT AFTER INDEXATION, LONG TERM CAPITAL GAIN (LTCG ) OF RS. 8,87,104/- WAS COMPUTED, THAT THE APPELLANT HAD CLAIMED EXEMPTION U/S. 54F IN RESPECT OF INVESTMENT IN RESIDENTIAL HOUSE AT SUN ROW HOUSE WHICH WAS PUR CHASED AT RS. 1,30,00,000/- ON 15-05-2003.BEFORE THE AO APPELLANT SUBMITTED THE CO PY OF THE AGREEMENT ALONG WITH THE DETAILED SUBMISSION EXPLAINING HOW THE CONDITIO N OF SECTION 54F WERE COMPLIED. AO AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE AO HELD THAT ASSESSEE WAS NOT ENTITLED TO THE EXEMPTION CLAIMED. ASSESSEE PREFERR ED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY(FAA).WHILE DECIDING THE APPEAL FAA DECIDED ALL THE GROUNDS OF APPEAL FILED BY THE ASSESSEE, EXCEPT THE FIRST GROU ND OF APPEAL FILED BY HIM. 4. BEFORE US, AUTHORISED REPRESENTATIVE (AR) SUBMITTED THAT FAA HAD DECIDED THE APPEAL WITHOUT DECIDING THE ISSUE OF JURISDICTION, THAT FAA SHOULD HAVE FIRST ADJUDICA -TED THE ISSUE OF RE-OPENING. DEPARTMENTAL REPRESE NTATIVE (DR) SUPPORTED THE ORDER OF THE FAA. 4.1. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE ASSESSEE HAD RAISED THE FOLLOWING SPECIFIC GROUND OF APPEAL BEFORE THE FAA CHALLENGING THE VALIDITY OF REASSESSMENT PROCEEDING S INITIATED U/S.148 OF THE ACT: 1)ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. INCOME TAX OFFICER ERRED IN LAW AND IN FACTS IN RE-OPENING OF THE ASSESSMENT AND DE TERMINING THE ADDITIONAL INCOME OF 8, 87, 104/- AND TOTAL INCOME OF THE APPELLANT FOR THE ASS ESSMENT YEAR AT RS. 10,58,416/-. 4.2. WE FURTHER FIND THAT FAA HAD NOT ADJUDICATED THE IS SUE WHILE DECIDING THE APPEAL FILED BY THE ASSESSEE.HE HAS DISCUSSED THE FACTS OF THE CASE AND HAD DECIDED THE APPEAL ON MERITS.IN OUR OPINION, QUESTION OF JURISDICTION IS THE BASIC QUESTION WHERE COMPLETED ASSESSMENTS ARE REOPENED AS PER THE PROVI SIONS OF SECTION 147 OF THE ACT. FAA SHOULD HAVE DECIDED THE FUNDAMENTAL ISSUE OF J URISDICTION BEFORE TAKING UP THE OTHER GROUNDS OF APPEAL. AS PER THE ESTABLISHED PR INCIPLES OF TAXATION JURISPRUDENCE QUESTION OF JURISDICTION SHOULD BE DECIDED FIRST, W HENEVER IT IS AGITATED ALONG WITH OTHER GROUNDS OF APPEAL BEFORE THE FAA.IF AN ORDER IS PASSED BY AN AO WITHOUT HAVING JURISDICTION OVER IT, SAME HAS TO BE ANNULLE D.FIRST AND PRIMARY CONDITION OF A VALID ASSESSMENT ORDER IS THE EXISTENCE OF JURISDIC TION BY AN AO OVER A PARTICULAR CASE. AN ORDER WITHOUT LEGAL SANCTION CANNOT BE ENDORSED BY THE HIGHER AUTHORITIES.IN SUCH CASES THEY SHOULD NOT DECIDE THE APPEAL WITHOUT DEC IDING THE BASIC ISSUE.AS THE FAA HAS NOT PASSED ANY ORDER IN THIS REGARD, SO IN THE INTEREST OF JUSTICE WE REMIT BACK THE MATTER TO HIS FILE FOR FRESH ADJUDICATION TO DECIDE THE GROUND NO. 1 FILED BEFORE HIM BY THE ASSESSEE. HE IS DIRECTED TO AFFORD A REASONABL E OPPORTUNITY OF HEARING TO THE ASSESSEE IN THIS REGARD. AS A RESULT, APPEAL FILED BY THE ASSESSEE STANDS PA RTLY ALLOWED. 0 1 !0* 2 34 ) . / 1 56 ) * 78. ITA NO. 8078/MUM/2011 BAKIR B. JAVERI, 3 ORDER PRONOUNCED IN THE OPEN COURT 18 TH APRIL, 2013 / ) ,-' : ;! %8, 2013 - ) . A SD/- SD/- ( . . / B.R. MITTAL ) ( / RAJENDRA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / MUMBAI, ;!/ DATE: 18 TH APRIL, 2013 TNMM / / / / ) )) ) %*C %*C %*C %*C DC'* DC'* DC'* DC'* / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / #$ 2. RESPONDENT / %&#$ 3. THE CONCERNED CIT (A) / E F 4. THE CONCERNED CIT / E F 5. DR B BENCH, ITAT, MUMBAI / CG. %*! , . . . 6. GUARD FILE/ . H &C* %* //TRUE COPY// /! /! /! /! / BY ORDER, I II I / 7 7 7 7 DY./ASST. REGISTRAR , / ITAT, MUMBAI