M/s. Kshema Geo Holdings Private Limited, Bangalore V. Income Tax Officer, Ward - 4(1)(2), Koramanagala

ITA 896/BANG/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 5145 (ITAT-BANGALORE)
• Duration Of Justice: 9 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 18-12-2019
• Assessment Year: 2014-2015
• Appeal Filed On: 25-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KARUPPUSAMY S R
• Assessee Lawyers: RAJNISH RAMA RAO
• Keywords: Principle of natural justice; Valuation report
• Section: 271(1)(c); 143(3); 142(1); 250; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES C BENCH: BANGALORE BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO. 896 /BANG/201 9 (ASSESSMENT YEAR: 20 14 - 15 ) M/S. KSHEMA GEO HOLDINGS PVT. LTD., NO.103/104, PRESTIGE ATRIUM, NO.1, CENTRAL STREET, SHIVAJINAGAR, BANGALORE - 560 001 .APPELLANT PAN AADCK 2942F VS. INCOME TAX OFFICER, WARD 4 (1)(2), BANGALORE. RESPONDENT. ASSESSEE BY: SHRI RAJNISH RAMA RAO, C.A. REVENUE BY: SHRI KARUPPUSAMY, S.R., ADDL CIT (D.R) DATE OF HEARING : 18.12 .20 19 . DATE OF PRONOUNCEMENT : 19 .02. 20 20. O R D E R PER SHRI PAVAN KUMAR GADALE, JM : THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 4, BANGALORE PASSED UNDER SECTION 271(1)(C) AND 250 OF THE THE INCOME TAX ACT, 1961 ('THE A CT'). 2 ITA NO. 896/BANG/2019 2. AT THE TIME OF HEARING, THOUGH THE ASSESSEE HAS RAISED THE GROUNDS OF APPEAL, BUT THE ONLY CONTENTION ENVISAGED BY THE LEARNED AUTHORIZED REPRESENTATIVE THAT THE ASSESSEE IS DEPRIVED OF REASONABLE OPPORTUNITY OF HEARING BEFORE THE ASSESSING AUTHORITY IN LEVYING THE PENALTY AND ALSO CIT (APPEALS) HAS CONFIRMED THE PENALTY. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN T HE BUSINESS OF LAND DEVELOPMENT AND R EAL ESTATE ACTIVITIES AND FILED THE RETURN OF INCOME FOR ASSESSMENT YEAR 2014 - 15 ON 26.09.2014 AND SUBSEQUENTLY THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143(2) AND 142(1) WERE ISSUED. IN COMPLIANCE, THE LEARNED AUTHORIZED REPRESENTATIVE APPEARED FROM TIME TO TIME AND FURNISHED THE DETAILS. THE ASSESSING OFFICER IN THE COURSE OF ASSESSMENT PROCEEDINGS, FOUND THA T THE ASSESSEE HAS ISSUED SHARES AT A PREMIUM DURING THE RELEVANT PREVIOUS YEAR AND DETAILS WERE FURNISHED. ON PERUSAL OF THE DETAILS FILED BY THE ASSESSEE, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS ISSUED 75,000 EQUITY SHARES OF FACE VALUE OF RS.10 EACH ON 9.10.2013 TO M/S. FER ROMIN SALES PVT. LTD. AT A VALUE OF RS.700 PER SHARE WHICH INCLUDE PREMIUM OF RS.690 .HENCE THE AO CALLED FOR VALUATION REPO RT IN RESPECT OF SHARES ISSUED AT A PREMIUM IN AC CORDANCE WITH RULE 11 U / 11 U A SINCE THE ASSESSEE COULD NOT SUBMIT THE VALUATION REPORT . TH E ASSESSING OFFICER MADE ADDITION APPLYING THE NET VALUE METHOD AS PER RULE 11 UA (2)(A) OF RS.1,47,75,000 AND A SSESSED TOTAL INCOME OF RS.1,52,65,185 AND PASSED THE ORDER UNDER SECTION 143(3) OF THE ACT 3 ITA NO. 896/BANG/2019 DT.8.12.2016.SUBSEQUENTLY, THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT AND ISSUED NOTICE. WHEREAS THE ASSESSEE HAS SUBM ITTED A LETTER ON 17.1.2017 MENTIONING THAT THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) OF THE ACT DT.8.12.2016 WAS ACCEPTED B Y THE ASSESSEE WITH ADDI TION OF RS.1,47,75,000 AS INCOME AND THE ASSESSEE HAS ALSO PAID THE TAXES OF RS.64,00,260 AND PRAYED FOR WAIVER OF PENALTY. WHEREAS THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS NOT RESPONDED AND FAILED TO GIVE SATISFACTORY EXPLANATION S IN THE ASSESSMENT PROCEEDINGS AND ALSO IN PENAL TY PROCEEDINGS . THEREFORE ASSESSING OFFICER HAS CONSIDERED IT A S FIT CASE FOR LEVY OF PENALTY AND PASS THE ORDER 271(1)(C) OF THE ACT DT.30.06.2017. AGGRIEVED BY THE ORDER, THE ASSESSEE HAS FILED AN APPEAL WITH THE CIT(APPEALS) , WHEREAS THE CIT(APPEALS) HAS CONFIRMED THE LEVY OF PENA LTY AND DISMISSED THE APPEAL. AGGRIEVED BY THE CIT ( APPEAL ) ORDER, THE ASSESSEE HAS FILED AN APPEAL WITH THE TRIBUNAL. 4. THE LEARNED AUTHORIZED REPRESENTATIVE AT THE TIME OF HEARING SUBMITTED THAT THE PENALTY WAS LEVIED BY THE ASSESSING OFFICER UNDER THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT FOR CONCEALMENT AND INACCURATE PARTICULARS FURNISHED AND FURTHER NO REASONABLE OPPORTUNITY OF HEARING WAS PROVIDED TO THE ASSESSEE BEFORE INITIATING THE PENALTY AND ONLY ONE HEARING WAS GRANTED . FURTHER THE CIT(APPEALS) HA S NOT GRANTED SUFFICIENT TIME TO THE ASSESSEE TO SUBSTANTIATE THE CASE WITH EVIDENCE AND PRAYED FOR AN OPPORTUNITY OF HEARING. CONTRA, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF CIT(APPEALS). 4 ITA NO. 896/BANG/2019 5. WE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE SOLE MATRIX OF THE DISPUTED ISSUE AS ENVISAGED BY THE LEARNED AUTHORIZED REPRESENTATIVE THAT THE ASSESSEE WAS NOT PROVIDED SUFFICIENT OPPORTUNITY OF HEARING BEFORE THE ASSESSING OFFICER IN THE PENALTY PROCEEDINGS. TH E CONTENTION OF THE LEARNED AUTHORIZED REPRESENTATIVE THAT THE ASSESSEE HAS ONLY SUBMITTED EXPLANATION WITH RESPECT TO ACCEPTANCE OF ADDITION MADE BY THE ASSESSING OFFICER IN THE ASSESSMENT PROCEEDINGS UNDER SECTION 143(3) OF THE ACT DT.8.12.2016. ON PERU SAL OF THE PENALTY ORDER, WE FOUND THAT THE ASSESSEE IN LIEU OF THE SHOW CAUSE NOTICE ISSUED HAS FILED EXPLANATION S ON 17.01.2017 AND MENTIONED THAT THE ADDITION IN ORD ER UNDER SECTION 143(3) OF THE A CT BY THE ASSESSING OFFICER WAS A CCEPTED AND PAID THE TA XES. FU RTHER, WE FOUND THAT THERE IS NO OTHER DATE OF HEARING IS PROVIDED, THE ASSESSEE HAS ACCEPTED THE ADDITION TO BUY PEACE WI TH THE DEPARTMENT. THE ASSESSING OFFICER IN COMPLYING THE PROVISIONS OF SECTION 271(1(C) OF THE ACT HAS COME TO A CONCLUSION THAT THE ASSESSEE HAS DELIBERATELY FURNISHED INACCURAT E INFORMA TION AND DETAILS. THE LEARNED AUTHORIZED REPRESENTATIVE EMPHASIZED THAT THE ASSESSEE HAS PRIMA FACIE VITAL EXPLANATIONS TO SUBMIT BEFORE THE ASSESSING OFFICER IN THE PENALTY PROCEEDINGS AND PR A YED FOR ONE MORE OPPORTUNITY. THEREFORE WE CONSIDERING THE FACTUAL ASPECTS AND PRINCIPLES OF NATURAL JUSTICE AND FURTHER THE REASONS ENVISAGED BY THE LEARNED AUTHORIZED REPRESENTATIVE, CONSIDER IT APPROPRIATE TO PROVIDE ONE MORE OPPORTUNITY TO THE ASSESSE E TO GIVE CLARIFICATIONS 5 ITA NO. 896/BANG/2019 AND EXPLANATIONS IN DETAIL TO THE ASSESSING OFFICER IN THE PENALTY PROCEEDINGS . A CCORDINGLY WE RESTORE THE DISPUTED ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO RE EXAMINE THE ISSUE AFRESH ON MER ITS AND PASS A S PEAKING ORDER. FURTHER THE ASSESSEE SHOULD BE PROVIDED ADEQUATE OP PORTUNITY OF BEING HEARD AND ALLOW THE GROUNDS O F APPEAL OF THE ASSESSEE FOR STATISTICAL PURPOSES. 6. IN THE RESULT, THE ASSESSEE APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. S D / - S D / - ( B.R. B ASKARAN ) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 1 9 .02. 20 20 . *REDDY GP COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT (A) 4. PR. CIT 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE TRIBUNAL BANGALORE