Shri. Venkatramana Byregowda , Bangalore V. Income Tax officer Ward-2(2)(4), Bangalore

ITA 94/BANG/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 2399 (ITAT-BANGALORE)
• Duration Of Justice: 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 09-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAVI SHANKAR SMT H KABI
• Keywords: Unexplained investment; Opportunity of being heard; Additional evidence
• Section: 142(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, B ENGALURU BEFORE S HRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI JASON P BOAZ , ACCOUNTANT MEMBER I TA NO. 94 / BANG/2 0 1 8 (ASSESSMENT YEAR: 2012 - 13 ) SHRI VENKATRAMANA BYREGOWDA, CHENNAKESHAVA NILAYA , 1, T G EXTENSION, HOSKOTE, BENGALURU - 562114. PAN:AJUPB 0299 F VS. APPELLANT INCOME - TAX OFFICER, WARD 2(2)(4), BENGALURU. RESPONDENT APPELLANT BY : SHRI RAVI SHANKAR, ADVOCATE. RESPONDENT BY : SMT. H.KABITA, JCIT(DR) DATE OF HEAR ING : 14/08/2018 DATE OF PRONOUNCEMENT : 05 /0 9 /2018 O R D E R PER JASON P BOAZ , AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF T HE COMMISSIONER OF INCOME - TAX(APPEALS) - 4, BENGALURU, DATED 30/10/2017 FOR ASSESSMENT YEAR 2 012 - 13. 2. BRIEFLY STATED, THE FACTS RELEVANT FOR DISPOSAL OF THIS APPEAL ARE AS UNDER: - 2.1 THE ASSESSEE, AN INDIVIDUAL SAID TO BE ENGAGED IN TRADING IN PETROLEUM PRODUCTS, FILED HIS RETURN FOR ASSESSMENT YEAR 2012 - 13 ON 30/092012 DECLARING INCOME OF RS.6,55,750/ - . THE RETURN WAS PROCESSED U/S 143(1) OF THE OF THE INCOME - TAX ACT, 1961 [IN SHORT 'THE ACT'] AND THE CASE WAS SUBSEQUENTLY TAKEN UP FOR SCRUTINY. TO ITA NO. 94 /BANG/ 2018 PAGE 2 OF 9 NOTICES ISSUED U/S 143(2) AND 142(1) OF THE ACT, THERE WAS NO COMPLIANCE BY THE ASSESSE E IN RESPECT OF FILING OF DETAILS CALLED FOR. IN THESE CIRCUMSTANCES, THE ASSESSMENT FOR ASSESSMENT YEAR 2012 - 13 WAS COMPLETED BY THE ASSESSING OFFICER (AO) EX - PARTE U/S 144 OF THE ACT VIDE ORDER DATED 12/03/2015 WHEREIN THE ASSESSEE S INCOME WAS DETERMINE D AT RS.1,30,43,984/ - ; IN VIEW OF ADDITION OF RS.1,23,88,235/ - , BEING THE INVESTMENT MADE BY THE ASSESSEE IN PURCHASE OF AN APARTMENT ON THE 3 RD FLOOR OF BUILDING KNOWN AS SCARLET BELLS , HAL 2 ND STAGE, INDIRANAGAR, BENGALURU, VIDE SALE DEED DATED 30/5/20 11. 2.2 AGGRIEVED BY THE EX - PARTE ORDER OF ASSESSMENT DATED 12/03/2015 FOR ASSESSMENT YEAR 2012 - 13, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) - 4 BENGALURU. THE LD.CIT(A), AFTER OBSERVING THAT INSPITE OF THE APPEAL BEING FIXED ON VARIOUS DATES, THE ASSESSEE FAILED TO FILE ANY DOCUMENTARY EVIDENCE TO ESTABLISH HIS CLAIM IN THE GROUNDS OF APPEAL; THAT THE INVESTMENT OF RS.1,23,88,235/ - IN PROPERTY WAS FULLY EXPLAINABLE, DISMISSED THE ASSESSEE S APPEAL, EX - PARTE, VIDE THE IMPUGNED ORDER DATED 30/10 /2017 , HOLDING AS UNDER AT PARA.4 THEREOF : - 3. THE ASSESSEE, BEING AGGRIEVED BY THE ORDER OF THE CIT(A) - 4, BENGALURU, DATED 30/10/2017 FOR ASSESSMENT YEAR 2012 - 13, HAS ITA NO. 94 /BANG/ 2018 PAGE 3 OF 9 FILED THIS APPEAL B EFORE THE TRIBUNAL, WHEREIN THE FOLLOWING GROUNDS ARE RAISED: - 4. IN THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSEE HAS FILED AN APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE PLACED AT PAGES 5 TO 25 OF PAPER BOOK. IN AN AFFIDAVIT , PAGES 1 TO 4, THE ASSESSEE HAS PUT FORWARD HIS PLEA FOR ADMISSION OF ADDITIONA L EVIDENCE, WHICH IS EXTRACTED HEREUNDER: - ITA NO. 94 /BANG/ 2018 PAGE 4 OF 9 4. THE CASE CAME TO BE LISTED FOR HEARING ON 19/09/2017, WHEREUPON THE AR HAS APPEARED AND HAS SOUGHT A SHORT ADJOURNMENT UP TO 27/09/2017 AND WAS ADJOURNED TO 26/10/2017 FOR ADMINISTRATIVE REASONS ETC. ITA NO. 94 /BANG/ 2018 PAGE 5 OF 9 15. THAT, THE FAILURE TO PRODUCE THE ABOVE MENTIONED ADDITIONAL EVIDENCES WAS NEITHER WILFUL NOR DELIBERATE AND THE ABOVE MENTIONED DOCUMENTS IN THE FORM OF ADDITIONAL EVIDENCES FORTIFY THE CASE OF THE ASSESSEE WHICH ARE VERY ESSENTIAL FOR APPRECIATION OF THE FACTS OF THE CASE. FURTHER THE ADDITIONAL EVIDENCES PRODUCED NOW HEREIN ARE VERIFIABLE. ITA NO. 94 /BANG/ 2018 PAGE 6 OF 9 5.1 WE HAVE HEARD THE RIVAL CONTENTIONS OF THE LD. AR FOR ASSESSEE AND THE LD. DR FOR REVENUE AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON REC ORD. WE FIND FROM A PERUSAL OF THE ORDERS OF THE AUTHORITIES BELOW THAT THE ORDER OF ASSESSMENT FOR ASSESSMENT YEAR 201 2 - 1 3 HAS BEEN PASSED EX - PARTE U/S 144 OF THE ACT VIDE ORDER DATED 12/03/2015 FOR NON - ATTENDANCE/NON FILING OF DETAILS RESULTING IN AN ADDITION OF RS.1,23,88,235/ - ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PURCHASE OF AN APARTMENT ON 3 RD FLOOR, SCARLET BELLS , HAL 2 ND STAGE, INDIRANAGAR, PURCHASED VIDE SALE DEED DATED 30/05/2011. IT IS SEEN FROM THE ORDER OF ASSESSMENT THAT, AFTER THE C ASE WAS TAKEN UP FOR SCRUTINY BY ISSUE OF NOTICE U/S 143(2) OF THE ACT ON 6/8/2013 AND NOTICE U/S 142(1) OF THE ACT ON 15/5/2014, TO WHICH THE ASSESSEE DID NOT RESPOND, A FURTHER NOTICE U/S 142(1) OF THE ACT DATED 26/2/2015 ALONG WITH A PROPOSAL THAT UNLES S THE INVESTMENT IN THE AFORESAID PROPERTY IS EXPLAINED, THE SAME WILL BE ASSESSED IN HIS HANDS. SINCE THERE WAS NO RESPONSE TO THIS PROPOSAL THE AFORESAID ADDITION OF RS.1,23,88,235/ - , WAS MADE TO THE ASSESSEE S INCOME AS UNEXPLAINED INVESTMENT IN PURCHA SE OF THE SAID APARTMENT IN SCARLET BELLS . WE FIND THAT FROM A PERUSAL OF PARA 4 OF THE IMPUGNED ORDER (SUPRA) THAT THE LD. CIT(A) DISMISSED THE ASSESSEE S APPEAL FOR NON - PROSECUTION. 5.2 WE HAVE ALSO PERUSED THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE (SUPRA) AND THE ASSESSEE S APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE IN TERMS OF RULES 10 AND 29 OF THE IT ( AT ) RULES, 1963. THE ASSESSEE S CONTENTION IN THESE TWO SUBMISSIONS, APPEAR TO US TO BE SOMEWHAT CONTRADICTORY. IN THE GROUNDS OF APPEAL, THE ASSESSEE ASSAILS THE ORDER OF THE LD.CIT(A) ON VARIOUS COUNTS, ITA NO. 94 /BANG/ 2018 PAGE 7 OF 9 INCLUDING THE AVERMENT THAT THE LD.CIT(A) OUGHT NOT TO HAVE DISMISSED THE ASSESSEE S APPEAL AS THE FACT IS THAT THE ASSESSEE HAD SUFFICIENT SOURCES FOR INVESTMENT IN PURCHASE OF TH E SAID PROPERTY AND ALL THE DETAILS THEREOF WERE FILED BEFORE THE AO AND WERE DISCERNIBLE FROM THE ASSESSEE S SUBMISSIONS IN THE STATEMENT OF FACTS. ON THE CONTRARY, IN THE APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE, THE ASSESSEE ACCEPTS THAT IT IS T HE L A P SE OF HIS AR, BEING PRE - OCCUPIED WITH OTHER WORK, WHO DID NOT ATTEND HEARINGS BEFORE THE LD.CIT(A) AND THAT THE CASE COULD NOT BE PRESENTED PROPERLY. IT IS ALSO ADMITTED THAT CERTAIN DETAILS CALLED FOR BY THE AO IN ASSESSMENT PROCEEDINGS AND CIT(A) COULD NOT BE FILED OR PRODUCED BY THE ASSESSEE BEFORE THE AUTHORITIES BELOW. 5.3 WHATEVER MAY BE THE AVERMENTS MADE BY THE ASSESSEE OR THE ACTIONS TAKEN BY THE AUTHORITIES BELOW, THE FACT REMAINS THAT THE IMPUGNED ORDER OF THE LD.CIT(A) AND THE O RDER OF ASSESSMENT FOR ASSESSMENT YEAR 2012 - 13 HAVE BEEN DECIDED EX - PARTE FOR NON - PROSECUTION. THE ORDERS PASSED ARE CRYPTIC AND NON - SPEAKING, WITHOUT AFFORDING THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD AND TO FILE DETAILS, SUBMISSIONS AND EVIDENCE S TO SUBSTANTIATE HIS CLAIMS. THE ASSESSEE ALSO IS AT FAULT IN NOT COMPLYING WITH THE STATUTORY NOTICE S ISSUED BY THE AUTHORITIES BELOW CALL ING FOR DETAILS OF INVESTMENT IN THE SAID PROPERTY. FURTHER, THE AVERMENTS OF THE ASSESSEE IN THE GROUNDS OF APPEA L, THAT HE HAD FILED ALL DETAILS IN RESPECT TO INVESTMENT IN THE SAID PROPERTY AT SCARLET BELLS IS ALSO ADMITTEDLY INCORRECT, AS CAN BE SEEN FROM HIS ACCEPTANCE TO THIS EFFECT IN THE APPLICATION FOR ADMISSION OF ADDITIONAL GROUNDS , THAT DETAILS CALLED FO R IN RESPECT OF THE INVESTMENT OF THE SAID PROPERTY WERE NOT FILED. BE THAT AS IT MAY, THE ULTIMATE OBJECT OF ASSESSMENT IS THAT THE TRUE AND CORRECT INCOME OF AN ASSESSEE HAS TO BE BROUGHT TO TAX. ON THE BASIS OF THE RECORD, IT APPEARS TO US THAT BOTH T HE AUTHORITIES BELOW HAVING FAILED TO AFFORD THE ASSESSEE ADEQUATE OPPORTUNITIES OF BEING HEARD, AND DECIDING AGAINST THE ASSESSEE EX - PARTE ONLY ON GROUNDS OF NON - PROSECUTION, WITHOUT EXAMINING AND ADJUDICATING THE ISSUE OF INVESTMENT IN PURCHASE OF APARTM ENT AT ITA NO. 94 /BANG/ 2018 PAGE 8 OF 9 SCARLET BELLS ON MERITS, THEIR ORDERS ARE LIABLE TO BE SET ASIDE AND WE DO SO ; SUBJECT TO CONDITION THAT THE ASSESSEE PAYS COSTS OF RS.5000/ - WHICH WE IMPOSE ON HI M FOR FAILURE TO COMPLY WITH STATUTORY NOTICES ISSUED BY THE AUTHORITIES BELOW . TH E COSTS LEVIED SHALL BE PAID TO THE GOVERNMENT OF INDIA ACCOUNT AS PER PROCEDURE LAID DOWN IN THIS REGARD. SUBJECT TO THE ABOVE, WE REMAND FOR EXAMINATION AND ADJUDICATION MERITS THE SOLE ISSUE OF EXAMINING AND VERIFYING THE ASSESSEE S SOURCE OF INVESTMEN T IN THE PURCHASE OF THE SAID APARTMENT IN SCARLET BELLS TO THE FILE OF THE AO . ON A CAREFUL CONSIDERATION OF THE ASSESSEE S APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE UNDER RULE 29 OF THE IT(AT) RULES 1963, PLACED AT PAGES 5 TO 25 OF PAPER BOOK DATED 05/086/2018, WE ARE OF THE VIEW THAT, SINCE THE SAME PERTAIN TO AND GO TOWARDS FACTUALLY DECIDING THE ALLOWABILITY OR OTHERWISE OF THE ASSESSEE S CLAIM WITH REGARD TO THE ISSUE OF DISPUTE IN APPEAL; I.E. THE SOURCES OF THE ASSESSEE S INVESTMENT IN TH E PURCHASE OF THE APARTMENT IN SCARLET BELLS , THE SAME IS TO BE ADMITTED FOR CONSIDERATION. THE AO IS ACCORDINGLY DIRECTED TO EXAMINE AND VERIFY THE AFORESAID ADDITIONAL EVIDENCE WHILE CONSIDERING THE ISSUE IN DISPUTE WHICH IS RESTORED TO HIS FILE. NEE DLESS TO ADD THAT THE ASSESSEE SHALL BE AFFORDED ADEQUATE OPPORTUNITY OF BEING HEARD AND TO FILE DETAILS/SUBMISSIONS REQUIRED IN THIS REGARD WHICH SHALL BE CONSIDERED BEFORE DECIDING THE ISSUE AFRESH. 6. IN VIEW OF OUR DECISION IN SETTING ASIDE THE ORDERS OF THE AUTHORITIES BELOW, AND RESTORING THE ISSUE IN DISPUTE, I.E. THE EXAMINATION AND VERIFICATION OF THE ASSESSEE S SOURCE OF INVESTMENT IN THE PURCHASE OF APARTMENT IN SCARLET BELLS ; FOR ADJUDICATION ON MERITS, WE REFRAIN FROM ADJUDICATING THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ON MERITS. ITA NO. 94 /BANG/ 2018 PAGE 9 OF 9 7. IN THE RESULT, THE ASSESSEE S APPEAL FOR ASSESSMENT YEAR 2012 - 13 IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 05 TH SEPTEMBER , 2018 S D/ - SD/ - ( SUNIL KUMAR YADAV ) ( JASON P BO AZ ) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE : BENGALURU. D A T E D : 05 / 0 9 /201 8 SRINIVASULU, SPS COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A) 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE B Y ORDER SENIOR PRIVATE SECRETARY INCOME - TAX APPELLATE TRIBUNAL BANGALORE