Sri Annaiah , Mysore V. The Income Tax Officer Ward-1(3), Mysore

ITA 945/BANG/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5885 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 01-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 27-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABDUL HAKEEM M
• Keywords: Opportunity of being heard; Reasonable cause; Set aside
• Section: 234B; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-C BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 945 / BANG/201 8 ASSESSMENT YEAR : 2007 - 08 SHRI ANNAIAH, S/O SHRI JOGE GOWDA, BELAVADI VILLAGE, MYSORE. PAN: NO PAN VS. THE INCOME TAX OFFICER, WARD 1 [3], MYSORE. APPELLANT RESPONDENT APPELLANT BY : SHRI RAVISHANKAR, ADVOCATE RESPONDENT BY : SHRI ABDUL HAKEEM .M, JCIT (DR) DATE OF HEARING : 2 3 . 0 4 .2018 DATE OF PRONOUNCEMENT : 04 . 0 5 .201 8 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS IS AN ASSESSEES APPEAL DIRECTED AGAINST THE O RDER OF LD. CIT(A), MYSORE DATED 28.09.2017 FOR ASSESSMENT YEAR 2007-08. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1. THE ORDERS OF THE AUTHORITIES BELOW IN SO FAR AS THEY ARE AGAINST THE APPELLANT, ARE OPPOSED TO LAW, EQUITY, WEIGHT OF EV IDENCE, PROBABILITIES, FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LEARNED CIT[A] IS NOT JUSTIFIED IN HOLDING T HAT THE APPEAL FILED BY THE APPELLANT BEFORE HIM IS NOT MAINTAINABLE SINCE IT FILED BELATEDLY BY 10 DAYS AND THAT THE APPELLANT HAD NOT OBTAINED AND QUOTED A PAN IN FORM NO. 35 AND HAD ALSO NOT PAID THE AMOUNT EQUIVA LENT TO THE ADVANCE-TAX AND HENCE THE APPEAL WAS NOT MAINTAINAB LE U/S 249[4] OF THE ACT UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE. 2.1 THE LEARNED CIT[A] OUGHT TO HAVE APPRECIATED TH AT THE APPELLANT HAD FILED A LETTER DATED 'NIL' EXPLAINING THE REASO NS FOR THE DELAY IN FILING THE APPEAL AND HAVING REGARD TO THE EXPLANAT ION TENDERED THE LEARNED CIT[A] OUGHT TO HAVE CONDONED THE DELAY AND ADJUDICATED THE APPEAL ON MERITS INSTEAD OF DISMISSING THE SAME ON THIS GROUND. 2.2 THE LEARNED CIT[A] FURTHER OUGHT TO HAVE APPREC IATED THAT MENTIONING OF PAN IN FORM NO. 35 WAS NOT A MANDATOR Y REQUIREMENT FOR FILING THE FIRST APPEAL AND HENCE THE APPEAL OU GHT TO HAVE BEEN ITA NO.945/BANG/2018 PAGE 2 OF 4 ADMITTED AND ADJUDICATED ON MERITS INSTEAD OF BEING REJECTED ON THIS GROUND. 2.3 WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED CIT [A] OUGHT TO HAVE APPRECIATED THAT THERE WAS NO OCCASION TO INVOKE TH E PROVISIONS OF SEC.249[4] OF THE ACT SINCE THE ENTIRE INCOME ASSES SED WAS DISPUTED AND HENCE HE OUGHT TO HAVE ADJUDICATED THE APPEAL ON ME RITS INSTEAD OF REJECTING THE SAME ON THIS GROUND. 3. THE LEARNED CIT[A] IS NOT JUSTIFIED IN DISPOSING OFF THE APPEAL WITHOUT ALLOWING SUFFICIENT AND REAL OPPORTUNITY TO THE APPELLANT TO REPRESENT THE CASE AND HENCE, THE IMPUGNED ORDER PA SSED REQUIRES TO BE SET ASIDE. 4. THE LEARNED CIT[A] IS NOT JUSTIFIED IN UPHOLDING THE ASSESSMENT OF CAPITAL GAINS OF RS.7,96,990/- ASSESSED BY THE LEAR NED AO FOR THE YEAR UNDER APPEAL UNDER THE FACTS AND IN THE CIRCUMSTANC ES OF THE APPELLANT'S CASE. 5. WITHOUT PREJUDICE TO THE RIGHT TO SEEK WAIVER WI TH THE HON'BLE CCIT/DG, THE APPELLANT DENIES HIMSELF LIABLE TO BE CHARGED TO INTEREST U/S.234-A AND 234B OF THE ACT, WHICH UNDER THE FACT S AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE AND THE LEVY DESERVES TO BE CANCELLED. 6. FOR THE ABOVE AND OTHER GROUNDS THAT MAY BE URGE D AT THE TIME OF HEARING OF THE APPEAL, YOUR APPELLANT HUMBLY PRAYS THAT THE APPEAL MAY BE ALLOWED AND JUSTICE RENDERED AND THE APPELLANT M AY BE AWARDED COSTS IN PROSECUTING THE APPEAL AND ALSO ORDER FOR THE REFUND OF THE INSTITUTION FEES AS PART OF THE COSTS. 3. THE ASSESSEE HAS ALSO RAISED TWO ADDITIONAL GROU NDS WHICH ARE AS UNDER. 1. THE ORDER OF RE-ASSESSMENT IS BAD IN LAW AND VOI D-AB-INITIO FOR WANT OF REQUITE JURISDICTION ESPECIALLY, THE MANDAT ORY REQUIREMENTS TO ASSUME JURISDICTION U/S 148 OF THE ACT DID NOT EXIS T AND HAVE NOT BEEN COMPLIED WITH AND CONSEQUENTLY, THE RE-ASSESSMENT R EQUIRES TO BE CANCELLED. 2. FOR THE ABOVE AND OTHER GROUNDS THAT MAY BE URGE D AT THE TIME OF HEARING OF THE APPEAL, YOUR APPELLANT HUMBLY PRAYS THAT THE APPEAL MAY BE ALLOWED AND JUSTICE RENDERED. 4. IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT THE IMPUGNED ORDER PASSED BY CIT(A) IS EX-PARTE QUA THE ASSESSEE. HE ALSO SUBMI TTED THAT THERE WAS DELAY OF 10 DAYS IN FILING THE APPEAL BEFORE CIT(A) BECAUSE THE ASSESSEE WAS NOT HAVING PAN AT THE RELEVANT POINT OF TIME AND FOR TH IS REASON, THERE WAS DELAY IN ITA NO.945/BANG/2018 PAGE 3 OF 4 FILING THE APPEAL AND ULTIMATELY, THE APPEAL WAS FI LED WITHOUT PAN BECAUSE THE ASSESSEE COULD NOT OBTAIN PAN TILL THAT TIME ALTHOU GH THE SAME HAS BEEN OBTAINED LATER ON. REGARDING VIOLATION OF CLAUSE ( B) OF SUB-SECTION (4) OF SECTION 249 OF IT ACT, HE SUBMITTED THAT THIS IS THE CASE O F THE ASSESSEE THAT THE SALE OF PROPERTY IS A AGRICULTURAL PROPERTY AND THEREFORE, THE INCOME IS NOT TAXABLE AND HENCE THE ASSESSEE WAS NOT REQUIRED TO OBTAIN PAN O R PAY ADVANCE TAX AND HENCE, THERE IS NO VIOLATION OF SECTION 249(4)(B). THE LD. DR OF REVENUE SUPPORTED THE ORDER OF CIT(A). 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. FIRST OF ALL, I REPRODUCE PARA 3 FROM THE ORDER OF CIT (A) WHICH IS AS UNDER. 3. THE APPEAL WAS FILED WITH A DELAY OF 10 DAYS AN D NO REASONABLE CAUSE WHICH COULD HAVE PREVENTED THE APPELLANT FROM PREFERRING THE APPEAL WITHIN THE STATUTORY TIME LIMIT WAS STATED B Y THE APPELLANT. THE ADMITTED FACTS PERTAINING TO THE APPELLANT THAT ARE STATED BOTH IN THE IMPUGNED ORDER OF ASSESSMENT AND IN THE STATEMENT O F FACTS SHOW THAT THE APPELLANT FAILED TO FURNISH A VALID PERMANENT A CCOUNT NUMBER AS PER THE STATUTORY REQUIREMENTS OF THE PROVISIONS OF SECTION 139A OF THE INCOME TAX ACT, READ WITH RULE 114 OF THE INCOME TA X RULES, 1962. THUS, THE APPELLANT ADMITTEDLY FAILED TO SATISFY TH E STATUTORY REQUIREMENT OF OBTAINING AND FURNISHING THE PERMANE NT ACCOUNT NUMBER. THE APPELLANT OUGHT TO HAVE OBTAINED A PERM ANENT ACCOUNT NUMBER AS PER LAW AND STATED THAT PERMANENT ACCOUNT NUMBER IN FORM 35 PRESCRIBED UNDER RULE 45 OF THE INCOME TAX RULES, 1962, AS PER THE STATUTORY REQUIREMENTS CONTAINED IN THE PRO VISIONS OF SECTION 249 OF THE INCOME-TAX ACT, 1961. FURTHER, THE APPEL LANT FAILED TO PAY AN AMOUNT EQUIVALENT TO THE AMOUNT OF ADVANCE TAX W HICH WAS PAYABLE BY HIM AS REQUIRED VIDE CLAUSE (B) OF SUB-S ECTION (4) OF SECTION 249 OF THE INCOME-TAX ACT, 1961. AS THE APP ELLANT ADMITTEDLY FAILED TO COMPLY WITH THE AFORESAID STATUTORY REQUI REMENTS, THE APPEALIS FOUND INADMISSIBLE, AS PER LAW. 6. AS PER THIS PARA, IT COMES OUT THAT THIS WAS THE EXPLANATION OF THE ASSESSEE BEFORE CIT(A) REGARDING DELAY OF 10 DAYS IN FILING THE APPEAL BEFORE CIT(A) THAT ASSESSEE WAS NOT HAVING PAN. AS PER THE STATEMENT OF FACTS FILED BEFORE CIT(A) AND AVAILABLE ON RECORD, IT IS SEEN THAT IT IS THE CASE OF THE ASSESSEE THAT ASSESSEE HAS DERIVED INCOME FROM SALE OF AGRICULTUR AL PRODUCTS OVER A PERIOD OF YEARS AND THEREFORE, THE ASSESSEE WAS NOT ASSESSED TO TAX AND FOR THIS REASON, THE ASSESSEE HAS NEITHER OBTAINED PAN NOR FILED THE RETURN OF INCOME AND THERE IS NO PAYMENT OF ADVANCE TAX BY ASSESSEE. AS PER T HE IMPUGNED ASSESSMENT ITA NO.945/BANG/2018 PAGE 4 OF 4 ORDER, IT IS SEEN THAT IT IS STATED BY AO IN THE AS SESSMENT ORDER THAT ASSESSEE WAS NOT ASSESSED TO TAX FOR ANY OF THE EARLIER YEAR S AND INFORMATION WAS RECEIVED ABOUT THE ASSESSEE THAT HE HAS ENTERED INT O DEVELOPMENT AGREEMENT WITH ONE SHRI R. VEERESH S/O. R.S. RAJASHEKAR FOR T HE SALE OF AGRICULTURAL LAND HELD BY HIM FOR A CONSIDERATION OF RS. 8 LAKHS. HE NCE THIS OBSERVATION OF THE AO ALSO SUPPORTS THE ASSESSEE THAT ASSESSEE IS NOT HAVING TAXABLE INCOME AND THEREFORE, IT CANNOT BE SAID THAT ASSESSEE HAS VIOL ATED LAW BY NOT FILING THE RETURN OF INCOME OR NOT OBTAINING THE PAN. CONSIDE RING THE FACTS OF THE PRESENT CASE IN ENTIRETY, I HOLD THAT DELAY OF 10 DAYS IN F ILING THE APPEAL BEFORE CIT(A) SHOULD BE CONDONED AND I CONDONE THE SAME. REGARDI NG ALLEGED VIOLATION OF SECTION 249(4)(B) ALSO, I HOLD THAT IN THE FACTS OF THE PRESENT CASE, ASSESSEE WAS NOT REQUIRED TO MAKE ANY PAYMENT OF ADVANCE TAX AND THEREFORE, SECTION 249 IS NOT APPLICABLE IN THE PRESENT CASE. I SET A SIDE THE ORDER OF CIT(A) AND RESTORE THE MATTER BACK TO HIS FILE FOR FRESH DECIS ION ON MERIT AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO BOTH SIDES. IN VIEW OF THIS, NO DECISION IS CALLED FOR REGARDING THE MERIT OF THE CASE AT TH E PRESENT STAGE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 04 TH MAY, 2018. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.