Shanmugam Ramamoorthy, CHENNAI V. ITO Non Corporate Ward 23(2), CHENNAI

ITA 958/CHNY/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7356 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 20-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: E PAVUNA SUNDARI
• Assessee Lawyers: SUSHMA HARINI
• Keywords: Reopening of assessment
• Section: 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , . !' , $ % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.958/CHNY/2018 ' (' / ASSESSMENT YEAR : 2011-12 SHRI SHANMUGAM RAMAMOORTHY, NO.2, SARATHY STREET, PALLAVARAM, CHENNAI - 600 043. PAN : AAAPR 2796 J V. THE INCOME TAX OFFICER, NON CORPORATE WARD - 23(2), TAMBARAM, CHENNAI - 600 045. (*+/ APPELLANT) (,-*+/ RESPONDENT) *+ . / / APPELLANT BY : MS. SUSHMA HARINI, ADVOCATE ,-*+ . / / RESPONDENT BY : SMT. E. PAVUNA SUNDARI, JCIT 0 . 1$ / DATE OF HEARING : 28.06.2018 2!( . 1$ / DATE OF PRONOUNCEMENT : 17.07.2018 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -10, CHENN AI, DATED 27.12.2017 AND PERTAINS TO ASSESSMENT YEAR 2011-12. 2. MS. SUSHMA HARINI, THE LD.COUNSEL FOR THE ASSESS EE, SUBMITTED THAT THE ASSESSEE WAS RUNNING A DEPARTMEN TAL STORE IN 2 I.T.A. NO.958/CHNY/18 THE NAME OF SRI KUMARAN SUPER MARKET AT DOOR NO.70/ A/1, NEW DOOR NO.8/70-A1, SRINIVASA PERUMAL KOIL STREET, CAN TONMENT, PALLAVARAM. ACCORDING TO THE LD. COUNSEL, THE ASSE SSEE ENTERED INTO AN AGREEMENT WITH SMT. P. TAMILSELVI ON 14.10. 2010 TO SELL THE ENTIRE BUILDING WITH STOCK. THE ASSESSEE ADMITTED THE TRANSACTION IN THE RETURN OF INCOME. AS PER THE AGREEMENT DATED 1 4.10.2010, ACCORDING TO THE LD. COUNSEL, THE POSSESSION OF THE PROPERTY WAS NOT GIVEN. THEREFORE, THE CAPITAL GAIN WAS OFFERED FOR THE ASSESSMENT YEAR 2012-13. ACCORDING TO THE LD. COUNSEL, THE AS SESSING OFFICER, IN FACT, ACCEPTED THE CAPITAL GAIN OFFERED AND TAXE D ACCORDINGLY. SUBSEQUENTLY, THE ASSESSING OFFICER REOPENED THE AS SESSMENT BY ISSUING NOTICE UNDER SECTION 148 OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') ON 17.08.2015. ACCORDING TO THE L D. COUNSEL, THE ASSESSING OFFICER OBTAINED A LETTER FROM THE ASSESS EE SAYING THAT HE WOULD NOT PREFER ANY APPEAL AGAINST THE ORDER OF AS SESSMENT FOR ASSESSMENT YEAR 2012-13 WHEN THE CAPITAL GAIN WAS S UBJECTED TO TAX. HAVING OBTAINED A LETTER FROM THE ASSESSEE TH AT HE WILL NOT GO ON APPEAL FOR ASSESSMENT YEAR 2012-13, ACCORDING TO THE LD. COUNSEL, THE ASSESSING OFFICER IS NOT JUSTIFIED IN REOPENING THE ASSESSMENT FOR ASSESSMENT YEAR 2011-12. THE CIT(AP PEALS) IN TURN FOUND THAT THE TRANSFER TOOK PLACE DURING THE YEAR UNDER 3 I.T.A. NO.958/CHNY/18 CONSIDERATION. ACCORDING TO THE LD. COUNSEL, THERE WAS TRANSFER OF PROPERTY DURING THE YEAR UNDER CONSIDERATION AND TH E ACTUAL TRANSFER WAS ONLY DURING THE ASSESSMENT YEAR 2012-13. THER EFORE, ACCORDING TO THE LD. COUNSEL, THE CIT(APPEALS) IS N OT JUSTIFIED IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER. 3. WE HEARD SMT. E. PAVUNA SUNDARI, THE LD. DEPARTM ENTAL REPRESENTATIVE ALSO. THE ONLY ISSUE ARISES FOR CON SIDERATION IS ASSESSMENT OF CAPITAL GAIN. THE REVENUE CLAIMS THA T THE PROPERTY WAS TRANSFERRED DURING THE ASSESSMENT YEAR 2011-12. HOWEVER, THE ASSESSEE CLAIMS THAT THE PROPERTY WAS TRANSFERRED D URING THE ASSESSMENT YEAR 2012-13. IT IS NOT IN DISPUTE THAT THE ASSESSEE FILED A LETTER BEFORE THE ASSESSING OFFICER SAYING THAT HE WILL NOT APPEAL FOR THE ASSESSMENT YEAR 2012-13 WHEREIN THE CAPITAL GAIN WAS OFFERED TO TAX. ON A QUERY FROM THE BENCH HOW THE ASSESSING OFFICER COULD GET SUCH A KIND OF LETTER PREVENTING THE ASSESSEE TO EXERCISE HIS STATUTORY RIGHT CONFIRMED UNDER INCOME -TAX ACT? THE LD. D.R. AND THE ASSESSING OFFICER, WHO WAS ALSO PR ESENT IN THE COURT, CLARIFIED THAT THE ASSESSEE VOLUNTARILY FILE D THE LETTER SAYING THAT HE WILL NOT TAKE UP THE MATTER ON APPEAL FOR A SSESSMENT YEAR 2012-13. 4 I.T.A. NO.958/CHNY/18 4. THIS TRIBUNAL HAS A DOUBT IN THE CLARIFICATION M ADE BY THE ASSESSING OFFICER. THERE MAY NOT BE ANY NECESSITY FOR THE ASSESSEE TO FILE SUCH A KIND OF LETTER BEFORE THE A SSESSING OFFICER. WHY SHOULD AN ASSESSEE FILE A LETTER BEFORE THE ASS ESSING OFFICER THAT HE WILL NOT TAKE UP THE MATTER ON APPEAL FOR T HE ASSESSMENT YEAR 2012-13 UNLESS IT WAS INSISTED SO BY AN OFFICE R OF THE DEPARTMENT. THIS TRIBUNAL IS OF THE CONSIDERED OPI NION THAT EVERY CITIZEN OF THIS COUNTRY HAS A RIGHT TO TAKE UP THE MATTER ON APPEAL OR OTHERWISE AS PER THE STATUTORY PROVISIONS ENACTED B Y THE PARLIAMENT. THEREFORE, OBTAINING A LETTER FROM ANY CITIZEN THAT HE WILL NOT GO ON APPEAL IS CONTRARY TO THE MANDATE OF THE INCOME-TAX ACT. WE ARE CONFIDENT THAT THIS KIND OF PRACTICE MAY NOT CONTIN UE IN FUTURE. BE THAT AS IT MAY, SINCE THE CAPITAL GAIN WAS ALREADY OFFERED FOR TAXATION FOR THE ASSESSMENT YEAR 2012-13 AND THE ASSESSING O FFICER ALSO ACCEPTED THE SAME, LETTER WAS ALSO OBTAINED FROM TH E ASSESSEE THAT HE WILL NOT TAKE UP THE MATTER ON APPEAL, THIS TRIB UNAL IS OF THE CONSIDERED OPINION THAT REOPENING OF ASSESSMENT FOR ASSESSMENT YEAR 2011-12 IS NOT CORRECT. IN THOSE CIRCUMSTANCE S, WE ARE UNABLE TO UPHOLD THE ORDERS OF THE LOWER AUTHORITIES. ACC ORDINGLY, BOTH THE 5 I.T.A. NO.958/CHNY/18 ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND T HE ADDITION MADE BY THE ASSESSING OFFICER FOR ASSESSMENT YEAR 2011-1 2 IS DELETED. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 17 TH JULY, 2018 AT CHENNAI. SD/- SD/- (. !' ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 17 TH JULY, 2018. KRI. . ,156 76(1 /COPY TO: 1. *+ /APPELLANT 2. ,-*+ /RESPONDENT 3. 0 81 () /CIT(A)-10, CHENNAI-34 4. PRINCIPAL CIT-7, CHENNAI. 5. 69 ,1 /DR 6. :' ; /GF.