BHARTU ESTATES (PRIVATE) LIMITED, MUMBAI V. INCOME TAX OFFICER 6(1)(2), MUMBAI

ITA 971/MUM/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4083 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 20-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Deemed to accrue or arise in india; Non passing of speaking order
• Section: 271(1)(c); 274; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUM BAI BEFORE SHRI SHAMIM YAHYA, AM AND SHRI RAM LAL NEGI, JM ITA NO.971/MUM/2018 (ASSESSMENT YEAR: 2008-09) M/S. BHARTU ESTATES ( PRIVATE) LIMITED 764E, UMRIGAR BUILDING DADAR, MUMBAI-400 014 VS. INCOME TAX OFFICER - 6(1)(2) ROOM NO.563, 5 TH FLOOR AAYKAR BHAVAN, M.K.ROAD MUMBAI-400 020 PAN/GIR NO. AAACB3474G ( APPELLANT ) : ( RESPONDENT ) APPELLANT BY : NONE RESPONDENT BY : SHRI.RITESH MISHRA DATE OF HEARING : 11.03.2019 DATE OF PRONOUNCEMENT : 11 .03.2019 O R D E R PER SHAMIM YAHYA, A. M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX -12, MUMBAI (LD .CIT FOR SHORT) DATED 24.10.2017 AND PERTAINS TO THE ASSESSMENT YEAR (A.Y .) 2008-09. 2. THE GROUNDS OF APPEAL READ AS UNDER: 1. 'THE MOST IMPORTANT GROUND OF APPEAL TO BE DECI DED BY YOUR LORDSHIPS ON THE BASIS OF RECORD AVAILABLE WITH THE ASSESSING OFFICER IS AS FOLLOWS: RS. 7.50 LAKHS ADDED BY THE ASSESSING OFFICER TO TH E INCOME RETURNED IS IN FACT AND IN REALITY THE INCOME OF PREVIOUS YEAR END ED 31.03.2009 A.Y. 2009- 10. THE ABOVE FACT WAS BROUGHT TO THE NOTICE OF THE ASS ESSING OFFICER AS WELL AS THE APPELLATE AUTHORITIES. 2. THE APPELLATE ORDER UNDER APPEAL IS PASSED WITHO UT TAKING INTO CONSIDERATION A SINGLE SUBMISSION PLACED ON RECORD WITH THE APPELLATE AUTHORITY DURING PENAL PROCEEDINGS U/S. 271(1)(C). 2 ITA NO. 971/MUM/2018 BHARTU ESTATES (P.) LTD. THE ORDER IS THUS A NON SPEAKING ORDER BASED PREJ UDICIAL AND ABOVE ALL MOST IMPORTANTLY DEFEATS THE PRINCIPLES OF NATURAL JUSTICE. 3. RS. 7.50 LAKHS SO ADDED IS NOT INCOME IN THE TRU E SENSE OF THE TERM. IT IS NOT INCOME WITHIN THE AMBIT AND PURVIEW OF SECTI ON 2(24) OF THE I.T. ACT.1961 IT IS DEEMED INCOME BROUGHT TO TAX BY FR ICTION OF LAW NAMELY U/S. 68 OF THE I.T.ACT. 1961. 4. THE CIT(A), BASED ON SEVERAL DECISIONS FAILED TO APPRECIATE IN DETAIL THE FACTS THE NOTICE ISSUED U/S. 274 R.W.S. 271(1)( C) IS VAGUE AND AMBIGUOUS, NOT IN CONFORMITY WITH THE LAW AND LAID DOWN BY VAR IOUS JUDICIAL DECISIONS. THE APPELLANT RESERVES THE RIGHT TO ADD ALTER AMEND THE ABOVE GROUNDS OF APPEAL ON OR BEFORE THE DATE OF HEARING OF THE APPE AL. 3. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIV E. NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE NOTICE. HENCE WE ARE DECIDING THE APPEAL BY HEARING THE LD. DR AND PERUSING THE RECORDS. IN THIS CASE WE NOTE THAT PENALTY UNDER SECTION 271(1)(C) OF RS. 3,00,000/- H AS BEEN LEVIED FOR ADDITION OF UNDISCLOSED INCOME UNDER SECTION 68 AMO UNTING TO RS. 10,00,000/-. 4. THE ASSESSEE HAS CONTENDED BEFORE THE LEARNED CI T THAT IN THE PENALTY NOTICE NECESSARY LIMB FOR SPECIFYING THE CH ARGE AGAINST THE ASSESSEE WAS NOT IDENTIFIED/STRUCK OFF. 5. THE LEARNED CIT HAS DISTINGUISHED THE DECISION O F KARNATAKA HIGH COURT IN CASE OF MAJUNATHA COTTON AND GINNING FACTO RY RELIED BY THE ASSESSEE ON THE PLEA THAT THE CHARGE WAS SPECIFIED IN THE ASSESSMENT ORDER. WE FIND THAT LEARNED CIT HAS CLEARLY MISDIRE CTED HIMSELF. THE DECISION WHICH HE IS SEEKING TO DISTINGUISH WAS WIT H REFERENCE TO THE STRIKING OF THE RELEVANT LIMB IN THE NOTICE AND NOT WITH REFERENCE TO THE 3 ITA NO. 971/MUM/2018 BHARTU ESTATES (P.) LTD. OBSERVATIONS IN THE ASSESSMENT ORDER. IN THIS VIEW OF THE MATTER WE ARE OF THE OPINION THAT THE ISSUE NEEDS TO BE REMITTED TO THE FILE OF LEARNED CIT. THE LEARNED CIT IS TO CONSIDER THE ASSESSEES SUBMI SSION AFTER FIRST FACTUALLY EXAMINING THE VERACITY OF ASSESSEE'S CLAI M. NEEDLESS TO ADD THE LEARNED CIT SHALL TAKE INTO ACCOUNT THE LATEST JUDG EMENT OF HIGHER COURTS AVAILABLE ON THE ISSUE. 6. AS REGARDS THE MERITS OF ADDITION ON WHICH PENAL TY HAS BEEN LEVIED, THE ASSESSEE HAS SUBMITTED BEFORE THE LEARNED CIT T HAT THE IMPUGNED AMOUNT WAS OFFERED AS SALES OF THE SUBSEQUENT YEARS . HENCE IT WAS PLEADED THAT IT WILL BE DOUBLE PREJUDICE TO THE ASSESSEE. L EARNED CIT DESPITE AGREEING THAT PENALTY PROCEEDINGS ARE DIFFERENT FRO M ASSESSMENT PROCEEDINGS DID NOT EXAMINE THIS ISSUE BY OBSERVING THAT ASSESSEE HAS NOT LED EVIDENCE BEFORE THE ASSESSING OFFICER IN THIS R EGARD. 7. IN OUR CONSIDERED OPINION, THE INTEREST OF JUST ICE WILL BE SERVED IF THE ISSUE IS REMITTED TO THE FILE OF LD. CIT. LEARNED C LT IS DIRECTED TO CONSIDER THE ISSUE AFRESH AND PASS A SPEAKING ORDER ON THE I SSUES RAISED BY THE ASSESSEE BEFORE HIM. NEEDLESS TO ADD THE ASSESSEE S HOULD BE GRANTED ADEQUATE ACQUAINTS OF BEING HEARD. 8. IN THE RESULT, APPEAL BY THE ASSESSEE STANDS ALL OWED FOR STATISTICAL PURPOSES ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH MARCH, 2019. 4 ITA NO. 971/MUM/2018 BHARTU ESTATES (P.) LTD. SD/- SD/- (RAM LAL NEGI) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED :11.03.2019 THIRUMALESH , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT - CONCERNED 5. DR, ITAT, MUMBAI 6. GUARD FILE BY ORDER, (DY./ASSTT. REGISTRAR) ITAT, MUMBAI