Mr.Zamir Mirza , Bangalore V. Deputy Commissioner of Income Tax Circle-1(1), Bangalore

ITA 98/BANG/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7581 (ITAT-BANGALORE)
• Duration Of Justice: 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 1996-1997
• Appeal Filed On: 16-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PADMA MEENAKSHI
• Assessee Lawyers: K Y NINGOJI RAO
• Keywords: Rectification of order; Opportunity of being heard; Question of law; Wrong claim; Condonation of delay
• Section: 143(3); 54F; 260A; 154; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH 'B' BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI JASON P BOAZ, ACCOUNTANT MEMBER ITA NO.98/BANG/2017 (ASST. YEAR 1996-97) SHRI ZAMIR MIRZA, FLAT NO.4A, IV FLOOR, MAYFAIR APARTMENTS NO.31, BERLIE STREET, LANGFORD TOWN, BENGALURU. . APPELLANT PAN ACAPM2850L. VS. THE DY. COMMISSIONER OF INCOME-TAX CIRCLE-1(1), BENGALURU. . RESPONDENT APPELLANT BY : SHRI K.Y N INGOJI RAO, C.A RESPONDENT BY : SMT. PADMAME ENAKSHI, JCIT DATE OF HEARING : 26-09-2017 DATE OF PRONOUNCEMENT : -10-2017 O R D E R PER SHRI JASON P BOAZ, ACCOUNTANT MEMBER: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) -7, BAN GALORE DATED 2/9/2016 FOR ASST. YEAR 1996-97 FOR UPHOLDING THE ORDER OF ITA NO. 98/B/17 2 ASSESSMENT PASSED U/S 143(3) R.W.S 260A OF THE INCO ME-TAX ACT, 1961 (IN SHORT THE ACT) DATED 27/3/2014. PETITION FOR CONDONATION OF DELAY IN FILING APPEAL FOR ASST. YEAR 1996-97 BEFORE THE TRIBUNAL 2.1 ALONG WITH THE APPEAL MEMO IN FORM NO.36, THE A SSESSEE HAS FILED A PETITION SEEKING CONDONATION OF DELAY OF 57 DAYS IN FILING THIS APPEAL BEFORE THE TRIBUNAL, ACCOMPANIED BY AN AFFID AVIT DATED 13/1/2017 SWORN TO BY THE ASSESSEE. IN THIS AFFIDA VIT, THE ASSESSEE HAS PUT FORTH THE FOLLOWING REASONS FOR DELAY OF 57 DAYS IN FILING THIS APPEAL FOR ASST. YEAR 1996-97. 2. THAT THE SAID APPEAL IS BEING FILED BY ME OUT O F THE DATE SPECIFIED U/S 253(3) OF THE INCOME TAX ACT, 19 61 AND I HAVE THIS DAY MADE AN APPLICATION U/S 253 (5) OF THE ACT SEEKING CONDONATION OF DELAY CAUSED; 3. THAT THE DELAY IN FILING THE SAID APPEAL IS DUE TO THE FOLLOWING REASONS: A. THE SAID ASSESSMENT WAS CHALLENGED ON APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEAL) 7, BENGALURU WHO BY HIS ORDER DATED 2.9.2016 IN ITA NO.298/CIT(A)-7/BR/2014-15, DISMISSED THE APPELLANT'S APPEAL ON GROUND THAT AS AGAINST THE APPELLANT'S RIGHT TO GET DEDUCTION OF RS.74,80,000/ - U/S 54 THE AD HAS ACCEPTED THE AMOUNT OF EXEMPTION TO THE EXTENT OF RS.77,50,000/- WITH A ITA NO. 98/B/17 3 FINDING OF FACT THAT THE SAME IS THE EXEMPTION SOUGHT IN THE RETURN OF INCOME FILED BY THE APPELLANT; B. THE SAID FINDING OF FACT AND THE SAID APPELLATE ORDER BEING ERRONEOUS, THE APPELLANT ON BEING ADVISED, SOUGHT RECTIFICATION OF MISTAKE U/S 154(2)(B) OF THE ACT VIDE HIS APPLICATION FILED ON 7.11.2016 BEFORE THE FIRST APPELLATE AUTHORITY WITH THE BELIEF AND HOPE THAT THE FIRST APPELLATE AUTHORITY WILL GRANT THE SOUGHT RELIEF AT THE EARLIEST. THOUGH THE APPELLANT MADE REPEATED REQUESTS, FIRST APPELLATE AUTHORITY HAS SO FAR NOT DISPOSED OFF THE SAID APPLICATION FOR RECTIFICATION ; C. IT IS UNDER THESE CIRCUMSTANCES THE APPELLANT COULD NOT FILE THE ACCOMPANYING APPEAL BEFORE THE HON'BLE APPELLATE TRIBUNAL WITHIN THE TIME SPECIFIED IN SECTION 253 (3) OF THE INCOME TAX ACT, 1961, WHICH ACCORDING TO THE APPELLANT OUGHT TO HAVE BEEN FILED ON OR BEFORE 27TH DAY OF NOVEMBER, 2016. THUS A DELAY OF ABOUT 57 DAYS IS CAUSED. D. THEREFORE THE APPELLANT PRAYS THAT THE HON'BLE APPELLATE TRIBUNAL MAY, PLEASE, CONDONE THE DELAY CAUSED TILL THE DAY OF FILING THE SAID APPEAL AND T O ADMIT THE SAID APPEAL UNDER SECTION 253(5) OF THE INCOME TAX ACT, 1961. ITA NO. 98/B/17 4 4. THE FACTS CONTAINED IN THE ACCOMPANYING APPLICAT ION MADE U/S 253 (5) OF THE INCOME TAX ACT, 1961 ARE TR UE AND CORRECT TO THE BEST OF MY KNOWLEDGE AND BELIEF. 2.2 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD. TAKING INTO ACC OUNT THE FACTS AND CIRCUMSTANCES OF THE CASE, THE REASONS CITED IN THE AFFIDAVIT FOR THE DELAY IN FILING THE APPEAL AND RESPECTFULLY FOLLOWI NG THE PRINCIPLES LAID DOWN BY THE HONBLE APEX COURT IN THE CASE OF MST KATIJI & OTHERS (167 ITR 467) (SC) FOR CONSIDERING MATTERS O F CONDONATION OF DELAY, WE ARE OF THE OPINION THAT THIS IS A FIT CAS E FOR CONDONATION OF 57 DAYS IN FILING THIS APPEAL BEFORE THE TRIBUNAL A ND DO SO. CONSEQUENTLY, THIS APPEAL IS ADMITTED FOR ADJUDICAT ION. 3. BRIEFLY STATED, THE FACTS OF THE CASE RELEVANT T O THIS APPEAL ARE AS UNDER:- 3.1 THE ASSESSEE HAD SOLD A PROPERTY NO:1/13, ALBER T STREET, RICHMOND TOWN, BANGALORE FOR A CONSIDERATION OF RS. 2,11,62,500/- VIDE SALE DEED DATED 11/9/1995 AND CLAIMED EXEMPTIO N OF RS.77,50,000/- U/S 54F OF THE ACT ON THE GROUND THA T AN AMOUNT OF RS.57,50,000/- WAS DEPOSITED IN THE SPECIFIED CAPIT AL GAINS SCHEME AND RS.20 LAKHS WAS PAID AS ADVANCE TO ONE SHRI SUR AT PRASAD FOR PURCHASE OF A RESIDENTIAL HOUSE AS PER AGREEMENT DA TED 2/8/1995. THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT VIDE ORDER DATED 30/8/1996, WHEREIN THE AO ACCEPTED THE INCOME AS RE TURNED BY THE ASSESSEE. SUBSEQUENTLY, BY AN ORDER U/S 154 OF THE ACT DATED 30/3/2001, THE AO WITHDREW THE EXEMPTION GRANTED TO THE ASSESSEE ITA NO. 98/B/17 5 U/S 54F OF THE ACT TO THE EXTENT OF RS.20 LAKHS ADV ANCED TO SHRI SURAT PRASAD AS THE AGREEMENT WAS RESCINDED AND THE ASSES SEE PURCHASED ANOTHER PROPERTY USING THE VERY SAME AMOUNT. THE A SSESSEE FILED AN APPEAL CHALLENGING THE AOS RECTIFICATION ORDER U/S 154 OF THE ACT DATED 30/3/3001, WHICH WAS DISMISSED BY THE LD CIT( A). ON FURTHER APPEAL BY THE ASSESSEE, THE CO-ORDINATE BENCH OF IT AT, BANGALORE BENCH VIDE ORDER IN ITA NO.22/BANG/2004 DATED 7/1/2 006 ALLOWING THE ASSESSEE PARTIAL RELIEF OF RS.6,67,493/- AFTER ACCEPTING THE CALCULATION OF PROPORTIONATE AMOUNT WHICH BEARS THE SAME RATIO AS THE COST OF NEW ASSET BEARS TO THE NET CONSIDERATION AS PER SECTION 54F OF THE ACT. THE ASSESSEE FILED AN M.P NO.48/BANG/2006 IN RESPECT OF THE AFORESAID ORDER OF THE TRIBUNAL (SUPRA), WHICH WAS DISPOSED VIDE ORDER DATED 2/5/2006. IN ITS ORDER IN THE M.P NO.4 8/BANG/2006, THE TRIBUNAL DISMISSED THE MISCELLANEOUS PETITION AND T HEREBY REJECTED THE ASSESSEES CLAIM FOR EXEMPTION U/S 54 INSTEAD OF SEC. 54F OF THE ACT ON THE GROUND THAT IT WAS THE ASSESSEE HIMSELF WHO CLAIMED EXEMPTION U/S 54F OF THE ACT, WHICH WAS ACCEPTED BY THE AO AND NOT CHALLENGED BY THE ASSESSEE IN THE APPEAL FILED AGAI NST THE SAID ORDER OF ASSESSMENT. 3.2 AGGRIEVED BY THE ORDERS OF THE TRIBUNAL FOR ASS T. YEAR 1996-97 DATED 7/1/2006 AND 2/5/2006, THE ASSESSEE WENT UP I N FURTHER APPEAL BEFORE THE HONBLE KARNATAKA HIGH COURT. THE HONB LE HIGH COURT IN ITS ORDER IN ITA NO.1090/2006 DATED 7/8/2012, RE MANDED THE MATTER OF THE ASSESSEES CLAIM FOR EXEMPTION U/S 54 OF THE ACT TO THE FILE OF THE AO FOR FRESH CONSIDERATION. THE OPERAT IVE PORTION OF THE HONBLE HIGH COURTS DECISION FROM THE FRAMING OF TH E SUBSTANTIAL ITA NO. 98/B/17 6 QUESTION OF LAW TO THE DIRECTIONS ISSUED TO THE AO IN RESPECT OF CONSIDERATION OF THE ASSESSEES CLAIM FOR EXEMPTION U/S 54 OF THE ACT AT PARAS 4 TO 8 THEREOF ARE EXTRACTED HEREUNDER:- '4. THE FOLLOWING SUBSTANTIAL QUESTION OF LAW HAS BEEN FORMULATED IN THE MEMORANDUM OF APPEAL AND ON RECONSIDERATION OF THE SUBSTANTIAL QUESTION OF LAW, FOLLOWING SUBSTANTIAL QUESTION OF LAW IS FRAMED FOR CONSIDERATION: 'WHETHER THE AO WHILE PASSING RECTIFICATION U/S 154 SHOULD HAVE TO GIVE BENEFITS TO ASSESSEE AVAILABLE U/S 54, EVEN THOUGH THERE IS NO CLAIM MADE BY THE ASSESSEE TO THAT EFFECT'? 5. LEARNED COUNSEL FOR THE APPELLANT SUBMITS THAT, THE APPELLANT TRIBUNAL HAS COMMITTED A MISTAKE IN DECLARING THAT THE ASSESSEE IS ENTITLED TO BENEFIT U/S 54, BUT WHILE COMPUTING THE BENEFIT HAS FOLLOWED THE SECTION 54F. THUS STATES THAT, IT HAS RESULTED IN WRONG COMPUTATION OF THE BENEFIT U/S 54. 6. THE LEARNED COUNSEL FOR THE APPELLANT FURTHER SUBMITTED THAT, THE AO IN THE COURSE OF RECTIFICATION ORDER ASSUMES THAT THE AMOUNT INVESTED IN THE CAPITAL GAIN ACCOUNT SCHEME, HAS TO BE GIVEN DUE DEDUCTION WHILE COMPUTING THE BENEFIT, WHETHER OR NOT ASSESSEE MAKES AN APPLICATION TO THAT EFFECT AND ALSO WHEN THE ITA NO. 98/B/17 7 ASSESSEE HAS MADE WRONG CALCULATION AND CLAIMS LESSER BENEFITS, IT IS THE DUTY UPON THE AO TO GRAN T BENEFIT ENTITLED TO UNDER LAW. 7. THE LEARNED COUNSEL FOR THE RESPONDENT STRENUOUSLY SUBMITTED THAT, THE FACT THAT WHETHER THE ASSESSEE HAD INVESTED RS.20,00,000/- IN THE CAPITAL GAIN ACCOUNT WITHIN THE PRESCRIBED TIME IS THE FACT TO BE CONSIDERED AND ALSO IT IS FURTHER TO BE FOUND OUT THAT, WHETHER THE ASSESSEE FULFILLS ALL T HE REQUIREMENTS OF SECTION 54 TO CLAIM BENEFITS UNDER THE SAID SECTION, THE SAID ASPECT REQUIRES FURTHER INVESTIGATION OF THE FACTS BY THE AO. 8. KEEPING IN VIEW ALL THE SUBMISSIONS MADE AT THE BAR, THE ORDER OF THE TRIBUNAL IS SET ASIDE. TH E MATTER IS REMANDED TO AO FOR FRESH CONSIDERATION. THE AO SHALL ALSO KEEP IN MIND THE DECISION OF THIS COURT IN FATHIMA BAI VS. INCOME TAX OFFICER REPORTED IN (2009) 32 DTR (KAR) 243 WITH RESPECT OF DEPOSIT OF RS.17,40,000/- IN THE CAPITAL GAIN ACCOUNT SCHEME AS TO WHETHER IT IS WITHIN THE STIPULATED PERIOD, THE AO SHALL CONSIDER THE CLAIM OF THE ASSESSEE FOR DEDUCTIONS U/S 54 AS REQUIRED UNDER LAW. 3.4 SUBSEQUENT TO THE AFORESAID ORDER OF THE HONBL E HIGH COURT OF KARNATAKA, THE AO ONCE AGAIN COMPLETED THE ORDER OF ASSESSMENT FOR ITA NO. 98/B/17 8 ASST. YEAR 1996-97 U/S 143(3) R.W.S 260A OF THE ACT VIDE ORDER DATED 27/3/2014 BY ACCEPTING THE INCOME OF RS.91,18,563/- AS RETURNED BY THE ASSESSEE IN THE RETURN OF INCOME FILED FOR THE YEAR UNDER CONSIDERATION. ON APPEAL, THE CIT(A)-7, BANGALORE DISMISSED THE ASSESSEES APPEAL VIDE THE IMPUGNED ORDER DATED 2/9 /2016 FOR ASST. YEAR 1996-97. 4.0 AGGRIEVED BY THE ORDER OF CIT(A)-7, BANGALORE D ATED 2/9/2016 FOR ASST. YEAR 1996-97, THE ASSESSEE HAS FILED THIS APPEAL WHEREIN IT HAS RAISED THE FOLLOWING GROUNDS:- 1. THE IMPUGNED ORDER OF THE COMMISSIONER OF INCOM E TAX (APPEALS) - 7, BENGALURU AND THAT OF THE ASSESS ING OFFICER ARE LIABLE TO SET ASIDE IN SO FAR AS THEY I NCORRECT, IMPROPER, IRREGULAR, OPPOSED TO FACTS AND CIRCUMSTA NCES OF THE CASE, OPPOSED TO THE LAW AND MADE IN DEFIANC E OF THE ORDER OF THE JURISDICTIONAL HIGH COURT.. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN UPHOLDING THE ACT OF THE ASSESSI NG OFFICER IN DENYING TO GRANT THE EXEMPTION OF RS.74,80,000/- U/S 54 (2) OF THE ACT, ACTING IN DEF IANCE OF THE HON'BLE HIGH COURT OF KARNATAKA. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN UPHOLDING THE IMPUGNED ORDER OF THE ASSESSING OFFICER ON THE MISTAKEN FACT THAT THE ASS ESSING OFFICER HAS ALLOWED THE DEDUCTION OF RS.77,50,000/- U/S ITA NO. 98/B/17 9 54 OF THE ACT AS CLAIMED BY THE APPELLANT IN HIS RE TURN OF INCOME ON 30.8.1996. 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DISMISSING THE APPELLANT'S APPEA L CHALLENGING THE IMPUGNED ORDER OF THE ASSESSING OFF ICER WHO FAILED TO GRANT THE EXEMPTION OF RS.74,80,000/- U/S 54 (2) OF THE ACT ACTING IN DEFIANCE OF THE HON'BLE HIGH COURT OF KARNATAKA. 5. THE LEARNED CIT (APPEALS) ERRED IN DISMISSING TH E APPELLANT'S APPEAL CHALLENGING THE IMPUGNED ORDER O F THE ASSESSING OFFICER WITH COMPLETE DISREGARD TO THE FA CTS OF THE CASE, APPLICABLE LAW AND TO THE BINDING DECISIO N OF JURISDICTIONAL HON'BLE HIGH COURT OF KARNATAKA. 5.0 GROUNDS 1 AND 5 5.1 IN THESE GROUNDS (SUPRA), THE ASSESSEE CHALLENG ES THE ORDERS OF THE AUTHORITIES BELOW, I.E, AO/CIT(A) AS BEING INCO RRECT, IMPROPER, IRREGULAR, OPPOSED TO THE FACTS AND CIRCUMSTANCES O F THE CASE AND MADE IN DEFIANCE TO THE ORDER OF THE HONBLE KARNAT AKA HIGH COURT. IT IS FURTHER CONTENDED THAT THE LD CIT(A) ERRED IN UPHOLDING THE IMPUGNED ORDER OF THE AO IN COMPLETE DISREGARD TO T HE DIRECTIONS ISSUED IN THE BINDING DECISION OF THE HONBLE HIGH COURT OF KARNATAKA. 5.2.1 WE HAVE HEARD THE RIVAL CONTENTIONS OF THE LD AR FOR THE ASSESSEE AND THE LD DR FOR REVENUE AND CAREFULLY PE RUSED THE DIRECTIONS ISSUED BY THE HONBLE HIGH COURT OF KARN ATAKA IN ITS ORDER ITA NO. 98/B/17 10 IN ITA NO.1090/2006 IN THE ASSESSEES CASE FOR ASST . YEAR 1996-97 (EXTRACTED SUPRA AT 3.3 OF THIS ORDER) WHILE REMAND ING THE ASSESSEES CLAIM FOR EXEMPTION U/S 54 OF THE ACT TO THE FILE O F THE AO FOR FRESH CONSIDERATION. IN THIS REGARD, WE HAVE ALSO CAREFU LLY PERUSED THE ORDER OF ASSESSMENT FOR ASST. YEAR 1996-97 PASSED U /S 143(3) R.W.S 260A OF THE ACT VIDE ORDER DATED 27/3/2014 AND THE IMPUGNED ORDER OF THE LD CIT(A) DATED 2/9/2016. 5.2.2 THE ORDER OF ASSESSMENT PASSED BY THE AO U/S 143(3) R.W.S 260A OF THE ACT VIDE ORDER DATED 27/3/2014 RE ADS AS UNDER:- ASSESSMENT ORDER THE ASSESSEE HAS FILED THE RETURN OF INCOME FOR THE A.Y. 1996-97 ON 30.08.1996 DECLARING AN INCOME OF R S. 91,18,5681-. THE RETURN WAS PROCESSED U/S 143(1) OF INCOME TAX ACT, 1961. THE SCRUTINY ASSESSMENT U/S. 143(3) WAS COMPLETED ON 17.02.1999 BY ACCEPTING THE RETURN OF INCOME FILED. SUBSEQUENTLY, IT WAS NOTICED THAT THE ASSESSEE HAS MODE A WRONG CLAIM OF RS. 20,00,0001- U/S. 54(2) OF THE I. T. ACT. ACCORDINGLY, A NOTICE U/S 154 WAS ISSUED ON 14 .08.2000 AND THE ORDER U/S. 143(3) WAS MODIFIED ON 30.03.200 1 BY ADDING THE WRONG CLAIM MADE BY THE ASSESSEE. AGGRIEVED BY THE ORDER PASSED U/S 154, ASSESSEE FIL ED AN APPEAL BEFORE CIT(A). THE CIT(A) HAS DISMISSED T HE ASSESSEE'S APPEAL. FURTHER TO THIS, THE ASSESSEE PR EFERRED AN APPEAL BEFORE ITAT, WHERE THE ITAT HAS PARTIALLY AL LOWED THE APPEAL. AGGRIEVED BY THE DECISION OF THE ITAT, THE ASSESSEE ITA NO. 98/B/17 11 PREFERRED AN APPEAL BEFORE THE HIGH COURT, WHO IN T URN ALLOWED THE ASSESSEE 'S APPEAL AND REMANDED THE MAT TER BACK TO THE ASSESSING OFFICER FOR FRESH CONSIDERATION OF ALLOWING DEDUCTION OF U/S. 54 INSTEAD OF 54F CLAIMED BY THE ASSESSEE. AS PER THE DIRECTIONS OF THE HIGH COURT, RE-ASSESSM ENT PROCEEDINGS WERE INITIATED BY ISSUE OF NOTICE TO TH E ASSESSEE. THE CASE HAS BEEN HEARD ON DIFFERENT DATES, THE ASS ESSEE HAS FURNISHED THE DETAILS AS CALLED FOR DURING THE COU RSE OF HEARINGS. AFTER EXAMINING THE DETAILS FURNISHED, AN D DISCUSSING THE CASE WITH THE AR, THE ASSESSMENT IS COMPLETED B Y ACCEPTING THE ORIGINAL RETURN FILED BY THE OSSESSEE. ACCORDIN GLY, THE ASSESSMENT IS COMPLETED AS UNDER: ITA NO. 98/B/17 12 5.2.3 IN OUR CONSIDERED VIEW, A PERUSAL OF THE ORDE R OF ASSESSMENT DATED 27/3/2014 FOR ASST. YEAR 1996-97, AS EXTRACTED ABOVE, CLEARLY ESTABLISHES THE ASSESSEES AVERMENT THAT THE AO HAS PASSED THIS ORDER BRAZENLY, IGNORING THE BINDING DE CISION OF THE HONBLE KARNATAKA HIGH COURT FOR FRESH CONSIDERATIO N OF THE ASSESSEES CLAIM FOR EXEMPTION U/S 54 INSTEAD OF U/ S 54F OF THE ACT AS ORIGINALLY CLAIMED. WE FIND THAT THERE IS NOT EVEN A WHISPER IN THE ORDER OF ASSESSMENT TO SHOW THAT THE AO COMPLIED WI TH THE BINDING DECISION OF THE HONBLE HIGH COURT OF KARNATAKA IN CONSIDERING THE ASSESSEES CLAIM U/S 54 OF THE ACT AND ADJUDICATING THEREON IN THE LIGHT OF THE HONBLE COURTS OBSERVATIONS/DIRECTIONS IN THIS REGARD. THE LD CIT(A)S FINDING IN THE IMPUGNED ORDER TO TH E CONTRARY; THAT THE AO HAS COMPLIED WITH THE DIRECTIONS OF THE HON BLE HIGH COURT (SUPRA) IN CONSIDERING THE ASSESSEES CLAIM FOR EXE MPTION U/S 54 OF THE ACT; IS, IN OUR VIEW, NOT BORNE OUT FROM A PLAI N READING OF THE ORDER OF ASSESSMENT DATED 27/3/2014 FOR ASST. YEAR 1996-97 (EXTRACTED SUPRA) AND APPEARS TO BE MORE A FIGMENT OF HIS IMAG INATION BASED ON NONEXISTENT ASSUMPTIONS. IN THIS VIEW OF THE MATTE R, WE ARE OF THE CONSIDERED OPINION THAT THE ORDER OF ASSESSMENT FOR ASST. YEAR 2006- 07 PASSED BY THE AO U/S 143(3) R.W.S 260A OF THE AC T DATED 27/3/2014 IS TO BE SET ASIDE, AS EVIDENTLY THE AO H AS NOT FOLLOWED THE HONBLE HIGH COURTS DIRECTIONS FOR CONSIDERATION OF THE ASSESSEES CLAIM FOR EXEMPTION U/S 54 OF THE ACT IN ACCORDANCE WITH LAW AND THE HONBLE COURTS OBSERVATIONS IN THIS REGARD. WE ACC ORDINGLY SET ASIDE THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW I.E OF THE AO/CIT(A), AND REMAND THE ISSUE OF CONSIDERATION OF THE ASSESS EES CLAIM FOR ITA NO. 98/B/17 13 EXEMPTION US/ 54 OF THE ACT TO THE FILE OF THE AO F OR FRESH CONSIDERATION AND TO PASS A REASONED, SPEAKING ORD ER THEREON IN ACCORDANCE WITH THE DIRECTIONS OF THE HONBLE KARNA TAKA HIGH COURT IN ITS ORDER IN ITA NO.1090/2006 DATED 7/8/2012 (EX TRACTED SUPRA AT PARA 3.3 OF THIS ORDER) AFTER AFFORDING THE ASSESSE E ADEQUATE OPPORTUNITY OF BEING HEARD IN THE MATTER AND TO FIL E DETAILS/SUBMISSIONS IN THIS REGARD. WE HOLD AND DI RECT ACCORDINGLY. CONSEQUENTLY, THE ASSESSEES GROUNDS AT S.NOS.1 AND 5 ARE ALLOWED FOR STATISTICAL PURPOSES. 6. GROUNDS 2 TO 4 ON MERITS 6.1 SINCE WE HAVE SET ASIDE THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW FOR ASST. YEAR 1996-97 AND REMANDED THE MATTE R OF THE ASSESSEES CLAIM TO EXEMPTION U/S 54 OF THE ACT TO THE FILE OF THE AO FOR FRESH CONSIDERATION IN ACCORDANCE WITH THE DIRE CTIONS OF THE HONBLE HIGH COURT OF KARNATAKA IN ITS ORDER IN ITA NO.1090/2006 DATED 7/8/2012 (SUPRA) WE DEEM THAT IT IS NOT APPR OPRIATE FOR US TO EXAMINE AND ADJUDICATE THESE GROUNDS NO.2 TO 4 RAIS ED ON THE MERITS OF THE ISSUE WHICH WILL NOW BE UNDER FRESH CONSIDER ATION BEFORE THE AO. 7. IN THE RESULT, THE ASSESSEES APPEAL FOR ASST. YEAR 1996-97 IS ALLOWED FOR STATISTICAL PURPOSES AS INDICATED ABOVE . ORDER PRONOUNCED IN THE OPEN COURT ON OCTOBER, 2017 . SD/- SD/- (SUNIL KUMAR YADAV) (JASON P BOA Z) JUDICIAL MEMBER ACCOUNTANT MEMB ER BANGALORE DATED : /10/2017 VMS ITA NO. 98/B/17 14 COPY TO :1. THE ASSESSEE 2. THE REVENUE 3.THE CIT CONCERNED. 4.THE CIT(A) CONCERNED. 5.DR 6.GF BY ORDER SR. PRIVATE SECRETAR Y, ITAT, BANGALORE