Jayesh C Shah , Bangalore V. The Deputy Commissioner of Income Tax Circle-13(1), Bangalore

ITA 99/BANG/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7592 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 16-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PADMA MEENAKSHI
• Keywords: Principle of natural justice; Validity of assessment; Accommodation entries
• Section: 142(1); 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-B BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 9 9 /BANG/201 9 ASSESSMENT YEAR :20 08 - 09 SHRI JAYESH C SHAH, NO. D-52, LAKSHMAN BUILDING, CHICKPET, BANGALORE 560 053. PAN: ARTPS2770H VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 13 (1), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SMT. SUMAN LUNKAR, CA RESPONDENT BY : SMT. PADMA MEENAKSHI, JCIT (DR) DATE OF HEARING : 10 .04.201 9 DATE OF PRONOUNCEMENT : 25 .04.201 9 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS IS AN ASSESSEES APPEAL DIRECTED AGAINST THE ORDER OF LD. CIT(A)-2, BANGALORE DATED 28.11.2018 FOR ASSESSMENT YEAR 2008-09. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1. THE LEARNED ASSESSING OFFICER HAD ERRED IN PASSING THE ORDER IN THE MANNER PASSED BY HIM AND THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE SAME. THE ORDERS PASSED ARE BAD IN LAW AND ARE LIABLE TO BE QUASHED. 2.1 IN ANY CASE, AS THERE WAS NO SERVICE OF NOTICE ULS. 148 OF THE ACT, THEREFORE CONSEQUENTLY THE ORDER AS PASSED / CONFIRMED BEING BAD IN LAW ARE TO BE QUASHED. 2.2 IN ANY CASE, THE CONDITIONS PRECEDENT FOR THE ISSUE OF NOTICE ULS. 148 OF THE ACT BEING ABSENT, THE RE-OPENING OF ASSESSMENT BECOMES BAD IN LAW AND CONSEQUENTLY THE ORDER AS PASSED/CONFIRMED BEING ALSO BAD IN LAW IS REQUIRED TO BE QUASHED. 2.3 IN ANY CASE THE ASSESSING OFFICER HAVING NOT COMPLIED WITH LEGAL PROVISIONS / PROCEDURE FOR REOPENING / REASSESSMENT, THE CONSEQUENTIAL ORDER BECOMES BAD IN LAW AND LIABLE TO BE QUASHED. ITA NO.99/BANG/2019 PAGE 2 OF 4 3. IN ANY CASE THE NON ISSUE OF MANDATORY NOTICE ULS. 143(2) OF THE ACT, ON THE COPY OF RETURN FILED BY THE APPELLANT IN RESPONSE TO NOTICE ULS 142(1) MAKES THE ORDER BAD IN LAW AND LIABLE TO BE QUASHED. 4.1 IN ANY CASE THE ORDER PASSED IS IN GROSS VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE AND FAIR PLAY, ESPECIALLY IN THE ABSENCE OF THE CROSS EXAMINATIONS OF THE PERSONS WHOSE AVERMENTS ARE SOUGHT TO BE RELIED UPON BY THE ASSESSING OFFICER WHILE PASSING THE ORDER, MAKES THE ORDER TOTALLY BAD IN LAW AND LIABLE TO BE CANCELLED. 4.2 THE LEARNED COMMISSIONER OF INCOME TAX '(APPEALS) HAS INSTEAD OF QUASHING THE IMPUGNED ORDER, HAS JUST CONFIRMED THE ORDER OF ASSESSING OFFICER WITHOUT PROPERLY CONSIDERING THE FACTS ANDCIRCUMSTANCES OF THE CASE, ARGUMENTS OF THE APPELLANT AND THE LAW APPLICABLE. 5. THE ASSESSING OFFICER HAD IN ANY CASE, ERRED IN TREATING A SUM OF RS. 21,94,666/- BEING CONSIDERATION RECEIVED ON SALE OF SHARES AS 'INCOME FROM OTHER SOURCES' WITHOUT ANY BASIS, PROOF OREVIDENCE AND THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE SAME. THE ACTION OF AUTHORITIES BELOW HAS NO SUPPORT IN LAW; IS CONTRARY TO FACTS AND EVIDENCE AVAILABLE AND THEREFORE DESERVES TO BE REJECTED. 6.1 IN ANY CASE AND WITHOUT FURTHER PREJUDICE, THE AUTHORITIES BELOW HAVE ERRED IN: A) TAXING/ CONFIRMING THE ENTIRE CONSIDERATION RECEIVED ON SALE OF SHARES UNDER THE HEAD OTHER SOURCES. B) HOLDING WITHOUT BASIS THAT THE TRANSACTIONS IN SHARES ARE FRAUDULENT. C) ALLEGING WITHOUT ANY BASIS THAT THE APPELLANT HAS OBTAINED ACCOMMODATION ENTRIES AND APPELLANT'S OWN MONEY COME BACK IN THE GUISE OF CAPITAL GAINS. THE CONCLUSIONS / OBSERVATIONS OF AUTHORITIES BELOW BEING TOTALLY ERRONEOUS AND WITHOUT BASIS BOTHON FACTS AND LAW IS TO BE DISREGARDED, 6.2 THE SEVERAL OBSERVATIONS MADE AND VARIOUS CONCLUSIONS DRAWN BY THE LOWER AUTHORITIES IN THECOURSE OF ORDER ARE WITHOUT BASIS AND EVIDENCE AND ARE MADE / DRAWN ON SURMISES, PROBABILITIES AND CONJECTURES. SUCH OBSERVATIONS AND CONCLUSIONS BY QUASI-JUDICIAL AUTHORITIES HAVE NO SUPPORT IN LAW AND DESERVE TO BE REJECTED IN TOTO. 7. THE APPELLANT HAD ACTUALLY SOLD SHARES THROUGH DEMAT ACCOUNT AND HAD EARNED CAPITAL GAIN THEREON AND SAME NEEDS TO BE ACCEPTED AS SUCH. ITA NO.99/BANG/2019 PAGE 3 OF 4 8. THE APPELLANT DENIES THE LIABILITY TO PAY INTEREST U/S 234A, 234B AND 234C OF THE ACT. THE INTEREST HAVING BEEN LEVIED ERRONEOUSLY IS TO BE DELETED. 9. IN VIEW OF THE ABOVE AND OTHER GROUNDS TO BE ADDUCED AT THE TIME OF HEARING, IT IS REQUESTED THATTHE IMPUGNED ORDER BE QUASHED OR ATLEAST THE INCOME FROM SHORT TERM CAPITAL GAIN EARNED ON SALE OF SHARES AS RETURNED BY THE APPELLANT BE ACCEPTED, THE ASSESSMENT OF SALE CONSIDERATION RECEIVED ON SALE OF SHARES UNDER THE HEAD INCOME FROM OTHER SOURCES BE DELETED AND THE INTEREST LEVIED BE ALSO DELETED. 3. AT THE VERY OUTSET, IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT AS PER GROUND NO. 3 OF ASSESSEES APPEAL BEFORE THE TRIBUNAL, THIS IS THE GRIEVANCE OF THE ASSESSEE THAT NO NOTICE WAS ISSUED BY THE AO U/S. 143(2) OF IT ACT AND THEREFORE, THE ASSESSMENT ORDER IS NOT VALID. SHE ALSO SUBMITTED THAT THIS ISSUE WAS RAISED BY ASSESSEE BEFORE CIT(A) ALSO AS PER GROUND NO. 1.6 REPRODUCED BY CIT(A) ON PAGE NO. 2 OF ITS ORDER. BUT IN THE IMPUGNED ORDER, THIS ISSUE WAS NOT DECIDED BY HIM. SHE SUBMITTED THAT UNDER THESE FACTS, THE MATTER MAY BE RESTORED BACK TO THE FILE OF CIT (A) FOR A DECISION ON THIS ASPECT OF THE MATTER. THE LD. DR OF REVENUE SUPPORTED THE ORDER OF CIT(A). 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. I FIND FORCE IN THE SUBMISSIONS OF LD. AR OF ASSESSEE BECAUSE I FIND THAT AS PER GROUND NO. 1.6 RAISED BY ASSESSEE BEFORE CIT (A) AS REPRODUCED BY HIM ON PAGE NO. 2 OF HIS ORDER, THIS WAS THE GRIEVANCE OF THE ASSESSEE THAT BECAUSE OF NON ISSUE OF MANDATORY NOTICE U/S. 143(2) OF IT ACT, THE ASSESSMENT ORDER IS BAD IN LAW AND IS LIABLE TO BE QUASHED. AS PER THE IMPUGNED ORDER OF CIT(A), THERE IS NO DECISION ON THIS GROUND RAISED BY THE ASSESSEE BEFORE CIT(A). HENCE I FEEL IT PROPER TO RESTORE THIS MATTER BACK TO THE FILE OF CIT (A) FOR DECIDING THIS ISSUE. SINCE THE ISSUE ON TECHNICAL ASPECT IS NOT DECIDED BY CIT(A) AS PER IMPUGNED ORDER, THE ISSUE ON MERIT HAS TO BE DECIDED BY HIM AFRESH BECAUSE THE DECISION ON MERIT SHOULD BE AFTER TAKING FINAL DECISION ON TECHNICAL ASPECT. HENCE AT THE PRESENT STAGE, NO DECISION IS CALLED FOR ON MERIT OF THE ISSUE RAISED BY ASSESSEE AS PER REMAINING GROUNDS OF APPEAL. I DO NOT MAKE ANY COMMENT ON THE MERIT OF THE ISSUE. THE CIT (A) SHOULD FIRST DECIDE THE ISSUE IN RESPECT OF VALIDITY OF ASSESSMENT ORDER AS PER ITA NO.99/BANG/2019 PAGE 4 OF 4 GROUND NO. 1.6 RAISED BY ASSESSEE BEFORE HIM AND IF THE ASSESSEE SUCCEEDS ON THIS ASPECT, THEN NOTHING MORE REMAINS TO BE DECIDED. BUT IF ASSESSEE FAILS ON THIS ASPECT, THEN THE ISSUE ON MERIT SHOULD BE DECIDED BY CIT(A) AFRESH. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 25 TH APRIL, 2019. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.