A Aravind L/R of Late Sri A Ramulu, Hyderabad V. DCIT, Circle-9(1), Hyderabad

MA 133/HYD/2014

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 2503 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 14 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 15-10-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 01-05-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B RAMA KRISHNA
• Assessee Lawyers: K A SAI PRASAD
• Keywords: Rectification of order; Opportunity of being heard; Principle of natural justice
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER M.A. NO. 133/HYD/2014 (IN IT(SS)A NO. 03/HYD/2009 BLOCK PERIOD: 31.03.1996 TO 31/03/2003) A. ARAVIND, LR OF LATE SRI A. RAMULU, APP LICANT HYDERABAD. VS. DY. COMMISSIONER OF INCOME-TAX, RESPONDENT CENTRAL CIRCLE 9(1), HYDERABAD. ASSESSEE BY : SHRI K.A. SAI PRASAD REVENUE BY : SHRI B. RAMAKRISHNA DATE OF HEARING : 26/09/2014 DATE OF PRONOUNCEMENT : 15/10/2014 ORDER PER SAKTIJIT DEY, J.M.: THIS IS AN APPLICATION U/S 254(2) FILED BY THE ASS ESSEE SEEKING RECTIFICATION OF MISTAKE CREPT INTO THE ORDER OF TH E TRIBUNAL DATED 30/07/2012 PASSED IN IT(SS)A NO. 03/HYD/2009. 2. AS STATED IN THE M.A. AND AS CONTENDED BY THE LE ARNED AR, AGAINST THE ASSESSMENT ORDER DATED 31/01/2006 PASSE D U/S 143(3) READ WITH SECTION 158BD, ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A). THE VERY SAME ASSESSMENT ORDER WAS ALSO REV ISED BY THE CIT U/S 263 OF THE ACT. IT WAS SUBMITTED THAT WHILE CON SIDERING ASSESSEES MA NOS. 133/HYD/14 A. ARAVIND 2 QUANTUM APPEAL, THE TRIBUNAL SET ASIDE THE ORDER OF THE CIT(A) AND REMITTED THE ISSUE BACK TO THE FILE OF THE AO FOR C ONSIDERING AFRESH. AT THE SAME TIME, TRIBUNAL ALSO SET ASIDE THE ORDER O F CIT PASSED U/S 263 AND DIRECTED HIM TO PASS A FRESH ORDER AFTER GI VING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IT WAS SUBMITTED BY TH E LEARNED AR THAT WHEN THE ISSUE RELATING TO THE QUANTUM WAS REMITTED BACK TO THE AO AND STILL PENDING BEFORE HIM, THERE IS NO SURVIVING ASSESSMENT ORDER TO BE REVISED BY THE CIT. THEREFORE, THERE IS A MIS TAKE IN THE ORDER OF THE TRIBUNAL IN DIRECTING THE CIT TO PASS FRESH ORD ER U/S 263. HE, THEREFORE, SUBMITTED THAT THE ORDER PASSED BY THE T RIBUNAL NEEDS TO BE RECALLED AND MODIFIED. 3. THE LEARNED DR, ON THE OTHER HAND, SUBMITTED THA T THERE IS NO APPARENT MISTAKE IN THE ORDER OF THE TRIBUNAL. 4. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIE S AND PERUSED THE MATERIALS ON RECORD. AS CAN BE SEEN, ASSESSMENT ORDER DATED 31/01/2006 PASSED U/S 143(3) R.W.S. 158BD FOR THE B LOCK PERIOD 31/03/1996 TO 31/03/2003 WAS NOT ONLY SUBJECT MATTE R OF APPEAL BEFORE THE CIT(A) BUT ALSO SUBJECTED TO PROCEEDING U/S 263 OF THE ACT. THOUGH, BOTH THE PROCEEDINGS RELATED TO COMPUTATION OF CAPITAL GAIN, THE SCOPE OF THE ISSUES INVOLVED WAS DIFFERENT. IN THE ASSESSMENT COMPLETED U/S 143(3) READ WITH SECTION 158BD, THE L ONG TERM CAPITAL GAIN WAS COMPUTED BY THE AO BY TAKING THE AREA OF L AND SOLD AS 978.285 SQ. YDS. AND THE SELLING RATE AT RS. 8,000/ - PER SQ.YD. ACCORDINGLY, LONG TERM CAPITAL GAIN WAS WORKED OUT AT RS. 82,90,015 BY THE AO AND THE SAME WAS DISPUTED BY THE ASSESSEE IN THE APPEAL FILED INITIALLY BEFORE THE LEARNED CIT(A) AND SUBSE QUENTLY WITH THE TRIBUNAL. VIDE HIS ORDER DATED 28/03/2008 PASSED U/ S 263, THE LEARNED CIT SOUGHT TO REVISE THE ASSESSMENT MADE BY THE AO AFTER HAVING NOTICED THAT THE ACTUAL AREA OF LAND SOLD BY THE AS SESSEE WAS 1304.33 SQ.YDS. AND THE SELLING RATE WAS RS. 9,838.64 PER S Q.YD. THE SCOPE OF THE ISSUE INVOLVED IN THE ORDER PASSED BY LEARNED C IT U/S 263, THUS, WAS DIFFERENT BUT THE SAME WAS SOMEWHAT CONSEQUENTI AL TO AND MA NOS. 133/HYD/14 A. ARAVIND 3 DEPENDENT ON THE COMPUTATION OF CAPITAL GAIN AS MAD E BY THE AO. IN THESE CIRCUMSTANCES, WHEN THE TRIBUNAL VIDE ITS ORD ER PASSED IN ITA NO. 20/HYD/2007 SET ASIDE THE ORDER OF THE LEARNED CIT(A) AND RESTORED THE MATTER RELATING TO COMPUTATION OF CAPI TAL GAIN TO THE FILE OF THE AO FOR DECIDING THE SAME AFRESH, IT CANNOT B E SAID THAT THE ORDER OF THE AO PASSED U/S 143(3) READ WITH SECTION 158BD DID NOT SURVIVE IN ITS ENTIRETY. HOWEVER, KEEPING IN VIEW THAT THE BASIC ISSUE RELATING TO COMPUTATION OF CAPITAL GAIN WAS TO BE R ECONSIDERED BY THE AO AFRESH, THE ISSUE CONSEQUENTIAL THERETO AS INVOL VED IN THE ORDER PASSED BY THE LEARNED CIT U/S 263 WAS ALSO LIABLE T O BE CONSIDERED BY THE LEARNED CIT AFRESH DEPENDING UPON THE FATE O F THE BASIC ISSUE OF COMPUTATION OF CAPITAL GAIN. THE TRIBUNAL, IN OU R OPINION, THUS, WAS RIGHT IN SETTING ASIDE THE ORDER OF THE LEARNED CIT PASSED U/S 263 WITH A DIRECTION TO PASS FRESH ORDER U/S 263, ALTHOUGH O N A DIFFERENT GROUND. THE ONLY MISTAKE, IN OUR OPINION, IS THAT T HE LEARNED CIT SHOULD HAVE BEEN DIRECTED BY THE TRIBUNAL TO PASS F RESH ORDER U/S 263 ONLY AFTER PASSING OF THE FRESH ORDER BY THE AO, WH ICH ALONE COULD BE CONSIDERED FOR REVISION U/S 263 IF AND AS PERMISSIB LE IN LAW. WE ACCORDINGLY RECTIFY THE SAID MISTAKE BY SUBSTITUTIN G PARAGRAPH 15 OF THE ORDER OF THE TRIBUNAL DATED 30/07/2012 PASSED I N ITA NO. 03/HYD/2012 WITH THE FOLLOWING PARAGRAPH 15: 15. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIALS ON RECORD. IT IS APPARENT FROM THE ORDER PASSED U/S 263 BY THE CIT THAT THE CASE WAS POSTED ON 27/03/20 08 ON WHICH DATE, SON OF THE ASSESSEE FILED A LETTER PRAY ING FOR ADJOURNMENT ON MEDICAL GROUND. THE CIT PASSED HIS O RDER ON THE VERY DAY ITSELF REJECTING THE REQUEST OF THE AS SESSEE. IN OUR VIEW SUCH AN ORDER PASSED BY THE CIT IS IN GROSS VI OLATION OF NATURAL JUSTICE AS NO PROPER OPPORTUNITY OF BEING H EARD WAS EXTENDED TO THE ASSESSEE. AS WE HAVE SET ASIDE THE ORDER OF CIT(A) AND REMITTED THE MATTER BACK TO THE FILE OF AO WHILE DECIDING ASSESSEES QUANTUM APPEAL IN ITA NO. 20/HY D/09 FOR THE IMPUGNED ASSESSMENT YEAR, WE CONSIDER IT APPROP RIATE TO SET ASIDE THE IMPUGNED ORDER OF THE LEARNED CIT. TH E LEARNED CIT MAY DO WELL TO WAIT FOR THE ASSESSMENT ORDER TO BE PASSED BY THE AO IN PURSUANCE TO THE DIRECTION OF THE TRIB UNAL AND ONLY THEREAFTER, IF WARRANTED AND PERMISSIBLE IN LAW, MA Y CONSINDER INITIATING PROCEEDING U/S 263 AGAIN. MA NOS. 133/HYD/14 A. ARAVIND 4 4 . IN THE RESULT, THE MISCELLANEOUS APPLICATION FI LED BY THE ASSESSEE IS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 15 TH OCTOBER, 2014. SD/- SD/- (P.M. JAGTAP) ( SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIA L MEMBER HYDERABAD, DATED: 15 TH OCTOBER, 2014. KV COPY TO:- 1) A. ARAVIND, LR OF LATE SRI A. RAMULU, D.NO. 18-8- 254/A/1/3, BHARAT RATNA, DEFENCE COLONY, HYDERABAD. 2) DCIT, CENTRAL CIRCLE 9(1), HYDERABAD. 3) CIT(A)-VI, HYDERABAD. 4) THE CIT CONCERNED, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABAD.