D.C.I.T., CC-2(3), KOLKATA, KOLKATA vs. SMT. SEEMA AGARWAL, KOLKATA

आयकर अपीलीय अधिकरण कोलकाता 'ए' पीठ, कोलकाता में IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘A’ BENCH, KOLKATA श्री संजय गगग, न्याधयक सदस्य एवं डॉ. मनीष बोरड, लेखा सदस्य के समक्ष Before SRI SANJAY GARG, JUDICIAL MEMBER & DR. MANISH BORAD, ACCOUNTANT MEMBER I.T.A. No.: 502/KOL/2022 Assessment Year: 2014-2015 DCIT, CC-2(3), Kolkata.............................................Appellant Vs. Shri Mridul Agarwal.............................................Respondent [PAN: ACJPA 0439 J] I.T.A. No.: 505/KOL/2022 Assessment Year: 2014-2015 DCIT, CC-2(3), Kolkata.............................................Appellant Vs. Shri Ramesh Agarwal...........................................Respondent [PAN: ADAPA 4884 F] I.T.A. No.: 508/KOL/2022 Assessment Year: 2014-2015 DCIT, CC-2(3), Kolkata.............................................Appellant Vs. Smt. Seema Agarwal............................................Respondent [PAN: ACZPA 0987 D]

I.T.A. Nos.: 502, 505 & 508/KOL/2022 Assessment Year: 2014-2015 Shri Mridul Agarwal Shri Ramesh Agarwal Smt. Seema Agarwal. Appearances by: Sh. Vijay Kumar, Addl. CIT, appeared on behalf of the Revenue. Sh. Bharat Jain, ACA, appeared on behalf of the Assessee. Date of concluding the hearing : December 1st, 2022 Date of pronouncing the order : January 24th, 2023 ORDER Per Manish Borad, Accountant Member: These appeals filed by the Revenue pertaining to the Assessment Year (in short “AY”) 2014-2015 are directed against separate orders passed u/s 250 of the Income Tax Act, 1961 (in short the “Act”) by ld. Commissioner of Income-tax (Appeals)-20, Kolkata [in short ld. “CIT(A)”] dated 18.02.2021. 2. Registry has informed that the appeals are time barred by 493 days. Condonation applications have been filed by the Revenue. After perusing the same, we find force in the reasons mentioned therein and are satisfied that the Revenue was prevented for reasonable cause (COVID -19 restrictions) in filing the instant appeals within statutory time limit. We, therefore, condone the delay and admit the appeals for adjudication. 3. The Revenue has raised following common grounds of appeal: “1. Whether on facts of the case and in law, Ld. CIT(A) has erred in allowing assessee’s appeal on account of the hon’ble ITAT setting aside PCIT’s order u/s. 263 whereas the matter being subjudice as the hon’ble ITAT decision has not attained finality. 2. That department craves leave to add, alter, or modify any or all grounds of appeal either before or during course of Appellate Proceedings.” Page 2 of 7

I.T.A. Nos.: 502, 505 & 508/KOL/2022 Assessment Year: 2014-2015 Shri Mridul Agarwal Shri Ramesh Agarwal Smt. Seema Agarwal. 4. Since common issues are involved and facts are identical, we dispose off these appeals by this consolidated order for the sake of convenience. 5. At the outset, ld. Counsel for the assessee submitted that the instant appeals at the instance of the Revenue deserves to be dismissed since the impugned order before ld. CIT(A) i.e. the assessment order u/s 143(3) r.w.s. 263 of the Act is not operative because the revisionary proceedings u/s 263 of the Act were quashed by the Hon'ble Tribunal vide order dated 28.02.2020 and, therefore, all the proceedings carried out thereafter have become infructuous. 6. On the other hand, ld. D/R failed to controvert the contention made by ld. Counsel for the assessee. 7. We have heard rival contentions and perused the records placed before us. Revenue’s common grievance in the case of the three assessees namely Shri Mridul Agarwal, Shri Ramesh Agarwal and Smt. Seema Agarwal is that ld. CIT(A) erred in allowing assessee’s appeal on account of the Hon'ble Tribunal setting aside the PCIT’s order u/s 263 of the Act. 8. We find that ld. CIT(A) allowed the assessee’s appeal observing as follows: “i. Grounds of appeal no. 1 & 2: A search & seizure action u/s. 132(1) of the Income-tax Act was conducted at various business premises of Rupa and Company Ltd. and other concerns and Individuals associated with this group on 07th November, 2013. Assessee belongs to this group. Subsequent to search, assessment order u/s.143(3) was passed on 22.03.2016. accepting the returned Page 3 of 7

I.T.A. Nos.: 502, 505 & 508/KOL/2022 Assessment Year: 2014-2015 Shri Mridul Agarwal Shri Ramesh Agarwal Smt. Seema Agarwal. Income. However, Subsequently, it was noticed that assessee had earned long term capital-gain of Rs.99,99,900/- on sale of-paintings, against which deduction has been claimed u/s.54EC. Assessee had made investments in long term specified assets in two installments. Rs.50,00,000/- was invested in the long term specified assets in 2013 and second investment of Rs.50,00,000/- was made in April, 2014. Ld. Pr.CIT(C)-1, Kolkata was of the considered opinion that the second investment of Rs.50 lakhs in specified long term assets was made beyond the period of six months from the date on which the long term capital gain was earned on sale of paintings. Hence, assessee was not entitled for deduction u/s.54EC in respect of investment made in specified assets in April, 2014. As the order of the Ld. AO was erroneous and prejudicial to the interest of revenue, the assessment order u/s. 143(3) was set aside vide order u/s.263 dated 16.03.2018. Consequently, order u/s.143(3) read with section 263 was passed on 26.11.2018 in which AO has denied deduction u/s.54EC on the amount of Rs.50 lakhs. Against this order assessee has filed the present appeal. Assessee had also challenged the order of Ld. Pr.CIT(C)-1, Kolkata, passed u/s263 dated 16.03.2018 before the ITAT. Ld. Pr.CIT(C)-1, Kolkata had also passed similar orders in respect of eight other family members. Appeals against the order u/s.263 has been disposed by ITAT, Kolkata by a common order dated 28.02.2020, as the same issue is involved in all these appeals. Thus, the ITAT has considered the following appeals in its common order dated 28.02.2020: Sl.No. Name PAN AY ITA No. 1. Rajnish Agarwal ACSPA8482C 2014-15 1177/Kol/2018 2. Manish Agarwal ACVPA7357F 2014-15 1178/Kol/2018 3. Ramesh Agarwal ADAPA4884F 2014-15 1179/Kol/2018 4. Seema Agarwal ACDPA8842P 2014-15 1180/Kol/2018 5. Mridul Agarwal ACJPA0439J 2014-15 1181/Kol/2018 6. Suresh Agarwal ADAPA9705H 2014-15 1182/Kol/2018 7. Shalini Agarwal ALAPS8142E 2014-15 1183/Kol/2018 8. Puja Agarwal AFTPA3723Q 2014-15 1184/Kol/2018 9. Seema Agarwal ACZPA0987D 2014-15 1185/Kol/2018 In response to notice for hearing, the AR of the assessee has submitted the copy of the ITAT order dated 28.02.2020 and pointed out that the Hon'ble ITAT vide its order dated 28.02.2020 has quashed the order passed u/s.263 by Ld. Pr.CIT(C)-1, Kolkata.

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I.T.A. Nos.: 502, 505 & 508/KOL/2022 Assessment Year: 2014-2015 Shri Mridul Agarwal Shri Ramesh Agarwal Smt. Seema Agarwal. Hence, consequential order passed by the AO u/s.143(3) read with sec. 263 has become infructuous. I have carefully considered the facts of the case and the submission of the appellant. I have also gone through the order of Hon'ble ITAT, Kolkata dated 28.02.2020. The ITAT has reversed the direction of Ld. Pr.CIT(C)-1, Kolkata and restored the original order of the AO u/s. 143(3) dated 22.03.2016. Under the circumstances, order u/s. 143(3) r.w.s. 263 is not operative now and this appeal has also become infructuous. As directed by the Hon'ble ITAT, AO has to allow deduction u/s.54EC on the amount of Rs.50,00,000/- as well which was invested in long term specified assets in April, 2014. Hence, these grounds are allowed. ii. Grounds of appeal no. 3: This ground is consequential in nature. iii. Grounds of appeal no. 4: This ground is general in nature. 4. In result, the appeal is allowed.” 9. From perusal of the above finding of ld. CIT(A) and also on going through the decision of this Tribunal in the case of the assessee vide ITA No. 1177/Kol/2018 order dated 28.02.2020, we find that the original assessment proceedings were carried out u/s 143(3) of the Act and the same was subject matter of the proceedings carried out u/s 263 of the Act wherein ld. Pr. CIT set aside the assessment order u/s 143(3) of the Act and directed ld. AO to reframe it in light of the directions given in this order u/s 263 of the Act. In compliance thereto, ld. AO carried out the assessment proceedings u/s 143(3) r.w.s. 263 of the Act making addition in the hands of the assessee. These additions were challenged before ld. CIT(A). As far as revisionary proceedings u/s 263 of the Act are concerned, the same were challenged by the assessees before this Tribunal and vide order dated 28.02.2020, the revisionary proceedings were quashed and the assessment

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I.T.A. Nos.: 502, 505 & 508/KOL/2022 Assessment Year: 2014-2015 Shri Mridul Agarwal Shri Ramesh Agarwal Smt. Seema Agarwal. order u/s 143(3) of the Act has been restored. Under these given circumstances of the case since revisionary proceedings u/s 263 of the Act being quashed, the order u/s 143(3) r.w.s. 263 of the Act has become infructuous. Since, all the proceedings carried out in pursuance to the revisionary proceedings u/s 263 of the Act have become infructuous, therefore, ld. CIT(A) has rightly allowed the assessee’s appeal. We, therefore, fail to find any infirmity in the finding of ld. CIT(A). Thus, all the grounds of appeal raised by the Revenue in I.T.A. Nos.: 502, 505 & 508/KOL/2022 are dismissed. 10. In the result, appeals filed by the Revenue are dismissed. Kolkata, the 24th January, 2023 Sd/- Sd/- [Sanjay Garg] [Manish Borad] Judicial Member Accountant Member Dated: 24.01.2023 Bidhan (P.S.)

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I.T.A. Nos.: 502, 505 & 508/KOL/2022 Assessment Year: 2014-2015 Shri Mridul Agarwal Shri Ramesh Agarwal Smt. Seema Agarwal. Copy of the order forwarded to: 1. DCIT, CC-2(3), Kolkata. 2. Shri Mridul Agarwal, 3, Alipore Road, Kolkata – 700 027. 3. Shri Ramesh Agarwal, 12, Sunny Park, Kolkata – 700 019. 4. Smt. Seema Agarwal, 3, Alipore Road, Kolkata – 700 027. 5. CIT(A)-20, Kolkata. 6. CIT- 7. CIT(DR), Kolkata Benches, Kolkata. //True copy // By order

Assistant Registrar ITAT, Kolkata Benches Kolkata

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