SRI.B.RAJAN,TRIVANDRUM vs. THE ITO, WD-1(2), TRIVANDRUM

Per George George K, JM

These appeals at the instance of the assessee are directed against the consolidate order of the Commissioner of Income-tax (Appeals), dated 14.09.2018. The relevant assessment years are 2006-2007, 2007-2008, 2009-2010 and 2010-2011. Common issues are raised in these appeals, hence, they were heard together and are being disposed of by this consolidate order.

ITA No.393-396/Coch/2019 2 Sri. B.Rajan. the appeals belatedly. We find that there is sufficient cause for the delayed filing of the appeals and no latches can be attributed to the assessee. Hence, we condone the delay and proceed to dispose off the appeals on merits.

The assessee is a individual. For the assessment years 2006-2007, 2007-2008, 2010 and 2010-2011, the assessee did not file the return of income because according to him, he was not having any taxable income. There was a search and seizure operation u/s 132 of the I.T.Act in assessee’s brothers premises (Sri.B.Vijayan). During the course of search, certain documents and materials connected with the assessee with regard to investment and business transaction was found and seized. After the assessment proceedings u/s 153A of the I.T.Act was completed in the case of assessee’s brother, the assessment u/s 143(3) r.w.s. 153C of the I.T.Act was completed in assessee’s case for assessment years 2006-2007 to 2009-2010.

ITA No.393-396/Coch/2019 3 Sri. B.Rajan. 5. Aggrieved by the order of the CIT(A) for assessment years 2006-2007, 2007-2008, 2010 and 2010-2011, the assessee preferred these appeals before the Tribunal. The assessee has raised grounds with regard to the addition on merits and also raised a legal ground with regard to the assessment orders passed u/s 143(3) r.w.s. 153C of the I.T.Act, being time barred. The assessee has filed a petition for admission of the additional ground, since the legal ground was not raised before the Income-tax authorities. The learned AR submitted that the additional ground raised is a pure legal ground, which does not require any examination of facts and in view of the judgment of the Hon’ble Apex Court in the case of National Thermal Co. Ltd. v. CIT [(1998) 229 ITR 383 (SC)], the additional ground relating to the assessment being time barred needs to be admitted and adjudicated. The learned Departmental Representative supported the orders passed by the Income-tax authorities.

Asst. Year Nature of additions Amount (Rs.) 2006-2007 Unexplained investment 2,56,812 2007-2008 Unexplained investment 3,22,184 2009-2010 Short term capital gains 4,14,300 2010-2011 Unexplained investment 3,10,000

ITA No.393-396/Coch/2019 4 Sri. B.Rajan. 6.1 The assessee has also raised the legal issue that the assessment order passed by the Assessing Officer u/s 143(3) r.w.s. 153C of the I.T.Act is barred by limitation. It was the contention of the learned AR that as per the 2nd proviso to section 153B of the I.T.Act, the assessment order ought to have been completed on or before 31.12.2011. It was submitted that the assessments in these cases have been completed subsequent to 31.12.2011 and hence the assessment order is time barred. The assessee has filed the petition for admission of additional ground because the legal issue regarding the assessment being time barred was not raised before the Income-tax authorities. We find that the issue raised by the assessee with regard to the assessment being time barred by limitation is a pure legal issue, which does not require any examination of fresh facts. Therefore, going by the dictum laid down by the Hon’ble Apex Court in the case of National Thermal Co. Ltd. v. CIT (supra), we admit the additional ground for adjudication.

6.2 On a query from the Bench, the learned DR submitted that the assessment records are not readily available with her. The assessment records needs to be examined to determine whether the assessment is barred by limitation in view of the 2nd proviso to section 153B of the I.T.Act. Moreover, we find that the CIT(A) had disposed off the appeal filed by the assessee ex parte. The CIT(A) in the impugned order has stated that the case was posted for hearing on three occasions, however, there was no response from the assessee,

ITA No.393-396/Coch/2019 5 Sri. B.Rajan. hence, he disposed off the appeal filed by the assessee ex parte. In the interest of justice and equity, as a last chance, we are of the view that one more opportunity should be granted to the assessee to place his contentions before the CIT(A). As stated earlier, we have already admitted the additional ground with regard to the issue that assessment is time barred. Since the CIT(A)’s order was an ex parte order and he did not have an occasion to consider the legal issue now raised before us, the entire case is restored to the CIT(A). It is ordered accordingly.

Sd/- Sd/- (Chandra Poojari) (George George K) ACCOUNTANT MEMBER JUDICIAL MEMBER

Cochin ; Dated : 04th September, 2019. Devdas* Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. The Pr.CIT, Kottayam. 4. The CIT(Appeals) Kottayam. 5. DR, ITAT, Cochin 6. Guard file.

BY ORDER,

(Asstt. Registrar) ITAT, Cochin