HIFZUR REHMAN ANSARI,MUMBAI vs. ITO 20(1)(5), MUMBAI

Before us, the learned counsel for the assessee submitted that the reassessment proceedings were initiated primarily on account of the alleged escapement relating to short term capital gain of ₹23,00,000/- arising from sale of property known as “Ebrahim Mansion”. It was fairly submitted that the assessee had accepted the omission regarding the said short term capital gain and, therefore, the addition to that extent was not being pressed. The grievance of the assessee is confined to the addition of ₹14,44,750/- made on account of the difference between the agreement value and the stamp duty valuation. It was contended that no show cause notice

It was further submitted that the reasons recorded for reopening were supplied only on 05.07.2019 and the assessment itself was completed on 19.07.2019. Even the notice issued under section 142(1) had granted time till 22.07.2019 for furnishing the reply; however, the assessment was finalized on 19.07.2019 itself, i.e., before expiry of the time granted by the Assessing Officer. According to the learned counsel, the entire reassessment was thus completed in undue haste and without granting a reasonable and effective opportunity to the assessee to contest the proposed addition. It was therefore pleaded that the matter be restored to the file of the Assessing Officer for fresh adjudication after providing adequate opportunity and, if required, after considering the assessee’s request for reference to the Departmental Valuation Officer.

On a careful examination of the sequence of events, we find considerable force in the grievance raised by the assessee. The reasons recorded for reopening were admittedly furnished only on 05.07.2019 and the reassessment was completed on 19.07.2019. It is further seen that the notice issued under section 142(1) dated 15.07.2019 granted time to the assessee till 22.07.2019 for compliance, whereas the assessment order itself came to be passed on 19.07.2019, even before the expiry of the period granted by the Assessing Officer. More importantly, the material placed before us indicates that no specific query or show cause notice was issued in relation to the proposed addition of ₹14,44,750/- arising on account of the difference between the sale consideration and the stamp duty valuation. Thus, the addition appears to have been made without affording the assessee an effective opportunity to

The principles governing assessment proceedings require that an assessee must be made aware of the precise issue proposed against him and must be afforded a fair and meaningful opportunity to place his explanation and supporting material on record before any adverse view is taken. In the present case, the chronology of events demonstrates that the reassessment proceedings culminated within a very short period after furnishing of reasons and the impugned addition was made without the issue being properly confronted to the assessee. Such a course of action has resulted in denial of an effective opportunity of hearing on the specific issue under dispute. Since the addition relates to valuation aspects and the assessee has also sought an opportunity to contest the stamp duty valuation and place appropriate material in support of its case, we are of the considered view that the ends of justice would be best served by restoring the matter to the file of the Assessing Officer for fresh adjudication.

Accordingly, the addition of ₹14,44,750/- is set aside and the issue is restored to the file of the Assessing Officer for deciding the matter afresh in accordance with law after granting due and effective opportunity of hearing to the

In the result, the appeal of the assessee is allowed for statistical purposes.