Shyam Manohar Agrawal vs. Commissioner Of Income Tax

I.T.A. No. 76 / 2013

23/01/2017 Shri A.P. Shrivastava, with Shri Abhijeet Shrivastava, learned counsel for the appellant. Shri Sanjay Lal, learned counsel for the respondent. This is assessee’s Appeal under Section 260-A of the Income Tax Act challenging the order passed by the Assessing Authority, the Appellate Tribunal in the matter of assessment for the Assessment Year 2007-2008. Assessee is a Builder and Developer and deals with construction of houses. For the assessment year 2007-2008, he declared the total income of Rs.42,39,565/- and agricultural income of Rs.2,70,000/-, however a search and seizure operation under Section 132 of the Income Tax Act was undertaken by the authorities in assessee’s premises and the impugned action was taken. During the course of hearing, learned counsel for the appellant invited our attention to substantial question Nos.7(a) and 7(b) formulated and admitted by this court for consideration, which reads as under : 7-A Whether Tribunal was justified in not deciding ground No.2(b) that assessment should have been completed in the status of Association of person and not in the status of individual, when warrant was issued in the joint name of Jitendra Purohit and Shyam Mohan Agrawal and, by not considering judgment of Hon’ble High Court of Allahabad in CIT (Central) Vs. Vandana Verma 330 ITR 533. 7-B Whether Tribunal was justified in not deciding ground No.2(a) of grounds of appeal that no notice u/s 143(2) was served, even though in earlier years this issue was restored to the file of assessing officer. Shri A.P. Shrivastava, learned counsel argues that so far as ground No.7(a) is concerned, in the matter of completion of assessment under the status of individual the learned counsel invited our attention to the Panchnama’s Annexure A-4 and argued that the warrant in question based on which the panchnama was prepared was jointly issued in the name of Shri Shyam Agrawal and Shri Jitendra Purohit, therefore, the assessment under such consideration should be completed under the status of Association of Persons (AOP), but, the assessment was completed under the status of Individual, this according to the assessee is in contravention to law. Learned counsel for the appellant places reliance on the judgment of the Allahabad High Court in the matter of CIT (Central) Vs. Smt. Vandana Verma (2010) 186 Taxman 88 and argues that as this aspect has not been adverted to either by the Assessing Officer or the Appellate Tribunal, it is a fit case where matter should be remanded back for reconsideration. That apart, SLP filed before the Supreme Court in the case of Smt. Vandana Verma (supra) has also been dismissed. Shri A.P. Shrivastava, learned counsel for the appellant further argued that with regard to question No.7(b) for the assessment year in question i.e. 2007-2008 notice under Section 143(2) was not issued to the assessee and, therefore, this aspect of the matter was also not considered by the Assessing Authorities. Accordingly, he argued that matter should be remanded back to the Assessing Officer for reconsideration on these two grounds. Shri Sanjay Lal, learned counsel for the respondent relying upon certain judgments of the Bombay High Court and argued that the first ground canvassed by the learned counsel for the assessee is not tenable. However, we are of the considered view that once specific grounds in this regard was raised before the Assessing Officer, it was incumbent for the Assessing Authorities to consider the same and as this has not been done the order of assessment suffers from material illegality, therefore, it is a fit case where the matter should be remanded back to the Assessing Officer for reconsidering these two aspects of the matter and the revenue can always raise its objection to these ground based on the judgments that were referred to before us by the Shri Sanjay Lal during the course of argument. Keeping in view the aforesaid we allow this appeal in part, quash the impugned order passed by the appellate authority and remand the matter back to the Assessing Officer for reconsideration of these two questions to decide it afresh in accordance with law after hearing all concern. Even though Shri Sanjay Lal learned counsel further argues that while framing issues under Section 153(A) the requirement of notice under Section 143(2) is not required, we leave this question open to be considered by the Assessing Officer when matter is reconsidered after hearing all concern. With the aforesaid the appeal stands disposed of.

(Rajendra Menon) (H.P. Singh) Acting Chief Justice Judge

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