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Income Tax Appellate Tribunal, “SMC” BENCH, PUNE
Before: SHRI D. KARUNAKARA RAO, AM & SHRI PARTHA SARATHI CHAUDHURY, JM
आदेश / ORDER
PER PARTHA SARATHI CHAUDHURY, JM :
This appeal preferred by the assessee emanates from the order of Ld. CIT(Appeals)-2, Pune dated 02.11.2016 for the assessment year 2007-08 as per following grounds of appeal on record:
“1.On the facts and circumstances of the case and in law the Ld. CIT(A) was not justified in confirming the addition of Rs.21,15,000/- made by the A.O. as assessee received on money on account of sale of agricultural land. The assessee had denied the receipt of such on money. The addition be quashed. 2. On the facts and circumstances of the case and in law and since the receipt of amount of Rs.21,15,000/- was denied and burden
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shifted to A.O. to prove with cogent evidence to prove the fact of receipt of on-money. The A.O. failed to discharge the burden that was shifted to him. The addition, therefore, is unwarranted. It be deleted. 3. On the facts and circumstances of the case and in law the Ld. CIT(A) was bound to consider all this facts of the case in their proper perspective. The Ld. CIT(A) was not correct in confirming the addition which is contrary to law and facts. It be deleted. 4. On the facts and circumstances of the case and in law the Ld. A.O. failed to offer the so called payer of the on-money to the assessee for cross-examination to find out the truth especially when assessee had denied the receipt of any on-money. The Ld. CIT(A) ought to have called for remand report from A. O. on this point. The failure of the Ld. CIT(A) results into the fact that the addition was confirmed by breaching the principles of natural justice. The assessment and appeal order be set aside. 5. On the facts and circumstances of the case and in law the Ld.CIT(A) passed the appeal order on a dead person as the appellant Shri Mahadev Kondiba Mahangare had died on 25.09.2016 and the appeal order was passed on 2.11.2016. The appeal order on a dead person is not sustainable in law. It be quashed. 6. The appellant craves to leave, add/amend or alter any of the above grounds of appeal.”
At the outset, we notice that there is a delay of 463 days for filing the
appeal. That with regard to this delay, the Ld. AR of the assessee filed
condonation petition along with affidavit stating reasons for such delay in
filing the appeal before us. We have perused the condonation petition and the
affidavit along with reasons for delay. We are convinced with the justification
rendered by the assessee through these documents. We therefore condone
the delay and proceed to hear the appeal on merits.
We have perused the grounds of appeal and in some of the grounds
assessee stated that principles of natural justice were not followed by the
Revenue Authorities and that information was collected which was
adverse for the assessee without confronting the assessee, while the
Assessing Officer completed the assessment.
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The brief facts in this case are that the assessee is an individual
and during the year under consideration no regular return as required
u/s.139 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’)
was filed. A search and seizure action was conducted on 28.08.2012 in
the case of M/s. Precision Automation & Robotics (I) Ltd. (PARI) group of
cases. During search, it was found that this company had purchased
substantial amount of land at Village Dhangar Wadi, Tal: Khandala, Dist.
Satara. It was further observed that the assessee was one of the person
who sold land to this company as per registered deed. The sale
consideration was shown at Rs.38,10,000/-. However, there were cash
components also which was to the tune of Rs.21,15,000/- which was
over and above the agreement value. The assessee was therefore, issued
notice u/s.148 of the Act, in response to which a nil return was filed. A
copy of reasons recorded was also handed over to the assessee’s counsel
by the Assessing Officer. Before completing the assessment, a detailed
show cause letter dated 23.12.2013 was issued along with notice
u/s.142(1) of the Act. There was no response on the part of the assessee
and thereafter, the Assessing Officer proceeded to complete the
assessment u/s.144 r.w.s.147 of the Act by considering the cash
component of Rs.21,15,000/- as other income of the assessee.
During the Appellate proceedings, no submission was filed by the
assessee and it was stated that the assessee is relying on the statement of
facts filed along with Form-35. In the statement of facts, it has been stated
that the assessee has not received any cash consideration over and above the
agreement value and therefore, addition made without any merit. The Ld.
CIT(Appeal) has perused the material on record and facts of the case and
statement of facts in Form-35 filed by the assessee. The Ld. CIT(Appeal)
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observed that the directors of M/s. PARI have confirmed in their statement
the fact of making payment in cash which is over and above the agreement
value. It has also confirmed by the M/s.PARI that the assessee was paid cash
component of Rs.21,15,000/- as ‘on money’. The Ld. CIT(Appeal) analyzed
that since it was not in dispute that the assessee had sold land to M/s. PARI
and since M/s. PARI has admitted the payment of ‘on money’ to the assessee,
therefore, addition of Rs.21,15,000/- was confirmed by the Ld. CIT(Appeals).
The Ld. AR of the assessee at the time of hearing vehemently argued on
the basis of grounds of appeal filed that principles of natural justice have
been violated and no opportunity was given to the assessee for cross
examination with regard to the statement made by M/s. PARI and without
confronting the assessee on such statement, additions were made which was
therefore in the nature of arbitrary, unwarranted and un-judicial and liable to
be quashed. Therefore, the Ld. AR prayed that the matter may be restored to
the file of Assessing Officer for proper adjudication.
On the other hand, Ld. DR has placed strong reliance on the findings of
the Sub-ordinate Authorities.
We have perused the case records and considered the arguments
placed before us by the parties herein. The facts on record demonstrate that
the assessment was completed u/s.144 r.w.s.147 of the Act and that on the
notice issued u/s.142(1) of the Act along with questionnaire, there was no
compliance by the assessee. Thereafter, the Assessing Officer proceeded to
complete the assessment u/s.144 r.w.s 147 of the Act.
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Before the Ld. CIT(Appeals) also, there was no proper representation by
the assessee and neither any submissions were filed. It was only on the
statement of facts which is the part of Form-35 and materials on record
based on which the Ld. CIT(Appeals) passed his order. The Ld. CIT(A)’s main
premise was that M/s. PARI has given statement of paying ‘on money’ to
various seller of land among whom the assessee was one of the seller. It was
admitted by the M/s. PARI that certain ‘on money’ was paid to the assessee.
However, all throughout the assessee has denied receiving any money apart
from the money disclosed in the sale deed.
The facts on record further demonstrates that the assessee has not got
adequate opportunity to defend his case on merits and also that the
statement of M/s. PARI was not confronted before the assessee. These are the
factors which go against the rules of natural justice.
In view of the aforesaid reasoning, we set aside the order of Ld.
CIT(Appeals) and restore the matter to the file of the Assessing Officer for
proper adjudication after providing reasonable opportunity of the hearing to
the assessee and in compliance with the principles of natural justice.
In the result, appeal of the assessee is allowed for statistical purposes. 10.
Order pronounced on 08th day of February, 2019.
Sd/- Sd/- D. KARUNAKARA RAO PARTHA SARATHI CHAUDHURY ACCOUNTANT MEMBER JUDICIAL MEMBER
पुणे / Pune; �दनांक / Dated : 08th February, 2019. SB
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आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to :
अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT(Appeals)-2, Pune. 4. The Pr. CIT-3, Pune. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “एक-सद�य” ब�च, 5. पुणे / DR, ITAT, “SMC” Bench, Pune. गाड� फ़ाइल / Guard File. 6.
// True Copy // आदेशानुसार / BY ORDER,
�नजी स�चव / Private Secretary आयकर अपील�य अ�धकरण, पुणे / ITAT, Pune.
7 ITA No. 724/PUN/2018 A.Y.2007-08
Date 1 Draft dictated on 07.02.2019 Sr.PS/PS 2 Draft placed before author 08.02.2019 Sr.PS/PS 3 Draft proposed and placed JM/AM before the second Member 4 Draft discussed/approved by AM/JM second Member 5 Approved draft comes to the Sr.PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr.PS/PS 7 Date of uploading of order Sr.PS/PS 8 File sent to Bench Clerk Sr.PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order