BHIMA RAJ MEENA,JAIPUR vs. ITO, JAIPUR

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR Jh fot; iky jko] U;kf;d lnL; ds le{k BEFORE: SHRI VIJAY PAL RAO, JUDICIAL MEMBER vk;dj vihy la-@ITA No. 304/JP/2015 fu/kZkj.k o"kZ@Assessment Year : 2008-09 cuke Shri Bhim Raj Meena, Income Tax Officer, Vs. S/o Shri Sita Ram Meena, Ward 7(3), Chhouta Neta Dhani, Chaka, Jaipur. Bassi, Distt. Jaipur-303301. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AXSPM5082H vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Dileep Shivpuri (Ad.) jktLo dh vksj ls@ Revenue by : Smt. Punam Rai (DCIT) lquokbZ dh rkjh[k@ Date of Hearing : 01/11/2017 mn?kks"k.kk dh rkjh[k@ Date of Pronouncement : 08/11/2017 vkns'k@ ORDER

PER: VIJAY PAL RAO, J.M. This appeal by the assessee is directed against the order dated 29.01.2015 of ld. CIT(A) A.Y. 2008-09. The assessee has raised the following grounds as under:- “1. That on facts and in circumstances of case, ld. CIT(Appeals) grossly erred in rejecting the additional grounds of appeal raised regarding finalization of assessment proceedings u/s 147 of the Act and issue of notice u/s 148 of the Act of the Act in case of the assessee.

2 ITA 304/JP/15_ Shri Bhim Raj Meena Vs. ITO

u/s 148 and refusal of admission of additional ground by the ld. CIT(A).

The ld. AR of the assessee has submitted in this case original return of

income was filed on 20.02.2009. Subsequently the Assessing Officer has

issued a notice u/s 148 on 07.12.2012 whereby proposed to reopen the

assessment on the ground of income of assessable to tax being capital

gain on account of transfer of plot of land of Rs. 25,00,000/- has escaped

assessment as the assessee has not shown the same in the total income.

He has further contended that since AO did not apply his mind on the

information received from J.CIT, Range-1, Udaipur as the said transaction

of sale of plot of land was carried out by the assessee in the capacity of

Power Attorney and not as an owner of the land. Therefore, the Assessing

Officer has proposed to assessed the full sale consideration as income of

3 ITA 304/JP/15_ Shri Bhim Raj Meena Vs. ITO

the assessee without applying the mind but solely on the basis of the

information received from J.CIT, Range-1, Udaipur. The ld AR thus

contended that the assessee raised the additional ground before the ld.

CIT(A) challenging the validity of reopening and issuing notice u/s 148

however, the ld. CIT(A) despite issuing a remand order and no objection

raised by the AO has rejected the additional ground in limine. He has

forcefully contended that when the additional ground raised by the

assessee is purely legal in nature and goes to the root of the matter then

the same ought to have been admitted and adjudicated by the ld. CIT(A)

instead of rejected in limine. In support of his contention he has relied

upon the following decisions as under:-

(I) NTPC V. CIT 229 ITR 383 (SC)

(II) CIT V. Indian Bank 230 Taxman 635 (Mad.)

(III) ITO V. Jasjit Singh 52 Taxmann.com 477 (Del-Trib.)

(IV) Asha Haldea V. Dy. DIT (Int. Taxantion), Jaipur dt. 19.06.2017

in ITA No. 11/JP/2016

Thus, the ld. AR of the assessee has submitted that the additional ground

may be decided on merits.

additional ground raised by the assessee before the ld. CIT(A) and

submitted that when the assessee did not appear before the AO despite

4 ITA 304/JP/15_ Shri Bhim Raj Meena Vs. ITO

sufficient opportunities and the Assessing Officer has passed the order u/s

144 r.w.s. 147 then conduct of the assessee does not warrant raising an

additional ground before the ld. CIT(A). She has strongly relied upon the

impugned order of the ld. CIT(A).

on record. The assessment was reopened by the AO by issuing a notice

u/s 148 on 07.12.2012. The reasons for reopening of the assessment has

been recorded by the AO are reproduced as under:-

“ As per information received from JCIT, Range-1, Udaipur vide letter No. JCIT/R-1/UDR/Int./2012-13 dated 08.11.2012, the aforesaid assessee has sold 4004 Sq. feet of land situated at Plot No. 9, Shree Ram Colony, Jaipur on 30.03.2008 to his assessee viz M/s Riddhi Siddhi Infra Projects Pvt. Ltd., Udaipur for Rs. 25,00,000/-. On perusal of ITR for A.Y. 2008-09 filed on 20.02.2009 at S.No. 2731018042, the assessee did not show any detail of capital gain in this regard. Since, the assessee has received sale consideration of Rs. 25,00,000/- as per copy of sale deed enclosed with the above referred letter and not shown the same in his total income, therefore the income of Rs. 25,00,000/- for the A.Y. 2008-09 did not offered for taxation by the assessee in his return of income, thus the income of Rs. 25,00,000/- has escaped from tax. I have therefore reason to believe that on account of failure on the part of the assessee to include the income in his return of income for the A.Y. 2008-09 the income chargeable to tax of Rs. 25,00,000/- has escaped assessment within the term of section 147 of the IT Act.”

5 ITA 304/JP/15_ Shri Bhim Raj Meena Vs. ITO

Thus, it is clear that the AO received information from J.CIT, Range-1,

Udaipur regarding sale of plot of land by the assessee on 30.03.2008 for a

consideration of Rs. 25,00,000/-. Since the assessee has not offered

income from the sale of plot of land the AO believed that the income

chargeable to tax of Rs. 25,00,000/- has escaped assessment. The

Assessing Officer has proposed to proceed and assess the entire sale

consideration as income of the assessee. The assessee did not appear

before the Assessing Officer and consequently the assessment was framed

u/s 144 r.w.s. 147. The assessee has challenged the action of the AO

before the ld. CIT(A) and also raised an additional ground regarding

validity of reopening on which the ld. CIT(A) was pleased to forward the

application of the assessee to the AO for the comments and objections of

the AO if any. In the remand report the Assessing officer did not raise any

objection in respect of additional ground, however, the ld. CIT(A) by

considering the conduct of the assessee during the reassessment

proceedings declined to admit the additional ground. It is pertinent to

note that the non appearance of the assessee before the AO cannot be a

reason for rejecting the admission of additional ground which is purely

legal in nature and goes to the root of the matter. The Hon’ble Supreme

Court in case of NTPC V. CIT (supra) while dealing with the issue of

6 ITA 304/JP/15_ Shri Bhim Raj Meena Vs. ITO

jurisdiction of the Appellate Authority to entertain and adjudicate a legal

issue has held as under:-

In the case of Jute Corporation of India Ltd. v. C.I.T.[1991] 187 ITR 688, this Court, while dealing with the powers of the Appellate Assistant Commissioner observed that an appellate authority has all the powers which the original authority may have in deciding the question before it subject to the restrictions or limitations, if any, prescribed by the statutory provisions. In the absence of any statutory provision, the appellate authority is vested with all the plenary powers which the subordinate authority may have in the matter. There is no good reason to justify curtailment of the power of the Appellate Assistant Commissioner in entertaining an additional ground raised by the assessee in seeking modification of the order of assessment passed by the Income-tax Officer. This Court further observed that there may be several factors justifying the raising of a new plea in an appeal and each case has to be considered on its own facts. The Appellate Assistant Commissioner must be satisfied that the ground raised was bona fide and that the same could not have been raised earlier for good reasons. The Appellate Assistant Commissioner should exercise his discretion in permitting or not permitting the assessee to raise an additional ground in accordance with law and reason. The same observations would apply to appeals before the Tribunal also.

The view that the Tribunal is confined only to issues arising out of the appeal before the Commissioner of Income-tax (Appeals) takes too narrow a view of the powers of the Appellate Tribunal [vide, e.g., C.I.T, v. Anand Prasad [1981] 128 ITR 388(Delhi), C.I.T. v. KaramchandPremchand P. Ltd.[1969] 47 ITR 254 (Guj) and C.I.T. v. Cellulose Products of India Ltd.[ 1985] 151 ITR 499 (Guj) [FB] . Undoubtedly, the Tribunal will have the discretion to allow or not allow a new ground to be raised. But where the Tribunal is only required to consider a question of law arising from the facts which are on record in the assessment proceedings we fail to see why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee.

The reframed question, therefore, is answered in the affirmative, i.e., the Tribunal has jurisdiction to examine a question of law which arises from the facts as found by the authorities below and having a bearing on the tax liability of the assessee. We remand the proceedings to the Tribunal for consideration of the new grounds raised by the assessee on the merits.

Thus, in view of the facts and circumstances of the case that the additional

ground raised by the assessee is purely legal in nature and goes to the

root of the matter the ld. CIT(A) should have exercised its discretion in

admitting the same and deciding the issue on merits instead of rejecting

the additional ground in limine. Hence, the additional ground raised by the

assessee is admitted and the issue of validity of reopening of the

assessment is remanded to the record of the ld. CIT(A) for adjudication on

merits. Needless to say that the assessee be given an appropriate

7 ITA 304/JP/15_ Shri Bhim Raj Meena Vs. ITO opportunity of hearing. It is made clear that since the legal issue raised by

the assessee goes to the root of the matter and has been set aside to the

record of the ld. CIT(A) for adjudication, therefore, I do not propose to go

into the other grounds raised by the assessee in this appeal and the same

are left open.

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

purposes.

Order pronounced in the open court on 08 /11/2017.

Sd/- ¼ fot; iky jko ½ (VIJAY PAL RAO) U;kf;d lnL; @Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 08/11/2017 *Santosh आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू vihykFkhZ@The Appellant- Shri Bhim Raj Meena, Jaipur. 1. izR;Fkh@ The Respondent- The ITO, Ward 7(3), Jaipur. 2. vk;dj vk;qDr@ CIT 3. vk;dj vk;qDr¼vihy½@The CIT(A) 4. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. xkMZ QkbZy@ Guard File (ITA No. 304/JP/15) 6. vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेज. त्महपेजतंत