VIJAY C SHAH,BANGALORE vs. THE INCOME TAX OFFICER WARD-2(2)(5), BANGALORE

O R D E R

Per Shri A.K. Garodia, Accountant Member

by the assessee are as under.

1. The learned Assessing Officer had erred in passing the order in the manner passed by him and the learned Commissioner of Income tax (Appeals) has erred in partially confirming the same. The orders passed are bad 'in law and are liable to be quashed. 2.1 In any case, the conditions precedent for toe issue of notice u/s. 148 of the Act being absent, the re-opening of assessment becomes bad in law and consequently the order as passed/confirmed being also bad in law is required to be quashed. 2.2 In any case the assessing officer having not complied with legal provisions / procedure for reopening / reassessment, the consequential order becomes bad in law and liable to be quashed. 3.1 In any case the order passed is in gross violation of the principles of natural justice and fair play, especially in the' absence of the cross examinations of the persons whose averments are sought to be relied upon by the Assessing Officer while passing the order, makes the Page 2 of 4 order totally bad in law and liable to be cancelled. 3.2 The learned Commissioner of Income: tax (Appeals) 'has instead of quashing the impugned order, has just confirmed the order of Assessing Officer. 'without properly considering the facts and circumstances of the case, arguments of the appellant and the law applicable.

5. In any case and without further prejudice, the authorities below have erred in: a) Taxing/ confirming the entire' consideration received on sale of- shares as unexplained income under the head other sources. b) Holding without basis that the transactions in shares are fraudulent. c) Alleging without any basis that the appellant has obtained accommodation entries and appellant's own money come back in the guise of capital gains. The conclusions / observations of authorities below being totally erroneous and without basis bothon facts and law is to be disregarded.

4. I have considered the rival submissions. I find that as per ground no. 3 raised by assessee before CIT (A) as reproduced by CIT (A) on page no. 2 of his order, this ground was raised by assessee that AO has not followed the legal requirements before completing the assessment and therefore, the assessment order is bad in law and should be quashed. Although in this ground, no specific claim was made that the order is bad in law for non- issue of notice u/s. 143(2) of IT Act but in the written submissions filed by assessee before CIT (A), specific claim was made in para 17 of written submissions as available on page 42 that there was no notice served u/s 143 (2) and therefore, the assessment order is bad in law. Reliance was placed on the judgment of Hon’ble Apex Court rendered in the case of ACIT &Anr. Vs. Hotel Blue Moon (supra). In spite of this, this ground of appeal no. 3 was not decided by CIT (A) and hence, I feel it proper to restore the matter back to the file of CIT (A) for first deciding this issue because that is the technical issue which should be decided first before decision on merit. If it is found that the assessee succeeds on this aspect, then nothing else remains to be decided because in that situation, the assessment order has to be quashed. But if the assessee fails on this aspect, then the issue on merit should be decided afresh. With these observations, I set aside the Page 4 of 4 order of CIT(A) and restore the matter back to the file of CIT(A) for fresh decision in the light of above discussion after providing adequate opportunity of being heard to both sides. In view of this decision, no adjudication on merit is called for at the present stage.