MOOL CHAND SHARMA,JAIPUR vs. ITO, JAIPUR

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ITA 524/JPR/2014Status: DisposedITAT Jaipur11 April 2017AY 2006-075 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the assessee was not provided with an effective opportunity of being heard, which is a mandatory legal requirement. Therefore, all issues were restored to the Assessing Officer for de novo decision.

What were the facts?

The assessee's appeal emanates from an order of the CIT(A) for AY 2006-07. The assessment was completed ex parte by the AO due to the assessee's non-appearance, and the CIT(A) also decided the appeal without a speaking order or proper appreciation of additional evidence.

What were the issues?

Whether the assessment and appellate orders were valid when the assessee was not given an adequate opportunity of hearing. Whether the CIT(A) properly appreciated the additional evidence and followed the correct procedure.

Which sections of the Income-tax Act were involved?

Section 144,Section 251(2),Section 54B,Section 54F

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JAIPUR BENCHES (SMC

Before: SHRI BHAGCHANDvk;dj vihy la-@ITA No. 524/JP/2014

For Appellant: Shri Manish Agarwal (CA) jktLo dh vksj ls@
Hearing: 06/04/2017Pronounced: 11/04/2017

+आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR Jh Hkkxpan] ys[kk lnL;] ds le{k BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER vk;dj vihy la-@ITA No. 524/JP/2014 fu/kZkj.k o"kZ@Assessment Year : 2006-07 cuke Mool Chand Sharma, Income Tax Officer, Vs. Village- Sarangpura, Tehsil- Ward 7(2), Sanganer, Jaipur. Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: BNBPS 2467 L vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Manish Agarwal (CA) jktLo dh vksj ls@ Revenue by : Shri Raj Mehra (Addl.CIT) lquokbZ dh rkjh[k@ Date of Hearing : 06/04/2017 mn?kks"k.kk dh rkjh[k@ Date of Pronouncement : 11/04/2017 vkns'k@ ORDER

PER: BHAGCHAND, A.M.

This is an appeal filed by the assessee emanates from the order dated 12/06/2014 passed by the ld CIT(A)-III, Jaipur for the A.Y. 2006-

07, wherein the assessee has raised following grounds of appeal:-

“1. On the facts and in the circumstances of the case the Ld. CIT(A) has grossly erred in upholding the action of the Ld.AO in completing the assessment u/s 144 without appreciating the fact that notice u/s 142(1) dated 14.02.2007 and 07.06.2007 requiring the assessee to file his return of income allegedly sent by registered post was never served upon the assessee thus the subsequent

ITA 524/JP/2014_ 2 Mool Chand Sharma Vs ITO

assessment framed u/s 144 for non-compliance of notice is invalid, illegal and bad in law and deserves to be hold as annulled / cancelled more particularly when the assessee has already filed the return of income 06.08.07 for which no cognizance was taken.

Without prejudice to ground nos. 1 the following grounds are taken on merit of the case:

2.

On the facts and in the circumstances of the case the CIT(A) has grossly erred in enhancing the income at Rs. 17,70,920/- on account of long term capital gain as against the addition of Rs. 15,78,480/- made by Ld. AO, without following the procedure u/s 251(2) of the Income tax Act, 1961.

2.1 That the Ld. CIT(A) has further erred in estimating the cost of acquisition at Rs. 4,563/- as against Rs. 2,00,000/- claimed by the assessee arbitrarily without any basis, thus the cost of acquisition be taken at Rs. 2,00,000/- for computing the long term capital gain.

3.

The Ld. CIT(A) has erred in not allowing the deduction u/s 54B of the Income Tax Act, 1961 of Rs. 2,75,000/- claimed by the assessee being investment made in agriculture land out of sale proceeds in the name of his family members, thus deduction as claimed deserves to be allowed to the assessee.

4.

The Ld. CIT(A) has erred in not allowing the deduction u/s 54F of the Income Tax Act, 1961 on account of investment in construction of house property, arbitrarily by wrongly observing that the construction was started in 2009 and finished on May, 2010 when in fact as per valuation report at point no. 41 it is clearly stated that construction was commenced in May 2005 and finished on April 2008 and date of valuation report is 25.05.2010, thus observation of

ITA 524/JP/2014_ 3 Mool Chand Sharma Vs ITO

the Ld. CIT(A) based on wrong facts deserves to be ignored and excluded and deduction u/s 54F as claimed by the assessee deserves to be allowed.”

2.

In this case, the assessment order was passed ex parte due to

non-appearance of the assessee. The Assessing Officer has observed in

his assessment order that several opportunities for compliance of the

notices were given to the assessee, but he failed. Therefore, he assessed

total income of the assessee at Rs. 16,28,480/-.

3.

Before the ld. CIT(A) the assessee has submitted additional

evidence, which were admitted, however, the ld. CIT(A) has not passed a

speaking order. The additional evidences were not properly appreciated.

4.

Before the Tribunal, the ld. AR of the assessee has submitted that

the Assessing Officer has decided the appeal ex parte without giving

proper and effective opportunity of hearing. The ld. CIT(A) has decided

the appeal without going into the merit of evidences, therefore, he

prayed to restore the matter back to the file of the Assessing Officer. The

AR pleaded that the Assessing Officer may be directed to give proper and

effective opportunity of being heard.

5.

On the contrary, the ld. Sr. DR has vehemently supported the

orders of the authorities below and further submitted that the Assessing

ITA 524/JP/2014_ 4 Mool Chand Sharma Vs ITO

Officer had given several opportunities to the assessee but the assessee

does not want to pursue his matter. The ld. CIT(A) has rightly decided

the appeal, therefore he prayed to sustain the order of the ld. CIT(A).

7.

I have heard both the parties and have also gone through the

records. From perusal of the records, it transpires that the Assessing

Officer gave opportunity to the assessee. However, there is no evidence

on record to justify or confirm the fact that assessee was provided

adequate and effective hearing with regard to the direction sought and

provided. The facts of the case shows that the assessee has not been

provided an effective opportunity of being heard with regard to directions

issued by the Assessing Officer, which is a mandatory requirement of

law. Therefore, by keeping in view of all these facts, I restore all the

issues to the file of the Assessing Officer to decide de novo after giving

adequate and sufficient opportunity of being heard to the assessee. The

assessee is also directed to cooperate with the Assessing Officer in

deciding the case in accordance with law. If the assessee fails in

cooperating the Assessing Officer then no further opportunity would be

given to him. Accordingly, this appeal is restore back to the file of the

Assessing Officer.

ITA 524/JP/2014_ 5 Mool Chand Sharma Vs ITO 7. In the result, the appeal of the assessee is allowed for statistical

purposes only.

Order pronounced in the open court on 11/04/2017.

Sd/- ¼Hkkxpan½ (BHAGCHAND) ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 11th April, 2017.

*Ranjan आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू vihykFkhZ@The Appellant- Shri Mool Chand Sharma, Jaipur. 1. izR;FkhZ@ The Respondent- The ITO, Ward-7(2), 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. 524/JP/2014) 6. vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेज. त्महपेजतंत

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