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Income Tax Appellate Tribunal, Bengaluru Bench
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ITA No. 349 of 2019
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 30TH DAY OF JANUARY, 2023 PRESENT THE HON'BLE MR. JUSTICE P.S.DINESH KUMAR AND THE HON'BLE MR. JUSTICE RAMACHANDRA D. HUDDAR INCOME TAX APPEAL NO. 349 OF 2019
BETWEEN: SHRI. PANNALAL PUKRAJ PROP:M/S. SUMANGALI JEWELLERS #2, 1 FLOOR, ELLORA MANSION BANGALORE-560 002 PAN:ANFPP1774N …APPELLANT (BY SHRI. T.N.C. SRIDHAR FOR SMT. M.R. VANAJA, ADVOCATES)
AND: ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-5(2) BANGALORE …RESPONDENT
(BY SHRI. E.I. SANMATHI, STANDING COUNSEL)
THIS ITA IS FILED UNDER SECTION 260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 30.01.2019 PASSED IN ITA NO.413/BANG/2018 FOR THE ASSESSMENT YEAR 2012-13 PRAYING TO FORMULATE THE SUBSTANTIAL QUESTION OF LAW AS STATED ABOVE AND ANSWER THE SAME IN SAME IN FAVOUR OF THE APPELLANT AND TO ALLOW THE APPEAL AND SET ASIDE THE FINDINGS TO THE EXTENT WHICH IS AGAINST THE APPELLANT IN THE ORDER PASSED BY THE
Digitally signed by YASHODHA N Location: HIGH COURT OF KARNATAKA
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ITA No. 349 of 2019
INCOME TAX APPELLATE TRIBUNAL BANGALORE ‘A’ BENCH, BANGALORE IN ITA NO.413/BANG/2018 DATED 30.01.2019 FOR THE ASSESSMENT YEAR 2012-2013 VIDE ANNEXURE-A AND ETC.
THIS ITA, COMING ON FOR HEARING, THIS DAY, P.S.DINESH KUMAR, J., DELIVERED THE FOLLOWING:
JUDGMENT
This appeal by the assessee, directed against the order dated 30.01.2019 in ITA No.413/Bang/2018 passed by the ITAT1, Bengaluru Bench, for the A.Y2. 2012-13, has been admitted to consider following questions of law: 1. Whether on the facts and circumstances of the case, the Tribunal ought to have held that the Jurisdiction of the assessing officer is governed by section 124 of the act and not PAN issued by the department and thus passed a perverse order upholding the assessment?
Whether on the facts and circumstances of the case, the learned Tribunal is justified in law in holding that the appellant cannot rise any plea about non-service of notice u/s 143(2) dated 11/09/2013 having regard to the provisions of section 292BB of the act by the Tribunal?
Whether on the facts and circumstances of the case, the Tribunal failed to appreciate the fluctuation in rate of gold depended upon the international market of gold on day to day and the requirement of the customers and thus passed a perverse order upholding the addition?
1 Income tax Appellate Tribunal, Bengaluru Bench 2 Assessment Year
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ITA No. 349 of 2019
Whether on the facts and circumstances of the case, the Tribunal ought to have noticed that the addition of Rs. 1,18,34,065/- was already offered as part of sales by the appellant and therefore the addition of the same amounted to a double addition and thus passed a perverse order?
Heard Shri T.N.C.Sridhar, learned advocate for the appellant-Assessee and Shri E.I.Sanmathi, learned Standing Counsel for the respondent –Revenue.
Brief facts of the case are, the assessee was filing his returns before the ACIT3, Circle (1), Vellore. The last return was filed in Vellore was for the A.Y. 1997-98. Thereafter he shifted to Bangalore. The case was taken up for scrutiny for the A.Y.2012-13 and a notice was issued by the ITO4 Ward-1(2), Vellore. The assessee addressed letters dated 22.09.2014, 13.10.2014, 12.01.2015 (Annexures K1, K2 & K3), in reply to the notices issued by the ACIT, Vellore, requesting him to transfer the file to Bangalore and to permit him to appear before the jurisdictional A.O.5 at
3 Assistant Commissioner of Income Tax 4 Income Tax Officer 5 Assessing Officer
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ITA No. 349 of 2019
Bangalore. However, the A.O. at Vellore completed the assessment and passed the assessment order dated 31.03.2015 as per Annexure-B. The assessee challenged the same in an appeal before the CIT(A)-13, Chennai and the said appeal was transferred to CIT(A)-5, Bangalore. By his order dated November 21, 2017 as per Annexure-D, CIT(A)-5, Bangalore, concurred with the view taken by the A.O and dismissed the appeal. The ITAT has also dismissed assessee’s appeal by the impugned order.
Shri Sridhar submitted that despite replying to first notice dated 15.09.2014 issued by the ACIT, Vellore, as per Annexure-K1, the ACIT kept on issuing notices repeatedly and the said notices have also been replied as per Annexures K2 dated 13.10.2014 and K3 dated 12.01.2015. Assessee had shifted from Thirupatur to Bangalore in A.Y.1997-98. He has filed his returns for the A.Y.2012-13 online. With these submissions he prayed that appeal be allowed.
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ITA No. 349 of 2019
Shri Sanmathi, learned Standing Counsel for the Revenue submitted that the assessee had participated in the assessment proceedings before the ACIT, Vellore. Having participated in the proceedings, he is estopped from taking a stand that he had shifted to Bangalore and his assessment ought to have been considered by the A.O., Bangalore. With these submissions, he prayed for dismissal of this appeal.
We have carefully considered rival submissions and perused the records.
The A.O. has noted in para 2 of his order that notice under Section 143(2) of the Act6 was issued on 11.09.2013 and the same was served. As there was no response, notice under Section 142(1) of the Act was issued on 24.12.2013 and further notices were issued on 15.09.2014, 07.10.2014 and 01.01.2015. In response to the said notices, the
6 Income Tax Act, 1961
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ITA No. 349 of 2019
assessee had replied on 19.01.2015 requesting the A.O. to transfer the file to Bangalore. Revenue’s case is, the case was likely to become time barred on 31.03.2015 and the PAN was lying with his jurisdiction and hence file could not be transferred to Bengaluru and the proceedings were continued in Vellore.
We may record that the A.O. has issued first notice dated 15.09.2014 which was promptly replied by the assessee on 22.09.2014 as per annexure-K1. However, the A.O. has adverted to his notice dated 01.01.2015 only. Even that notice has been replied on 12.01.2015 as per Annexure-K3. A.O. has completed the assessment on the premise that it was likely to be time barred on 31.03.2015. If prompt action was taken by the A.O., still six months time was available to him to complete the assessment.
We have noticed that in guidelines/notifications issued by the CBDT7, it has impressed upon Assessing Officers and
7 Central Board of Direct Taxes
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ITA No. 349 of 2019
other Tax Officers to assist the assessees. In this case, though repeatedly the assessee was requesting for transfer, the ACIT, Vellore proceeded further to complete the assessment on an untenable and perverse premise that assessment was likely to be time barred. The CIT(A), though has taken note of this aspect in para 7 of his order, he has accepted the view taken by the A.O. and dismissed the appeal. The ITAT has also dismissed the appeal.
In our considered view, the communications as per Annexures K1, K2 and K3 ought to have been examined in the right perspective and the case ought to have been transferred to Bangalore. Shri Sanmathi is right to the extent that the assessee did participate in the proceedings. However, once the assessee had pleaded that he had shifted his residence and made repeated requests for transfer of the case, the reasons assigned by the A.O. that assessment was likely to be time barred is perverse and unsustainable in law.
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ITA No. 349 of 2019
At this stage, Shri Sanmathi submits that matter may be remitted to the jurisdictional AO to pass fresh order. The request is just and appropriate.
In view of the above, this appeal merits consideration and hence the following: ORDER i) The appeal is allowed;
ii) The order 31.03.2015 passed by the A.O. (Annexure-B);
iii) The order dated 21.11.2017 passed by the CIT(A) (Annexure-D); and
iv) The order dated 30.01.2019 in ITA No.413/Bang/2018 passed by the ITAT are set aside.
v) The matter is remitted to the ITO, Ward 5(2(1), Bangalore to pass fresh orders in accordance with law.
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ITA No. 349 of 2019
vi) Since the matter has been remitted, questions of law are not answered.
No costs.
Sd/- JUDGE
Sd/- JUDGE
YN List No.: 1 Sl No.: 39