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Income Tax Appellate Tribunal, BENGALURU
1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28TH DAY OF OCTOBER, 2022 PRESENT THE HON’BLE MR. JUSTICE P.S.DINESH KUMAR AND THE HON’BLE MR. JUSTICE ANANT RAMANATH HEGDE ITA NO.156 OF 2022 BETWEEN: M/S ICKON PROJECTS, REPRESENTED BY ITS PARTNER, SRI.D.K.SHIVAKUMAR SON OF LATE SRI.D.K.KEMPEGOWDA, AGED ABOUT 59 YEARS, UNIT 303, 3RD FLOOR, EMBASSY SQUARE, 148, INFANTRY ROAD, BENGALURU-560001, PAN AABF17099A. …APPELLANT (BY SRI V CHANDRASHEKAR, ADVOCATE FOR SRI M LAVA, ADVOCATE) AND: THE INCOME TAX OFFICER, WARD -4(3)/7(2)(3), BMTC BUILDING, 80 FEET ROAD, 6TH BLOCK, KORAMANAGALA, BENGALURU-560095. …RESPONDENT (BY SRI K.V.ARAVIND, ADVOCATE)
2 THIS ITA IS FILED UNDER SECTION 260A OF THE INCOME TAX ACT, 1961, ARISING OUT OF COMMON ORDER DATED 02/12/2021 PASSED IN ITA NO.771 AND 772/BANG/2017, FOR THE ASSESSMENT YEAR 2006-2007 AND 2007-2008 PRAYING THIS HON'BLE COURT TO: (A) TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN AND ANSWER THE SAME IN FAVOUR OF THE APPELLANT. (B) ALLOW THE APPEAL AND SET ASIDE THE FINDINGS THEREIN TO THE EXTENT AGAINST THE APPELLANT IN THE COMMON ORDERS PASSED BY THE HON'BLE INCOME TAX APPELLATE TRIBUNAL, BENGALURU BENCH 'B', BENGALURU IN ITA NOS. 771 AND 772/BANG/2017 IN COMMON ORDER DATED 02/12/2021 RELATING TO THE ASSESSMENT YEARS 2006-2007 AND 2007-2008 RESPECTIVELY (VIDE ANNEXURE-A). (C) TO PASS SUCH OTHER ORDERS, AS THIS HON'BLE COURT DEEMS FIT AND PROPER TO MEET THE ENDS OF JUSTICE. THIS APPEAL COMING ON FOR FURTHER HEARING THIS DAY, P.S. DINESH KUMAR J, DELIVERED THE FOLLOWING:- JUDGMENT
This appeal by the assessee challenging the common order dated 02.12.2021 in ITA Nos.771 and 772/Bang/2017 has been filed framing three questions of law which are as under: "1. Whether the Tribunal was justified in not holding that the notices issued under section 148
3 for the Assessment Years 2006-07 and 2007-08 are without jurisdiction and hence void-ab-initio under the facts and circumstances of the Appellant's case. 2. Whether the Tribunal was justified in not holding that the notices issued under section 148 for the Assessment Years 2006-07 and 2007-08 are without jurisdiction, in as much as no sale of the subject land took place in the impugned assessment years and hence void-ab-initio under the facts and circumstances of the Appellant's case. 3. Whether the Tribunal was justified in not deciding itself that the proceedings initiated under section 147, by issue of notice under section 148 was bad in law in as much the correct section under which any proceeding could have been initiated was under section 153C of the Act and hence void ab initio under the facts and circumstances of the Appellant's case".
Shri Chandrashekar for the assessee submitted that during search in the premises of M/s Davanam Jewellers Pvt. Ltd. on 02.09.2010, an undated 'agreement to sell' entered into between the assessee and M/s Sobha
4 Developers Limited in respect of property measuring 52152 sq. ft. of land mentioned in the schedule to the agreement was found. Without following due process, the Assessing Officer issued notice under Section 148 of the Income Tax Act holding that the sale was complete and asssessee was liable for capital gains tax for A.Y.2006-07 and concluded the assessment. He also concluded protective assessment for A.Y. 2007-08. Assessee challenged both the orders before the CIT(A). The CIT(A) by two different orders upheld the Assessing Officer's view. On further appeal, the ITAT by its common order dated 02.12.2021 has remitted the matter to the CIT(A) for fresh disposal to decide the issue raised in the additional grounds.
Shri Chandrashekar urged that though the agreement in question is not dated, the stamp paper was purchased on 09.10.2009. Therefore, as on that date the sale was not complete. Adverting to paragraph 9 of the agreement, he contended that the actual physical
5 possession of the property in question was agreed to be delivered at the time of execution and registration of the sale deed. Therefore the question of taxing the assessee for A.Y.2006-07 and the protective assessment for 2007- 08 are bad in law.
Sri K.V.Aravind, learned Senior Standing Counsel for the Revenue submitted that assessee among others had raised a ground before the ITAT that the assessment under Section 147 of the Income Tax Act was not maintainable but the Revenue could have considered the assessment under Section 153C. He submitted that a specific query was made by the ITAT whether the assessee would invite a decision on merits and the answer given by the assessee was in the affirmative. In that view of the matter, the ITAT has remanded the case to the file of CIT(A). Hence, no interference is called for in this appeal.
We have carefully considered the rival contentions and perused the records.
Undisputed facts of the case are, based on the agreement found during the search in the premises of M/s Davanam Jewellers Pvt. Ltd., the assessment was reopened for A.Y.2006-07. The assessment order does not indicate the procedure followed in re-opening the assessment. In addition protective assessment for A.Y.2007-08 has also been completed.
We have perused the agreement. Shri Chandrashekar is right in his submission that though the agreement is undated, the stamp paper bears the date of purchase as October 9th, 2009. In paragraph 2 of the agreement, the details of the payments are shown. In paragraph 9 of the agreement, it is stated that the possession of the land shall be handed over after execution of the sale deed. In the facts of this case, in the absence of details in the assessment order with regard to the procedure followed and want of reasons whether assessment could be done under Section 147 or 153C
7 which is a question of law, in our considered opinion, same requires to be answered by the ITAT.
It was pointed out by Sri Aravind that the question with regard to conclusion of assessment in similar case is pending consideration in CA 954/2022 which has been heard and reserved for orders by the Apex Court.
In view of the above, in our considered opinion, the matter requires consideration in the hands of the ITAT. Accordingly, this matter is remitted on the file of the ITAT for fresh consideration in accordance with law.
Hence the following: ORDER (i) Appeal is disposed of. (ii) Matter is remitted to the file of the ITAT for fresh consideration in accordance with law, after disposal of C.A.954/2022 by the Apex Court. (iii) Liberty is reserved to both assessee and Revenue to urge all contentions raised earlier before the ITAT.
8 (iv) In view of the remand order, the questions of law raised by the assessee do not require any answer and hence, they are unanswered.
No costs. Sd/- JUDGE Sd/- JUDGE BRN