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Income Tax Appellate Tribunal, “C” BENCH : BANGALORE
Before: SHRI SUNIL KUMAR YADAV & SHRI A.K. GARODIA
O R D E R
Per Sunil Kumar Yadav, Judicial Member
This appeal is preferred by the assessee against the order of the CIT(Appeals) inter alia on the following grounds:-
“1. The orders of the authorities below in so far as they are against the appellant are opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case.
2. The order of re-assessment is bad in law and void-ab-initio for want of requite jurisdiction especially, the mandatory requirements to assume jurisdiction u/s 148 of the Act did not exist and have not been complied with and consequently, the re- assessment requires to be cancelled.
2.1 The learned CIT[A] is not justified in upholding the validity of the assessment that was re-opened u/s. 147 of the Act without acceding to the prayer of the appellant to furnish the reasons recorded by the Assessing Officer and thus, the re- opening of the assessment that has been sustained without considering the objections of the appellant is improper and the same required to be vacated.
3. Without prejudice to the above, the learned CIT[A] is not justified in sustaining the assessment of long term capital gains of Rs.86,09,030/- holding that the appellant has transferred his property to his wife and son in terms of the sale deed dated 14/05/2008 under the facts and in the circumstances of the appellant's case.
3.1 The learned CIT[A] ought to have appreciated that the apparent was not real as the appellant had established the circumstances under which the appellant executed the sale deed dated 14/05/2008 and there was no case to hold that there was a transfer of the capital asset under the facts and in the circumstances of the appellant's case.
3.2 The learned CIT[A] ought to have further appreciated that the appellant had shown that his title to the property itself was under question and hence, he ought to have vacated the assessment of capital gains under the facts and in the circumstances of the appellant's case.
4. Without prejudice to the right to seek waiver with the Hon'ble CCIT/DG, the appellant denies himself liable to be charged to interest u/s. 234-A and 234- B of the Act, which under the facts and in the circumstances of the appellant's case deserves to be cancelled.
5. For the above and other grounds that may be urged at the time of hearing of the appeal, your appellant humbly prays that the appeal may be allowed and Justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs.”
During the course of hearing, the ld. counsel for the assessee has contended that the AO or the CIT(Appeals) have not supplied the reasons for reopening of the assessment. In the absence of availability of reasons, the assessee could not defend his case effectively. It was further contended before the CIT(Appeals) that assessee has raised a specific objection with regard to reasons recorded for reopening of the assessment and also sought the reasons from the CIT(Appeals), but it was not made available to the assessee. The CIT(Appeals) rejected the claim of the assessee, having noted that it was not sought from the AO.
Now before us, the ld. counsel for the assessee has categorically objected that the assessee has a right to know the reasons for reopening of the assessment, therefore reasons may be supplied to him so that he could file proper objections and before proceeding with the matter, reasons for reopening of the assessment should be disposed of by passing a speaking order.
The ld. DR, on the other hand, has submitted that the assessee has not sought the reasons for reopening the assessment before the AO, therefore he has no right to claim it at the belated stage, that too, in second appeal.
Having carefully examined the orders of the authorities below in the light of rival submissions, we find that the assessee has a right to know the reasons for reopening of the assessment. Undisputedly he has not raised a specific demand for supply of reasons before the AO. But a specific demand was raised before the CIT(Appeals) and the CIT(Appeals) instead of supplying copy of the reasons, has rejected the claim of assessee. This action of the CIT(Appeals) is not in accordance with the law. When the assessee has a right to know the reasons for reopening of the assessment, the same should have been supplied as and when demand is raised.
Therefore, we are of the view that the CIT(Appeals) first adjudicate the reasons for reopening of the assessment and thereafter proceed to decide the appeal on merits. We accordingly set aside the order of the CIT(Appeals) and restore the matter to his file with a direction to first supply the copy of reasons for reopening of the assessment and after obtaining the objections from the assessee, first dispose of the reasons for reopening of the assessment by passing a speaking order and thereafter decide the appeal on merits afresh, after affording opportunity of being heard to the assessee.
In the result, the appeal of the assessee is allowed for statistical purposes.
Pronounced in the open court on this 31st day of October, 2017.