INCOME-TAX OFFICER vs. SMT. SUSHILABAI K. SANKLECHA, NASHIK

आदेश / ORDER

PER D. KARUNAKARA RAO, AM

This core appeal filed by Revenue is directed against the order of

Commissioner of Income Tax (Appeal)-2, Nashik dated 22.06.2016 for

assessment year 2008-09. The assessee has filed cross objection in the appeal

filed by the Department.

ITA No.1972/PUN/2016 ( By Revenue) A.Y. 2008-09

in appeal:

“1. Whether on the facts & circumstances of the case and in law, the Ld. CIT(A) was justified in quashing the reassessment order u/s 147 passed by the AO. relying on the decision of the Hon'ble Supreme court in the case of GKN Drive Shaft (India) Ltd. Vs. ITO 259 ITR 19 without appreciating the fact that the A.O had disposed off the objection filed by the assessee by way of making a noting in the order sheet and signed by the A.R of the assessee? 2. Whether on the facts & circumstances of the case and in law, the CIT(A) was justified in quashing the reassessment order u/s 147 passed by the AO. by not considering section 292B of the Income-tax Act-1961? 3. The appellant prays leave to add, alter, clarify, amend or to withdraw any grounds of appeal as and when the occasion demands.”

ITA No.1972/PUN/2016 CO No. 01/PUN/2017 A.Y.2008-09

income on 06.03.2009 declaring total income at Rs.2,09,130/-. The case of

the assessee was re-opened on 02.08.2012 by issuing notice u/s. 148 of the

Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). The Assessing

Officer noted that the assessee entered into development agreement with

M/s.Vascon Dewlling Pvt. Ltd. for developing the property bearing survey No.

82/1/1/1+2+3 at Wadala, Nashik. The sale value of the said property was

credited by M/s. Sanklecha Constructions in its profit and loss account. The

Assessing Officer held that as the per the provision of the Income Tax Act,

1961, the sale should have been recorded in the books of purchaser and not in

the books of M/s. Sanklecha Construction and the short term/ long term

capital gain/loss should be taxed in the hands of assessee. In re-assessment

proceedings, the Assessing Officer assessed the total income of assessee at

Rs.43,75,800/- (rounded off) and completed the assessment u/s. 143(3) r.w.s.

147 by making addition of Rs. 41,66,666/- on account of short term capital

gain.

CIT(A) challenging the re-assessment proceedings on the ground that

Assessing Officer disposed off the objection filed by assessee by way of making

a noting in the order sheet and not followed the proper procedure laid down

by the Hon'ble Supreme Court of India. The CIT(A) in the case of assessee

held that the Assessing Officer has not adhered to the procedure laid down by

the Hon'ble Supreme Court of India in the case of GKN Driveshafts (India)

Ltd. Vs. Income Tax Officer & Ors reported as 259 ITR 19 and thus,

assessment order is declared invalid by CIT(A). Against the said findings of the

CIT(A), the Department is in appeal before us raising grounds extracted above.

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Officer/ CIT(A).

CIT(A) submitted that the assessee sought the reasons for re-opening of the

assessment and thereafter, filed objections against re-opening of the

assessment. The Assessing Officer without disposing of the objections as has

been laid down by the Hon'ble Supreme Court of India in the case of GKN

Drive shaft (India) Ltd. ITO & Ors (supra) proceeded on to make assessment.

The Ld. Counsel further, submitted that similar issue involved in this case

was adjudicated by Pune Bench of Tribunal in the case of ITO Vs. Smt.

Nirmala Vijay Sanklecha, ITA No. 1937/PUN/2016 and CO No.

35/PUN/2016 for A.Y. 2008-09 decided on 23.02.2018. The contents of Para

15 of the order of Tribunal are relevant in this regard and same is extracted as

under:

“15. It is apparent from record that the Assessing Officer committed error in not following the proper procedure for deciding the objections of assessee against re-opening of assessment. The Assessing Officer is a quasi judicial authority and is therefore, duty bound to follow the law laid down by the Hon'ble Supreme Court of India, the Hon'ble High Courts and the Appellate Authorities. The assessment orders have been passed by the Assessing Officer in both the cases without following the principles as set out by the Hon'ble Apex Court and Hon'ble Jurisdictional High Court. Thus, considering the facts of the case and in the light of various judgments the impugned orders are set aside and appeals of the Revenue are dismissed.”

Thus, considering the above referred decision of Pune Bench of

Tribunal, the fact that the Assessing Officer had not disposed of objections of

the assessee against issuance of notice for re-opening assessment by a

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speaking order, the impugned order is set aside and appeal of the Revenue is

dismissed.

CO No. 01/PUN/2017 ( By assessee) A.Y. 2008-09

delay in filing cross objection in late by 57 days due to miscommunication

among their staff. Since the delay in filing cross objection is unintentional,

the cross objection filed by assessee is admitted and taken up for

adjudication.

addition made on merit. Since, I uphold the findings of CIT(A) in quashing the

assessment order as mentioned by the Ld. AR, the cross objection filed by the

assessee has become infructuous and is dismissed.

Order pronounced on 16th day of May, 2018.

Sd/- (डी.क�णाकरा राव/D. Karunakara Rao) लेखा सद�य / ACCOUNTANT MEMBER

पुणे / Pune; �दनांक / Dated : 16th May, 2018. SB

6 ITA No.1972/PUN/2016 CO No. 01/PUN/2017 A.Y.2008-09

आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT(Appeal)-2, Nashik. 4. The Pr. CIT-2, Nashik. 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “एक-सद�य” ब�च, पुणे / DR, ITAT, “SMC” Bench, Pune. गाड� फ़ाइल / Guard File. 6.

// True Copy // आदेशानुसार / BY ORDER,

�नजी स�चव /Private Secretary आयकर अपील�य अ�धकरण, पुणे / ITAT, Pune.