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Income Tax Appellate Tribunal, DELHI BENCH “SMC-I”: NEW DELHI
Before: SHRI VIJAY PAL RAO
INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC-I”: NEW DELHI BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA No. 6851/Del/2014 (Assessment Year: 2007-08)
Sanjay Sharma, ITO, F-41, Site-C, Surajpur Ward-27(1), Vs. Industrial Area, New Delhi Greater Noida, PAN:AOAPS3749A (Appellant) (Respondent)
Appellant by : Sh.S.K.Khurana, Adv Respondent by : Dr. Anjula Jain, Sr. DR Date of Hearing 17.12.2015 Date of pronouncement 22.01.2016
O R D E R This appeal of the assessee is directed against the order dated 01.09.2014 of ld. CIT(A), New Delhi for the Assessment Year 2007-08. 2. The assessee has raised the following grounds:- “1. That Ld Income Tax Officer erroneously initiated the proceedings under sec 147 of the Act which was not valid and justified in both fact and law and Ld CIT (Appeal) was not justified in upholding the initiation of proceeding U/s 147 & the issuance of notice U/s 148 of IT Act 1961. 2. That Income Tax Officer was not correct on the fact and in the circumstances of the case and in law in assessing the appellant at taxable Income of Rs 8,15,030/- and Ld CIT (Appeal) was not justified in upholding the addition of Rs 5,48,600/-. 3. That Ld Income Tax Officer was not correct on the fact and in the circumstances of the case by treating sale of the depreciable assets to cover in the ambit of section 50C of Income Tax Act. 4. That Income Tax Officer was not justified in not referring the case to valuation officer and he ought to have referred to valuation officer prior to make addition. 5. That failure to apply valuation u/s 50C does not mean that assessee has escaped income and basis of reopening the assessment is bad in law. 6. The appellant assessee craves leave to after, amend or withdraw all or any objections here in or add any further grounds as may be considered necessary either before or during the hearing.” 3. The grounds No.1 is regarding validity of reopening.
Page No. 2 4. The assessee is engaged in the business of manufacturing of electrical penals under the name and style of M/s. Electro Control and Device. The original assessment in this case was completed u/s 143(3) of the Act vide order dated 04.05.2009, wherein the income of the assessee was assessed at Rs.2,66,430/- as against the return of income of Rs.2,14,099/-. Subsequently, the AO proposed to reopen the assessment on the reasons that the assessee has sold a property on 19.10.2006 of Rs.20 lac whereas the circle rate of the said property at that time was Rs.26,85,000/- by recording reasons as under:- “In this case assessment was completed u/s 143(3) on 04.05.2009 at an income of Rs.2,66,430/- against the return income of Rs.2,14,091/-. On going through the assessment record during the year the assessee has transferred a property on 19.10.2006 at Rs.20,00,000/- and the circle rate of said property was Rs.26,85,000/-. The property was purchased by the assessee on 19.11.2004 of Rs.16,36,400/-. Therefore there is a short term capital gain of Rs.10,48,600/- as per the provisions of section 50C of the Income Tax Act, 1961. The assessee has not declared full particulars in respect of this capital gain in his return of income. On the basis of above, I have reason to believe that an amount of Rs.10,48,600 has escaped assessment for the Assessment Year.2007- 08 and notice u/s 148 is issued to the assessee after taking approval from the Commissioner of Income Tax-IX, Delhi.
In re-assessment order dated 15.03.2013 the AO made an addition of Rs.5,48,600/- on account of short term capital gain. The assessee challenged the addition made by the AO before CIT(A) but could not succeed. 6. The ld AR of the assessee vehemently argued that the reopening is not valid as the AO proposed to reopen assessment only to apply section 50C of the Act and that too on the basis of the audit objection. Ld AR relied the decisions wherein it was held that reopening with the view to recomputed short term capital gain by applying the provisions of section 50C is not valid. Thus the ld AR argued that reopening is not valid in this case and is liable to be quashed/set aside. 7. On the other hand the ld DR vehemently object to the plea taken by the ld Authorized Representative. 8. Having considered the rival submission and carefully perused the record I find that ground No.1 is regarding the validity of reopening has been raised by the assessee first time before this tribunal. The learned Commissioner of Income-tax (Appeals) has reproduced grounds raised by the assessee and
Page No. 3 the assessee did not raise any such ground or objection or even took such plea challenging the validity of reopening. Though, an additional ground or a fresh plea can be raised before this tribunal on the legal issue which goes to the root of the matter however, such a plea or additional grounds can be raised only by seeking permission for admission of such plea before this Tribunal. The assessee has not raised this ground as an additional ground but has including in the grounds raised along with memorandum of appeal in Form No.36. Even otherwise the assessee has not sought any permission for admission of additional ground(s)/plea on this issue. In the absence of any such application or plea for admission of the additional grounds the ground No.1 raised by the assessee cannot be taken up for adjudication as the same does not emanates from the impugned order of the learned Commissioner of Income-tax (Appeals). Accordingly when this grounds was not adjudicated by the learned Commissioner of Income-tax (Appeals) and the assessee has not explained any reason for not raising this ground before learned Commissioner of Income-tax (Appeals) then this ground raised by the assessee becomes non-est and accordingly dismissed. 9. The ld AR of the assessee has not advanced any argument on the merits of the issue and he confined his argument and contention only on the issue of validity of the reopening of the assessment without pointing out the fact that this ground was not raised by the assessee before the authorities below and even without seeking the leave/permission of the Tribunal to raise such ground and admission of such ground for adjudication. Therefore other grounds raised by the assessee are dismissed as no arguments were advanced by the assessee. 10. In the result appeal of the assessee is dismissed. Order pronounced in the open court on 22.01.2016. -Sd/- (VIJAY PAL RAO) JUDICIAL MEMBER Dated:22/01/2016 A K Keot Copy forwarded to 1. Applicant
Page No. 4 2. Respondent 3. CIT 4. CIT (A) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, New Delhi