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Income Tax Appellate Tribunal, ‘SMC’ BENCH PUNE
Before: HON’BLE SHRI G. D. PADMAHSHALI & SHRI VINAY BHAMORE
ORDER PER G. D. PADMAHSHALI, AM; This bunch of eight appeals of the assessee instituted u/s 253(1) of the Income-tax Act, 1961 [‘the Act’ hereinafter] impugns the following orders of Ld. Commissioner of Appeals-12, Pune [‘Ld. CIT(A)’ hereinafter] passed u/s 250 of the Act, which in turn arisen out of respective orders of assessment passed by the Ld. Dy. Commissioner of Income Tax, Central Circle-2(2), Pune and by Ld. Jt Commissioner of Income Tax (OSD), Central Circle-2(4) [‘Ld. AO’ hereinafter] anent to respective assessment years [‘AY’ hereinafter]; ITAT-Pune Page 1 of 10
Gulab Maruti Dhankude Vs DCIT/JCIT(OSD) to 963 & 965 to 968/PUN/2024
Order of Asstt First Appellate Order under challenge Sr framed u/s Dt Passed u/s Dt DIN & Order No 1 960/PUN/2024 2011-12 143(3) r.w.s 147 19/12/2018 250 r.w.s. 254 09/03/2024 ITBA/APL/S/250/2023-24/1062303996(1) 2 961/PUN/2024 2012-13 144 r.w.s. 153C 23/03/2021 250 ITBA/APL/S/250/2023-24/1062228600(1) 3 965/PUN/2024 2016-17 144 22/03/2021 250 08/03/2024 ITBA/APL/S/250/2023-24/1062252813(1) 4 967/PUN/2024 2017-18 147 r.w.s 144 22/03/2021 250 ITBA/APL/S/250/2023-24/1062253129(1) 5 962/PUN/2024 2013-14 147 r.w.s 144 24/03/2022 250 ITBA/APL/S/250/2023-24/1062240087(1) 6 963/PUN/2024 2014-15 147 r.w.s 144 24/03/2022 250 ITBA/APL/S/250/2023-24/1062240087(1) 08/03/2024 7 966/PUN/2024 2016-17 153C 28/03/2021 250 ITBA/APL/S/250/2023-24/1062231759(1) 8 968/PUN/2024 2017-18 153C 28/03/2021 250 ITBA/APL/S/250/2023-24/1062232834(1)
Since the facts and threadbare issue involved in this bunch of appeals are common & identical, on the request from rival parties, for the sake of brevity & expediency these appeals are heard together for a common and consolidated order.
Briefly stated the common facts emanating from the records are that; 3.1 The assessee is an individual who was engaged in the proprietary business of brick manufacturing in the name & style ‘M/s Shrinath Bricks Manufacturer.
3.2 A search action on a ‘Baburao D Chandere’ and his family members [‘Searched Party / SP’ hereinafter] was carried out u/s 132 of the Act on 19/12/2017 wherein the residential premises of the assessee viz; 501, Alcazar, Supreme Pallcio, Pancard Club Road, Baner, Pune-411045 was covered. In connection therewith a statement of the assessee was recorded on the even date u/s 132(4) of the Act.
3.3 The case of the assessee by an order dt. 25/10/2018 u/s 127(2) was first centralised and subsequently transferred to Ld. DCIT, Central Circle-2(4), Pune by an order dt. 26/08/2019 passed u/s 127(1) of the Act.
ITAT-Pune Page 2 of 10
Gulab Maruti Dhankude Vs DCIT/JCIT(OSD) to 963 & 965 to 968/PUN/2024 4. ITA No 960/PUN/2024; 4.1 While recording aforestated statement, in answer to Question No 16, the assessee admitted that; he was in receipt of ₹25Lakhs out of development agreement dt. 03/05/2010 entered into by him with certain family members of ‘M/s Jewel Housing’ and such receipt remained to be offered in respective year for taxation.
4.2 In the absence of return for the year under consideration the case of the assessee was reopened by service of notice u/s 148 of the Act dt. 28/03/2018. Subsequently the case of the assessee got transferred from ITO Ward 2(2), Pune to the Dy. Commissioner of Income Tax, Central Circle 2(2), Pune by order dt. 10/08/2018. Whereupon a fresh show cause notice [‘SCN’ hereinafter] dt. 14/08/2018 u/s 142(1) of the Act was issued as to why the proceeding u/s 147/148 should not be completed in the event of failure on the part of the assessee to file return in response to notice issued u/s 148 of the Act. In response thereto the assessee filed his return of income on 17/11/2018 declaring total income of ₹4,30,423/- The said return of income was subjected to scrutiny u/s 143(2) of the Act.
4.3 In the event of assessee’s failure to furnish details of receipt, bank account showing the receipt ₹25Lakhs out of development agreement dt. 03/05/2010 entered by him with certain family members of M/s Jewel Housing, the Ld. AO exercised his jurisdiction u/s 133(6) of the Act and called relevant information from his banker viz; Vishweshwar Co-op. Bank, Union Bank and PDCC Bank with whom the assessee maintained his bank accounts. The bank statements did not confirm the receipt/credit of aforestated amount but newly revealed to the Ld. AO that, during the year under ITAT-Pune Page 3 of 10
Gulab Maruti Dhankude Vs DCIT/JCIT(OSD) to 963 & 965 to 968/PUN/2024 consideration the assessee had made total cash deposit of ₹5,71,500/- in his bank account maintained with Vishweshwar Co-op. Bank. Upon assessee’s failure to explained details & sources of such cash deposits, the Ld. AO treated same as unexplained cash/receipt and consequently added it to total income while framing the assessment u/s 143(3) r.w.s. 147 of the Act.
4.4 Aggrieved by the aforestated addition the assessee filed an appeal which came dismissed by the Ld. CIT(A) by an order passed u/s 250 of the Act. However while disposing the said appeal the legal grounds (Ground No 1 & 2) challenging the re- opening jurisdiction u/s 147/148 and addition made otherwise than qua reasons recorded were left unadjudicated by the Ld. CIT(A) holding them as ‘general in nature & do not require separate adjudication’.
ITA No 961/PUN/2024; 5.1 Placing on record the satisfaction from the assessing officer of searched party and the assessee, the assessment proceedings u/s 153C of the Act against the assessee was initiated and by notice dt. 20/10/2020 was called upon to file return of income. The assessee filed his return of income declaring total business income of ₹6,17,920/-. The said return of income was then taken for scrutiny by service of notice u/s 143(2) of the Act.
5.2 In the event of failure on the part of assessee to comply with the subsequent notices issued u/s 142(1) of the Act and tender evidential material in support of return of income filed in pursuance of notice issued the Ld. AO preceded ex-parte and completed the assessment u/s 144 r.w.s. 153 of the Act.
ITAT-Pune Page 4 of 10
Gulab Maruti Dhankude Vs DCIT/JCIT(OSD) to 963 & 965 to 968/PUN/2024 5.3 In this ex-parte assessment the Ld. AO made two bullet additions based upon the seized material viz; ‘Bundle No 2 Pages 1-25 of Party No RC-4A representing copy of agreement of purchase of land at Baner 172/5, 172/16 & 172/18’ such as; (a) assessee’s 50% share in the total purchase value ₹4,76,250/- i.e. ₹2,43,125/- as unexplained investment u/s 69 of the Act and (b) ₹6,19,375/- being assessee’s 50% share in difference between stamp duty value of the property i.e. ₹17,25,000/- and the consideration shown to have been paid ₹4,76,250/- u/s 56(2)(vii)(b) of the Act.
5.4 Aggrieved assessee filed an appeal which came dismissed by the Ld. CIT(A) by an order passed u/s 250 of the Act wherein the legal grounds (Ground No 1 & 3) challenging the invocation of 153C jurisdiction and additions made ex-parte in violation of principle of natural justice were left unadjudicated holding them as ‘general in nature & do not require separate adjudication’. and 967/PUN/2024; 6.1 In response to notice u/s 153C of the Act the assessee filed his return of income declaring total income of ₹8,15,960/-, ₹8,99,570/-, ₹10,57,710/- & 13,14,030/- respectively for AY 2013-14, 2014-15, 2016-17 & 2017-18. The assessments in these cases were completed accepting the said returned income without variation. Subsequently, after recording the reasons that, the assessee in his return furnished u/s 153C of the Act has failed to disclosed annual rental income of ₹7,20,000/- claimed to have earned & as admitted in his statement recorded u/s 132(4) of the Act, the Ld. AO with the prior approval from the authority re-opened these assessments by service of separate notice issued u/s 148 of the Act.
ITAT-Pune Page 5 of 10
Gulab Maruti Dhankude Vs DCIT/JCIT(OSD) to 963 & 965 to 968/PUN/2024 6.2 In response thereto, vide separate letters the assessee requested the Ld. AO to treat the returns filed in pursuance to notice u/s 153C of the Act as the returns in response to notice issued to him u/s 148 of the Act. And further by a separate letter the assessee objected the re-opening proceedings, which came disposed-off.
6.3 In the event of failure to adduce any evidential document in support of such returns filed in pursuance of notice u/s 148 of the Act and failure to showcase that the rental income as admitted in the statement recorded indeed offered to tax, the Ld. AO added such rental income of ₹7,20,000/- in each of these assessment additionally and re-framed the assessment u/s 147 r.w.s. 144 of the Act.
6.4 Aggrieved by the aforestated additions the assessee filed separate appeals which came partly allowed by the Ld. CIT(A) by an order passed u/s 250 of the Act wherein the legal ground (Ground No 1 ) challenging the re-opening of completed assessment and additions made ex-parte in violation of principle of natural justice were left unadjudicated holding it as ‘general in nature & do not require separate adjudication’. and 968/PUN/2024; 7.1 Owning to search action and consequent to satisfaction recorded the case of the assessee was subjected to assessments u/s 153C of the Act. In response thereto the assessee filed his returns of income declaring total business income of ₹10,57,740/- & ₹13,14,030/- respectively for AY 2016-17 & 2017-18. The said returns were separately subjected to scrutiny by service of notice u/s 143(2) of the Act.
ITAT-Pune Page 6 of 10
Gulab Maruti Dhankude Vs DCIT/JCIT(OSD) to 963 & 965 to 968/PUN/2024 7.2 During the assessment proceedings the Ld. AO noticed from the seized material viz; ‘Bundle No 10 Pages 74-84 that the assessee alongwith Mr. Suhas Maruti Dhankude (Co-purchaser) entered into a draft agreement to sell [‘ATS’] for purchase of piece of land situated at Baner 172/2A & 172/18 from Smt. Subhadrabai kisan Dhankude, her sons & daughters etc. for a total consideration of ₹35Lakhs and in pursuance thereof cash amounting to ₹5Lakhs was paid to the sellers by the assessee & his co-purchaser. The said transaction however was ultimately registered with the total consideration of ₹30Lakhs which was paid by the co-purchases by cheque/banking channel and with the incidental expenditure incurred on stamp duty of ₹1.87Lakhs & ₹0.30Lakhs towards its registration charges.
7.3 In the event of failure on the part of assessee to explain the source of total investment including cash consideration paid in acquiring the property at the time of entering ATS to the proposed sellers, the Ld. AO treated entire consideration as unexplained. The portion of cash consideration paid was treated as unexplained money u/s 69A of the Act and cheque consideration paid was treated as unexplained investment u/s 69 of the Act.
7.4 Consequently, in AY 2016-17 an addition of 50% of such cash consideration paid by assessee (being the co-purchaser) was made and total income was re-assessed at ₹13,07,740/- u/s 153C of the Act. In AY 2017-18, an addition of 50% of cheque consideration/investment was made as unexplained investment and re-assessed the total income at ₹29,22,530/- u/s 153C of the Act.
ITAT-Pune Page 7 of 10
Gulab Maruti Dhankude Vs DCIT/JCIT(OSD) to 963 & 965 to 968/PUN/2024 7.5 Aggrieved by the aforestated additions the assessee filed separate appeals which came dismissed by the Ld. CIT(A) by an order passed u/s 250 of the Act wherein the legal grounds (Ground No 1 & 3) challenging the invocation of 153C jurisdiction and additions made ex-parte in violation of principle of natural justice were left unadjudicated holding them as ‘general in nature & do not require separate adjudication’.
Aggrieved assessee came before us in separate appeals challenging the adjudications of first appellate authority on various grounds which are argumentative in nature and inconsonance with rule 8 of ITAT-Rules, 1963 hence reproduction thereof deem unfit for the purpose of our adjudications. However it shall suffice to state that, these grounds collective are directed against; (a) non-adjudication of legal ground raised challenging the very jurisdiction of Ld. AO in invoking the re- assessment proceedings u/s 147/148 of the Act and in invoking the proceedings u/s 153C of the Act and (b) challenging the assessment/re-assessment on merits of the case/s etc.
At the outset of virtual hearing, the rival parties sought our attention to the impugned orders and commonly submitted that the legal ground raised before first appeal challenging the very jurisdiction of re-opening of assessment u/s 147/148 of the Act and 153C of the Act was dismissed by the Ld. CIT(A) without adjudication. Therefore, the impugned orders are suffered from the provisions of section 250(6) of the Act. For the reasons, the assessee without touching the merits of the case sought to remand these matters back to the file of Ld. CIT(A) with a bullet direction to deal ITAT-Pune Page 8 of 10
Gulab Maruti Dhankude Vs DCIT/JCIT(OSD) to 963 & 965 to 968/PUN/2024 with the legal issue in terms of section 250(6) of the Act. The Ld. DR candidly solidified the fact but could hardly pull apart the request of the assessee for remanding the matter for re-adjudication.
Heard rival parties on limited issue and subject to rule 18 of ITAT-Rules 1963 perused material placed on record and considered the fact & circumstances of these cases in the light of settled legal position and case laws relied upon by rival parties. From Pg 5/6 para 4, Page 24/71 para 7, Pg 15/70 para 6, and Pg 27/69 para 13, Pg 57/69 para 26 and Pg 68/69 para 34, Pg 55/72 para 23 & Pg 74/75 para 30 of ther respective impugned orders we observed that, the legal ground assailed challenging the jurisdiction to assess/re-assess income u/s 153C/147 of the Act before Ld. CIT(A) was dismissed as general without adjudicating it in terms of s/s (6) of section 250 of the Act. Besides above we also note that, while adjudicating the grounds on merits, the Ld. CIT(A) did perfunctorily disposed-off the appeals of the appellant assessee without recording his independent findings.
Dispensing reproduction of provision in verbatim, we note here that, a plain reading of section 250 of the Act reveals that, in first appellate proceedings it is incumbent upon the Ld. CIT(A); (i) to make necessary enquiries (ii) to deal with each issue under challenge on merits and (iii) to decide the grievance under appeal by a well speaking order by stating therein (a) point of his determination, (b) decision arrived thereon and (c) clear reasons therefore. A conjoint reading of s/s (4) r.w.s/s (6) of section 250 of the Act further unveils that the Ld. CIT(A) while exercising his jurisdiction u/s 251(1)(a) of the Act is in no case empowered to dismiss any ground without dealing with it in former terms.
ITAT-Pune Page 9 of 10
Gulab Maruti Dhankude Vs DCIT/JCIT(OSD) to 963 & 965 to 968/PUN/2024
It is a trite law as laid down by Hon’ble Supreme Court in case ‘Chandra Kishore Jha Vs Mahavir Prasad’ reported in 8 SCC 266 (SC), that ‘if a statute provides for a thing to be done in a particular manner, then it has to be done in that manner and in no other manner’. In view hereof, any adjudication by the first appellate authority sidestepping the dictate is not in consonance with the provision of sub-section (6) of section 250 of the Act. Hence deserves to be set-aside.
In the instance cases, the impugned orders since suffered from the provisions of s/s (6) of section 250 of the Act on account of (a) non-adjudication of legal ground/s raised by assessee and (b) failure to state point of determination, decision thereon and reasoning in arriving such decision, we therefore deem it fit to set-aside these impugned orders and remand these matters to the file first appellate authority in faceless regime with a direction to adjudicate them de-novo in accordance with law and pass assessment year-wise separate speaking orders in terms of section 250(6) of the Act separately in each case. Ergo ordered accordingly.
This bunch of appeals of the assessee in results is ALLOWED FOR STATISTICAL PURPOSES in above terms. In terms of rule 34 of ITAT Rules, the order pronounced in the open court on this Monday, 22nd July, 2024.
-S/d- -S/d- VINAY BHAMORE G. D. PADMAHSHALI JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / PUNE ; दिन ांक / Dated : 22nd July, 2024. आदेश की प्रतितिति अग्रेतिि / Copy of the Order forwarded to : 1.अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT Concerned. 4. The CIT(A) Concerned. 5. DR, ITAT, ‘SMC’ Bench, Pune 6. ग र्डफ़ इल / Guard File. आिेश नुस र / By Order वररष्ठ दनजी सदिव / Sr. Private Secretary आयकर अपीलीय न्य य दिकरण, पुणे / ITAT, Pune.
ITAT-Pune Page 10 of 10