MR. NAGRAJ GOPALKRISHNA,PHATTEPUR vs. INCOME-TAX OFFICER, WARD - 1[5], BELAGAVI

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ITA 400/PAN/2018Status: DisposedITAT Panaji22 June 2022AY 2013-144 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the legal issue regarding the non-issuance of the Section 143(2) notice was vital and needed to be adjudicated by the CIT(A). Consequently, the matter was set aside to the CIT(A) for a fresh adjudication of both legal and factual grounds.

What were the facts?

The assessee's appeal stemmed from an assessment order that included undisclosed stock and cash as deemed income under Section 69. The assessee argued that the assessment order was bad in law due to the non-issuance of a mandatory notice under Section 143(2).

What were the issues?

Whether the assessment order is invalid due to the non-issuance of a notice under Section 143(2) and whether the addition of stock and cash as deemed income under Section 69 is justified.

Which sections of the Income-tax Act were involved?

Section 143(2),Section 143(3),Section 263,Section 69,Section 115BBE,Section 250(6),Section 292BB

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PANAJI BENCH, PANAJI

Before: DR. M. L. MEENA & SH. ANIKESH BANERJEE

Hearing: 07.04.2022Pronounced: 22.06.2022

ORDER Per Anikesh Banerjee, JM:

The instant appeal was filed by the assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), Belagavi [in brevity the CIT(A)], bearing dated 02.08.2018 passed u/s 250(6) of the Income Tax Act, 1961 (in brevity the Act), for Assessment Year 2013-14. The said appeal was originated from the order of the Ld. Income Tax Officer,

Nagraj Gopalkrishna v. ITO Ward -1(5), Belagavi (in brevity the AO) passed u/s 143(3) r.w.s 263 of the Income Tax Act, 1961.

2.

The assessee has filed the following grounds of appeal which are as follows:

“1] That the Order passed u/s 143[3] r.w.s. 263 dated 21-12-2017 by the Income-Tax Officer and sustained by Commissioner [Appeals] is against Law as Order passed without issue of fresh Notice u/s 143[2] in Reassessment Proceedings which is mandatory and which is not curable mistake. Hence, Order Passed by the Income-Tax Officer and confirmed by the Commissioner [Appeals] is Bad-in-Law requires to be quashed.

2] The Learned Commissioner [Appeals] is not justified in treating Rs. 17,76,144 on account of excess Stock and Cash found in Survey as deemed income - U/S 69- 69A instead of treating the same as Business Income. Hence, findings of the CIT [A] is against Law and facts of the case.

3] Since Income of Rs. 1776144/- assessed U/S 69-69A is opposed to Law and there is no justification for taxing the income @ 30% as per Provisions of Section 115BBE instead of taxing at normal rate of tax.

4] For these and other grounds may be urged at the time of hearing of the appeal.”

3.

Brief fact is that the assessee in his first ground of appeal mentioned that during proceeding of the assessment u/s 143(3) r.w.s. 263 of the Act, the Ld. AO did not issue notice u/s 143(2) of the Act. The addition also made related to undisclosed cash of Rs.1,57,153/- and undisclosed stock of Silver Ornaments amount of Rs.16,18,991/- during assessment. The total undisclosed investment was added back u/s 69 amount to Rs.17,76,144/-. The assessee first time agitated the legal ground, non issuance of notice u/s 143(3) of the Act before the Bench. The Nagraj Gopalkrishna v. ITO assessee filed an appeal against the order of the Ld. AO before the Ld. CIT(A).

The Ld. CIT(A) upheld the order of the Ld. AO. Accordingly, aggrieved assessee filed an appeal before the bench.

4.

The issue related to non issuance of notice u/s 143(2) is a very important issue which is under question valid or not u/s 292BB of the Act. But the ground is first time agitated before the Ld. ITAT. Related other grounds addition of stock and cash which the Ld. AO was added back u/s 69 of the Act and calculated tax u/s 115BBE of the Act @ of 30% tax.

5.

The Ld. DR argued and relied on the order of Ld. CIT(A).

6.

We considered the rival submissions and documents available in the record.

The Ld. counsel of the assessee filed a paper book which is kept in the record but the first the legal issue related to non issuance of notice u/s 143(2) is agitated which is a vital issue and that should be adjudicated by the Ld. CIT(A). Related to application of u/s 115BBE for calculation of tax, the Ld. AO filed the following judgments of Pr. CIT v. Bajargan Traders DB in AY 2013-14 dated 12.09.2017 (Rajasthan High Court) and Lovish Singhal & Ors in ITA No. 143/Jodh/2018 AY 2014-15 dated 25.05.2018. The section 115BBE is substituted by the Taxation laws Act, 2016 w.e.f. 01/04/2017. Before adjudication of legal issue, the other issues are not accepted for discussion in this stage. We directed the Nagraj Gopalkrishna v. ITO assessee to submit all the relevant documents before the Ld. CIT(A). The matter is setting aside before the Ld. CIT(A) for adjudication both the legal and factual grounds. On the other hand, the assessee should allow the reasonable opportunity for redressal of his grievance.

7.

In the result, the appeal of the assessee is allowed for statistical purposes.

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