×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
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This appeal by the assessee is directed against the order of the CIT(A)-4, Bangalore, dated 31.10.2018 for Assessment Year 2009-09.
2. Briefly stated, the facts relevant for disposal of this appeal are as under:
2.1 The assessee filed the return of income for Assessment Year 2008-09 on 21.01.2009 declaring income of Rs.3,29,130/- . Proceedings u/s 147 of the Income Tax Act, 1961 (in short ‘the Act’) were initiated by the Assessing Officer (AO) as he had reason to believe that income of the assessee; arising on account of Long Term Capital Gain (LTCG) exigible to tax, consequent to Joint Development Agreement (JDA) entered into by the assessee, his siblings and mother with M/s. Sai Deep Estates on 03.12.2007 for development of property at No.18, 1st A Main Road, New Thippasandra, Bangalore; had escaped assessment. Consequent thereto, notice u/s 148 of the Act was issued to the assessee on 20.01.2012. The assessment was concluded u/s 143(3) of the Act vide order dated 25.03.2013 wherein the assessee’s income was determined at Rs.26,67,100/- in view of the assessee’s 19.87% share in the LTCG amounting to Rs.23,37,970/- arising on account of JDA in respect of the aforesaid New Thippasandra property. On appeal, the CIT(A) dismissed the assessee’s appeal vide order dated 19.09.2016.
2.2. On further appeal by the assessee, a co-ordinate bench of this Tribunal, in its order in ITA No.167/Bang/2017 dated 05.05.2017, remanded the matter to the file of the AO for consideration and adjudication on the issue of validity of re-opening of assessment as well as other grounds, modified/additional grounds of appeal raised on merits, holding as under at para 7 thereof:
“7. We have onsidered the rival submissions as well as the relevant material on record. In support of his contention that the Assessing Officer has not supplied the reasons recorded for reopening of the assessment despite a specific request made by the assessee. He has also filed an Affidavit dt.7.3.2017 wherein the assessee has stated that he had requested for reasons recorded by the Assessing Officer vide letter dt.22.2.2012. We find that the order of the Assessing Officer as well as the CIT (Appeals) are silent on this issue and therefore it is not possible to give a concluding finding without referring to the assessment record on this point. Further it is well settled proposition of law that in case the assessee demands the reasons recorded for reopening of assessment the Assessing Officer is duty bound to supply the reasons and then decide the objections if any filed by the assessee against the Notice issued under Section 148 prior to the framing of reassessment. Thus in the facts and circumstances of the case, when this issue has not been raised and considered by the authorities below, we remit this issue to the record of the CIT (Appeals) for adjudication as per law. Since the issue of validity of the reopening has been remitted to the record of the CIT (Appeals) therefore the other grounds raised on merit are also remitted to the record of the CIT (Appeals) for consideration and adjudication on merit.
2.3.1 Pursuant to the aforesaid order of the Tribunal dated 05.05.2017 (supra), the CIT(A) called for the show cause notice and order sheet notings along with assessment records from the AO for verification as to whether the reasons have been provided/communicated to the assessee during assessment proceedings. Based on his examination thereof, the CIT(A), at para 5 of the impugned order, held that the AO had provided / communicated the reasons to the assessee in the course of assessment proceedings by way of show cause letter dated 20.01.2012 wherein it was recorded as under:
“During the Financial Year 2007-08 the assessee executed Joint Development Agreement with the M. Sukesh Reddy, Jagan Modan Reddy, in respect of property Katha No.18 and handed over possession to the builders. The transaction squarely falls u/s 2(47)(v). However, the assessee has not declared any capital gain nor has he disclosed the above transactions by / in filing Return of Income for the AY:2008- 09. Hence, I have reason to believe that income chargeable to tax in case of the assessee for the AY:2008-09 has escaped assessment and this is a fit case for reopening u/s 147 ”
2.3.2 At para 5 of his order, the CIT(A), then held that the show cause notice issued (supra) mentioning the reasons for re-opening the assessment for Assessment Year 2008-09 can be treated as the reasons for re-opening the assessment have been communicated to the assessee and therefore upheld the validity of the order of assessment. On merits, the CIT(A) confirmed/followed the findings of his predecessor in the first round of appeals and consequently dismissed the assessee’s appeal vide the impugned order dated 31.10.2018.