×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
These are the latest case laws decided by various Income Tax Appellate Tribunals (ITAT) of India on Income Tax which have been published recently. The case laws are open for discussion and we invite expert comments from our members on its applicability and effect on relevant issues.
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 NIL income. 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.23,65,033/- in view of the assessee’s 20.10% share in the LTCG 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.76/Bang/2017 dated 28.07.2017, remanded the matter to the file of the CIT(A) 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 paras 9 to 11 thereof:
2.3.1 Pursuant to the aforesaid order of the Tribunal dated 28.07.2017 (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 par 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.
3. Aggrieved by the order of the CIT(A)-4, Bangalore, dated 31.10.2018, for Assessment Year 2008-09, the assessee has preferred this appeal before the Tribunal wherein he has raised the following grounds:
1. The order of the learned Commissioner of Income-tax [Appeals] passed under Section 250 r.w.s. 254 of the Act in so far as it is against the Appellant is opposed to law, weight of evidence, probabilities, facts and circumstances of the Appellant's case.
2. Grounds on jurisdiction on re-opening of assessment u/s. 148 of the Act.
The learned Commissioner of Income -Tax [Appeals] failed to appreciate that the assessment order passed u/s. 147 rws 143 of the Act is bad in law and void ab initio in as much as the reasons recorded were not communicated to the Appellant though the same was requested vide letter dated 22/02/2012, consequently the assessment order founded on an invalid reopening deserves to be cancelled on the facts and circumstances of the case.
[ii] The learned Commissioner of Income-tax [Appeals] erred in holding that the show cause notice dated 20/01/2012 stating merely the details of transaction entered by the Appellant during the impugned assessment year is sufficient compliance of the principles laid down by the Hon'ble Apex Court in GKN Driveshaft [India] Ltd., v. ITO 259 ITR 19 [SC] with regards to communication of reasons recorded for issue of notice u/s. 148 of the Act on the facts and circumstances of the case.
[iii] The learned Commissioner of Income -Tax [Appeals] below erred in law in not holding that the order of assessment passed by the learned assessing officer under Section 143 r.w.s 147 of the Act is bad in law since the mandatory conditions as envisaged in the Act to assume jurisdiction did not exist or having not been complied with and