Income Tax Appellate Tribunal - Mumbai
Sri Ishwar Sadan Cooperative Housing ... vs Assessee on 27 August, 2014
आयकर अपील य अ धकरण "ई" यायपीठ मुंबई म।
IN THE INCOME TAX APPELLATE TRIBUNAL "E" BENCH, MUMBAI
ी एन. के. बलै या, लेखा सद य एवं ी संजय गग, या यक सद य के सम ।
BEFORE SHRI N. K. BILLAIYA, ACCOUNTANT MEMBER AND
SHRI SANJAY GARG, JUDICIAL MEMBER
आयकर अपील सं./I.T.A. No. 2441/Mum/2011
( नधारण वष / Assessment Year: 2001-02)
Sri Ishwar Sadan Co-operative Housing Dy. CIT-19(3)
Society Ltd. Mumbai
बनाम/
Plot No. 601, 6th Road,
TPS-III, Bandra (W), Vs.
Mumbai-400 050
थायी ले खा सं . /जीआइआर सं . /PAN/GIR No. AABAS 0012 N
(अपीलाथ /Appellant) : ( यथ / Respondent)
अपीलाथ क ओर से / Appellant by : Shri H. N. Motiwalla &
Shri Piyush Chhajed
यथ क ओर से/Respondent by : Shri Vijay Kumar Sami
सनु वाई क तार ख / : 14.08.2014
Date of Hearing
घोषणा क तार ख / : 27.08.2014
Date of Pronouncement
आदे श / O R D E R
Per Sanjay Garg, Judicial Member :
The present appeal has been preferred by the assessee against the order of the Commissioner of Income Tax (Appeals)-30, Mumbai ('CIT(A)' for short) dated 28.01.2011. The assessee has raised as many as four grounds of appeal, which reads as under:
'1. On the facts and in the circumstances of the case, the assessing officer erred in passing order U/s 143(3) r.w.s 147 without issuance of Notice u/s.143(2) and therefore the order passed by the learned assessing officer is bad in law and void ab initio.2 ITA No. 2441/Mum/2011 (A.Y. 2001-02)
Sri Ishwar Sadan Co-operative Housing Society Ltd. vs. Dy. CIT
2. On the facts and in the circumstances of the case, the learned Commissioner of Income-tax (Appeals) erred in upholding the re-opening of assessment u/s. 148 of the Income-tax Act.
3. On the facts and in the circumstances of the case, the learned Commissioner of Income-tax (Appeals) erred in confirming the order of the learned Assessing Officer in respect of charging Rs.55 lacs to be received from the developer under the head capital gains, when the developer has not fulfilled the conditions stated in the agreement for development dated 17-1-
2000 and has only paid Rs.18,50,000/- and thus not complied with the requirements of section 53A of Transfer of Property Act, and therefore, is not covered by section 2(47)(v) of the Income-tax Act.
4. On the facts and in the circumstances of the case, the learned Commissioner of Income-tax (Appeals) erred in upholding the capital gains at Rs. 55 lacs, treating the same as sale of TDR, without appreciating the fact that there was no sale of TDR and there was no taxable gains, in view of the Hon. Supreme Court judgement in case of B.C. Srinivasa Shetty, 28 ITR 294 and various other judicial rulings directly applicable to the facts of the case.'
2. The brief facts of the case are that the assessee is a registered Co-operative Housing Society. The return of income was filed on 22.08.2002 declaring the total income at Rs.Nil. The same was processed u/s. 143(1) of the I. T. Act. Subsequently, it was learnt that the assessee had entered into an agreement for sale/transfer of TDR/FSI with Narang Developers Pvt. Ltd., for a consideration of Rs.55,00,000/-. Since this transaction was not disclosed in the return of income filed, the assessment was reopened u/s.147 of the I.T. Act by issue of notice u/s.148 of the I.T. Act.
3. Through grounds no. 1 & 2, the assessee has raised the contention that no notice u/s.143(2) was issued to the assessee under the reopened assessment proceedings u/s.147 r.w.s. 143(3) of the Act. The ld. AR has submitted that the issuance of notice before reopening of the assessment was mandatory. He has relied upon a decision of Hon'ble Supreme Court styled as "CIT & Another Vs. Hotel Blue Moon" (2010) 229 CTR (SC) 362, wherein Hon'ble Supreme Court, while adjudicating upon the case of block assessment under the Income Tax Act, has observed that if the A.O., for any reason, 3 ITA No. 2441/Mum/2011 (A.Y. 2001-02) Sri Ishwar Sadan Co-operative Housing Society Ltd. vs. Dy. CIT repudiates the return filed by the assessee in response to a notice under section 158BC(a), he must necessarily issue notice under section 143(2) within the time prescribed in the proviso to section 143(2); omission on the part of the assessing authority to issue notice under section 143(2) cannot be said to be a mere procedural irregularity and, that the same is not curable.
4. On the other hand, learned DR has submitted that vide Finance Act 2008, w.e.f. 1.4.2008 section 292-BB in the Income Tax Act has been inserted. He has further submitted that any right which has been accruing to the assessee for non-service of notice u/s. 143(2) of the Income Tax Act has been taken away with the insertion of section 292BB in the I.T. Act.
5. We may observe that the issue relating to the introduction and operation of section 292BB came into consideration before the Special Bench of the Tribunal at Delhi in the case of "Kuber Tobacco Products (P) Ltd. vs. DCIT" in IT(SS)A No. 261/Del/2001. The Special Bench of the Hon'ble Delhi Tribunal in the case of Kuber Tobacco Products (P) Ltd. (supra) has summarized the legal position as under:
"(i) Section 292-BB even if it is procedural it is creating a new disability as it precludes the assessee from taking a plea which could be taken a right, cannot be construed retrospectively as the same is made applicable by the statute w.e.f 1.4.2008.
(ii) Section 292-BB is applicable to the assessment year 2008-09 and subsequent assessment years."
Further, the Hon'ble Jurisdictional High Court of Bombay in the case of "CIT Vs. Mr. Salman Khan" in Income Tax Appeal (L) No. 2362 of 2009 dated 1.12.2009 has categorically held that sections 292-BB & 292-B of the Income Tax Act have been amended from 1.4.2008 and thus have come into operation prospectively for the A.Y. 2009-10. Further, this view has been again reiterated by Hon'ble Bombay High Court in another case styled as "CIT Vs. Virendra Kumar Agarwal" Income Tax Appeal No. 2429 of 2009 dated 7.1.2010".
4 ITA No. 2441/Mum/2011 (A.Y. 2001-02)Sri Ishwar Sadan Co-operative Housing Society Ltd. vs. Dy. CIT Since the assessment year involved in this case is 2001-02, hence, the newly inserted provision of section 292BB is not applicable to this year. In view of the said legal position as discussed above, the assessment proceedings in consequence of reopening u/s.147 were bad in law and cannot be sustained and are accordingly set aside.
6. Since, while deciding the above ground nos. 1 and 2, we have set aside the reopened assessment proceedings itself, hence, the consequential other grounds of appeal (i.e., ground nos. 3 & 4) have become infructuous and rendered academic in nature and as such do not require any adjudication at this stage. In view of our above findings, the additions made/confirmed by the lower authorities are accordingly set aside.
7. In the result, the assessee's appeal is hereby allowed.
प रणामतः नधा रती क अपील वीकृत क जाती है ।
Order pronounced in the open court on August 27, 2014 Sd/- Sd/-
(N. K. Billaiya) (Sanjay Garg)
लेखा सद य / Accountant Member या यक सद य / Judicial Member
मंब
ु ई Mumbai; दनांक Dated : 27.08.2014
व. न.स./Roshani, Sr. PS
आदे श क त ल प अ े षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent
3. आयकर आयु त(अपील) / The CIT(A)
4. आयकर आयु त / CIT - concerned
5. वभागीय त न ध, आयकर अपील य अ धकरण, मंब
ु ई / DR, ITAT, Mumbai
6. गाड फाईल / Guard File
आदे शानस
ु ार/ BY ORDER,
उप/सहायक पंजीकार (Dy./Asstt. Registrar)
आयकर अपील य अ धकरण, मंब
ु ई / ITAT, Mumbai