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TMI Blog2014 (12) TMI 384X X X X Extracts X X X X X X X X Extracts X X X X ..... rcumstances, the ld. CIT(A) erred by observing that the A.O was not justified in not giving adequate opportunity of being heard to the assessee, before concluding the assessment, whereas from the records it is seen that, the same is not correct. The AO has given sufficient opportunities to the assessee before concluding the assessment. 3. On the facts and circumstances, the Id. CIT(A) grossly erred by allowing the claim of assessee of Rs. 28 lakhs paid to the tenants to be deducted from sale consideration on only ground that in the Remand report the A.O. has not examined the assessee's submission, whereas in the Assessment order, the A.O. has rejected the same giving detailed reasons thereof." 3. In all these appeals, all the assessees are the legal heirs of Late Prabhakar V Bhandare. All assessees are common owner of the property of Bhandare faimily, therefore, all these appeals are disposed by this common order. 3.1. The short fact of the case are that the assessee has filed the return of income for A.Y.2007-08 on 20.02.2008 declaring Rs. 84,240/- capital gains. Post survey proceedings revealed escapement of income and notice u/s.148 dated 22.10.2008 was issued and duly served ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the A.O. has confirmed that no office copy of any Notice u/s 143(2) is available on record, proving thereby that no Notice u/s 143(2) was even issued by the A.O. 8.3 In the Remand Report, the A.O. has mentioned that issue of Notice u/s 143(2) is mandatory only when the assessee files a Return in response of Notice u/s 148. Since, in this case, the assessee did not file a Return in response to Notice u/s.148, issue of Notice u/s 143(2) was not required for completing reassessment proceedings. 9. The appellant has contended that the principal of Natural Justice was seriously violated as no opportunity of being heard was given to the appellant. I found the Notice of hearing given by the A.O. quite unusual, wherein he gives many different dates in one notice with the last date being 03.02.2009. Subsequently, these dates are withdrawn by the A.O. and goes on to finalise the assessment on 27.01.2009, when time available for finalising the assessment was upto 31.12.2009. The conduct of the A.O. in itself proves that the principle of Natural Justice has been violated. 9.1. On this issue, the letter written by Mrs. Indira Bhandare dated 29.01.2009 makes an interesting reading. Contents o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vey proceedings. This is not true. You had summoned all the family members including my mother/mother-in-law who is 82 year old and we all have attended before you in your office. However even our attendance was not noted by you since you have not obtained my signature for having attended the summons. Many of the notices served by you were served on either some cases on only one assessee or on staff of office of one of the co-owners, situated at Panaji. During the conversation you used to always force us to accept the demand worked out by you and you were threatening us that would levy penalty u/s. 274 read with sec. 271 of Income Tax Act 1961, to the maximum extent. Our explanations were never heard by you. Our valuation reports are also not considered by you. Your entire approach to my case was vindictive and not based on principles of equity and natural justice. We therefore request you to kindly take note of this letter and not to enforce Demand raised by you until Assessment proceeding in respect of the said notice u/s. 142(1) of the Income Tax Act, 1961 is disposed off." Sd/ (Indira Shandare) The above mentioned letter of Mrs. Indira Bhandare is an ample testimony of the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Income Tax has relied upon the decision of Supreme Court in the case of ACIT vs. Hotel Blue Moon 321 ITR 362(SC). The assessee in this case ACIT vs. Hotel Blue Moon the search and seizure was conducted and after search block returns were filed, whereas in the case of assessee no return of income have been filed. Hence, notice u/s. 143(2) is not mandatory in this case. In the case of CIT vs. Sanjeev Sharma 192 taxman 197(Allahabad) wherein it has held that if the assessee filed the return in response to notice u/s. 148, it is mandatory to issue notice u/s.143(2). The learned DR submitted that in this case, notice u/s.142(1) letters were issued on 11.12.2008, 5.1.2009, 12.1.2009, 16.1.2009 and fifth opportunity on 28.1.2009 and final opportunity was given on 3.2.2009. There was sufficient opportunity was given to the assessee. The assessee did not avail any opportunity. During the proceeding of the assessment a notice u/s. 148 was issued. On the ground that there was a survey and in survey the following facts were noticed by department which is in the assessment order, therefore, CIT(A) is not justified in annulling the assessment. 3.5. On the other hand, learned AR relied upon t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and if there is an escapement of income, it is chargeable to tax, therefore, on the basis of materials Sub-Registrar letter, Sale deed dated 6.7.2006 and exemption claimed u/s. 54EC, the Assessing Officer has recorded the reasons and notice u/s. 148 was issued Seas per section 147 which read as under: "Section 147. Income escaping assessment.--If the Assessing Officer, has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recomputed the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year): Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income u/s. 143(2), it is not necessary to issue the notice u/s. 148 of the Act. But in the instant case, the Assessing Officer has not completed the assessment and pendency of the assessment order. The Assessing Officer has issued the notice u/s. 147 and made the assessment. Therefore, we are of the view that AO is justified in reopening the assessment as well as making the assessment u/s. 147 r.w.s. 144. Therefore, we are of the view that CIT (A) is not justified in action, therefore, we reverse the finding of CIT(A) and confirm the action of the AO. In the result, ground no. 1 of department's appeal is allowed. 4. Ground No.2 & 3:- All the assessees are co-owner of the property which is situated at village Carambolim. The assessees' property was cultivated by tenant as defined in "The Goa Daman & Diu Agricultural Tenancy Act". All the assessees have sold this property. All the assessee's are common assessee have made settlement with the tenants and they have paid 28,00,000/- to the tenant. The assessee has claimed a deduction from sale consideration which was paid to tenant. The Income Tax Officer was of the view that the tenant's name is not appearing in Form No. I & XIV, or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m partem, a basic principle of natural justice which must inform every quasi-judicial process and this rule must be observed in its proper spirit and mere pretence of compliance with it would not satisfy the requirement of law". Orders which are made without recording the reasons in support of the decision taken do not inspire confidence in the objectivity and fairness of the authority in regard to the order. Such orders passed by Income-tax authorities have been quashed by High Courts as violative of a basic principle of natural justice. The Allahabad High Court in their judgment in Paras Bhan Sadh vs. CIT, Agra (1978) (114 ITR 834 at pages 837-838) held: "It is incontrovertible that where an authority makes an order in exercise of a quasi-judicial function it must record reasons in support of the order. If an authority is needed for the said proposition reference may be made to the cases of the Supreme Court in Express Newspapers P. Ltd. v. Union of India, AIR 1958 SC 578 and Siemens Engineering and Manufacturing Co. of India Ltd. v. Union of India, AIR 1976 SC 1785. In these two cases, the Supreme Court has clearly laid down that every quasi-judicial, order must be supported b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law". In the case of Naresh Kumar Gupta vs. CIT, Meerut (1983) 144 ITR 556 the Allahabad High Court followed the above decision and quashed CIT's order passed under section 273A. The High Court observed that the proceedings under section 273A were quasi-judicial in nature and reasons had to be recorded for passing the final order. The Punjab & Haryana High Court in Commissioner of Income-Tax vs. R. K. Metal Works (1978) 112 ITR 445(447) confirmed Tribunal's order getting aside the order passed by the Commissioner under section 263 of the Income-tax Act, 1961 observing as under: "It was necessary for the Commissioner to state in what manner he considered that the order of the Income-tax Officer was erroneous and prejudicial to the interests of the revenue and what the basis was for such a conclusion." The Delhi High Court in Bharat Nidhi Ltd. vs. Union of India (92 ITR 1) quashed Board's order refusing exemption to the assessee from payment of Surtax inter alia on the ground that the order did not give any reasons in support of its finding and did not show that the Board had applied its mind to the question at issue. In view of what is stated above, the Departmental ..... X X X X Extracts X X X X X X X X Extracts X X X X
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