Ita/156/2022 Of M/S Ickon Projects v. The Income Tax Officer

IN THE HIGH COURT OF KARNATAKA AT BENGALURUDATED THIS THE 28 DAY OF OCTOBER, 2022|PRESENT THE HON’'BLE MR. JUSTICE P.S.DINESH KUMAR AND THE HON’BLE MR. JUSTICE ANANT RAMANATH HEGDEITA NO.156 OF 2022. BETWEEN M/S ICKON PROJECTS,REPRESENTED BY ITS PARTNER,SRI.D.K.SHIVAKUMAR SON OF LATE!SRI.D.K.KEMPEGOWDA,AGED ABOUT 59 YEARS,UNIT 303, 3RD FLOOR,EMBASSY SQUARE, ~148, INFANTRY ROAD,|BENGALURU-560001,. PAN AABF1/099A. APPELLANT| (BY SRI V CHANDRASHEKAR, ADVOCATE FORSRI M LAVA, ADVOCATE) AND: THE INCOME TAX OFFICER,WARD -4(3)/7(2)(3),BMTC BUILDING,SO FEET ROAD, 61H BLOCK, KORAMANAGALA, BENGALURU-560095. RESPONDENT| (BY SRI K.V.ARAVIND, ADVOCATE) THIS ITA IS FILED UNDER SECTION JZ60A OF THEINCOME TAX ACT, 1961, ARISING OUT OF COMMON|ORDER DATED 02/12/2021 PASSED IN ITA NO.7/71 AND772/BANG/2017, FOR THE ASSESSMENT YEAR 2006-2007AND 2007-2008 PRAYING THIS HON'BLE COURT TO: (A) TO FORMULATE THE SUBSTANTIAL QUESTIONS|OF LAW STATED THEREIN AND ANSWER THE SAME INFAVOUR OF THE APPELLANT. (B) ALLOW THE APPEAL AND SET ASIDE THE:FINDINGS THEREIN TO THE EXTENT AGAINST THEAPPELLANT IN THE COMMON ORDERS PASSED BY THE|HON BLE INCOME TAX APPELLATE TRIBUNAL, BENGALURUBENCH‘B, |BENGALURU|INLIANOS.JS/1AND7/2/BANG/2017 IN COMMON ORDER DATED 02/12/2021RELATING TO THE ASSESSMENT YEARS 2006-2007 AND200 /7-200RESPECTIVELY(VIDEANNEXURE-A).(C) TO PASS SUCH OTHER ORDERS, AS THIS HON BLECOURT DEEMS FIT AND PROPER TO MEET THE ENDS OFJUSTICE. THIS APPEAL COMING ON FOR FURTHER HEARINGTHIS’ DAY,P.S. DINESH KUMAR J, DELIVERED |THEFOLLOWING:- JUDGMENT This appeal by the assessee challenging the commonorderdatedO7.17.7071|InITANos.//1.and7/2/Bang/2017 has been filed framing three questions of law which are as under: — >1. Whether the Tribunal was Justified in notholding that the notices issued under section 148.holding that the notices issued under section 148. for the Assessment Years ZOOC6-O/7 and JZO0O/are witnout Jurisdiction and hnence void-ab-initioUnderthefactsandcircumstancesOf|theAppellant's case. 2. Whether the Tribunal was Justified in not nolding that the notices [issued under section 148 for theAssessment Years 2006-07 and JZ00/7-08 erwithout jurisdiction, in as much as no sale of thesubjectland.tookplaceIntheimpugnedassessment years and hence void-ab-initio underthe facts and circumstances of the Appellant's case. | 3. Whether the Tribunal was Justified in notdeciding itself tnat the proceedings initiated undersection 14/7, by issue of notice under section 148Was bad in law in as much the correct sectionunder whicn any proceeding could nave been.Initiated was under section 153C of the Act andhence|VOI|ab|InNItIOUnder.thefactsand|circumstances of the Appellant's case’. | 2. Shri Chandrashekar for the assessee submitted|that during search in the premises of M/s Davanam|Jewellers Pvt. Ltd. on 02.09.2010, an undated agreement|to sell’ entered into between the assessee and M/s Sobha Developers Limited in respect of property measuring52152 sq. ft. of land mentioned in the schedule to the|agreement was found. Without following due process, theAssessing Officer issued notice under Section 148 of theIncome Tax Act holding that the sale was complete and/asssessee was liable for capital gains tax for A.Y.2006-07and concluded tne assessment. He also concludedprotective assessment for A.Y. 2007-08. Assessee|challenged botn the orders before tne CIT(A). Tne CIT(A)by two different orders upheld the Assessing Officer's view. |On further appeal, the ITAT by its common order dated02.12.2021 has remitted the matter to the CIT(A) for fresh disposal to decide the issue raised in the additional|grounds. 3. Shri Chandrashnekar urged that thougn the)agreement in question is not dated, the stamp paper waspurcnased on 09.10.2009. Therefore, as on that date tnesale was not complete. Adverting to paragraph 9 of theagreement,ne!contendedthattheactualphysical 3. Shri Chandrashnekar urged that thougn the)agreement in question is not dated, the stamp paper waspurcnased on 09.10.2009. Therefore, as on that date tnesale was not complete. Adverting to paragraph 9 of theagreement,ne!contendedthattheactualphysical possession of the property in question was agreed to bedelivered at the time of execution and registration of the|sale deed. Therefore the question of taxing the assesseefor A.Y.2006-07 and the protective assessment for 2007-O8 are bad in law. | 4. Sri K.V.Aravind, learned Senior Standing Counsel|for the Revenue submitted that assessee among others.nad raised a ground before tne ITAT that the assessmentunder Section 14/7 of the Income Tax Act was notmaintainable but the Revenue could nave considered tneassessment under Section 153C. He submitted that aspecific query was made Dy the ITAT whether the assesseewould invite a decision on merits and the answer given by tne assessee was in tne affirmative. In that view of thematter, the ITAT has remanded the case to the file of|CIT(A). Hence, no interference is called for in this appeal. 5.We,Nave|carefullyconsideredtnerival.contentions and perused the records. 6. Undisputed facts of the case are, based on the)agreement found during the search in the premises of M/sDavanamJewellers|Pvt. Ltd.,|tneassessment was.reopened for A.Y.2006-07. The assessment order does notindicate|theprocedurefollowed|Inre-openingthe|assessment. In addition protective assessment forA.Y.2007-08 has also Deen completed. /.We|nave|perused|theShri Cnandrashekar is rignt in nis submission that though|the agreement is undated, the stamp paper bears the dateof purchase as October 9[tn], 2009. In paragraph 2 of theagreement, the details of the payments are shown. In|paragraph 9 of the agreement, it is stated that thepossession of the land snall be hnanded over after|execution of the sale deed. In the facts of this case, in theabsence of details in the assessment order with regard tothe procedure followed and want of reasons whnetnerassessment could pe done under Section 14/7 or 153C agreement. | which is a question of law, in our considered opinion, samerequires to be answered by the ITAT. 8. It was pointed out by Sri Aravind tnat the)question witn regard to conclusion of assessment in similarcase iS pending consideration in CA 954/2022 which hasbeen heard and reserved for orders by the Apex Court. 9. In view of the above, in our considered opinion,|the matter requires consideration in the nands of the ITAT.Accordingly, this matter is remitted on the file of the ITATfor fresn consideration in accordance witn law. 10. Hence the following: ORDER| (i)|Appeal is disposed of. (il)Matter is remitted to the file of the ITAT for fresh|consideration in accordance with law, after disposal of)C.A.954/2022 by tne Apex Court. (il)Liberty is reserved to potn assessee and Revenue tourge all contentions raised earlier before the ITAT. 8 (iV) In view of the remand order, the questions of law.raised by the assessee do not require any answer andnence, they are unanswered. No costs. | Sd/- | JUDGE. Sd/-'| JUDGE BRN