Ita/256/2010 Of Smt P Ammani v. The Deputycommissioner Of Income Tax

IN THE HIGH COURT OF KARNATAKA AT BENGALURU| ON THE 13 DAY OF NOVEMBER, 2018| BEFORE THE HON'BLE MR. JUSTICE RAVI MALIMATH AND| THE HON'BLE MR. JUSTICE K.NATARAJAN INCOME TAX APPEAL No. 256 OF ZO1L BETWEEN Smt.P.Ammapn|No.114/7, 1['-]MainHAL 2[).]Stage, IndranagarBangalore-560 O08. .. Appellant (By Sri A. Shankar andSri M.Lava, Advocates) AND" Tne Deputy Commissioner|Of Income TaxCentral Circle 1(2)C.R. Building, Queens Road|Bangalore-560 OO1. Respondent. (By Sri K.V.Aravind, Advocate) Tnis income tax appeal is filed under Section 260-A of I.T Act, 1961 arising out of order dated: 02.03.2010 passed in|IT(SS)A No.44/BNG/2008, for the assessment year 1998-99|to 2003-04, praying to i) formulate the substantial questions|of law stated therein ti) allow the appeal and set aside the|order.Passed|DYtneITAT,BangaloreinIT(SS)ANo.44/BNG/2008, dated 02.03.2010 and etc., This income tax appeal, coming on for hearing this day,RAVI MALIMATH., J delivered the following: JUDGMENT Tne appellant is an individual and also partner in the|business concern Kaypee Exporters. Tne premises of Kaypee|Exporters was subjected to searcn proceedings under Section132 of the Income Tax Act. Tne premises of the appellant.was also searched. Several Gocuments and material were|recovered during tne course of search. Tne assessing officerinitiated assessment proceedings against Kaypee Exporters.Certain material belonging to the assesee was Nanded over on)the ground that they were undisclosed income in the nands ot the appellant. Pursuant to the receipt of the material, a notice|was issued under Section 158 BD of the Income Tax Actcalling upon the appellant to file her return. The return was|accordingly filed. The assessing officer computed capital|gains arising from the K.G.F.property at Rs.5,01,207/- as|against the claim of the capital loss of Rs. 3,20,642.20. An|appeal was filed, which was partly allowed. The appellate|authority confirmed the findings of the assessing officer in|relation to the issue pertaining to the KGF_ property.|Aggrieved by the same, an appeal was preferred before the) Tribunal. The Revenue also preferred an appeal. The appeal|filed by the Revenue was allowed in part. The appeal filed by|tne assessee was also allowed in part. Aggrieved by the same,|the present appeal is filed in so far as rejection of the grounds|filed by the appellant is concerned. | 2. By order dated 02.11.2010, the appeal was admittedto consider the following substantial questions of law: (1) Whether the Income Tax autnorities haveIn law.assumed proper Jurisdiction on_ theappellant under Section 158 BD on the facts andcircumstances of the case? (ii) Whether the Tribunal was Justified in law.in making an adhoc addition of Rs.2,00,000/- asincome from capital gains in respect of KGFRobertsonpetpropertyOF)the|factsandcircumstances of the case? (iii) Whether the Tribunal was Justified in.law in not adjudicating the ground relating to theISSUE|of.assumptionof.jurisdiction|bytheassessing officer to assess the appellant underSection 158 BD of the Act?| (iv) Whether the Tribunal was Justified inapplying the rate of 60% tax to capital gains as against the rate of 20% as prescribed underSection 117 of the Act? 3. Both the learned counsels submit that the substantial questions of law require to be re-framed. Therefore, they|have addressed arguments with regard to the same. 4. On hearing learned counsels we are of the consideredview that the following substantial questions of law arise for|consideration in this appeal: (i) Whether the Tribunal was Justified in law.in not adjudicating the grounds relating to theguestion ofjurisdiction as raised by the assessee? (ii) Whether the order of the Tribunal isperverse in not recording any reasons for passingthe said order with regard to modifying theadaition in respect of KGF property? (iv) Whether the Tribunal was Justified inapplying the rate of 60% tax to capital gains as against the rate of 20% as prescribed underSection 117 of the Act? 3. Both the learned counsels submit that the substantial questions of law require to be re-framed. Therefore, they|have addressed arguments with regard to the same. 4. On hearing learned counsels we are of the consideredview that the following substantial questions of law arise for|consideration in this appeal: (i) Whether the Tribunal was Justified in law.in not adjudicating the grounds relating to theguestion ofjurisdiction as raised by the assessee? (ii) Whether the order of the Tribunal isperverse in not recording any reasons for passingthe said order with regard to modifying theadaition in respect of KGF property? 5. Learned counsel for the asessee contends that.primarily, the question of jurisdiction with regard to Section.158 BD was raised before the Tribunal. Tne Tribunal nas not|even adverted to the said contention. Therefore, the non-consideration of the question of jurisdiction has vitiated the|order of the Tribunal. It is further contended tnat the Tribunal straightaway held that they would modify addition in respect|of KGF property to Rs.2.00 lakhs. There are no reasons)assigned by the Tribunal to arrive at sucn a conclusion. —Therefore, both the substantial questions of law require to be|answered in favour of the assessee. The same Is disputed by |learned counsel for the Revenue. | 6. Heard learned counsels. 7. We are of the considered view that the contentions of tne learned counsel! for the assessee requires to be accepted. Whenever a question of jurisdiction is raised before the)authority, the same snould be adjudicated. The very powerot |tne authority to consider the plea of the assessee Is called in|question. Whether it is to be accepted or not is completely|within the jurisdiction of the authority. However, the question|of jurisdiction should necessarily be answered by the authority|which has not been done. Therefore, the first substantial|question of law is answered in favour of the assesee by|nolding that the Tribunal was not justified in passing thneimpugned order without adjudicating the ground relating to jurisdiction. — 8. In so far as second substantial question of law, with|regard to modification in respect of KGF_ property isconcerned, the Tribunal has not given any reasons for|recording such a finding. Any conclusion to be recorded by theauthority should stand preceded by reasons. In the absence|of recording any reasons, the order becomes unsustainable.Hence, the order stands vitiated and therefore, the second|substantial question of law is accordingly answered. | 9. In view of answering both the substantial questions|of law, the appeal is allowed. The order of the Tribunal dated —02.03.2010 passed in IT(SS)A.No.44/Bang/2008 is set-aside|to the extent of jurisdiction and extent of the KGF property.Tne matter is remanded to the Tribunal for aée fresadjudication based on the observations made hereinabove. | Sd/-JUDGE Sd/-JUDGE| cm/-