ITO And Others vs Murti Devi And Others

H.S. Sidhu, J

The Revenue has filed the appeal and Assessee has filed the Cross Objection against the impugned order dated 19.2.2015 passed by the Ld. CIT(A)-13, New Delhi pertaining to assessment year 2008-09. The grounds raised by the Revenue read as under:

Whether the Ld. CIT(A) on the facts and circumstances of the case and in law was correct in holding that no consideration was paid between the parties while it is evident from the registered sale deed of the alleged property at page 5 that consideration of Rs. 88 lakhs in cash, in addition to stamp duty of Rs. 5,28,000/- was paid by Smt. Murti Devi and assessee has not explained source of the same before the AO.

Whether on the facts and in circumstances of the case and in law, the Ld. CIT(A) was right in not appreciating the legal and factual position of the case.

The appellant craves leave to add, alter or amend any of the grounds of appeal at the time of hearing.

The grounds raised in the Assessee's Cross Objection read as under:-

That the initiation of proceedings u/s. 147 is illegal, in as such as the AO had initiated such proceedings solely on the basis of information received by him from the Investigation Wing without applying his own mind and also without making any verification at his end.

That the issuance of notice u/s. 148 is illegal, in as much as the AO had not obtained prior sanction of his superior authority, as required u/s. 151(1).

That on the facts of the case and in the law, the addition of Rs. 5,28,000/- made by the AO u/s. 69A is liable to be deleted.

Since the legal issue have been raised in the Cross Objection, hence, we are dealing with Cross Objection first. Ld. Counsel for the assessee reiterated the contents of the grounds raised in the Cross Objection and filed Form No. 35 showing that assessee has raised the legal grounds of appeal before the Ld. CIT(A), but the same has not been decided by the Ld. CIT(A), as per the arguments advanced by the Ld. Counsel for the assessee before the Ld. CIT(A). He requested that the legal ground may be set aside to the file of the Ld. CIT(A) with the directions to decide the same first and then decide the merit on the case, after giving adequate opportunity of being heard to the assessee.

On the contrary, Ld. DR has not raised any serious objection on the request of the assessee's counsel.

We have heard both the parties and perused the records especially the orders passed by the revenue authorities as well as the grounds raised in the cross objection and legal ground raised vide Form No. 35 filed before the Ld. CIT(A) in which the assessee has mentioned statement of facts in brief and the grounds no. 1 & 2 which were legal in nature and are being reproduced here for the sake of clarity.

"1. That on the facts of the case and under the law, the AO had erred in initiating proceedings u/s. 147 and in consequence thereof in issuing notice u/s. 148."

That the assessment order dated 28.2.2014 passed u/s. 147/143(3) is bad on various factual and legal grounds."

5.1 After perusing the impugned order as well as material placed before us, we are of the view that Ld. CIT(A) has not adjudicated the legal ground no. 1 and 2 as reproduced above, by stating that these are general in nature on which no specific submissions have been made by the assessee, hence, no adjudication is required thereon and the same were dismissed as infructuous by the Ld. CIT(A). We note that Ld. Counsel for the assessee made the submissions that assessee has not given any consent for not adjudicating the legal grounds filed before the Ld. CIT(A) and it should be decided by the Ld. CIT(A) after giving the hearing, as per the arguments advanced by the assessee before the Ld. CIT(A). We are of the view that assessee has not filed return of income on the receipt of information on the purchase of agriculture land, the AO has issued notice u/s. 148 of the Act on 31.3.2013 to the assessee and filed her return of income of Rs. 2,197/- as income from other sources. AO assessed the income of the assessee at Rs. 93,30,200/- by making the addition of Rs. 88,00,000/- on account of sale consideration to Shri Harish and Shri Rajesh and another addition of Rs. 5,28,000/- on account of payment of stamp duty. The basis of the addition in dispute is notice issued u/s. 148 of the Act and return filed by the assessee in response to the notice. But the same legal issues which the assessee has raised before the Ld. CIT(A) has not been decided by the Ld. CIT(A) which is contrary to law and fact on the file. In the interest of justice, we are sending back the issues to the file of the Ld. CIT(A) to decide first the legal grounds which we have reproduced as above, as already raised before the Ld. CIT(A) and also decide the issues raised in the Cross Objection before us on legal issue as well as on merits, after giving adequate opportunity of being heard to the assessee. Accordingly, the Cross Objection is allowed for statistical purposes.

5.2 Since we have already set aside the legal issues as well issues on merits of the case, as aforesaid, with the aforesaid directions to the Ld. CIT(A), the grounds raised by the Department in its Revenue also set aside to the Ld. CIT(A) to decide the same afresh, after giving adequate opportunity of being heard to the assessee. Accordingly, the Revenue's appeal is allowed for statistical purposes.

In the result the Cross Objection of the assessee as well as Revenue's Appeal of the Department stand allowed for statistical purposes.