TMI Blog2017 (3) TMI 679X X X X Extracts X X X X X X X X Extracts X X X X ..... hough HUF is represented by Shri A. Ramakrishna, still as per law, Shri A. Ramakrishna-HUF is ‘such other person’ within the meaning of the expression provided in Explanation 3. As seen from the record, the CIT(A) has not given any opportunity to such other person before a direction was given. Therefore, the direction given violates not only the provisions of law but also the principles of natural justice. The direction cannot be upheld on these reasons. - I.T.A. No. 813/HYD/2016 - - - Dated:- 10-3-2017 - SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER For The Assessee : Shri S. Rama Rao, AR For The Revenue : Shri Mohan Reddy, DR ORDER This is an appeal by assessee against the order of the Commissioner of Income Tax (Appeals)-9, Hyderabad dated 23-12-2015. Assessee is aggrieved on the order of direction issued by the CIT(A), after accepting assessee s contentions with reference to the status in which the income is to be assessed. 2. The appeal is filed with a delay of 42 (Forty two) days. In the condonation petition filed, it was submitted that assessee was suffering from enteric fever and was undergoing medical treatment. He has enclosed the certificate from M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... necessary capital gains to tax in the hands of Shri A. Ramakrishna, HUF. The order of the Ld.CIT(A) is as under: 4.4. I have carefully considered the assessment order, the submissions of the assessee, the facts of the case and also the remand report submitted by the Assessing Officer. I have also perused the sale deed in question i.e. the deed dt. 18.12.2004 vide registered deed no. 223/2005 and it is observed that as averred by both the assessee and the Assessing Officer, the subject property sold is HUF property and not individual property. The Assessing Officer completed the assessment in individual capacity instead of HUF capacity as the assessee filed return of income on 31.12.2007 by treating the said property as individual property. 4.5. Further, the assessee s contentions that what was transferred is only terrace rights and not vacant land is not adjudicated upon as the assessee has not raised this issue in the grounds of appeal. However, since the said property relates to HUF and not individual, the assessment ought to have been made in the capacity of HUF. Hence, the addition made in the individual capacity is not sustainable and is hereby deleted. But the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en to that assessee, before issuing direction pertaining to a third party, it was submitted that assessee himself is representing HUF also therefore, it is to be considered as deemed opportunity. 8. I have considered the submissions and perused the documents on record. First of all, the information received by the AO that assessee has invested an amount of ₹ 46,15,635/- itself is not correct. Inspite of having the information and the sale deed, AO chose to assess the same in the hands of assessee-individual, whereas the property was sold by assessee-HUF. This fact was also accepted by the AO in the course of remand proceedings before the Ld.CIT(A). To that extent, the findings of the Ld.CIT(A) given in para 4.4 have become final. Revenue is not in appeal on that issue. Therefore, the assessment done by the AO on the merits does not stand as of now. 9. The only issue is whether the Ld.CIT(A) can issue a direction to assess to tax the amount in the hands of A. Ramakrishna, HUF? In my view, the direction is not valid. There are certain time limits prescribed for issuance of a notice u/s. 148, which is governed by the provisions of Section 149. The assessment year involved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uram Pottery Workers Co. Ltd. 106 ITR 1 at page 10. In the instant case no addition was made in the hands of Smt. Kalpana Vijay Sarda though she has filed the return by specifying that she has purchased the property. At the same time it is not in dispute that the AO has taken a consistent stand that a sum of ₹ 16,51,000/- was paid for purchase of the said property but consciously took a view that she has no wherewithal to make such payment and hence no addition can be made under section 69A of the Act. This finding has become final and this was not in dispute before the Appellate Authority. In the appeal filed by the assessee s husband the only issue was as to whether he paid a sum of ₹ 16,51,000/- to the tenant on behalf of his wife and it is not the case of either the AO or the assessee that the payment was made by assessee s wife. Such being the case, an issue which is not before the first Appellate Authority cannot be subject matter of consideration while disposing of an appeal, in exercise of the powers vested in the first Appellate Authority under section 251 of the Income Tax Act. In the case of A.B. Parikh vs. Income Tax Officer 203 ITR 186 the Hon'ble Gujar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enhance the assessment but that is confined to the assessee and a finding or direction, while disposing of the appeal, must be a finding necessary for giving relief in respect of the assessment year in question. In other words, the conclusion reached by the AO in the case of a third party should not be disturbed without giving such assessee an opportunity of being heard and when it is not a necessary finding or direction in the case of the assessee whose appeal is pending and the issue therein is subject matter of dispute before the CIT(A). 12.In the case of CIT vs. Banwari Lal Sons P. Ltd. 257 ITR 518 at page 522 the Hon'ble Delhi High Court approved the findings of the Appellate Tribunal by observing as under: Before closing, we would like to say a word about the direction of the learned Appellate Assistant Commissioner to the Income-tax Officer to bring the amount in question to tax under the head Income from house property in the respective assessment years to which the income relates. This direction of the learned Appellate Assistant Commissioner has to be construed in the light of the decision of the Supreme Court in the case of RajinderNath v. CIT [1979] ..... 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