TMI Blog2014 (3) TMI 1181X X X X Extracts X X X X X X X X Extracts X X X X ..... t that the revenue authorities on the basis of such power of attorney has registered the sale deeds in favour of the buyers in the revenue records. We have also perused the power of attorney placed in assessee s paper book and have found that the assessee was appointed as power of attorney holder of Smt. Pamela Colleco in clear terms without any conditions. Thus, after going through all the documents and considering the material available on record, we are of the considered opinion that the power of attorney is valid and on the basis of such attorney the assessee is held as agent of Smt. Pamela Colleco. Therefore, we find no infirmity in the order of ld. CIT(A) in justifying the action of ld. AO in holding the assessee as representative assessee of Smt. Pamella Colleco. Accordingly we hold the assessee as the representative assessee of Smt. Pamela Colleco as provided in section 163 - Decided against revenue. - ITA NO. 890/JP/2012, ITA NO. 952/JP/2012, ITA NO. 958/JP/2012 - - - Dated:- 5-3-2014 - SHRI HARI OM MARATHA AND SHRI N.K. SAINI For the Department : Shri A.K. Khandelwal For the Assessee : Shri Manish Agarwal ORDER PER BENCH : Since all these app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n assessee s appeal pertain to the action of lower authorities holding him as agent and representative assessee for the NRI owner Smt. Pamela Colleco in terms of the provisions of section 163(1) of the Act. Before us, it was stated by the ld. AR that no proper opportunity was provided to assessee before passing the order u/s 163 of the Act and to support this version, the ld. A/R has made written submissions which is reproduced as under: At the outset, it is submitted that the Ld. AO has issued notice u/s 148 of the Income Tax Act, 1961 for making assessment of a non resident by ignoring the fact that the DCIT Mumbai had jurisdiction to undertake the assessment of a non resident. A representative assessee can be assessed only by the DCIT, Mumbai and none else. In the present case, the order u/s 163, notice u/s 148 and the consequent order u/s 147 / 143(3) was passed by the ITO, Ward 2(1), Jaipur who though have had the territorial jurisdictional over the individuals however does not have the jurisdiction to assess in the capacity of representative of the non- resident which is with the DCIT, Mumbai only thus the entire proceedings are without any jurisdiction and therefore dese ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lse in India. In connection with such proceedings, the Deputy CIT, Mumbai, had authority to summon or ask for information from any person throughout India in connection with such proceedings. It is therefore submitted that observations of the Ld. CIT(A) are without properly appreciating the facts of case, thus the same deserve to be ignored and excluded and since the AO does not have the jurisdiction to assess in the capacity of representative of the non resident which is with the DCIT, Mumbai only thus the entire proceedings are without any jurisdiction and therefore deserves to be hold as illegal and void-ab-initio.. Without prejudice to above, it is further submitted as under: 1. The order dated 24.03.2011 passed u/s 163 was illegal: 1.1 Denial of fair opportunity of hearing amounts to violation of principles of Natural Justice: It is now a well established law that an order prejudicial to assessee cannot be passed without affording to the assessee an opportunity of being heard, and any empty formality done in this regard does not fulfill this requirement, rather a fair opportunity must be granted. This is a vital part of the principles of Natural Justice wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... national Taxation) [2008]reported in 298 ITR (A.T.) 0113, wherein the Hon ble Bench has held as under: Representative Assessee Non Resident Agent of Non resident Condition precedent to treat person as agent of non resident Meaningful opportunity to be heard Notice issued to assessee at old address at Jamnagar Returned unserved No proof that notice issued at London office No opportunity to be heard Order treating assessee as agent of non resident not valid Income Tax Act, 1961, S. 163. Thus, the order suffers from severe illegality in the procedure followed. 1.3 Entire proceedings are liable to be quashed in view of the illegality embedded in the procedure followed: It has clearly been explained in the preceding paragraph that the order dated 24.03.2011 u/s 163 is defective in nature being violative of the Principles of Natural Justice and in view of the illegality in the procedure followed. 1.4 This defect cannot be cured at this stage, as the Hon ble Tribunal is not a fact finding authority but an appellate forum: The illegality involved in the procedure followed has infected the very core the ensuing proceedings as the order u/s163 is the ver ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sued u/s 133(6) dated 20.10.2011 to Smt. Pamela Colleco at her local address in India was duly served on her and has not returned un-served, however the reply was not received. There is no adverse finding in the order that the address was wrong or that notice could not be served for any other reason. The Ld. AO was supposed to make further enquiry by sending at least one more notice or by deputing the concerned area inspector to investigate and find out the true state of affairs. Merely on the basis of fact that reply was not received from the Non-resident lady, it cannot be presumed that the address mentioned was wrong particularly when the notice was duly served at the given address. It must be noted that the assessee is not a general Power of Attorney Holder so as to be liable in respect of any act of the lady, but is merely a specific power of attorney holder and just in respect of the said land. And, thus assessee is not at all liable to bear the consequences of failure on part of the lady to furnish reply to the notice. Moreover, it is a fact that when reply was not received from the lady, department had every power in its hands to trace out the lady and extract information o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 163 and subsequent order u/s 147 / 143(3) have been challenged on the basis of the judicial pronouncement by the Hon ble Calcutta High Court in the case of CESC Ltd. and Others Vs. DCIT 263 ITR 402. 4.2 I have carefully perused the order relied on by the AR. Before distinguishing the order on facts from the facts of the case of the assessee, I would like to quote the observation of the Hon ble Calcutta High Court while deciding the matter of jurisdiction in the case relied on by the AR The question of jurisdiction seems not so easy to answer. A question of law is always dependent on the given facts. Without the facts, no proposition of law can be founded. The proposition may be an abstract one but when it comes to application, it has to be applied on the facts and the facts are the factors on which the application of the abstract law would depend. Top what extent it would apply and to what extent it would not, is a question determinable by courts. When it is a question of discretion, the court has every liberty to exercise or not to exercise the discretion. Normally a court would be slow to exercise its discretion, in a given fact, unless it appears that it is necessary for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee from the case relied on by the AR that is CESC Ltd. Vs. DCIT. In this case property of very high value recorded in the books of Revenue Department of the State Govt. in the name of Ms. Pamela Jean Koleko was transferred by Shri Banwari Lal Sharma as an authorized representative and the payment was received in his bank account and was never transferred to Ms. Pamela Jean Koleko as per evidence available on record. Ms. Pamela Jean Koleko was not being assessed anywhere in India. Therefore, given the above discussion it is held that the facts of the case of the assessee are completely different from the facts of the case relied on by the assessee and so the finding of the Hon ble Calcutta High Court is not applicable to the facts of the case of the assessee. Reliance was also placed by the AR on the decision of Hon ble ITAT, Mumbai given in case of Saipem UK Ltd. Vs. Deputy Director of Income Tax (International Taxation) (2008) reported in 298 ITR (A.T.) 0113 wherein it was held that meaningful opportunity to be heard should be given to the assessee. During the course of all the proceedings in the case of the appellant it is seen that repeated opportunity was given to the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . However, by merely providing the address the assessee cannot absolve himself from his statutory liability of payment of tax arising on the income generated from the transaction of sale of the immovable property. Assessee is a legally appointed power of attorney holder in respect to the property owned by a non resident and on the basis of such attorney he has executed the sale agreements and has received consideration and no tax was paid either by the non resident or by the assessee himself. It is also a matter of fact that the revenue authorities on the basis of such power of attorney has registered the sale deeds in favour of the buyers in the revenue records. We have also perused the power of attorney placed in assessee s paper book and have found that the assessee was appointed as power of attorney holder of Smt. Pamela Colleco in clear terms without any conditions. Thus, after going through all the documents and considering the material available on record, we are of the considered opinion that the power of attorney is valid and on the basis of such attorney the assessee is held as agent of Smt. Pamela Colleco. Therefore, we find no infirmity in the order of ld. CIT(A) in j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assess as buyer and Shri Banwarilal Sharma as the seller (a power of attorney holder of the real owner of property Smt. Pamella Colleco) which is available in the paper book filed by the assessee. The seller i.e. Smt. Pamela Colleco was represented by Banwari Lal Sharma who is holding power of attorney executed in his favour by Smt. Pamela Colleco in respect to the property transferred. Since the seller i.e. Smt. Pamela Colleco or her legally appointed power of attorney holder Banwari Lal Sharma had not paid due taxes on the income from sale of the property purchased by the appellant, therefore, the appellant was held as an agent of Smt. Pamela Colleco u/s 163(1) for A.Y. 2008-09 in respect of income from capital gains on sale of the property purchased by the assessee. 3.4 Aggrieved, the assessee went in appeal before the ld. CIT(A) who has allowed the grounds taken by the assessee and held that the assessee could not be treated as an agent of Smt. Pamela Colleco for A.Y. 2008-09 in respect of her income on account of capital gains on the transfer of such property through Shri Banwari Lal Sharma u/s 163(1) of the Act which is purchased by the assessee. 3.5 Aggrieved by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified in :- 1) Holding that Shri Banwari Lal Sharma only and not Shri Vivek Gupta, was an agent of Smt. Pamela Jeans Colleco for A.Y. 2008-09 in respect of her income from Capital Gain on sales of one property by Shri Banwari lal Sharma as power of attorney holder of Smt. Pamela Jeans Colleco, ignoring the fact that unregistered power of attorney was neither signed by Shri Banwari Lal Sharma nor by the Witness. 2) Holding that the assessee Shri Vivek Gupta was not a agent of Smt. Pamela Jeans Colleco u/s 163(1) for A.Y. 2008-09 in respect of her income from Capital Gain on sales of one property by Shri Banwari Lal Sharma, Shri Vivek Gupta ignoring the provision of section 163(d) of I.T. act, 1961 wherein Agent is defined as any person in India who has acquired by means of transfer of a Capital Assets in India. 3) Holding that the assessee Shri Ashish Gupta was not an agent u/s 163(1) of Smt. Pamela Jeans Colleco for A.Y. 2008-09 in respect of her income from Capital Gain on sale of one property by Shri Banwari Lal Sharma to Shri Ashish Gupta ignoring the provision of section 160 of I.T. Act, 1961 wherein representative assessee in respect to income of a non resident spec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vestment Ltd. reported in 73 ITD 125 wherein it has been held that no party could be given second inning at the detriment of the other party. 4.7 After considering the rival submissions we found that the assessee was held as an agent of Smt. Pamela Colleco as the assessee has purchased a property owned by her through Banwari Lal Sharma who was the power of attorney holder. While deciding the similar issue in appeal in ITA No. 890/JP/12 (surpa) in respect to the power of attorney holder Shri Banwari Lal Sharma, we have already hold the Banwari Lal Sharma as the agent and representative assessee u/s 163(1)(c) of the Act for the income from capital gain arising from the transfer of the immovable properties through two sale deeds, one of which related to the assessee. Therefore, by following our orders in ITA No. 890/JP/12 in the case of Banwari Lal Sharma (supra), we find no reason to hold the assessee Shri Ashish Gupta as representative assessee for Smt. Pamela Colleco in respect to the income from capital gain on the sale of immovable properties through Shri Banwari Lal Sharma. The ld. CIT(A) after appreciating these facts has held that assessee can no circumstances be treated as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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