ITO, New Delhi V. Smt. Burfi Devi, Delhi

ITA 1104/DEL/2013

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 2794 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 08-05-2017
• Assessment Year: 1998-1999
• Appeal Filed On: 26-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVIKANT GUPTA
• Keywords: Capital asset; Principle of natural justice; Additional evidence
• Section: 143(3); 45(5); 2(14); 142(1); 263; 144

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A NEW DELHI BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO. 1104/DEL/2013 ASSTT. YEAR: 1998-99 INCOME TAX OFFICER, WARD 36(4), ROOM NO. 105, H BLOCK, VIKAS BHAWAN, NEW DELHI. (PAN: ANFPD8250R) VS BURFI DEVI, L/H SHRI OMBIR SINGH, VILLAGE GHAROLI, DELHI-110096 (APPELLANT) (RESPONDENT) ITA NO. 4652/DEL/2014 ASSTT. YEAR: 1998-99 AND ITA NO. 4653/DEL/2014 ASSTT. YEAR: 1998-99 BURFI DEVI, L/H SHRI OMBIR SINGH, VILLAGE GHAROLI, DELHI-110096 VS INCOME TAX OFFICER, WARD 36(4), NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI RAVI KANT GUPTA, SR. DR RESPONDENT BY: SHRI RAJAN BHATIA, ADV. SHRI S.K. DHAMIJA, CA DATE OF HEARING: 31.05.2018 DATE OF PRONOUNCEMENT: 29.08.2018 ORDER PER SUDHANSHU SRIVASTAVA, J.M. ITA NO. 1104/DEL/2013 IS THE DEPARTMENTS APPEAL P REFERRED AGAINST THE ORDER DATED 11.12.2012 PASSED BY THE L D. CIT(A)-13, NEW 2 DELHI FOR ASSESSMENT YEAR 2008-0. ITA NO. 4652/DEL /2014 IS THE APPEAL PREFERRED BY THE ASSESSEE AGAINST THE ORDER PASSED U/S. 263 OF THE ACT BY THE LD. CIT-XII, NEW DELHI FOR THE ASSESSMENT YEAR 1998-99 WHEREAS THE ITA NO. 4653/DEL/2014 IS THE ASSESSEES APPEAL FOR ASSESSMENT YEAR 2008-09 AND CHALLENGES THE ORDER OF THE CIT(A)-XXVI I, NEW DELHI WHEREIN VIDE ORDER DATED 12.6.2014 THE LD. CIT(A) HAS UPHEL D THE ORDER PASSED U/S. 143(3) OF THE ACT SUBSEQUENT TO THE ORDER PASS ED U/S. 263 OF THE ACT. ALL THE THREE APPEALS WERE HEARD TOGETHER AND FOR T HE SAKE OF CONVENIENCE THERE ARE BEING DISPOSED OF BY THIS COMMON ORDER. 2. FOLLOWING GROUNDS HAVE BEEN RAISED BY THE REVENU E:- (I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) HAD ERRED IN GIVING DIRECTION TO THE AO IN P ARA 5 TO CONSIDER THE ORIGINAL DATE OF TRANSFER OF LAND AS P OINT OF TRANSFER AND DECIDE THE MERIT OF THE CASE ACCORDINGLY AS IT AMOUNTS TO SETTING ASIDE THE ORDER OF A.O. WHICH IS NOT PERMIT TED U/S 251(L)(A) OF THE INCOME TAX ACT. (II) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ORDER OF CIT(A) HAD ERRED IN HOLDING THAT THE AGRICULTURAL L AND FOR WHICH ASSESSEE RECEIVED COMPENSATION/INTEREST WAS NOT CAP ITAL ASSET U/S 2(14)(III) OF THE INCOME TAX ACT IN THE F.Y. 20 03-04 WHEN THE LAND WAS ORIGINALLY ACQUIRED BY GOVT, AND ALSO IN THE F.Y. 1997-98, WHEN THE ASSESSEE RECEIVED ENHANCED COMPENSATION/SOLATIUM/INTEREST. (III) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAD ERRED IN NOT DISCUSSING AND GIVI NG ANY FINDING ON THE STAND OF THE A.O. AND CASE LAWS RELIED UPON BY THE A.O. (IV) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAD ADMITTED ADDITIONAL EVIDENCE A L ETTER DATED 03.02.2010 FROM BLOCK DEVELOPMENT OFFICER, EAST DEL HI, IGNORING THE JUDGMENT OF JURISDICTIONAL DELHI HIGH COURT IN THE CASE OF MANISH BUILDWELL PVT. LTD. (V) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAD ERRED BY IGNORING THE FACT THAT DURING THE PENDENCY OF APPEAL, THE CIT, DELHI-XII U/S 263 HAD SET ASIDE THE ORDER OF THE A.O. TO RECOMPUTED THE INCOME AND TAX THE ENTIRE 3 INTEREST OF RS.26,38,462/- ON ENHANCED COMPENSATION . THIS FACT WAS SPECIFICALLY POINTED OUT BY THE ASSESSEE DURING THE APPELLATE PROCEEDINGS BEFORE THE CIT(A) AND DISCUSSED ON PAGE 9 & 10 OF THE ORDER. 3. FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESS EE IN ITA NO. 4652/DEL/2014 :- 1) THAT THE ORDER DATED 30/03/2012 OF THE LEARNED CIT-XII, NEW DELHI (LD. CIT) UNDER SECTION 263 IS BAD BOTH I N LAW AND ON FACTS OF THE CASE. THAT THE CIT WRONGLY ASSUMED JUR ISDICTION UNDER SECTION 263. THAT THE JURISDICTIONAL FACTS FO R INVOCATION OF SECTION 263 ARE ABSENT. 2) THAT THE OBSERVATION OF THE LD. CIT-XII, NEW DE LHI WHILE PASSING ORDER UNDER SECTION 263 THAT THE ASSESSMENT ORDER PASSED BY THE AO WAS ERRONEOUS, WITHOUT APPLICATION OF MIND, WITHOUT MAKING NECESSARY ENQUIRIES AND ACCEPTING TH E CONTENTION OF THE ASSESSEE IS INCORRECT, ABSOLUTELY BIASED AND NOT IN ACCORDANCE WITH THE PROVISIONS OF THE ACT. 3) THAT THE LD. CIT HAS NOT PROPERLY SCANNED THE A SSESSMENT RECORDS WHEREIN IT IS ABUNDANT CLEAR THAT AO HAD DU LY APPLIED HIS MIND AND MADE NECESSARY ENQUIRIES BEFORE PASSIN G THE ASSESSMENT ORDER. THAT THE ASSESSMENT ORDER IS NEIT HER ERRONEOUS, NOR PREJUDICIAL TO THE INTEREST OF THE R EVENUE. 4) THAT THE CONCLUSION OF THE LD. CIT-XII, NEW DEL HI , THAT THE ORDER OF THE AO IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE IS NOT BASED ON COGENT MATERIAL REASONI NG AS WELL AS NOT BASED ON THE PRONOUNCEMENTS OF THE APEX COUR T. 5) THAT THE DIRECTIONS OF THE LD. CIT-XII, NEW DEL HI UNDER SECTION 263 IS ERRONEOUS FOR SETTING ASIDE THE ASSE SSMENT ORDER OF THE AO FOR FRAMING THE ASSESSMENT DE NOVO AND TH E CIT HAS ERRED IN DIRECTING CHARGE OF INTEREST OF RS. 26,38, 462/- ON RECEIPT BASIS IN THE YEAR OF RECEIPT. 6) THAT THE ACTION OF THE LD. CIT-XII, NEW DELHI B Y SETTING ASIDE THE ORDER OF THE A.O. WITH A DIRECTION TO REO PEN THE CASE AND RE-COMPUTE THE INCOME AND TAX THE ENTIRE INTERE ST OF RS.26,38,462/- IS NOT IN ACCORDANCE WITH THE PROVIS IONS OF THE INCOME TAX ACT, 1961. 4 7) THAT THE ORDER UNDER SECTION 263 IS WITHOUT THE VALID JURISDICTION AS THE ASSESSEES APPEAL AGAINST THE O RDER OF THE A.O. WAS PENDING BEFORE THE LD.CIT-XXVII. 8) THAT THE ORDER UNDER SECTION 263 HAS BEEN PASSE D WITHOUT A VALID SHOW CAUSE NOTICE ON THE ASSESSEE AND THIS VI TIATES THE PROCEEDINGS. 9) THAT NO PROPER OPPORTUNITY WAS GIVEN TO THE ASS ESSEE AND THE LD. CIT-XII, NEW DELHI PASSED THE ORDER UNDER S ECTION 263 IN A HASTE AND MECHANICAL MANNER. 10) THAT THE APPELLANT CRAVES LEAVE TO ADD, TO ALT ER, TO DELETE ALL OR ANY GROUNDS OF APPEAL. 4. FOLLOWING GROUNDS HAVE BEEN RAISED IN ITA NO. 4653/DEL/2014: 1. THAT THE ORDER OF THE LD. CIT (A) IS BAD BOTH IN LA W AND ON THE FACTS OF THE CASE. 2. THAT THE LD. CIT (A) HAS ERRED IN UPHOLDING THE AS SESSMENT FRAMED BY THE ASSESSING OFFICER AT A FIGURE OF RS. 50,86,818/- AND THUS HAS ERRED IN UPHOLDING THE DEM AND RAISED BY THE AO AT RS. 56,22,808/-. 3. THAT THE AO ERRED IN ADDING TO INCOME AN AMOUNT OF RS. 50,86,818/- ON ACCOUNT OF CAPITAL GAINS/ INTEREST I NCOME AND THE CIT (A) ERRED IN UPHOLDING THE SAME. 4. THAT THE LD. AO ERRED BOTH IN LAW AND ON FACTS BY ADDING AN AMOUNT OF RS.24,48,356/-UNDER THE HEAD CAPITAL GAINS ON ACCOUNT OF MONEY RECEIVED TOWARDS COMPULSO RY ACQUISITION OF RURAL AGRICULTURAL LANDS (OWNED BY T HE FAMILY OF THE APPELLANT FOR CENTURIES AND BEING USED FOR A GRICULTURAL PURPOSES WHICH WERE ABSOLUTELY UNDER THE PURVIEW OF GRAM PANCHAYAT AT THE TIME THE LAND WAS ACQUIRED) AND TH E CIT (A) ERRED IN UPHOLDING THE SAME. 5. THAT THE LD. AO PASSED THE ASSESSMENT ORDER SUMMAR ILY WITHOUT TAKING INTO CONSIDERATION THE DIRECTIONS OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)- XXX, NEW DELH I (ORDER DATED 11/12/2012) AND CIT (A) ERRED IN BY UPHOLDING THE SAME. 6) THAT THE CIT (A) HAS ERRED IN HOLDING THAT THE O RDER OF CIT (A)- XXX IS NULL AND VOID AND ERRED BY CONFIRMING/ UPHOLDING THE ORDER OF AO BY TAXING RS: 24,48,356/- UNDER THE HEAD CAPITAL GAINS, WHEREAS THE CIT (A)- XXX HAD SPECIF ICALLY HELD SPECIFICALLY THAT THE CAPITAL GAINS NOT TO BE TAXAB LE. HENCE, THE 5 ORDER OF THE CIT (A)- XXVII IS BEYOND THE JURISDICT IONAL POWERS ON THE PRINCIPLES OF RULES OF FINALITY. 7) THAT IN ANY CASE THE LAND WHICH HAS BEEN SUBJECTED TO CAPITAL GAINS WAS AGRICULTURAL IN NATURE AND WAS NO T A CAPITAL ASSET WITHIN THE MEANING OF SEC 2(14) OF INCOME TAX ACT AND THE INCOME RELATING TO SAME COULD NOT HAVE BEEN MAD E THE SUBJECT OF TAXATION AND CIT(APPEALS) ERRED IN BY UP HOLDING THE SAME. THAT THE SEC 45/45(5) DOES NOT APPLY ON THE F ACTS OF THE CASE AND CIT(APPEALS) ERRED IN BY UPHOLDING THE SAM E. 8) THAT THE ASSESSMENT FRAMED BY THE LD. AO IS TOTALL Y ARBITRARY SINCE HE DID NOT EVEN TAKE COGNIZANCE OF THE BASIC AND FUNDAMENTAL ASPECTS OF THE LOCATION AND THE NATURE OF THE LAND AND THEREBY HURRIEDLY COMPLETED THE ASSESSMENT WHIC H IS PURELY BASED ON SURMISES AND GUESS WORK, AND CIT(AP PEALS) ERRED IN BY UPHOLDING THE SAME. 9) THAT THE DETAILS REGARDING THE NATURE OF PROPERTY/ LOCATION WERE AVAILABLE WITH LD. AO BUT STILL HE IGNORED THE SAME AND FRAMED THE ASSESSMENT AND THUS THE SAME IS VITIATED IN LAW, AND CIT(APPEALS) ERRED IN BY UPHOLDING THE SAME. 10) THAT THE NECESSARY EVIDENCES GIVEN TO THE LD. AO REGARDING NATURE OF THE PROPERTY AND ITS NOT BEING A CAPITAL ASSET U/S 2(14) HAVE BEEN COMPLETELY IGNORED BY HIM , AND CIT(APPEALS) ERRED IN BY UPHOLDING THE SAME. 11) THAT IN ANY CASE LD. AO DIDNT GRANT TIME AND PERM IT PROCUREMENT OF FURTHER EVIDENCES (EXISTING) TO PROV E THAT THE ASSET IS NOT A CAPITAL U/S 2(14) AND IS PURELY AGRI CULTURAL LAND IN NATURE; INSPITE OF THE SPECIFIC REQUEST OF THE APPE LLANT HE COMPLETED THE ASSESSMENT IN RUSHED MANNER AND IN VI OLATION OF THE PRINCIPLES OF NATURAL JUSTICE AND RULE OF AUDI- ALL-PARTEM, AND COMMISSIONER OF INCOME TAX(A) ERRED BY UPHOLDING TH E SAME. 12) THAT IN ANY CASE THE AMOUNT ADDED TO THE INCOME DID NOT PERTAIN TO RELEVANT PREVIOUS YEAR. 13) THAT THE LD. AO HAS ERRED IN LAW AND ON FACTS BY TA XING AN AMOUNT OF RS. 26,28,342/- ON ACCOUNT OF INTEREST IN COME ON RECEIPT BASIS, AND CIT(APPEALS) ERRED IN BY UPHOLDI NG THE SAME. 14) THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS BY C ONFIRMING THE ACTION OF THE LD. AO OF TAXING THE ENTIRE INTEREST IN THE YEAR OF RECEIPT WHICH IS ABSOLUTELY AGAINST THE SPIRIT OF T HE LAW, AS THE AO/ CIT (A) DIDNT TAKE INTO CONSIDERATION THE JUDG EMENT OF THE APEX COURT IN THIS REGARD. 15) THAT IN ANY CASE THE AMOUNT ADDED TO THE INCOME DI DNT 6 PERTAIN TO RELEVANT PREVIOUS YEAR AND HAS BEEN WRON GLY ADDED TO THE INCOME OF THE YEAR IGNORING THE WELL SETTLED POSITION OF LAW IN RAMA BAIS CASE AND MORE SO BY UNNECESSARILY DISTURBING HIS PREDECESSORS ORDER, (ORDER DATED 24.12.2009), A ND CIT(APPEALS) ERRED IN BY UPHOLDING THE SAME. 16) THAT THE LD. AO PASSED THE ORDER ABSOLUTELY MECHAN ICALLY BY FOLLOWING THE WHIMSICAL ORDER OF THE LD. CIT-XII, W ITHOUT APPLYING HIS OWN MIND IN THIS REGARD AND CIT(APPEAL S) ERRED IN BY UPHOLDING THE SAME. 17) THAT THE LD. AO HAS NOT CONSIDERED THE SUBMISSIONS OF THE APPELLANT THAT THE ENTIRE AMOUNT IS NOT TAXABLE AT ALL AS THE SAME HAD ALREADY BECOME TIME BARRED, AND CIT(APPEAL S) ERRED IN BY UPHOLDING THE SAME. 18) THAT THE ORDER OF LD. AO IS BASED ON SURMISES AND I S ABSOLUTELY MECHANICAL IN NATURE AND FURTHER ALL RELEVANT EVIDE NCES WERE IGNORED WHILE COMPUTING THE ASSESSMENT AND THE ASSE SSMENT FRAMED IS TIME BARRED, AND CIT(APPEALS) ERRED IN BY UPHOLDING THE SAME. 19) THAT THE LD. CIT/ LD. AO FAILED TO TAKE INTO CONSI DERATION THE FUNDAMENTAL PRINCIPLE OF EQUALITY BY ABSOLUTELY IGN ORING THE FACT OF NON TAXABLE ORDER HAVING BEEN PASSED BY THE AO IN THE CASE OF SIMILARLY PLACED ANOTHER, ASSESSEE WHO IS F ROM THE SAME VILLAGE WHOSE AGRICULTURAL LANDS WERE ALSO ACQUIRED BY THE DELHI GOVERNMENT SIMILARLY. 20) THAT THE LD. AO ERRED BY INITIATING PENALTY PROCEE DINGS U/S 274/ 271(L)(C) OF THE INCOME TAX ACT, 1961, AND CIT (APPEALS) ERRED IN BY UPHOLDING THE SAME. 21) THAT THE LD. AO WRONGLY CHARGED THE INTEREST U/S 2 34(A), 234(B), 234(C) TOTALING TO RS.10,74,724/- (RS. 4,77,655+RS.5,97,069), AND CIT(APPEALS) ERRED IN BY UPHOLDING THE SAME. 22) THAT THE LD. AO WRONGLY CHARGED THE INTEREST U/S 2 20(2) AMOUNTING TO RS. 33,80,412/-, AND CIT(APPEALS) ERRE D IN BY UPHOLDING THE SAME. 23) THE APPELLANT CRAVES TO LEAVE TO ADD, TO ALTER, AN D TO DELETE ALL OR ANY GROUNDS OF APPEAL, AND CIT(APPEALS) ERRED IN BY UPHOLDING THE SAME. 7 5. THE BRIEF FACTS OF THE CASE ARE THAT ON THE BA SIS OF SOME INFORMATION GATHERED FROM PAY & ACCOUNTS OFFICE, DE LHI, GOVERNMENT OF INDIA, IT WAS FOUND THAT THE LAND OF ASSESSEES HUSBAND (NOW DECEASED) SH. OM BIR SINGH) WAS ACQUIR ED BY THE DELHI GOVERNMENT AND THE AMOUNT OF RS. 48,22,972/- WAS PAID TO THE ASSESSEES HUSBAND AS COMPENSATION / ADDITIONAL COMPENSATION / ENHANCED COMPENSATION/ SOLATIUM ON ACCOUNT OF TRA NSFER OF CAPITAL ASSETS BY WAY OF COMPULSORY ACQUISITION. TH IS AMOUNT INCLUDED INTEREST OF RS. 26,38,462/-. STATUTORY NOT ICE U/S. 142(1) OF THE ACT WAS ISSUED TO THE ASSESSEE WHO WAS ALIVE AT THAT TIME, BUT NO COMPLIANCE WAS MADE. THEREAFTER, THE AO PAS SED AN EXPARTE ORDER U/S. 144 OF THE ACT ON 28.4.2000 ASSE SSING THE INCOME AT RS. 48,22,972/-. 6. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WHO UPHELD THE ASSESSMENT ORDER. FURTHER AGGRIEVED, TH E ASSESSEE APPROACHED THE ITAT AND THE ITAT, VIDE ITS ORDER DA TED 9.9.2008 IN ITA NOS. 1758, 1759 & 1760/DEL/2003, RESTORED THE MATTER BACK TO THE FILE OF THE AO FOR MAKING DENOVO ASSESSMENT . SUBSEQUENTLY, THE ASSESSEE WAS REPRESENTED THROUGH THE LEGAL HEIR OF THE ASSESSEE AND IT WAS SUBMITTED BEFORE T HE AO THAT THE IMPUGNED LAND WAS IN THE NATURE OF AGRICULTURAL LAN D AND THEREFORE THE LAND WAS OUTSIDE THE PURVIEW OF DEFINITION OF CAPITAL ASSET AS DEFINED IN SECTION 2(14) OF THE ACT AND, THEREFORE ANY COMPENSATION RECEIVED ON COMPULSORY ACQUISITION WAS NOT TAXABLE. IN SUPPORT OF THE CLAIM, A COPY OF CENSUS OF INDIA, 1981 FOR THE VILLAGE GHAROLI, WHERE THE LAND WAS SITUATED WAS A LSO SUBMITTED ACCORDING TO WHICH THE POPULATION OF THE VILLAGE GH AROLI WAS ONLY 1985. HOWEVER, THE AO DID NOT ACCEPT THE ASSESSEE S CONTENTION AND TOOK THE VIEW THAT IN VIEW OF THE PROVISIONS CONTAINED IN SECTION 45(5) OF THE ACT, ANY COMPENSATION RECEIVE D BY THE ASSESSEE WAS TO BE DEEMED AS INCOME CHARGEABLE UND ER THE HEAD CAPITAL GAIN FOR THE PREVIOUS YEAR IN WHICH THE A MOUNT WAS 8 RECEIVED BY THE ASSESSEE. THE AO PROCEEDED TO MAKE THE ADDITION OF RS. 2448356/- BEING CAPITAL GAIN IN THE HANDS OF THE ASSESSEE. THE AO ALSO MADE THE ADDITION OF RS. 254637/- BEING THE INTEREST APPORTIONED OUT OF THE TOTAL AMOUNT OF INTEREST OF RS. 2638462/- FOR THE YEAR UNDER CONSIDERATION. 7. AGGRIEVED WITH THIS ORDER THE ASSESSEE AGAIN APP ROACHED THE LD. CIT(A). IN THE MEANWHILE THE LD. COMMISSIONER OF INCOME TAX-XII, NEW DELHI ALSO INITIATED THE PROCEEDINGS U /S. 263 OF THE ACT NOTING THAT THE ORIGINAL ASSESSMENT U/S. 144 OF THE ACT WAS COMPLETED AT RS. 4822972/- WHICH HAD BEEN UPHELD BY THE ERSTWHILE LD. CIT(A) WHEREAS IN THE SECOND ROUND O F ASSESSMENT, ON THE MATTER BEING RESTORED TO THE FILE OF THE AO BY THE ITAT, THE AO HAD COMPLETED THE ASSESSMENT AT RS. 2702993/- O NLY AND IT WAS THE VIEW OF THE LD. CIT THAT THE INTEREST INC OME TO THE EXTENT OF RS. 2383825/- HAD GONE UNTAXED. AS PER THE LD . CIT, THE ORDER OF THE AO WAS ERRONEOUS AND PREJUDICIAL TO TH E INTEREST OF THE REVENUE. THE ASSESSEE IS IN APPEAL AGAINST THE ORD ER PASSED U/S. 263 OF THE ACT IN ITA NO. 4562/DEL/2014. THE ASSE SSEES APPEAL AGAINST THE ASSESSMENT ORDER DATED 24.12.2009, IN WHICH THE AO HAD ASSESSED THE INCOME AT RS. 2702993/-, IN THE SE COND ROUND OF ASSESSMENT PROCEEDINGS AFTER BEING SET ASIDE BY THE ITAT WAS ALSO DECIDED VIDE ORDER DATED 11.12.2012 AND THIS APPEAL WAS STATISTICALLY ALLOWED BY THE LD. CIT(A) AND THE DE PARTMENT IS NOW IN APPEAL BEFORE THE ITAT CHALLENGING THE DIRECTION OF THE CIT(A) THAT SINCE THE LAND IN QUESTION WAS NOT CAPITAL ASS ET U/S. 2(14) OF THE ACT, THE AO SHOULD CONSIDER THE ORIGINAL DATE O F TRANSFER OF LAND AS THE POINT OF TRANSFER AND DECIDE THE MERITS OF T HE CASE ACCORDINGLY. THIS APPEAL BY THE DEPARTMENT BEARS CA PTION NO. 1104/DEL/2013. CONSEQUENTIAL ORDER SUBSEQUENT TO TH E PROCEEDINGS U/S. 263 OF THE ACT WAS PASSED BY THE AO IN WHICH THE ASSESSMENT WAS COMPLETED AT RS. 50,86,818/- BY TAXING THE ENTIRE INTEREST INCOME OF RS. 26,38,462/- ON RECEIP T BASIS. THE 9 ASSESSEES APPEAL AGAINST THIS ORDER OF ASSESSMENT WAS DISMISSED BY THE LD. CIT(A) AND THE ASSESSEE IS IN APPEAL AGA INST THIS ORDER BEFORE THE ITAT IN APPEAL CAPTION NO. 4653/DEL/2014 . 8. AT THE OUTSET, IT WAS BROUGHT TO THE NOTICE OF T HE BENCH THAT THE DEPARTMENTS APPEAL BEARING NO. 1104/DEL/2013 W AS ADMITTEDLY BELOW THE TAX LIMIT PRESCRIBED FOR FILIN G THE APPEAL BEFORE THE ITAT. THE LD. SR. DR APPEARING ON BEHAL F OF THE DEPARTMENT ACCEPTED THAT THE PLEA OF THE A.R. OF T HE ASSESSEE THAT THE APPEAL OF THE DEPARTMENT WAS BELOW THE TAX LIMIT FOR FILING THE APPEAL BEFORE THE TRIBUNAL WAS CORRECT. ACCOR DINGLY, ITA NO. 1104/DEL/2013 IS DISMISSED BEING BELOW THE TAX EFFE CT. 9. WITH RESPECT TO ASSESSEES APPEAL CHALLENGING T HE PROCEEDINGS U/S. 263, THE AR SUBMITTED THAT THERE W AS A DELAY OF 815 DAYS IN FILING THE APPEAL BEFORE THE ITAT. OUR ATTENTION WAS DRAWN TO THE DELAY CONDONATION APPLICATION FILED BY THE ASSESSEES LEGAL HEIR IN THIS BEHALF AS WELL AS THE AFFIDAVIT WHICH HAD BEEN FILED IN SUPPORT OF THE DELAY CONDONATION APPLICATION WH EREIN IT HAD BEEN AVERRED THAT THE APPEAL COULD NOT BE FILED DUE TO BONAFIDE REASONS AND THAT THERE WAS NO NEGLIGENCE OR INACTIO N OR LACK OF BONAFIDES ON THE PART OF THE APPELLANT. REQUEST WA S MADE THAT THE DELAY MAY BE CONDONED. 9. SR. DR OPPOSED THE APPLICATION FOR CONDONATION O F DELAY. 10. HAVING HEARD BOTH THE PARTIES AND KEEPING IN MI ND THAT THE ASSESSEE HAS SINCE DECEASED AND IS BEING REPRESENTE D BY HER WIDOW WHO HERSELF IS ABOVE 80 YEARS OF AGE AND WHO DID NOT HAVE ADEQUATE LEGAL ASSISTANCE SO AS TO SAFEGUARD HER IN TEREST, WE DEEM IT APPROPRIATE TO CONDONE THE DELAY AND ACCORDING LY ADMIT THE APPEAL FOR HEARING. 11. THE LD. AR SUBMITTED THAT THE ORDER PASSED U/ S. 263 OF THE ACT WAS BAD IN LAW BECAUSE THE AO HAD CORRECTLY BRO UGHT TO TAX INTEREST AMOUNT OF RS. 254637/- OUT OF THE TOTAL I NTEREST RECEIVED OF RS. 2638462/-. IT WAS SUBMITTED THAT THE ACT O F THE AO WAS IN 10 CONFORMITY WITH THE LAW LAID DOWN BY THE HONBLE AP EX COURT IN THE CASE OF RAMA BAI REPORTED IN 181 ITR 400 (SC) AND, THEREFORE, IT COULD NOT BE SAID THAT THE AO HAD NOT APPLIED HIS M IND WHILE PASSING THE ASSESSMENT ORDER AS HAS BEEN ALLEGED B Y THE LD. CIT. IT WAS ALSO SUBMITTED THAT OUT OF THE TWO COURSES O F ACTION WHICH THE AO COULD HAVE TAKEN, THE AO TOOK ONE OF THE PLA USIBLE VIEWS. FOR THIS RELIANCE WAS PLACED ON THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF GABRIEL INDIA REP ORTED IN 203 ITR 108 (MUMBAI). IT WAS ALSO SUBMITTED THAT THE J URISDICTION INVOKED BY THE LD. CIT U/S. 263 OF THE ACT WAS PATE NTLY WRONG ON THE FACTS OF THE CASE BECAUSE IT COULD NOT BE SAID THAT THE AO HAD TAKEN UP A PATENTLY WRONG VIEW. RELIANCE WAS ALS O PLACED ON THE JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF DG HOUSING REPORTED 343 ITR 529 (DEL). THE AR REITERATED TH AT THE AOS ORDER WAS NOT ERRONEOUS. 12. COMING TO THE ASSESSEES APPEAL WHICH WAS AGA INST THE CONSEQUENTIAL ORDER SUBSEQUENT TO THE ORDER PASSED U/S. 263 OF THE ACT, IT WAS SUBMITTED THAT SINCE THE AMOUNT ADD ED TO THE INCOME DID NOT PERTAIN TO THE RELEVANT PREVIOUS YE AR, THE SAME HAS WRONGLY BEEN ADDED TO THE INCOME OF THE YEAR U NDER CONSIDERATION IGNORING THE WELL SETTLED POSITION O F LAW IN RAMA BAIS CASE (SUPRA). IT WAS SUBMITTED THAT THIS ORD ER OF THE LD. CIT DESERVE TO BE SET ASIDE. 13. IN RESPONSE, THE LD. SR. DR PLACED EXTENSIVE RE LIANCE ON THE OBSERVATIONS OF THE LD. CIT IN THE ORDER PASSED U /S. 263 OF THE ACT AND SUBMITTED THAT THE LD. CIT HAD RIGHTLY INVO KED THE JURISDICTION U/S. 263 OF THE ACT. SIMILARLY, WITH RESPECT TO THE ASSESSEES APPEAL AGAINST THE QUANTUM PROCEEDINGS, THE SR. DR PLACED RELIANCE ON THE CONCURRENT FINDINGS OF THE A O AS WELL AS LD. CIT(A) AND SUBMITTED THAT NO INTERFERENCE IS CALL ED FOR IN THIS REGARD. 11 14. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE MATERIAL ON RECORD. WE TAKE UP THE ASSESSEES APP EAL CHALLENGING THE 263 PROCEEDINGS FIRST. IT IS NOTICED THAT THE AO HAS TAKEN RECOURSE TO CHARGING THE INTEREST TO TAX ONLY OF T HAT PORTION WHICH COULD BE ATTRIBUTED TO THE YEAR UNDER CONSIDERATIO N BY DULY KEEPING THE RATIO OF THE HONBLE APEX COURT IN THE CASE OF RAMA BAI (SUPRA) IN MIND. IT HAS BEEN HELD IN RAMA BAI S CASE THAT INTEREST CANNOT BE TAKEN TO HAVE ACCRUED ON THE DAT E OF THE ORDER OF THE COURT GRANTING ENHANCED COMPENSATION BUT HAS TO BE TAKEN AS HAVING ACCRUED YEAR AFTER YEAR FROM THE DATE OF DELIVERY OF POSSESSION OF THE LANDS TILL THE DATE OF SUCH ORDER . THUS, THE AO HAS TAKEN A VIEW WHICH WAS PERMISSIBLE IN LAW AND I T COULD NOT BE SAID THAT THE AOS ACTION IN APPORTIONING THE INTER EST WAS AGAINST THE LAW. IT IS SETTLED LAW THAT ONCE THE AO TA KES ONE OF THE VIEW OUT OF TWO POSSIBLE VIEWS, IT CANNOT BE SAID THAT HE HAS ACTED AGAINST THE LAW. SIMILARLY, THE HONBLE BOMB AY HIGH COURT IN THE CASE OF GABRIEL INDIA (SUPRA) HAS HELD THAT ONC E THE AO HAS TAKEN A POSSIBLE VIEW, THE JURISDICTION OF THE LD. CIT TO TAKE ACTION U/S. 263 OF THE ACT IS OUSTED. THE COURT FURTHE R OBSERVED AS UNDER: WE, THEREFORE, HOLD THAT IN ORDER TO EXERCISE POWE R UNDER SUB-SECTION (1) OF SECTION 263 OF THE ACT THE RE MUST BE MATERIAL BEFORE THE COMMISSIONER TO CONSIDE R THAT THE ORDER PASSED BY THE INCOME-TAX OFFICER WAS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INT ERESTS OF THE REVENUE. WE HAVE ALREADY HELD WHAT IS ERRONEOUS . IT MUST BE AN ORDER WHICH IS NOT IN ACCORDANCE WITH THE LAW OR WHICH HAS BEEN PASSED BY THE INCOME-TAX OFFICER WITHOUT MAKING ANY ENQUIRY IN UNDUE HASTE. WE HAVE ALSO HELD AS TO WHAT IS PREJUDICIAL TO THE INT ERESTS OF THE REVENUE. AN ORDER CAN BE SAID TO BE PREJUDIC IAL TO THE INTERESTS OF THE REVENUE IF IT IS NOT IN ACC ORDANCE WITH THE LAW IN CONSEQUENCE WHEREOF THE LAWFUL 12 REVENUE DUE TO THE STATE HAS NOT BEEN REALISED OR CANNOT BE REALISED. THERE MUST BE MATERIAL AVAILABL E ON THE RECORD CALLED FOR BY THE COMMISSIONER TO SATISF Y HIM PRIMA FACIE THAT THE AFORESAID TWO REQUISITES A RE PRESENT. IF NOT, HE HAS NO AUTHORITY TO INITIATE PROCEEDINGS FOR REVISION. EXERCISE OF POWER OF SUO MOTU REVISION UNDER SUCH CIRCUMSTANCES WILL AMOUNT TO ARBITRARY EXERCISE OF POWER. IT IS WELL-SETTLED THA T WHEN EXERCISE OF STATUTORY POWER IS DEPENDENT UPON THE EXISTENCE OF CERTAIN OBJECTIVE FACTS, THE AUTHORITY BEFORE EXERCISING SUCH POWER MUST HAVE MATERIALS ON RECORD TO SATISFY IT IN THAT REGARD. IF THE ACTION OF THE AUTHORITY IS CHALLENGED BEFORE THE COURT IT WOULD B E OPEN TO THE COURTS TO EXAMINE WHETHER THE RELEVANT OBJECTIVE FACTORS WERE AVAILABLE FROM THE RECORDS C ALLED FOR AND EXAMINED BY SUCH AUTHORITY. OUR AFORESAID CONCLUSION GETS FULL SUPPORT FROM A DECISION OF SABYASACHI MUKHARJI J. (AS HIS LORDSHIP THEN WAS) IN RUSSELL PROPERTIES PVT. LTD. V. A. CHOWDHURY, AD DL. CIT . IN OUR OPINION, ANY OTHER VIEW IN THE MATTER WILL AMOUNT TO GIVING UNBRIDLED AND ARBITRARY POWER TO T HE REVISING AUTHORITY TO INITIATE PROCEEDINGS FOR REVI SION IN EVERY CASE AND START RE-EXAMINATION AND FRESH ENQUIRIES IN MATTERS WHICH HAVE ALREADY BEEN CONCLUDED UNDER THE LAW. AS ALREADY STATED IT IS A QUASI JUDICIAL POWER HEDGED IN WITH LIMITATION AND HAS TO BE EXERCISED SUBJECT TO THE SAME AND WITHIN ITS SCOPE AND AMBIT. SO FAR AS CALLING FOR THE RECORDS AND EXAMIN ING THE SAME IS CONCERNED, UNDOUBTEDLY, IT IS AN ADMINISTRATIVE ACT, BUT ON EXAMINATION 'TO CONSIDER ' OR IN OTHER WORDS, TO FORM AN OPINION THAT THE PARTICU LAR ORDER IS ERRONEOUS IN SO TAR AS IT IS PREJUDICIAL T O THE INTERESTS OF THE REVENUE, IS A QUASI-JUDICIAL ACT B ECAUSE ON THIS CONSIDERATION OR OPINION THE WHOLE MACHINER Y OF RE-EXAMINATION AND RECONSIDERATION OF AN ORDER OF ASSESSMENT, WHICH HAS ALREADY BEEN CONCLUDED AND 13 CONTROVERSY WHICH HAS BEEN SET AT REST, IS SET AGAI N IN MOTION. IT IS AN IMPORTANT DECISION AND THE SAME CANNOT BE BASED ON THE WHIMS OR CAPRICE OF THE REVISING AUTHORITY. THERE MUST BE MATERIALS AVAILAB LE FROM THE RECORDS CALLED FOR BY THE COMMISSIONER. 15. WE FURTHER NOTE THAT THE HONBLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. VS. COMMISSIONER OF INCOME TAX, (2000) 243 ITR 83 (SC), HAD OBSERVED THAT THE PHRAS E PREJUDICIAL TO THE INTEREST OF REVENUE HAS TO BE READ IN CONJU NCTION WITH AN ERRONEOUS ORDER PASSED BY THE ASSESSING OFFICER. EV ERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSI NG OFFICER CANNOT BE TREATED AS PREJUDICIAL TO THE INTEREST OF REVENUE. THUS, WHEN THE ASSESSING OFFICER HAD ADOPTED ONE OF THE C OURSES PERMISSIBLE AND AVAILABLE TO HIM, AND THIS HAS RESU LTED IN LOSS TO REVENUE; OR TWO VIEWS WERE POSSIBLE AND THE ASSESSI NG OFFICER HAS TAKEN ONE VIEW WITH WHICH THE CIT MAY NOT AGREE; TH E SAID ORDERS CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTEREST OF REVENUE UNLESS THE VIEW TAKEN BY THE ASSESSING O FFICER IS UNSUSTAINABLE IN LAW. IN SUCH MATTERS, THE CIT MUST GIVE A FINDING THAT THE VIEW TAKEN BY THE ASSESSING OFFICER IS UNS USTAINABLE IN LAW AND, THEREFORE, THE ORDER IS ERRONEOUS. HE MUST ALS O SHOW THAT PREJUDICE IS CAUSED TO THE INTEREST OF THE REVENUE. 16. WE FURTHER FIND OUR SUPPORT FROM THE JUDGMENT OF THE HONBLE DELHI HIGH COURT ALSO IN THE CASE OF DG HOU SING (SUPRA). THEREFORE, IN VIEW OF THE ABOVE CITED DECISIONS AND RESPECTFULLY 14 FOLLOWING THE SAME WE HAVE NO HESITATION IN HOLDING THAT THE PROCEEDINGS INITIATED U/S. 263 OF THE ACT WERE BAD IN LAW AND ARE LIABLE TO BE QUASHED. ACCORDINGLY, WE QUASH THE PR OCEEDINGS INITIATED U/S. 263 OF THE ACT AND ITA NO. 4652/DEL/ 2014 STANDS ALLOWED. 17. SINCE WE HAVE ALREADY QUASHED THE PROCEEDINGS I NITIATED U/S. 263 OF THE ACT THE CONSEQUENTIAL ASSESSMENT PROCEED INGS SUBSEQUENT TO THE ORDER PASSED U/S. 263 ALSO BECOME INFRUCTUOUS AND AS A RESULT THE APPEAL OF THE ASSESSEE ALSO BEC OME INFRUCTUOUS AND THE SAME IS DISMISSED AS SUCH. ACCORDINGLY, THE ITA NO. 4653/DEL/2014 STANDS DISMISSED. 18. IN THE FINAL RESULT, THE ITA NO. 1104/DEL/2013 AND ITA NO. 4653/DEL/2014 STAND DISMISSED AND ITA NO. 4652/DEL/ 2014 STAND ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29.08.2018 . SD/- SD/- (PRAMOD KUMAR) (SUDHANSHU SRIVAS TAVA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 29.08.2018 SRB/GS COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT BY ORDER ASSTT. REGISTRAR