Shri. Prakash Ramachandra Prabhu, Bangalore V. The Income Tax Officer, Ward- 1(1)(3), Bangalore

ITA 1253/BANG/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 1061 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-06-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 04-06-2020
• Assessment Year: 2007-2008
• Appeal Filed On: 03-06-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R PREMI
• Keywords: Earning of tax free income; Revised return
• Section: 143(3); 143(1); 264; 13; 22; 154

Judgement Text

1 ITA NO.1253(B)/2019 IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH C BEFORE SHRI N.V VASUDEVAN, VICE - PRESIDENT AND SHRI B.R.BASKARAN, ACCOUNTANT MEMBER ITA NO.1253/BANG/2019 (ASSESSMENT YEAR : 2007 - 08) SHRI PRAKASH RAMACHANDRA PRABHU, NO.308, 7 TH MAIN, HAL #RD STAGE, INDIRANAGAR, BANGALORE - 560 075. PAN NO.AAJPP5078N APPELLANT VS THE INCOME TAX OFFICER, WARD - 1(1)(3), B ANGALORE RESPONDENT ASSESSEE BY : SMT. PRATIBHA, R. ADVOCATE REVENUE BY : SMT. R.PREMI, JCIT DATE OF HEARING : 03 - 06 - 2020 DATE OF PRONOUNCEMENT : 04 - 06 - 2020 O R D E R PER B.R.BASKARAN, AM : THE ASSESSEE HAS FILED THIS APPEAL CHA LLENGING THE ORDER DATED 28 - 03 - 2019 PASSED BY LD CIT(A) - 12, BANGALORE AND IT RELATES TO THE ASSESSMENT YEAR 2007 - 08. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN DISMISSING THE APPEAL OF THE ASSESSEE WITHOUT CONDONING THE DELAY IN FILING APPE AL BEFORE HIM AND FURTHER HOLDING THAT THE APPEAL IS NOT MAINTAINABLE BEFORE HIM AND ALSO DECIDING THE ISSUE ON MERITS AGAINST THE ASSESSEE. THE ISSUE URGED BY THE 2 ITA NO.1253(B)/2019 ASSESSEE RELATED TO THE CLAIM OF EXEMPTION U/S 10(38) OF THE ACT AGAINST THE LONG TERM CAPI TAL GAIN EARNED ON SALE OF SHARES. 2. WE HEARD THE PARTIES AND PERUSED THE RECORD. THE BACKGROUND OF THE CASE REQUIRES TO BE DISCUSSED FIRST. THE ASSESSEE FILED HIS RETURN OF INCOME FOR AY 2007 - 08 ON 31.07.2007 . THE TOTAL INCOME OF THE ASSESSEE INCLUDED LONG TERM CAPITAL GAIN OF RS.2,58,60,190/ - EARNED ON SALE OF SHARES. AS PER THE INFORMATION AVAILABLE IN PAGES 19 TO 26 OF THE PAPER BOOK, THE ASSESSEE HAS SOLD SHARES OF A COMPANY NAMED I - FLEX SOLUTIONS LTD. AS PER INFORMATION AVAILABLE AT PAG ES 13 TO 14 OF THE PAPER BOOK, THE ASSESSEE HAS SOLD SHARES OF M/S ORACLE FIN SERVICES SOFTWARE LTD. SINCE THE STATEMENT OF TOTAL INCOME HAS NOT BEEN ATTACHED IN THE PAPER BOOK AND SINCE THE LD A.R ALSO COULD NOT FURNISH ANY CLARIFICATION ON THIS POINT , I T IS NOT CLEAR AS TO WHETHER THE ABOVE SAID CAPITAL GAIN WAS EARNED ON SALE OF ABOVE SAID SHARES. 3. BE THA T AS IT MAY, THE ASSESSEE HAS MENTION ED IN SCHEDULE E1 DETAILS OF EXEMPT INCOME OF THE RETURN OF INCOME THAT THE ABO VE SAID LONG TERM CAPITAL GAIN I S EXEMPT. HOWEVER, IN PART - B OF THE RETURN OF INCOME RELATING TO COMPUTATION OF TOTAL INCOME, THE ABOVE SAID LONG TERM CAPITAL GAIN CAME TO BE STATED WITHOUT CLAIMING EXEMPTION U/S 10(38) OF THE ACT. SINCE THE ASSESSEE CLAIMED EXEMPTION OF LONG T ERM CAPITAL GAIN , HE DID NOT PAY ANY TAX. WHEN THE RETURN OF INCOME WAS PROCESSED U/S 143(1) OF THE ACT ON 20 - 03 - 2009, THE EXEMPTION WAS NOT ALLOWED TO THE ASSESSEE AND ACCORDINGLY A DEMAND OF RS.74.10 LAKHS WAS RAISED UPON THE ASSESSEE. ACCORDING TO THE ASSESSEE, HE DID NOT RECEIVE THE COPY OF INTIMATION U/S 143(1) OF THE ACT AND HENCE HE APPLIED FOR COPY OF THE SAME LATER AND A COPY OF INTIMATION WAS FURNISHED TO THE ASSESSEE ON 20.01.2017. 3 ITA NO.1253(B)/2019 4. IT APPEARS THAT THE ASSESSEE HAS RECEIVED A COMMUNICATION /O RDER DATED 6.11.2014 U/S 245 OF THE ACT FOR ADJUSTING REFUND PERTAINING TO SOME OF THE YEAR AGAINST THE OUTSTANDING DEMAND OF AY 2007 - 08. AT THAT POINT OF TIME, THE ASSESSEE FILED A REVISION PETITION U/S 264 OF THE ACT ON 14 - 07 - 2015 PRAYING THAT THE DEMAN D RAISED FOR ASSESSMENT YEAR 2007 - 08 BE CANCELLED. HOWEVER, THE LD PR. CIT - 1, BENGALURU, VIDE HIS ORDER DATED 27 - 02 - 2017, DISMISSED THE REVISION PETITION OF THE ASSESSEE HOLDING THAT THE SAME IS TIME BARRED. IT IS PERTINENT TO NOTE THAT LD PR. CIT HAS OB SERVED THAT THE INTIMATION U/S 143(1) HAS BEEN GENERATED ON 20 - 03 - 2009 AND ACCORDI NGLY COMPUTED THE LIMITATION PER IOD FROM THAT DATE . 5. THEREAFTER, THE ASSESSEE FILED A RECTIFICATION PETITION U/S 154 OF THE ACT ON 22 - 03 - 2017 BEFORE THE ASSESSING OFFIC ER SEEKING EXEMPTION U/S 10(38) OF THE ACT. IT WAS STATED THEREIN THAT THE COPY OF INTIMATION WAS GIVEN TO THE ASSESSEE BY A LETTER DATED 17 - 01 - 2017 AND HENCE THE RECTIFICATION PETITION HAS BEEN FILED IN TIME. ACCORDING TO LD A.R, THE SAID RECTIFICATION PETITION HAS NOT BEEN DISPOSED OF BY THE AO YET. 6. AT THIS STAGE, THE ASSESSEE ALSO FILED AN APPEAL BEFORE LD CIT(A) ON 25.03.2017 AGAINST THE INTIMATION DATED 20 - 03 - 2009 ISSUED U/S 143(1) OF THE ACT . BY CONSIDERING THE DATE OF 20 - 01 - 2017, I.E., THE DATE ON WHICH THE COPY OF INTIMATION WAS GIVEN TO THE ASSESSEE, IT WAS SUBMITTED BEFORE LD CIT(A) THAT THE APPEAL FILED BEFORE HIM WAS DELAYED BY 34 DAYS ONLY . 7. THE LD CIT(A) DISMISSED THE APPEAL O F THE ASSESSEE ON THREE COUNTS, VIZ.,; - (A) HE REFUSED TO CONDONE THE DELAY OF 34 DAYS. 4 ITA NO.1253(B)/2019 (B) HE ALSO HELD THAT THE APPEAL IS NOT MAINTAINABLE BEFORE HIM, SINCE THE ASSESSEE HAS CHOSEN ALTERNATIVE REMEDY U/S 264 OF THE ACT ON THE VERY SAME ISSUE. (C) ON M ERITS, THE LD CIT(A) HELD THAT IT WAS THE MISTAKE OF THE ASSESSEE IN NOT CLAIMING EXEMPTION U/S 10(38) OF THE ACT IN THE RETURN OF INCOME IN THE ORIGINAL RETURN OF INCOME. THE ASSESSEE COULD HAVE CORRECTED THE SAME BY FILING REVISED RETURN OF INCOME, WHIC H WAS NOT DONE. HENCE THERE IS NO MISTAKE IN THE INTIMATION ISSUED U/S 143(1) OF THE ACT. 8. AGGRIEVED, THE ASSESSEE HAS FILED THIS APPEAL BEFORE US. 9. WE HEARD THE PARTIES AND PERUSED THE RECORD. ON THE POINT OF DELAY IN FILING APPEAL, THE LD CIT(A) HAS OBSERVED AS UNDER: - 6. I FIND THAT THE INTIMATION U/S 143(3) IS PASSED ON 20 - 03 - 2009. THE APPELLANT CLAIMS THAT THE SAME WAS NOT RECEIVED BY HIM. IT IS FURTHER SUBMITTED BY THE APPELLANT THAT THE INTIMATION WAS PROVIDED TO THE APPELLANT VI DE COMMUNICATION DATED 17.1.2017. 7. ON RECEIPT OF INTIMATION THE APPELLANT HAD FILED REVISION PETITION BEFORE THE CIT. THE PR.CIT DISMISSED THE REVISION PETITION BY HER ORDER DATED 27.2.2017 WHICH WAS CLA IMED TO HAVE BEEN SERVED ON THE APPELLANT ON 2.3.2017. NOW, THE APPELLANT WAS CHOSEN TO FILE THE APPLICATION UNDER SECTION 154 BEFORE THE ASS ESSING AUTHORITY ON 22.3.2017. THEREAFTER, THE APPELLANT HAS CHOSEN TO FIE THE PRESENT APPEAL ON 25.3.2017. ACCORDINGLY, IT IS CLAIMED THAT THER E IS DELAY OF 34 DAYS IN FLING THIS APPEAL. I HAVE EXAMINED THE CHRONOLOGY. 8. THE APPELLANT MUST HAVE FILED THE APPEAL WITHIN 30 DAYS OF THE RECEIPT OF T HE INTIMATION DATED 20.3.2009. EVEN ASSUMING THAT IT TOOK 10 DAYS TO SERVE THE INTIMATION THE SAME MUST HAVE BEEN FILED BY 30.04.2009. THUS, COUNTED FROM THIS DATE HE APPEAL IS FILED LATE BY ABOUT 8 YEARS. 9. DURING THE APPELLATE PROCEEDINGS IT CAME TO MY NOTICE THAT THE APPELLANT HAS ALSO FILED PETITION U/S 264. THIS REVISION PETITION U/S 264 WAS F ILED ON 14.07.2015. THUS, HE APPELLANT WAS AWARE OF THE INTIMATION AT LEAST ON THIS DATE. THUS, EVEN COUNTING FROM THIS DATE THE APPEAL IS FILED LATE BY ABOUT 18 MONTHS. 5 ITA NO.1253(B)/2019 10. IN VIEW OF THE ABOVE MISLEADING STATEMENTS SUBMITTED BY THE APPELLANT THE DELAY IS NOT CONDONED. WE NOTICE THAT THE LD CIT(A) HAS HELD THAT THERE WAS A DELAY OF ABOUT 8 YEARS IN FILING APPEAL BEFORE HIM, REJECTING THE CLAIM OF THE ASSESSEE THAT THERE WAS DELAY OF 34 DAYS. 10. WE HAVE EARLIER ALSO NOTICED THAT THE LD PR. CIT HAS ALSO COMPUTED THE DELAY IN FILING REVISION PETITION U/S 264 OF THE ACT BY CONSIDERING THE DATE O F INTIMATION, I.E., 20 - 03 - 2009. HENCE THE CLAIM OF THE ASSESSEE THAT THERE WAS DELAY OF ONLY 34 DAYS IN FILING APPEAL BEFORE LD CIT(A) WAS SPECIFICALLY REJECTE D BY LD CIT(A). 11. WE HAVE NOTICED THAT THE ASSESSEE HAS FILED REVISION PETITION U/S 264 OF THE ACT BEFORE PR. CIT ON 14.07.2015. THE ASSESSEE WAS CONSTRAINED TO FILE THE ABOVE SAID REVISION PETITION, SINCE HE RECEIVED AN ORDER U/S 245 OF THE ACT FOR ADJUSTING REFUND OF SOME OF THE YEAR AGAINST THE DEMAND RAISED IN AY 2007 - 08. IT IS NOTICED THAT THE DATE OF ORDER PASSED/S 245 OF THE ACT WAS 06 - 11 - 2014, MEANING THEREBY, THE ASSESSEE WAS AWARE OF THE INTIMATION PASSED U/S 143(1) FOR AY 2007 - 08 BY 06.11. 2014 ITSELF AND HENCE HE HAS FILED REVISION PETITION U/S 264 OF THE ACT BEFORE LD PR. CIT. IT APPEARS THAT THE ASSESSEE DID NOT TAKE ANY STEP AT THAT POINT OF TIME. IT IS ALSO NOT CLEAR AS TO HOW THE ASSESSEE COULD FILE REVISION PETITION U/S 264 OF THE A CT WITHOUT A COPY OF INTIMATION, WHICH WAS SOUGHT TO BE REVISED. 12. HOWEVER, THE ASSESSEE HAS CLAIMED BEFORE LD CIT(A) THAT HE HAS RECEIVED COPY OF INTIMATION ONLY ON 20 - 01 - 2017 AND ACCORDINGLY SUBMITTED THAT THE DELAY IN FILING APPEAL BEFORE HIM WAS O NLY 34 DAYS. HOWEVER , THE LD CIT(A) HAS HELD THAT THE DELAY IS ABOUT 8 YEARS. HE HAS FURTHER STATED THAT THE ASSESSEE WAS AWARE OF THE INTIM ATION BY THE TIME HE FILED REVISION PETITION AND THE DELAY IS 6 ITA NO.1253(B)/2019 ABOUT 18 MONTHS FROM THAT DATE. ACCORDINGLY, HE HAS REFUSED TO CONDONE THE DELAY IN FILING APPEAL BEFORE HIM. 13. IN OUR VIEW, THE LD CIT(A) HAS GIVEN PROPER REASONS FOR REFUSING TO CONDONE THE DELAY. IN FACT, THE ASSESSEE HAS TAKEN DIFFERENT STANDS IN PURSUING THE MATTER AND HENCE THE LD CIT(A) HAS O BSERVED THAT THE ASSESSEE HAS GIVEN MISLEADING STATEMENTS. WE ALSO NOTICE THAT THERE IS HUGE TIME GAP IN BETWEEN DIFFERENT STEP S TAKEN BY THE ASSESSEE AND THE DELAY DURING THOSE PERIODS HAS NOT BEEN EXPLAINED PROPERLY. 14. WE NOTICE THAT THE ASSESSEE HAS, IN FACT, MENTIONED IN SCHEDULE E1 OF THE RETURN OF INCOME THAT THE LONG TERM CAPITAL GAIN IS EXEMPT. HOWEVER, THE SAME WAS NOT PROPERLY CARRIED FORWARD TO THE SUMMARY PAGE OF THE RETURN OF INCOME RESULTING IN DENIAL OF EXEMPTION. AFTER THAT, WE NOT ICE THAT THE ASSESSEE HAS NOT PROPERLY HANDLED THE MATTER, RESULTING IN DELAY IN FILING APPEAL BEFORE LD CIT(A). 15. ACCORDINGLY, WE ARE OF THE VIEW THAT THE LD CIT(A) WAS JUSTIFIED IN REFUSING TO CONDONE THE DELAY AND DISMISSING THE APPEAL. THE ASSESS EE MAY PURSUE ALTERNATIVE REMEDIES AVAILABLE UNDER THE LAW TO REDRESS HIS GRIEVANCE. 16. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNC ED IN THE OPEN COURT ON 04 - 06 - 2020. SD/ - SD/ - (N.V VASUDEVAN (B.R.BASKARAN) VICE - PRESIDENT ACCOUNTANT MEMBER BANGALORE DATED : 04 - 06 - 2020 *AM 7 ITA NO.1253(B)/2019 COPY TO : 1. THE ASSESSEE 2. THE REVENUE 3. THE CIT CONCERNED. 4. THE CIT(A) CONCERNED. 5. DR 6. GF BY ORDER ASST. REGISTRAR