MUTHUSAMY MADHANAGOPAL, COIMBATORE V. THE PCIT, COIMBATORE

ITA 142/CHNY/2021

• Counselvise Citation: [NaN] 107 COUNSELVISE.COM (IT) 1671 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-07-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 03-05-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Search and seizure; Assessment record; Revised return; Reason to believe; Set aside; Capital Gains
• Section: 148; 263; 132; 144; 69A

Judgement Text

आयकर अपीलीय अिधकरण, ’सी’ Ɋायपीठ, चेɄई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI ŵी वी दुगाŊ राव Ɋाियक सद˟ एवं ŵी जी. मंजुनाथा, लेखा सद˟ के समƗ Before Shri V. Durga Rao, Judicial Member & Shri G. Manjunatha, Accountant Member आयकर अपील सं./I.T.A. No. 142/Chny/2021 िनधाŊरण वषŊ/Assessment Year:2011-12 Mr. Muthusamy Madhanagopal, 2/12, Indhu Nagar, Vilankurichi, Coimbatore 641 035. [PAN:AHTPM0258Q] Vs. The Principal Commissioner of Income Tax-1, Coimbatore. (अपीलाथŎ/Appellant) (ŮȑथŎ/Respondent) अपीलाथŎ की ओर से / Appellant by : Shri B. Ramakrishnan, F.C.A. ŮȑथŎ की ओर से/Respondent by : Shri M. Rajan, CIT सुनवाई की तारीख/ Date of hearing : 09.05.2022 घोषणा की तारीख /Date of Pronouncement : 01.07.2022 आदेश /O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: This appeal filed by the assessee is directed against the order of the ld. Principal Commissioner of Income Tax-1, Coimbatore, dated 25.02.2021 relevant to the assessment year 2011-12. 2. The appeal filed by the assessee is delayed by 7 days in filing the appeal before the Tribunal, for which, the assessee has filed a petition for condonation of the delay in the form of an affidavit, to which; the ld. DR has not raised any serious objection. Consequently, since the assessee was prevented by sufficient cause, the delay of seven days in filing of the I.T.A. No.142/Chny/21 2 appeal stands condoned and the appeal is admitted for adjudication. 3. Facts are, in brief, the assessee sold an immovable property of 30 cents of land located at Eachanari, Coimbatore, along with four others during the period relevant to the assessment year 2011-12 for a consideration of ₹.45,30,000/- through Power of Attorney given to Mr. D. Sundararajan on 14.07.2010. But the assessee has filed his return of income on 25.05.2016, admitting income of ₹.6,63,524/- only without admitting any income under the head ‘Capital gain’ on the transfer of the above said capital asset for the assessment year 2011-12. Since there was reason to believe that income chargeable to tax has escaped the assessment, the Assessing Officer issued notice under section 148 of the Act r.w.s. 147 of the Act to the assessee. In response to the notice under section 148 of the Act, the assessee filed his revised return of income on 19.04.2018 admitting a taxable income of ₹.12,63,999/-, which includes assessee’s share of income admitted under the head ‘capital gain’ of ₹.5,89,625/-. During the course of assessment proceedings, after considering the seized materials during search and seizure action under section 132 of the Act, sworn statement of the assessee and verification of documents, the Assessing Officer issued a pre-assessment order dated 19.12.2018 to the assessee proposing an addition of ₹.12,56,667/- I.T.A. No.142/Chny/21 3 as assessee’s income for the assessment year 2011-12 in addition to the admitted total income. In response to the above, the assessee filed detailed objections and after considering the objections of the assessee, the Assessing Officer has completed the assessment under section 144 of the Act dated 28.12.2018 by assessing total income of the assessee at ₹.25,09,289/- after making addition under section 69A of the act of ₹.12,45,290/-. 3.1 On examination of the assessment records, the ld. PCIT has found certain error, which was prima facie prejudicial to the interest of the Revenue. Therefore, by invoking the provisions of section 263 of the Act, the ld. PCIT issued notice to the assessee and also communicated the reasons for which the assessment order was treated as erroneous and prejudicial to the interest of Revenue. After considering the details available on record, the ld. PCIT has noted that the total value of the land sold was ₹.1,08,45,000/-. The assessee has received ₹.63,15,000/- in cash from M/s. Sree Annapoorna Sree Gowrishankar Hotels Pvt. Ltd. and ₹. 45,30,000/- as cheque amount towards sale of the said immovable property. The entire cash payment received by the assessee of ₹.21,05,000/- (1/3 rd share of the assessee) was to be brought to tax. The ld. PCIT further noted that during the course of assessment proceedings, I.T.A. No.142/Chny/21 4 the Assessing Officer made an addition of ₹.12,45,290/- under section 69A of the Act and the Assessing Officer has wrongly reduced the 1/3 of 50C value of the property instead of reducing the LTCG worked out by the assessee. After working out the capital gains of the assessee, which should have been brought to tax, the ld. PCIT set aside the assessment order and directed the Assessing Officer to redo the assessment afresh after giving due opportunity to the assessee. 4. On being aggrieved, the assessee is in appeal before the Tribunal. The ld. Counsel for the assessee has submitted that the assessee has already opted to avail the Vivad-se-Vishwas Scheme 2020 and filed Form 1 and Form 2 on 10.11.2020 and subsequently Form 3 were issued to the assessee on 23.12.2020 by the Designated Authority and moreover, Form 4 was filed on 04.02.2021 for issuance of Form 5. However, the ld. PCIT erroneously issued notice on 25.01.2021 for revising the assessment order and completed the revision order under section 263 of the Act dated 25.02.2021 without taking cognizance of the proceedings under Direct Tax Vivad-se-Vishwas Scheme 2020 and prayed for quashing the order passed under section 263 of the Act. 5. On the other hand, the ld. DR relied on the order passed by the ld. PCIT. I.T.A. No.142/Chny/21 5 6. We have heard both the sides, perused the materials available on record and gone through the orders of authorities below as well as From 1 to Form 5 filed by the assessee for availing Vivad-se-Vishwas Scheme 2020. In this case, the assessment was completed on 28.12.2018 and the ld. PCIT has issued notice under section 263 of the Act on 25.01.2021 for proposing to revise the assessment order and thereafter completed the revision order under section 263 of the Act dated 25.02.2021. Much prior to issue of notice under section 263 of the Act by the ld. PCIT, and in order to settle the tax matter, the assessee has already opted to avail the Vivad-se-Vishwas Scheme 2020 and filed Form 1 and Form 2 on 10.11.2020 and subsequently Form 3 were issued to the assessee on 23.12.2020 by the Designated Authority and moreover, Form 4 was filed on 04.02.2021 for issuance of Form 5 and Form 5 was already issued and taxes accordingly paid as per page No. 5 of the paper book filed before the Tribunal. 6.1 Before us, the ld. Counsel for the assessee has relied on the extract of FAQ of Direct Tax at page No. 6 of the paper book, wherein, it has been clarified that “Section 5(3) restricts the rights of the Income-tax Authorities from reopening any issues under the IT Act. The order passed by designated authority is conclusive, comprehensive and final order, in I.T.A. No.142/Chny/21 6 respect of matters covered by such order including tax arrears and sums payable towards full and final settlement. Once the declarant makes payment of the amount so determined, the immunity springs into effect. Thereafter, it would not be open to the Income-tax authorities to sit over such orders and initiate any proceeding under the IT Act. It is only in cases, wherein, the declaration is presumed to have never been made because of false declaration or violation of provisions of the Act or violation of an undertaking (section 4(6) of the Act), the income-tax authorities can take appropriate actions under the IT Act. We find force in the arguments of the ld. Counsel. The relevant provision of Section - 5, Direct Tax Vivad se Vishwas Act, 2020 is extracted as under: “Section - 5, Direct Tax Vivad se Vishwas Act, 2020 Time and manner of payment 5. (1) xxxxxxxxxx (2) xxxxxxxxxx (3) Every order passed under sub-section (1), determining the amount payable under this Act, shall be conclusive as to the matters stated therein and no matter covered by such order shall be reopened in any other proceeding under the Income-tax Act or under any other law for the time being in force or under any agreement, whether for protection of investment or otherwise, entered into by India with any other country or territory outside India.” 6.2 From the above provisions, it is amply clear that order passed by designated authority is conclusive, comprehensive and final, in respect of matters covered by such order. In the present case, the assessee has opted to avail the Vivad-se-Vishwas Scheme 2020 and filed Form 1 and I.T.A. No.142/Chny/21 7 Form 2 on 10.11.2020 and subsequently Form 3 were issued to the assessee on 23.12.2020 by the Designated Authority and moreover, Form 4 was filed on 04.02.2021 for issuance of Form 5 and Form 5 was also issued and taxes paid accordingly, much before the revision order under section 263 of the Act was passed on 25.02.2021. Since the assessee could produce the above details of availing Vivad-se-Vishwas Scheme 2020 and the Designated Authority has already issued Form 5 during the course of revision proceedings, the ld. PCIT was not aware of the above facts. 6.3 Considering the above facts and circumstances we of the considered opinion that the revision order passed under section 263 of the Act by the ld. PCIT cannot survive. Accordingly, the revision order passed under section 263 of the Act is quashed. 7. In the result, the appeal filed by the assessee is allowed. Order pronounced on the 01 st July, 2022 in Chennai. Sd/- Sd/- (G. MANJUNATHA) ACCOUNTANT MEMBER (V. DURGA RAO) JUDICIAL MEMBER Chennai, Dated, 01.07.2022 Vm/- आदेश की Ůितिलिप अŤेिषत/Copy to: 1. अपीलाथŎ/Appellant, 2.ŮȑथŎ/ Respondent, 3. आयकर आयुƅ (अपील)/CIT(A), 4. आयकर आयुƅ/CIT, 5. िवभागीय Ůितिनिध/DR & 6. गाडŊ फाईल/GF.