Ramgopal Damodarlal HUF, Hyderabad V. ITO, Ward 7(4), Hyderabad

ITA 1421/HYD/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 53781 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 1998-1999
• Appeal Filed On: 15-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANJANA SAHU
• Assessee Lawyers: K L RATHI
• Keywords: Capital asset; Rectification of order; Cost of acquisition
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B (SMC), HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ITA NO.1421/HYD/2010 ASSESSMENT YEAR 1998-99 RAMGOPAL DAMODARLAL HUF, HYDERABAD. ( PAN AADHR 7982 R) VS INCOME-TAX OFFICER, WARD - 7(4),HYDERABAD. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.L. RATHI RESPONDENT BY : SMT.ANJANA SAHU DATE OF HEARING: 23-11-2011 DATE OF PRONOUNCEME NT: 23 -11-2011. O R D E R THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED A GAINST THE ORDER OF THE CIT (A)-VI, HYDERABAD DATED 24-9-2010 AND IT PERTAINS TO THE ASSESSMENT YEAR 1998-99. 2. BRIEF FACTS OF THE CASE ARE THAT FOR HE ASSESSME NT YEAR UNDER CONSIDERATION, THE ASSESSEE HAD FILED RETURN OF INC OME ON 13-11-1998 WHICH WAS AFTER THE DUE DATE PRESCRIBED UNDER SECTI ON 139(1) OF THE ACT I.E., ON 2-11-1998, DECLARING AN INCOME OF RS.4,16, 870/-. THE RETURN OF INCOME WAS PROCESSED UNDER SECTION 143(1)(A) ON 26- 3-1999, MAKING PRIMA FACIE ADJUSTMENT OF RS.1,20,000/- TOWARDS HE SALARY PAID. ON THIS ITA NO.1421/HYD/2010- RAMGOPAL DAMODARLAL HUF, HYD.. L.L ========================== 2 ADJUSTMENT, THE ASSESSEE HAD GONE ON APPEAL BEFORE THE VCIT (A) AND THE CIT (A) VIDE ORDER DATED 03-03-2000 ALLOWED THE ASSESSEES APPEAL ON THIS GROUND. THIS ORDER OF THE CIT (A) WAS GIVE N EFFECT BY THE ASSESSING ON 22-02-2001. AGAIN ON 21-7-2000, THE A SSESSEE FILED A PETITION UNDER SECTION 154 STATING THAT WHILE ARRIV ING AT THE SHORT TERM CAPITAL GAINS, IN THE RETURN FILED BY THE ASSESSEE, COST OF LAND BY OVERSIGHT WAS LEFT TO BE DEDUCTED AND REQUESTED FOR ALLOWING THE SAME. THE ASSESSING OFFICER VIDE LETTER DATED 20-02-2002, REJECTED THE CLAIM OF THE ASSESSEE STATING THAT AS THE ASSESSEE HIMSELF H AD NOT CLAIMED THE DEDUCTION IN THE RETURN OF INCOME FILED AND ALSO AS THE ASSESSEE WAS ALREADY IN APPEAL BEFORE THE CIT (A) ON A DIFFERENT GROUND AND THE SAME HAD BEEN DECIDED, HENCE A FRESH CLAIM OF DEDUCTION CANNOT BE ALLOWED AND STATED THAT THE APPLICATION IS NOT MAINTAINABLE . THE ASSESSEE WENT ON APPEAL BEFORE THE CIT (A) ON THE REJECTION OF IT S APPLICATION UNDER SECTION 154 OF THE ACT. DURING THE COURSE OF THE A PPELLATE PROCEEDINGS, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE CONTE NDED BEFORE THE CIT (A) THAT THE ASSESSEE SOLD THE CAPITAL ASSET, I.E., LAND AND BUILDING FOR WHICH PURPOSE OBTAINED 230A CERTIFICATE FROM THE AS SESSING OFFICER WHEREIN THE SALE CONSIDERATION AND OTHER DETAILS AR E CLEARLY MENTIONED. THEREFORE, THE ASSESSING OFFICER CANNOT SAY THAT TH E 230A CERTIFICATE ISSUED BY THE ASSESSING OFFICER ALLOWING THE ASSESS EE TO SELL HIS CAPITAL ASSET IS NOT PART OF THE INCOME-TAX RECORD. THE CI T (A) AFTER CONSIDERATION OF THE FACTS OF THE CASE VIDE ORDER D ATED 23-7-2003 DIRECTED THE ASSESSING OFFICER AS UNDER: AFTER CAREFULLY GOING THROUGH THE JUDGMENT OF THE AP HIGH COURT IN THE CASE OF CIT VS. GANGAPPA CABLES LTD. 116 ITR 779 AND THIS DECISION OF THE SUPREME COURT RELIED UPON BY THE IT O IN THE CASE ITA NO.1421/HYD/2010- RAMGOPAL DAMODARLAL HUF, HYD.. L.L ========================== 3 OF ANCHOR PRESSINGS (P) LTD. VS. CIT 161ITR 159, I AM OF THE VIEW THAT THE FACTS OF THE CASE RELIED UPON BY THE ITO A RE NOT APPLICABLE TO THE INSTANT CASE. THEREFORE, I HOLD THAT THE AO IS NOT CORRECT IN REFUSING TO REJECT THE PETITION U/S 154. IN THIS V IEW OF THE MATTER, I DIRECT THE AO TO PASS AN ORDER U/S 154 SUBJECT TO THE CONDITION THAT THE PETITION FILED U/S 154 BEFORE HIM BY THE A PPELLANT IS IN ORDER AND TIME IS AVAILABLE AS PROVIDED UNDER THIS ACT 3. FOR GIVING EFFECT TO THE ORDER OF THE CIT (A), T HE ASSESSING OFFICER VIDE LETTER DATED 25-8-2003 HAD REQUESTED THE ASSES SEE TO SUPPORT THE COST OF LAND ADOPTED AT RS.700/- PER SQ. YARD, BY F URNISHING THE COST OF ACQUISITION OF LAND AS ON 1-4-1981 AS CERTIFIED BY THE SRO FOR CONSIDERATION OF THE ASSESSEES PETITION UNDER SECT ION 154 OF THE ACT. HOWEVER, THE ASSESSEE COULD NOT SUBSTANTIATE ITS CL AIM OF RS.700 PER SQ. YARD AND PROCEEDED TO ACCEPT THE RATE OF RS.400 PER SQ. YARD WHICH WAS THE PREVALENT MARKET VALUE OF LAND SITUATED AT MUSH EERABAD MAIN ROAD AS ON 1-4-1982 AND AS CERTIFIED BY THE SUB REGISTRA R. VIDE ANOTHER LETTER DATED 22-6-2005, THE ASSESSING OFFICER HAD A SKED THE ASSESSEE TO FILE CERTAIN MORE INFORMATION REGARDING THE LAND AC TUALLY REGISTERED ALONG WITH THE CONSTRUCTED AREA SOLD AND RELEVANT REGISTE RED SALE DEED COPIES. HOWEVER, THE ASSESSEE VIDE LETTER DATED 1-7-2005, S TATED THAT THE TIME LIMIT UNDER SECTION 153(2A) FOR GIVING APPEAL EFFEC T HAD LAPSED BY 31-3- 2005, AND SINCE THE APPEAL WAS ALLOWED IN THE ASSE SSEES FAVOUR HIS APPLICATION UNDER SECTION 154 HOLDS GOOD AND REQUES TED THE ASSESSING OFFICER TO PASS THE ORDER ACCORDINGLY. THE ASSESSI NG OFFICER VIDE REPLY DATED 2-8-2005 STATED THAT THE SECTION 153(2A) RELI ED ON BY THE ASSESSEE PRESCRIBES THE LIMITATION OF TIME FOR SET ASIDE ASSESSMENTS ONLY AND ALSO STATED THAT IN THE ABSENCE OF NON FILING OF FULL INFORMATION ITA NO.1421/HYD/2010- RAMGOPAL DAMODARLAL HUF, HYD.. L.L ========================== 4 CALLED FOR IT WOULD NOT BE POSSIBLE TO GIVE EFFECT TO THE ORDER OF THE CIT (A). LATER, VIDE LETTER DATED 22-8-2005, THE ASSES SEE WAS INFORMED BY THE ASSESSING OFFICER THAT IN THE ABSENCE OF FURNIS HING OF FULL INFORMATION BY THE ASSESSEE THE CONSEQUENTIAL ORDER COULD NOT B E PASSED. LATER, THE ASSESSEE APPROACHED THE CCIT THROUGH GRIEVANCE PETI TION DATED 21-11- 2005. IN RESPONSE TO THE GRIEVANCE PETITION, THE A SSESSING OFFICER, WARD-7(4), HYDERABAD VIDE REPLY DATED 18-9-2006, ST ATED THAT THE LIMITATION FOR PASSING AN ORDER UNDER SECTION 154 F OR THE RETURN PROCESSED UNDER SECTION 143(1)(A) ON 26-3-1999 EXPI RED BY 31-3-2003 BEING FOUR YEARS FROM THE END OF THE YEAR IN WHICH THE INTIMATION UNDER SECTION 143(1)(A) IS PASSED. LATER, VIDE LETTER DA TED 29-3-2007, THE ASSESSING OFFICER HAS STATED THAT NO INTERFERENCE C OULD BE MADE AS THE DATE FOR GIVING EFFECT UNDER SECTION 154 OF THE ACT FOR THE RETURN PROCESSED UNDER SECTION 143(1)(A) OF THE ACT ON 26- 3-1999 EXPIRED ON 31-3-2003 ITSELF. 4. AGGRIEVED AGAINST THE ORDER OF THE ASSESSING OFF ICER, THE ASSESSEE WENT IN APPEAL BEFORE THE CIT (A) AND THE CIT (A) O BSERVED THAT ON EARLIER OCCASION, THE CIT (A) VIDE HIS ORDER DATED 23-7-2003 HELD AS FOLLOWS:- IN THIS VIEW OF THE MATTER, I DIRECT THE ASSESSING OFFICER TO PASS AN ORDER UNDER SECTION 154 SUBJECT TO THE CONDITION TH AT THE PETITION FILED UNDER SECTION 154 OF THE ACT BEFORE HIM BY TH E APPELLANT IS IN ORDER AND TIME IS AVAILABLE AS PROVIDED UNDER THIS ACT. IN VIEW OF THIS, THE CIT (A) PASSED AN ORDER DATED 23-7-2003 WHICH IS BEYOND THE TIME OF LIMITATION I.E., 31-3-2003 FOR P ASSING THE ORDER UNDER ITA NO.1421/HYD/2010- RAMGOPAL DAMODARLAL HUF, HYD.. L.L ========================== 5 SECTION 154 FOR AN INTIMATION UNDER SECTION 143(1)( A) OF THE ACT PROCESSED ON 26-3-1999. HENCE, HE CONFIRMED THE OR DER OF THE ASSESSING OFFICER BY REJECTING THE CLAIM OF THE ASS ESSEE. AGGRIEVED AGAINST THE FINDINGS AND THE DECISION OF THE CIT (A ), THE ASSESSEE RAISED THE FOLLOWING CONCISE GROUNDS BEFORE US: 1. THE LD.CIT (A) VERY MUCH ERRED IN HOLDING THAT HIS PREDECESSORS ORDER DATED 23-7-2003 HAVING BEEN PAS SED BEYOND 31-3-2003, THE SAME IS ILLEGAL AND THIS STAN D SHE HAS TAKEN AT THE INSTANCE OF ASSESSING OFFICER. 2. THE ORDER OF CIT (A) HOLDING HER PREDECESSORS O RDER AS TIME BARRED IS VERY MUCH ILLEGAL BOTH FROM POINT OF LAW AND POINT OF FACT AND PRESENT CIT (A) CANNOT BE A JUDGE TO DECIDE THE VALIDITY OR OTHERWISE OF HER PREDECESSORS ORDER. 3. THAT IF ASSESSING OFFICER WAS AGGRIEVED BY THE S AID ORDER AS TIME BARRED, THE RIGHT COURSE WAS FOR HIM TO FILE A PPEAL IN TRIBUNAL. 4. EVEN OTHERWISE ALSO THE ORDER OF THE ASSESSING O FFICER IS VERY MUCH BAS IN LAW AS THE SAME IS PASSED BEYOND LIMITA TION PRESCRIBED U/S 153(2A). 5. THAT THERE IS NO DISPUTE TO THE FACT THAT APPLIC ATION U/S 154 MADE IN TIME I.E., ON 21-7-2000 AND AS SUCH THE LIM ITATION U/S 154 WILL BE RECKONED FROM THE LATEST ORDER PAS SED WHICH IS DATED 22-2-2001 AND FROM THIS POINT OF VIEW ALSO THE LIMITATION REMAINS ALIVE FOR CIT (A) IN RESPECT OF THE ORDER PASSED BY HIM DATED 23-7-2003. 6. EVEN THE BOARD HAS ALSO ISSUED THE CIRCULAR NO.7 3 DATED 7- 1-1972 WHEREIN IT ADVISED IF APPLICATION IS FILED I N TIME, THE ITA NO.1421/HYD/2010- RAMGOPAL DAMODARLAL HUF, HYD.. L.L ========================== 6 SAME EVEN CAN BE DISPOSED OF BEYOND LIMITATION PERI OD PRESCRIBED U/S 154(7) AND THE SAME VIEW HAS BEEN HE LD BY SUPREME COURT 5. WE HAVE HEARD THE CONTENTIONS OF THE RIVAL PARTI ES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THIS CASE, A DMITTEDLY, THE ASSESSEE FILED 154 PETITION ON 21-7-2000 AND THE SAME WAS RE JECTED BY THE ASSESSING OFFICER ON 20-2-2002. AGAINST THIS, THE ASSESSEE WENT IN APPEAL BEFORE THE CIT (A) ON 16-4-2002. THE CIT (A ) ALLOWED THE CLAIM OF THE ASSESSEE. WHILE PASSING CONSEQUENTIAL ORDER , THE ASSESSING OFFICER CALLED FOR SOME INFORMATION AND THE SAME WA S FURNISHED BY THE ASSESSEE ON 25-8-2003. FURTHER, THE ASSESSEE FILED INFORMATION ON 25-9- 2003. FINALLY, THE ASSESSING OFFICER REJECTED THE CLAIM OF THE ASSESSEE VIDE HIS LETTER DATED 29-3-2007 OBSERVING THAT IT WAS COMMUNICATED TO THE ASSESSEE VIDE HIS LETTER DATED 18-9-2006 WHEREI N IT WAS DISCUSSED IN DETAIL THAT NO ORDER NEED TO BE PASSED IN THIS REG ARD. ON APPEAL, THE CIT (A) OBSERVED THAT HIS PREDECESSOR WAS NOT CORRE CT IN PASSING THE ORDER ON 23-7-2003 AS IT IS BEYOND THE TIME LIMIT U P TO 31-3-2003. THIS DIRECTION OF THE CIT (A) IS NOT JUSTIFIED AND SHE C ANNOT SIT OVER ON THE ORDER OF HER PREDECESSOR, IF THE DEPARTMENT IS HAVI NG ANY GRIEVANCE AGAINST THAT ORDER, THEY COULD HAVE FILED AN APPEAL BEFORE THE HIGHER FORUM. WITHOUT DOING SO, THE CIT (A) CANNOT VACATE THE FINDINGS OF THE ORDER OF HER PREDECESSOR. FURTHER, IN THIS CASE, T HERE IS NO FAULT OF THE ASSESSEE AS THE ASSESSEE HAS FILED RECTIFICATION PE TITION WITHIN THE STATUTORY TIME LIMIT ALLOWED UNDER THE PROVISIONS O F THE ACT PROVIDED UNDER THE ACT AND IT WAS NOT DISPOSED OF BY THE ASS ESSING OFFICER WITHIN THE TIME SPECIFIED UNDER SECTION 154(7) OF THE ACT. THIS VIEW OF OURS IS SUPPORTED BY THE JUDGMENT OF SUPREME COURT IN THE C ASE OF HIND WIRE ITA NO.1421/HYD/2010- RAMGOPAL DAMODARLAL HUF, HYD.. L.L ========================== 7 INDUSTRIES LIMITED VS. CIT (212 ITR 639) AND ALSO T HE CIRCULAR OF C.B.D.T NO.73 DATED 7-1-1972. ACCORDINGLY, WE DIRECT THE A SSESSING OFFICER TO PASS A RECTIFICATION ORDER ON MERITS IN ACCORDANCE WITH LAW. AT THIS STAGE, WE HAVE TO MENTION HERE THAT WE HAVE ALREADY DISPOSED OF THE MAIN GROUND I.E, LEGAL GROUND RAISED BY THE ASSESSE E IN THIS APPEAL, THE OTHER GROUNDS BEING CONSEQUENTIAL IN NATURE ARE NOT ADJUDICATED UPON HERE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 23 -1 1-2011 . SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER. DT/- 23-11-2011. COPY FORWARDED TO: 1. C/O K.L. RATHI, ADVOCATE, 3 - 5 - 144/5, EDEN GARDEN, HYDERABAD. 2. INCOME - TAX OFFICER, WARD - 7(4), HYDERABAD. 3. CIT(A)-VI, HYDERABAD. 4. CIT, AP, HYDERABAD. 5. THE D.R., ITAT, HYDERABAD. JMR*