P.V. ANANTHKRISHNAN, THANE V. ASST.C.I.T.CIRCLE-1, THANE

ITA 1820/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78865 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-05-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2004-2005
• Appeal Filed On: 04-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARMINDER
• Assessee Lawyers: MALAY H SHAH
• Keywords: Revised return
• Section: 54F

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH C , MUMBAI BEFORE SHRI N.K. BILLAIYA , ACCOUNTANT MEMBER AND SHRI SANJAY GARG , JUDICIAL MEMBER ITA NO. 1820/M/2011 ASSESSMENT YEAR: 2004 - 05 SHRI P.V. ANANTHKRISHNAN 901/ IXORA BUILDING, HIRANANDANI MED OS, NEAR KHEWRA CIRCLE, THANE 400 610 PAN: AAJPP 9187 E VS. ACIT, CIRCLE - 1, INCOME TAX OFFICE , VARDAAN , MIDC, WAGLE ESTATE, THANE 400 604 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MALAY H. SHAH REVENUE BY : SMT. PARMINDER, D.R. DATE OF HEARING : 05.05. 201 4 DATE OF PRONOUNCEMENT : 05.05.2014 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INC OME TAX (APPEALS) [(HEREINAFTER REFERRED TO AS CIT(A)] DATED 13.09.10. IN HIS GROUNDS OF APPEAL, THE ASSESSEE HAS AGITATED THE DISALLOWANCE OF THE CLAIM OF DEDUCTION UNDER SECTION 54EC AND 54F OF THE INCOME TAX ACT (HEREINAFTER REFERRED TO AS THE ACT). 2. AT THE OUTSET, THE LD. A.R. OF THE ASSESSEE HAS BEEN FAIR ENOUGH TO STATE THAT SINCE THE INVESTMENT IN BONDS WAS PRIOR TO THE DATE OF OCCURRENCE OF CAPITAL GAINS, HENCE THE ASSESSEE WAS NOT ENTITLED TO CLAIM EXEMPTION UNDER SECTION 54EC AND EVEN THE SA ID CLAIM WAS NOT PRESSED BEFORE THE LD. CIT(A) ALSO. ITA NO . 1820/M/201 SHRI P.V. ANANTHKRISHNAN 2 HENCE THE GROUND NO.1 VIDE WHICH THE ASSESSEE HAS AGITATED THE DISALLOWANCE OF DEDUCTION UNDER SECTION 54EC , IS ACCORDINGLY DISMISSED. 3. THE ASSESSEE, HOWEVER, HAS STRONGLY AGITATED THE DISALLOWANCE OF CLAIM UNDER SECTION 54F OF THE ACT. THE ASSESSEE IN HIS RETURN OF INCOME HAD SHOWN TO HAVE EARNED LONG TERM CAPITAL GAIN OF RS. 3,58,827/ - . HOWEVER, HE HAD NOT CLAIMED IN THE SAID RETURN ANY DEDUCTION UNDER SECTION 54F OF THE ACT IN RESPECT OF INVESTM ENT OF CAPITAL GAINS FOR THE RESIDENTIAL PROPERTY. HOWEVER, DURING THE ASSESSMENT PROCEEDINGS , THE ASSESSEE MADE THE ABOVE CLAIM UNDER SECTION 54F ON THE GROUND THAT THE DEDUCTION HAD NOT BEEN CLAIMED IN THE ORIGINAL RETURN OF INCOME BECAUSE THE RETURN WA S FILED BEFORE THE PURCHASE OF HOUSE PROPERTY BY WAY OF FILING A REVISED COMPUTATION. THE ASSESSING OFFICER (HEREINAFTER REFERRED TO AS THE AO) DID NOT ALLOW THE ABOVE CLAIM OF DEDUCTION UNDER SECTION 54F ON THE GROUND THAT THE SAID DEDUCTION HAD NEITHER BEEN CLAIMED IN THE ORIGINAL RETURN OF INCOME NOR IN THE REVISED RETURN. THE PROPER COURSE FOR THE ASSESSEE WAS TO FILE A REVISED RETURN INSTEAD OF REVISED COMPUTATION. HE THEREFORE DISALLOWED THE ABOVE CLAIM OF THE ASSESSEE. 4. IN THE FIRST APPEAL, T HE LD. CIT(A) ALSO OBSERVED THAT THE ASSESSEE WAS REQUIRED TO MAKE HIS CLAIM BY WAY OF FILING A REVISED RETURN AND NOT THROUGH REVISED COMPUTATION. HE ALSO DID NOT ADMIT THE ABOVE CLAIM OF THE ASSESSEE ON THIS GROUND AND HENCE CONFIRMED THE DISALLOWANCE. AGGRIEVED AGAINST THE ORDER OF THE LD. CIT(A) , THE ASSESSEE IS THUS IN APPEAL BEFORE US. 5. WE HAVE HEARD THE LD. REPRESENTATIVES OF BOTH THE PARTIES AND ALSO HAVE GONE THROUGH THE RECORDS. THE LD. A.R. OF THE ASSESSEE , WHILE RELYING UPON THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT OF BOMBAY IN THE CASE OF CIT VS. PRUTHVI BROKERS & SHAREHOLDERS PVT. LTD. IN ITA NO.3908 OF 2010 DECIDED ON 21.06.12, HAS CONTENDED THAT EVEN THOUGH THE CLAIM WAS NOT ITA NO . 1820/M/201 SHRI P.V. ANANTHKRISHNAN 3 ADMITTED BY THE AO BECAUSE OF NON FILING OF T HE REVISED RETURN , THE ASSESSEE HAD RAISED THE ADDITIONAL PLEA OF HIS CLAIM BEFORE THE LD. CIT(A) AND THE LD. CIT(A) OUGHT TO HAVE CONSIDERED THE CLAIM OF THE ASSESSEE. ON THE OTHER HAND, THE LD. D.R. HAS STRONGLY RELIED UPON THE FINDING OF THE LOWER AU THORITIES. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE LD. REPRESENTATIVES OF THE PARTIES. WE MAY OBSERVE THAT THE HONBLE BOMBAY HIGH COURT IN THE CASE OF PRUTHVI BROKERS & SHAREHOLDERS PVT. LTD. (SUPRA) , WHILE RELYING UPON THE VARIOUS DECISI ONS OF THE HONBLE SUPREME COURT AND OTHER HONBLE HIGH COURTS , HAS HELD THAT EVEN IF A CLAIM IS NOT MADE BEFORE THE AO IT CAN BE MADE BEFORE THE APPELLATE AUTHORITIES. THE JURISDICTION OF THE APPELLATE AUTHORITIES TO ENTERTAIN SUCH A CLAIM IS NOT BARRED. THE HONBLE BOMBAY HIGH COURT WHILE RELYING UPON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF JUTE CORPORATION OF INDIA L IMITED VS. CIT 1991 SUPP (2) SCC 744 = (1991) 187 ITR 688 HAS OBSERVED THAT THE POWER OF THE APPELLATE COMMISSIONER IS COTERMINOUS WITH THAT OF THE INCOME TAX OFFICE R AND AN APPELLATE AUTHORITY WHILE HEARING APPEAL AGAINST THE ORDER OF THE SUBORDINATE AUTHORITY , HAS ALL THE POWERS WHICH THE ORIGINAL AUTHORITY MAY HAVE IN DECIDING THE QUESTIONS BEFORE IT , SUBJECT TO THE RES TRICTIONS OR LIMITATIONS , IF ANY , PRESCRIBED BY STATUTORY PROVISIONS. IN THE ABSENCE OF ANY STATUTORY PROVISION , THE APPELLATE AUTHORITY IS VESTED WITH ALL THE PLENARY POWERS WHICH THE SUBORDINATE AUTHORITY MAY HAVE IN THE MATTER. AN ASSESSEE IS ENTITLED TO RAISE NOT MERELY ADDITIONAL LEGAL SUBMISSIONS BEFORE THE APPELLATE AUTHORITIES BUT IS ALSO ENTITLED TO RAISE ADDITIONAL CLAIMS BEFORE THEM. THE APPELLATE AUTHORITIES HAVE THE DISCRETION WHETHER OR NOT TO PERMIT SUCH ADDITIONAL CLAIMS TO BE RAISED. IT CANNOT, HOWEVER, BE SAID THAT THEY HAVE NO JURISDICTION TO CONSIDER THE SAME. THE APPELLATE AUTHORITIES HAVE JURISDICTION TO DEAL NOT MERELY WITH ADDITIONAL ITA NO . 1820/M/201 SHRI P.V. ANANTHKRISHNAN 4 GROUNDS WHICH BECAME AVAILABLE ON ACCOUNT OF CHANGE OF CIRCUMSTANCES OR LAW, BUT WITH ADDITIONAL GROUNDS WHICH WERE AVAILABLE WHEN THE RETURN WAS FILED BUT COULD NOT HAVE BEEN RAISED AT THAT STAGE OR THE GROUNDS WHICH BECAME AVAILABLE ON ACCOUNT OF CHANGE OF CIRCUMSTANCES OR LAW. THE WORDS COULD NOT HAVE BEEN RAISED MUST BE CONSTRUED LIBERALLY AND NOT STRICTLY. IT IS OPEN TO THE ASSESSEE TO CLAIM A DEDUCTION BEFORE THE APPELLATE AUTHORITY WHICH COULD NOT HAVE BEEN CLAIMED BEFORE THE AO. THE HONBLE BOMBAY HIGH COURT HAS FURTHER OBSERVED THAT THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF GO ETZE (INDIA) LIMITED V. CIT (2006) 157 TAXMAN 1, REGARDING THE RESTRICTION OF MAKING THE CLAIM THROUGH A REVISED RETURN WAS LIMITED TO THE POWERS OF THE ASSESSING AUTHORITY AND THE SAID JUDGMENT DOES NOT IMPINGE ON THE POWER OR NEGATE THE POWERS OF THE AP PELLATE AUTHORITIES TO ENTERTAIN SUCH CLAIM BY WAY OF ADDITIONAL GROUND. 7. FURTHER, IN OUR VIEW, WHILE REFUSING TO TAKE INTO CONSIDERATION THE RELEVANT CLAIM OF THE ASSESSEE , WHICH WAS VERY MUCH NECESSARY FOR THE JUST DECISION OF THE CASE, LD. CIT(A) FAILED TO EXERCISE HIS APPELLATE JURISDICTION UNDER SECTION 250 OF THE ACT. THE DUTY WAS ALSO CAST UPON THE LD. CIT(A) TO ADMIT AND CONSIDER THE EVIDENCE PRODUCED BEFORE HIM BY THE ASSESSEE . THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SMT. PRABHAVATI S. SHAH V. CIT (1998) 231 ITR 1 (BOM.) HAS HELD THAT THE POWERS CONFERRED ON THE FIRST APPELLATE AUTHORITY UNDER SUB - SECTION (4) OF SECTION 250 OF THE ACT, BEING A QUASI - JUDICIAL POWER, IT IS INCUMBENT ON HIM TO EXERCISE THE SAME, IF THE FACTS AND CIRCUMS TANCES JUSTIFY. IT MAY BE OBSERVED THAT THOUGH THE DISCRETION IS VESTED WITH THE APPELLATE AUTHORITIES TO ADMIT OR REJECT THE NEW/ADDITIONAL CLAIM BUT THE DISCRETION IN THAT REGARD IS TO BE EXERCISED FAIRLY AND JUSTIFIABLY SO AS TO SERVE THE INTEREST OF J USTICE. ITA NO . 1820/M/201 SHRI P.V. ANANTHKRISHNAN 5 8. IN THE CASE IN HAND, THE RESIDENTIAL PROPERTY WAS NOT PURCHASED BY THE ASSESSEE AT THE TIME OF FILING OF THE RETURN. THE CLAIM WAS SPECIFICALLY MADE BY THE ASSESSEE BEFORE THE APPELLATE AUTHORITY. BUT THE FIRST APPELLATE AUTHORITY FAILED TO EXERCISE ITS JURISDICTION TO CONSIDER THE CLAIM OF THE ASSESSEE. 9. WE ACCORDINGLY SET ASIDE THE IMPUGNED ORDER OF THE LD. CIT(A) AND REMAND THE MATTER BACK TO THE FILE OF THE LD. CIT(A) WITH A DIRECTION TO CONSIDER THE CLAIM OF THE ASSESSEE REGARDING DEDUCTION UNDER SECTION 54F OF THE ACT ON MERITS AFTER GIVING PROPERTY OPPORTUNITY TO THE ASSESSEE TO REPRESENT HIS CASE. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 05.05. 201 4 . SD/ - SD/ - ( N.K. BILLAIYA ) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 15 TH MAY, 201 4 . * KISHORE COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT ( A) CONCERNED, MUMBAI THE DR C BENCH //TRUE COPY// [ BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.