Govindarajan (HUF), Pondicherry V. ITO Ward 1, Puducherry

ITA 1877/CHNY/2018

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 4693 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 05-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAILENDRA MAMIDI
• Keywords: Set aside; Capital Gains
• Section: 143(3); 263

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , , $ BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER /. I.T.A. NO. 1877/CHNY/2018 / ASSESSMENT YEAR : 2009-10 M/S. GOVINDARAJAN (HUF), NO. 14, V.O.C STREET, KAMARAJ NAGAR, PUDUCHERRY 605 011. [PAN: AAAHG 1472G] VS. INCOME TAX OFFICER, WARD -1, PUDUCHERRY. ( / APPELLANT) ( %&' /RESPONDENT ) ASSESSEE BY : SHRI. R. SELVAM, CA SHRI V MEENAKSHI SUNDARAM, CA REVENUE BY : SHRI SAILENDRA MAMIDI, CIT 0 /DATE OF HEARING : 24.10.2018 0 /DATE OF PRONOUNCEMENT : 24.10.2018 / O R D E R PER S. JAYARAMAN, ACCOUNTANT MEMBER : THE ASSESSEE FILED THIS APPEAL AGAINST THE ORDER O F PRINCIPAL COMMISSIONER OF INCOME TAX, PUDUCHERRY, PASSED U/S. 263 IN C.NO 9127A/11/PCIT/PDY/17-18 DATED 28.03.2018 FOR ASSESS MENT YEAR 2009- 10. :-2-: ITA NO. 1877/CHNY/2018 2. THE AR SUBMITTED THAT M/S. GOVINDARAJAN (HUF), T HE ASSESSEES ASSESSMENT U/S. 143(3) R.W.S. 147 WAS COMPLETED ON 21.11.2013, INTER ALIA, REJECTING THE ASSESSEES CLAIM THAT THE LAND SOLD WAS AGRICULTURAL LAND AND MAKING AN ADDITION UNDER THE HEAD CAPITAL GAINS. ON AN APPEAL, THE LD. CIT(A) BY HIS ORDER IN ITA NO. 1644 /13-14/A-VI DATED 26.06.2014 ALLOWED THE ASSESSEES APPEAL BY DELETIN G THE ADDITION MADE BY THE AO, PRIMARILY FOR THE REASON THAT THE BAHOUR WAS NOT A NOTIFIED AREA IN TERMS OF NOTIFICATION NO. SO 10(E) DATED 06 .01.1994 AS AMENDED BY NOTIFICATION NO. SO 1302 DATED 28.12.1999. AGAI NST THE ORDER OF THE LD. CIT(A), THE REVENUE FILED AN APPEAL BEFORE THIS TRIBUNAL AND THIS TRIBUNAL IN ITA NO. 2180/MDS/2014 DATED 20.02.2015, HELD AS UNDER: 8. A CLOSE READING OF SECTION 2(14)(III)(A) OF THE ACT SUGGESTS WITH TWO CRITERIA, (I) AGRICULTURAL LAND SHOULD BE IN A AREA WITHIN THE MUNICIPALITY AND (II) THAT THE AREA SHOULD HAVE A P OPULATION OF MORE THAN TEN THOUSAND. IN THE PRESENT CASE, NO DOUBT THAT TH E LAND SOLD BY THE ASSESSEE IS WITHIN BAHOUR MUNICIPAL LIMIT, AS PER T HE SCHEDULE OF THE SALE DEED, BUT, SO FAR AS THE POPULATION IS CONCERNED, N EITHER THE ASSESSING OFFICER NOR THE LD. CIT(A) HAS DISCUSSED ABOUT THE SECOND CRITERIA. THEREFORE, IN THE INTEREST OF JUSTICE, WE SET ASIDE THE ORDER PASSED BY THE LD. CIT(A) ON THIS ISSUE AND REMIT THE MATTER BACK TO THE ASSESSING OFFICER TO DECIDE THE ISSUE DE NOVO KEEPING IN VIEW OF OUR ABOVE OBSERVATIONS AS WELL AS DECISION OF THE HONBLE SUP REME COURT IN THE CASE OF G. M. OMER KHAN V. ADDL. CIT (196 ITR 269) AFTER GIVING OPPORTUNITY OF HEARING TO THE ASSESSEE. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSE. :-3-: ITA NO. 1877/CHNY/2018 3. COMPLYING WITH THE DIRECTIONS OF THE HONBLE ITA T, THE AO EXAMINED THE ISSUE BY DEPUTING HIS INSPECTOR TO VER IFY THE FACTS. THE INSPECTOR FURNISHED THE REPORT DATED 28.05.2015, WH EREIN, INTER ALIA, HE REPORTED THAT THE IMPUGNED LAND IS SITUATED AT PANI THITTU, PUDUCHERRY WHICH IS 13.1 KMS AWAY FROM KADALUR MUNICIPALITY AN D 10.4 KMS FROM PUDUCHERRY AND THE TOTAL POPULATION OF BAHOUR PANCH AYAT AS PER 2011 SENSUS IS 9221 ONLY. HENCE, BAHOUR IS A COMMUNAL P ANCHAYAT AND DOES NOT FALL UNDER THE MUNICIPALITY LIMITS OF PUDUCHERR Y PANCHAYAT. AFTER CONSIDERING SUCH REPORT ETC., THE ASSESSING OFFICER PASSED AN ORDER U/S. 143(3) R.W. 254 DATED 28.05.2015, HOLDING THAT THE IMPUGNED LAND SOLD BY THE ASSESSEE WAS SITUATED IN PANITHITTU VILLAGE AND IT WAS IN THE BAHOUR COMMUNE PANCHAYAT, A VILLAGE PANCHAYAT DISTI NCT AND DIFFERENT FROM MUNICIPALITY AND THE CHITTA ADANGAL ISSUED BY THE REVENUE AUTHORITIES REVEALS THAT THE LAND IS AN AGRICULTURA L LAND ETC. 4. THE LD. AR CONTINUED HIS SUBMISSIONS STATING THA T THE LD. PCIT WRONGLY INVOKED THE JURISDICTION U/S. 263 ON THE OR DER PASSED U/S. 143(3) R.W. 254 DATED 28.05.2015 HELD THAT THIS ORDER IS E RRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE AND SET ASID E THE ORDER. THE AR SUBMITTED THAT THE LD. PCIT FAILED TO APPRECIATE TH AT THE IMPUGNED ORDER DATED 28.03.2018 PASSED U/S. 263 CLEARLY BARRED BY LIMITATION AS PER PROVISIONS OF SECTION 263(2). THE FACT THAT THE AG RICULTURAL NATURE OF THE :-4-: ITA NO. 1877/CHNY/2018 LAND WAS ARRIVED AT IN THE ORIGINAL ASSESSMENT ORDE R PASSED U/S. 143(3) R.W. 147 DATED 21.11.2013 AND NOT IN THE ORDER PASS ED U/S. 143(3) R.W. 254 DATED 26.05.2015. THE LD. PCIT OVERLOOKED THE FACT THAT IN THE ASSESSMENT ORDER DATED 21.11.2013, THE AO HAS IMPLI EDLY GAVE A FINDING AS TO THE AGRICULTURAL NATURE OF LAND BY RECORDING THE FACT OF HIS VISIT TO THE LAND. THE LD. PCIT OVERLOOKED THE FACT THAT TH E AO NEED NOT HAVE GONE INTO THE QUESTION OF DISTANCE OF THE LAND FROM THE NEAREST MUNICIPALITY, IF THE LAND IN QUESTION WAS FOUND OR SUSPECTED TO BE NON- AGRICULTURAL. FURTHER, THE FACTS HAVE ATTAINED FIN ALITY IN VIEW OF THE DECISION OF THE ITAT, EXCEPT FOR ASCERTAINING THE P OPULATION OF BAHOUR COMMUNE PANCHAYAT AS PER THE ITAT ORDER IN ITA NO 2 180/MDS/2014. HENCE, THE AR PLEADED THAT THE ORDER PASSED BY THE LD PCIT MAY BE QUASHED. PER CONTRA, THE LD. DR SUPPORTED THE ORDE R OF THE PCIT. 5. WE HEARD THE RIVAL SUBMISSIONS. THE FACTS REMAI N THAT THE ITAT DIRECTED THE AO TO VERIFY WHETHER THE POPULATION OF BAHOUR MUNICIPAL IS HAVING A POPULATION OF MORE THAN 10,000 AND THEN DE CIDE THE ISSUE IN ACCORDANCE WITH THAT CRITERIA, BUT FOR THIS ISSUE, ALL OTHER ISSUES ATTAINED FINALITY IN THE ORIGINAL ORDER U/S. 143(3) R.W. 147 DATED 21.11.2013. HENCE, THE LD PCIT IS NOT RIGHT IN INVOKING THE JUR ISDICTION U/S. 263 ON THE NATURE OF AGRICULTURAL LAND AGAINST THE ORDE R PASSED U/S. 143(3) :-5-: ITA NO. 1877/CHNY/2018 R.W. 254 DATED 28.05.2015 AND HENCE THE IMPUGNED O RDER PASSED BY THE LD. PCIT DATED 28.03.2018 IS QUASHED. 6. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH OCTOBER, 2018 AT CHENNAI. SD/- ( ) (GEORGE MATHAN) ! /JUDICIAL MEMBER SD/- ( ) (S. JAYARAMAN) ! /ACCOUNTANT MEMBER /CHENNAI, 5 /DATED: 24 TH OCTOBER, 2018 JPV 0%7898 /COPY TO: 1. ' / APPELLANT 2. %&' /RESPONDENT 3. ; ) ( /CIT(A) 4. ; /CIT 5. 8% /DR 6. /GF