Shri Ramdev Mandhani, HUF, Raipur V. Income Tax Officer - 3(2), Raipur

ITA 19/RPR/2021

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3315 (ITAT-RAIPUR)
• Duration Of Justice: 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2016-2017
• Appeal Filed On: 05-04-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Revision of order; Assessment record; Set aside; Audi alteram partem; Capital Gains
• Section: 54; 263; 143(3); 54B; 2(14)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI N. K. CHOUDHRY, JUDICIAL MEMBER ./ I.T.A. NO. 19/RPR/2021 ( / ASSESSMENT YEAR : 2016-17) RAMDEV MANDHANI HUF, C-295, SHAILENDRA NAGAR, RAIPUR, CHHATTISGARH - 492001 / VS. INCOME TAX OFFICER-3(2), RAIPUR ./ ./ PAN/GIR NO. : AAGHR 5208 F ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SH RI R.B. DOSHI, AR / RESPONDENT BY : SHRI P.K. MISHRA, CIT-DR / DATE OF HEARING 29.07.2021 / DATE OF PRONOUNCEMENT 21 . 10 .2021 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE REVISIONAL ORDER OF THE PRINCI PAL COMMISSIONER OF INCOME TAX (PCIT IN SHORT), RAIPUR-1 COMMUNICATED TO THE ASSESSEE ON 26.03.2021 PASSED UNDER SECTION 263 OF THE INCOM E TAX ACT, 1961 (THE ACT IN SHORT) WHEREBY THE ASSESSMENT ORDER P ASSED BY THE ASSESSING OFFICER (AO IN SHORT) DATED 05.12.2018 UNDER SECTION 143(3) OF THE ACT CONCERNING ASSESSMENT YEAR (AY IN SHORT) 2016- 17 WAS SOUGHT TO BE SET ASIDE FOR REFRAMING THE ASS ESSMENT IN TERMS OF SUPERVISORY JURISDICTION. 2. AS PER ITS GROUNDS OF APPEAL, THE ASSESSEE HAS C HALLENGED THE REVISIONAL ACTION OF THE PCIT WHEREBY THE ASSESSING OFFICER WAS DIRECTED TO PASS THE ASSESSMENT ORDER DE NOVO AFTER MAKING ENQUIRIES ON THE POINTS SET OUT IN THE NOTICE WHICH HAS ALREA DY EXAMINED AND CONSIDERED DURING THE ORIGINAL ASSESSMENT PROCEEDIN GS CONCERNING AY ITA NO. 19/ RPR/2021 SHRI RAMDEV MANDHANI HUF VS. ITO AY : 2016-17 - 2 - 2016-17. THE ASSESSEE HAS CHALLENGED THE ASSUMPTIO N OF JURISDICTION BY THE PCIT UNDER SECTION 263 OF THE ACT ON THE GRO UND THAT THE ASSESSMENT ORDER UNDER REVISION IS NEITHER ERRONEOU S NOR PREJUDICIAL TO THE INTEREST OF THE REVENUE. 3. BRIEFLY STATED, THE ASSESSEE FILED RETURN OF INC OME FOR AY 2016- 17 DECLARING TOTAL INCOME AT RS.14,35,500/-. THE C ASE WAS SELECTED FOR SCRUTINY ON THE REASONS FOR VERIFICATION OF LAR GE DEDUCTIONS CLAIMED UNDER SECTION 54-B, 54-C, 54-D, 54-G OF THE ACT AND WHETHER DEDUCTIONS FROM CAPITAL GAINS HAVE BEEN CLAIMED COR RECTLY. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF TH E ACT ALLOWING THE DEDUCTIONS CLAIMED. THEREAFTER, THE PCIT CALLE D FOR THE ASSESSMENT RECORDS AND OPINED THAT THE ASSESSMENT O RDER SO PASSED IS ERRONEOUS INSOFAR AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. A SHOW CAUSE NOTICE WAS ISSUED TO ASSESSEE SEEKING HI S RESPONSE. IT WILL BE PERTINENT TO REPRODUCE THE SHOW-CAUSE NOTICE ISS UED BY THE PCIT FOR APPRECIATION OF CONTROVERSY. TO, RAMDEV MANDHANI C-295, SHAILENDRA NAGAR 492001 , CHHATTISGARH INDIA PAN/TAN: AAGHR5208F AY: 2016-17 DIN & NOTICE NO:ITBA/REV/F/REV1/2020-21/1031386740( 1) DATED: 10/03/2021 NOTICE FOR THE HEARING SUBJECT: NOTICE FOR HEARING IN RESPECT OF REVISION PROCEEDINGS U/S 263 OF THE THE INCOME TAX ACT, 1961 ASSESSMENT YE AR 2016- 17. IN THIS REGARD, A HEARING IN THE MATTER IS FIXED ON 15/03/2021 AT 11:00 AM. YOU ARE REQUESTED TO ATTEND IN PERSON OR THROUGH AN AUTHORIZED REPRESENTATIVE TO SUBMIT YOUR REPRESENTA TION, IF ANY ALONGWITH SUPPORTING DOCUMENTS/INFORMATION IN SUPPO RT OF THE ISSUES INVOLVED (AS MENTIONED BELOW). IF YOU WISH T HAT THE REVISION PROCEEDING BE CONCLUDED ON THE BASIS OF YO UR WRITTEN ITA NO. 19/ RPR/2021 SHRI RAMDEV MANDHANI HUF VS. ITO AY : 2016-17 - 3 - SUBMISSIONS/REPRESENTATIONS FILED IN THIS OFFICE, O N OR BEFORE THE SAID DUE DATE, THEN YOUR PERSONAL ATTENDANCE IS NOT REQUIRED. YOU ALSO HAVE THE OPTION TO FILE YOUR SUBMISSION FROM T HE E-FILING PORTAL USING THE LINK: INCOMETAXINDIAEFILING.GOV.IN ON EXAMINATION OF YOUR INCOME TAX RECORDS FOR THE A BOVE ASSESSMENT YEAR, I FIND THAT THE ORDER PASSED U/S 1 43(3) ON 05.12.2018OF THE INCOME TAX ACT, 1961 IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE IN THE FO LLOWING MANNER: - THE ORDER IN THE AFORESAID CASE IS ERRONEOUS SO FAR AS PREJUDICIAL TO THE INTEREST OF REVENUE ON THE FOLLOWING GROUNDS : IN THIS CASE, THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME FOR A.Y. 2016-17 ON 31.03.2017 DECLARING TOTAL INCOME A T RS. 14,35,500/-. THE CASE WAS SELECTED FOR SCRUTINY THR OUGH CASS ON THE REASON LARGE DEDUCTION CLAIMED U/S 54-B, 54-C, 54-D, 54-G WHETHER DEDUCTION FROM CAPITAL GAIN HAS BEEN CLAIME D CORRECTLY. THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE I.T. ACT, 1961 ON 05.12.2018 AT RS. 14,35,500/-. LATER ON THE RAP HAS RAISED TWO OBJECTIONS VIDE AUD IT OBJECTION MEMO DATED 23.07.2019 WHICH IS REPRODUCED AS UNDER: - THE DEDUCTION UNDER SECTION 54 B IS AVAILABLE IN R ESPECT OF CAPITAL GAIN ARISING FROM TRANSFER OF AGRICULTURE L AND, IF FOLLOWING CONDITIONS ARE SATISFIED: (1) THE AGRICULTURAL LAND HAS BEEN TRANSFERRED BY A N INDIVIDUAL. (2) THE AGRICULTURAL LAND HAS BEEN USED BY THE INDI VIDUAL OR HIS PARENTS FOR AGRICULTURAL PURPOSE DURING THE 2 YEARS IMMEDIATELY PRECEDING THE DATE OF TRANSFER (3) THE ASSESSEE HAD PURCHASED ANOTHER AGRICULTURAL LAND (RURAL OR URBAN) WITHIN A PERIOD OF 2 YEARS AFTER THE DAY OF TRANSFER OF THE ORIGINAL AGRICULTURAL LAND TO BE USED FOR AGRIC ULTURAL PURPOSES. FURTHER, AS PER SECTION 2(14) (III) OF THE INCOME T AX ACT, 1961, UNLESS THE CONTEXT OTHERWISE REQUIRES, THE TERM, C APITAL ASSET DOES NOT INCLUDE AGRICULTURAL LAND IN INDIA, NOT BE ING LAND SITUATED: (A) IN ANY AREA WHICH IS COMPRISED WITHIN THE JURIS DICTION OF A MUNICIPALITY (WHETHER KNOWS AS A MUNICIPALITY, MUNI CIPAL CORPORATION, NOTIFIED AREA COMMITTEE, TOWN ARE COMM ITTEE, TOWN COMMITTEE, OR BY ANY OTHER NAME) OR A CANTONMENT BO ARD AND ITA NO. 19/ RPR/2021 SHRI RAMDEV MANDHANI HUF VS. ITO AY : 2016-17 - 4 - WHICH HAS A POPULATION OF NOT LESS THAN TEN THOUSAN D; OR (B) IN ANY AREA WITHIN THE DISTANCE, MEASURED AERIALLY: (I) NOT BEING MORE THAN TWO KILOMETERS, FROM THE LO CAL LIMITS OF ANY MUNICIPALITY OR CANTONMENT BOARD REFERRED TO IN ITEM (A) AND WHICH HAS A POPULATION OF MORE THAN TEN THOUSAND BU T NOT EXCEEDING ONE LAKH; OR (II) NOT BEING MORE THAN SIX KILOMETERS, FROM THE L OCAL LIMITS OF ANY MUNICIPALITY OR CANTONMENT BOARD REFERRED TO IN ITEM (A) AND WHICH HAS A POPULATION OF MORE THAN ONE LAKH BUT NO T EXCEEDING TEN LAKH; OR (III) NOT BEING MORE THAN EIGHT KILOMETERS, FROM TH E LOCAL LIMITS OF ANY MUNICIPALITY OR CANTONMENT BOARD REFERRED TO IN ITEM (A) AND WHICH HAS A POPULATION OF MORE THAN TEN LAKH. EXPLANATION: FOR THE PURPOSE OF THIS SUB-CLAUSE, P OPULATION MEANS THE POPULATION ACCORDING TO THE LAST PRECEDIN G CENSUS OF WHICH THE RELEVANT FIGURES HAVE BEEN PUBLISHED BEFO RE THE FIRST DAY OF THE PREVIOUS YEAR. FURTHER, AS PER SECTION 45 OF INCOME TAX ACT, PROVI DES THAT, ANY PROFIT OR GAINS ARISING FROM THE TRANSFER OF A CAPI TAL ASSET EFFECTED IN THE PREVIOUS YEAR SHALL, SAVE AS OTHERWISE PROVI DED IN SECTIONS BE CHARGEABLE TO INCOME-TAX UNDER THE HEAD CAPITAL GAIN, AND SHALL BE DEEMED TO BE THE INCOME OF THE PREVIOUS YE AR IN WHICH THE TRANSFER TOOK PLACE. AUDIT SCRUTINY OF CASE FILE RE VEALED THAT ASSESSEE HAD SOLD AGRICULTURAL LAND SITUATED AT DAL DAL SEONI, RAIPUR FOR SALES CONSIDERATION AMOUNTING TO 2,56,72 ,500/- DATED 01/12/15 AND EARNED LONG TERM CAPITAL GAIN OF 2,13, 70,207/- AND CLAIMED DEDUCTION U/S 54 B BY INVESTING IN 3 AGRICU LTURAL LANDS SITUATED AT SEJBAHAR, RAIPUR HAVING PURCHASE VALUE I.E. 84,00,000/- AND 60,00,000/- AND 1,07,40,000/- TOTAL ING TO 2,51,40,000/-. BUT SCRUTINY OF CASE FILE, REVEALED THAT LAND SOLD AND PURCHASED BY ASSESSEE IN NOT AGRICULTURAL LAND IT COMES UNDER DE FINITION OF CAPITAL ASSET AS PER SECTION 2(14) OF IT ACT, BECAU SE IT IS ITSELF MENTIONED IN SALE DEED THAT ABOVE SOLD LAND IS IN D ALDAL SEONI LOCALITY WHICH FALLS UNDER LIMITS OF RAIPUR MUNICIP AL CORPORATION. FURTHER, THERE IS NO CERTIFICATE FROM LAND RECORD AUTHORITIES ATTACHED IN CASE FILE, THAT ABOVE MENTI ONED SOLD AND PURCHASED AGRICULTURAL LANDS ARE SITUATED AT MORE T HAN SPECIFIC DISTANCE FROM LIMITS OF MUNICIPAL BODIES ARE DESCRI BED ABOVE IN SECTION 2(14)(III) OF IT ACT, 1961. FURTHER, LAND A T DALDAL SEONI, RAIPUR IS SOLD TO ABHINAV BUILDERS. THAT CORROBORAT ES THAT ABOVE LAND WOULD BE USED FOR NON-AGRICULTURAL PURPOSES I. E. COMMERCIAL ITA NO. 19/ RPR/2021 SHRI RAMDEV MANDHANI HUF VS. ITO AY : 2016-17 - 5 - OPERATIONS. THEREFORE DEDUCTION TAKEN BY ASSESSEE U /S 54 B I.E. 2,13,70,207/- IS IRREGULAR AND IS LIABLE FOR TAXATI ON ON LONG TERM CAPITAL GAIN AMOUNTING TO 2,13,70,207/- 4. HENCE, THERE IS NO APPLICATION OF MIND ON THE PA RT OF THE AO TO CORRECTLY TAX THE INCOME OF THE ASSESSEE IN THE RET URN OF INCOME AND THEREFORE, THE ASSESSMENT ORDER PASSED U/S 143( 3) OF THE ACT IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INT EREST OF REVENUE. THEREFORE, IN EXERCISE OF THE POWERS CONFERRED ON M E BY SECTION 263 OF THE I.T.ACT, 1961, I PROPOSE TO SUITABLE REV ISE THE ORDER U/S 263, WHICH MAY INCLUDE SETTING ASIDE THE ORDER AS S UCH. ACCORDINGLY, AN OPPORTUNITY IS BEING EXTENDED TO EX PLAIN YOUR CASE ALONG WITH DETAILS, DOCUMENTS AND NECESSARY EV IDENCES. AN ABSENCE OF ANY SUBMISSION OR REPLY SHALL LEAD TO TH E CONCLUSION THAT YOU HAVE NO OBJECTION FOR THE PROPOSED ACTION AND THE PROCEEDINGS SHALL BE FINALIZED ACCORDINGLY. YOUR SUBMISSION / REPLY MAY KINDLY BE SENT THROUGH THE E-MAIL ON OR BEFORE 15/03/2021. IF YOU WISH TO APPEAR PERSONALLY OR THROUGH YOUR AU THORIZED REPRESENTATIVE, PERSONAL HEARING MAY KINDLY BE AVAI LED ON 15/03/2021 AT 11:00 AM IN THE OFFICE OF PCIT-1, CEN TRAL REVENUE BUILDING, CIVIL LINES, RAIPUR. IT WAS ALLEGED BY THE PCIT THAT DEDUCTIONS CLAIMED UNDER SECTION 54-B BY THE ASSESSEE ON TRANSFER OF AGRICUL TURAL LAND HAS BEEN WRONGLY ALLOWED BY THE AO AND WITHOUT APPLICATION O F MIND. A REVISION ORDER WAS PASSED BY WHICH THE PCIT ACCORDI NGLY SET ASIDE THE ASSESSMENT SO COMPLETED AND REMANDED THE ISSUE BACK TO THE FILE OF THE AO FOR FRESH ADJUDICATION THEREOF. 4. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE TRIBUNAL. 5. WHEN THE MATTER WAS CALLED FOR HEARING, TWO FOLD CONTENTIONS WERE RAISED ON BEHALF OF THE ASSESSEE. 5.1 FIRSTLY, IT WAS CONTENDED THAT THE ASSESSEE HAS NOT RECEIVED THE SHOW-CAUSE NOTICE UNDER SECTION 263 AT ALL AND, THE REFORE, NO APPEARANCE COULD BE MADE BEFORE THE PCIT IN THE ABS ENCE OF ANY ITA NO. 19/ RPR/2021 SHRI RAMDEV MANDHANI HUF VS. ITO AY : 2016-17 - 6 - OPPORTUNITY PROVIDED TO THE ASSESSEE. IT WAS POINTE D OUT THAT THE SHOW-CAUSE NOTICE BEARS THE DATE 10.03.2021 CALLING FOR HEARING ON 15.03.2021 AT 11:00 AM. HOWEVER, THE NOTICE ITSELF BEARS THE SIGNATURE ON 15.03.2021 AT 1.49PM. APPARENTLY, AS PER SHOW-C AUSE NOTICE, THE TIME FIXED FOR HEARING IS PRIOR TO THE TIME OF ISSU E OF NOTICE ITSELF. BESIDES, THE SHOW-CAUSE NOTICE HAS BEEN PURPORTEDLY SENT ON EMAIL ID [e-mail] WHICH WAS NOT RECEIVED ON THE SAID ID AT ANY TIME. THE PCIT DID NOT VERIFY THE FACT OF SERVICE O F NOTICE ESPECIALLY WHEN THERE WAS NO RESPONSE FROM THE ASSESSEE IN THE MATTER. IT WAS THUS CONTENDED THAT FIRSTLY THE NOTICE HAS NOT BEEN ISSUED AND SECONDLY EVEN IF IT IS MOMENTARILY ASSUMED THAT THE NOTICE H AS BEEN SERVED, IT CARRIES NO LEGAL EFFECT FOR THE REASON THAT ISSUE O F NOTICE IS SUBSEQUENT TO DATE AND TIME FIXED FOR ATTENDANCE. IT WAS FURT HER SUBMITTED THAT THE BURDEN IS ON THE DEPARTMENT TO PROVE SERVICE OF NOTICE AND GIVING OF OPPORTUNITY AS HELD IN VENKAT NAICKEN TRUST VS. ITO (2000) 242 ITR 141 (MAD.). IT WAS ALSO SUBMITTED THAT EXCEPT THE IMPUGNED SHOW CAUSE NOTICE, NO OTHER NOTICE/INTIMATION OF THE REV ISIONAL PROCEEDINGS WERE GIVEN TO THE ASSESSEE. THE REVISIONAL ORDER WA S PASSED BASED ON SUCH SOLITARY SHOW CAUSE NOTICE WHICH REMAINED UNSE RVED. IN THESE BACKGROUND, IT WAS STRONGLY CONTENDED THAT THE REVI SIONAL ORDER PASSED, WITHOUT ANY OPPORTUNITY OF HEARING, IS NULL AND VOID AB INITIO AND SUCH REVISIONAL ORDER PASSED WITHOUT OPPORTUNIT Y IS NON EST AND IS UNSUSTAINABLE IN LAW. A REFERENCE WAS MADE TO THE D ECISION OF CO- ORDINATE BENCH IN THE CASE OF SMT. SHARDABEN B. PAT EL VS. PCIT (2020) 180 ITD 328 (AHD.) FOR THIS PURPOSE. 5.2 ON MERIT, LEARNED COUNSEL FOR THE ASSESSEE SUBM ITTED THAT THE PCIT IN THE REVISIONAL ORDER PASSED EX-PARTE HAS OBSERVED THAT DEDUCTION CLAIMED BY THE ASSESSEE ON SALE OF AGRICU LTURAL LAND UNDER S.54B OF THE ACT HAS BEEN WRONGLY ALLOWED WITHOUT A DEQUATE ENQUIRY ITA NO. 19/ RPR/2021 SHRI RAMDEV MANDHANI HUF VS. ITO AY : 2016-17 - 7 - AND THE ORDER OF THE AO PASSED UNDER SECTION 143(3) OF THE ACT IS VITIATED BY NON-APPLICATION OF MIND. IN ITS DEFENS E, THE LEARNED AR FOR THE ASSESSEE POINTED OUT THAT THE WHOLE PREMISE FOR COMING TO SUCH CONCLUSION BY THE PCIT IS PRIMA FACIE INCORRECT. THE LEARNED COUNSEL REFERRED TO THE REASONING PROVIDED BY THE PCIT IN P AGE 3 OF ITS ORDER AND SUBMITTED THAT PCIT REFERRED TO THE DEFINITION OF SECTION 2(14) OF THE ACT AND OBSERVED THAT THE AGRICULTURAL LAND IS SITUATED WITHIN THE RAIPUR MUNICIPAL CORPORATION AND IS THUS A CAPITAL ASSET. IN DEFENSE, THE LEARNED COUNSEL SUBMITTED, AT THE OUTSET, THAT THE CONTROVERSY IS ON ACCOUNT OF DEDUCTIBILITY UNDER SECTION54B OF THE ACT AND HAS NO CONNECTION WITH PARAMETERS OF SECTION 2(14) OF THE ACT. THE LEARNED COUNSEL SUBMITTED THAT IF THE AGRICULTURAL LAND IS OUTSIDE SPECIFIED DISTANCE OF 8 KILOMETERS OF THE RAIPUR MUNICIPAL CO RPORATION, THE ASSET WILL NOT BE A CAPITAL ASSET AT THE FIRST PL ACE AND GAINS ARISING WOULD BE TOTALLY EXEMPT FROM TAXATION. IN SUCH A SI TUATION, THE QUESTION OF DEDUCTIBILITY UNDER S.54B OF THE ACT WO ULD NOT ARISE AT ALL. THE LEARNED COUNSEL POINTED OUT THAT THE LAND IN QU ESTION IS AGRICULTURAL LAND AS CAN BE SEEN FROM THE SALE DEED PLACED AT PAGE NO.16 OF THE PAPER BOOK. IT WAS FURTHER CONTENDED THAT ALL THE CONDITIONS STIPULATED UNDER S.54B OF THE ACT ARE FU LLY SATISFIED IN THE INSTANT CASE AND THE DEDUCTIBILITY UNDER SECTION 54 B OF THE ACT AS CLAIMED BY THE ASSESSEE WAS RIGHTLY ALLOWED BY THE AO AFTER TAKING COGNIZANCE OF RELEVANT FACTS PLACED ON RECORD. IT WAS POINTED OUT THAT LAND WAS USED FOR AGRICULTURAL PURPOSES IN TWO YEAR S PRIOR TO SALE AS CAN BE SEEN FROM REVENUE RECORDS (P-22) MAINTAINED BY PATWARI. FURTHER, THE NEW LAND PURCHASED IS AGRICULTURAL LAN D WHICH FACT IS AGAIN SUPPORTED BY FORM P-2 PLACED AT PAGE NOS. 92, 93, 95 & 96 OF THE PAPER BOOK. THE PRODUCE SHOWN IN THE FORM P-2 WOULD DEMONSTRATE THAT THE NEW LAND PURCHASED WAS ALSO PU T TO USE FOR AGRICULTURAL PURPOSES. THE LEARNED COUNSEL POINTED OUT THAT NO ITA NO. 19/ RPR/2021 SHRI RAMDEV MANDHANI HUF VS. ITO AY : 2016-17 - 8 - EVIDENCE HAS BEEN BROUGHT TO THE CONTRARY BY THE PC IT FOR COMING TO AN ADVERSE OPINION. IT WAS THUS POINTED OUT THAT O NCE SECTION 54B OF THE ACT WERE DULY COMPLIED WITH, THERE WAS NO REASO N FOR THE AO TO DENY THE DEDUCTION. THE LEARNED COUNSEL FOR THE AS SESSEE SUBMITTED THAT THE PCIT WITHOUT GIVING ANY OPPORTUNITY HAS PR OCEEDED ON AN IRRELEVANT CONSIDERATION, SUCH AS, LAND SOLD WAS A CAPITAL ASSET UNDER SECTION 2(14) OF THE ACT, WHEREAS, THE ASSESSEE HAS NEVER CLAIMED THAT IT WAS NOT A CAPITAL ASSET. THE DEDUCTION UNDER S. 54B OF THE ACT IS ADMISSIBLE ONLY IN RESPECT OF URBAN AGRICULTURAL LA ND AND RURAL AGRICULTURAL LAND ARE OTHERWISE ALSO EXEMPT FROM TA XATION. HENCE, THE PCIT HAS WRONGLY ALLEGED INADEQUACY TO ENQUIRIES ON THE FACE OF TELL- TALE EVIDENCES AND WRONGLY INVOKED THE REVISIONAL P OWER BESTOWED UPON IT UNDER S.263 OF THE ACT WITHOUT SHOWING AS T O HOW THE ACTION OF THE AO IS ERRONEOUS PER SE. THE LEARNED AR ACCO RDINGLY URGED FOR CANCELLATION OF THE REVISIONAL ORDER PASSED IN WRON GFUL EXERCISE OF JURISDICTION. 5.3 IN CONCLUSION, THE LEARNED COUNSEL SUBMITTED TH AT THE REVISIONAL ORDER IS NEITHER SUSTAINABLE IN LAW IN THE ABSENCE OF MANDATORY REQUIREMENT OF OPPORTUNITY ENSHRINED IN SECTION 263 ITSELF NOR ON MERITS AS THE PCIT HAS TOTALLY MISCONSTRUED THE FAC TS OF THE CASE AND GROSSLY MISAPPLIED THE LAW. HE ACCORDINGLY URGED FO R CANCELLATION OF THE REVISIONAL ORDER AND RESTORATION OF ASSESSMENT ORDER. 6. THE LEARNED CIT-DR, ON THE OTHER HAND, RELIED UP ON THE CONTENTS OF THE REVISIONAL ORDER. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL PLACED BEFORE US BY WAY OF PAPER-BOOK. FIRSTLY, WE CONSIDER IT EXPEDIENT TO ADDRESS OURSELVES ON JUSTIFICATION OF THE ISSUANCE OF THE ITA NO. 19/ RPR/2021 SHRI RAMDEV MANDHANI HUF VS. ITO AY : 2016-17 - 9 - SHOW-CAUSE NOTICE UNDER SECTION 263 OF THE ACT AND CONSEQUENTLY THE DIRECTION FOR VERIFICATION OF DEDUCTION UNDER SECTI ON 54-B ON MERITS. 8. ON PERUSAL OF THE SHOW-CAUSE NOTICE AND THE REVI SIONAL ORDER ALONG WITH FACTUAL MATRIX, WE FIND THAT THE PRINCIP AL ALLEGATION OF THE PCIT IS THAT THE LAND SOLD AND THEN PURCHASED BY TH E ASSESSEE IS NOT AN AGRICULTURAL LAND. THE LAND SOLD GIVING RISE TO CA PITAL GAINS ON WHICH DEDUCTION UNDER SECTION 54-B HAS BEEN ALLEGED TO FA LL UNDER THE LIMITS OF MUNICIPALITY, I.E. RAIPUR MUNICIPAL CORPORATION. IT IS FURTHER OBSERVED THAT THERE IS NO CERTIFICATE FROM THE LAND REVENUE AUTHORITIES THAT THE LAND SOLD AND PURCHASED ARE SI TUATED AT MORE THAN SPECIFIC DISTANCE FROM THE LIMITS OF MUNICIPALITY B ODIES AS DESCRIBED IN SECTION 2(14)(III) OF THE ACT. IT IS FURTHER AL LEGED THAT THE LAND WAS SOLD TO A BUILDER WHICH WOULD MEAN THAT THE LAND WO ULD BE USED FOR NON-AGRICULTURAL PURPOSES AND FOR COMMERCIAL OPERAT ION AFTER SALE. IN THIS BACKDROP, IT IS ALLEGED THAT THE DEDUCTION TAK EN BY THE ASSESSEE UNDER SECTION 54-B OF THE ACT IS IRREGULAR AND THE GAINS ARISING ON THE SALE OF LAND IS LIABLE FOR TAXATION AS LTCG WITHOUT ANY DEDUCTION CLAIMED UNDER SECTION 543 OF THE ACT.. 8.1 WE FIND THE OBSERVATIONS OF THE PCIT NEITHER HE RE NOR THERE. IT IS MANIFEST THAT THE PCIT HAS PROCEEDED ON A TOTAL MISCONCEPTION OF LAW IN THE GIVEN SET OF FACTS. WHERE THE AGRICULTUR AL SOLD LAND SITUATED IS OUTSIDE THE MUNICIPAL LIMITS, IT WILL NOT BE DEE MED AS CAPITAL ASSET UNDER SECTION 2(14)(III) OF THE ACT AT THE FIRST PL ACE AND CONSEQUENTLY THERE WOULD BE NO LIABILITY OF CAPITAL GAIN ON THE ASSESSEE AT THE THRESHOLD. HENCE, WE DO NOT UNDERSTAND THE NEED FOR CERTIFICATE OF LAND RECORD AUTHORITIES IN THIS REGARD. THE ASSESS EE HAS NOT CLAIMED AT ALL THAT THE AGRICULTURAL LAND IS SITUATED OUTSIDE THE SPECIFIED DISTANCE OF MUNICIPALITY. THE ASSESSEE HAS, IN FACT, CALCULA TED THE LTCG AND CLAIMED DEDUCTION THEREON ON THE GROUND THAT THE CA PITAL GAIN ACCRUED ITA NO. 19/ RPR/2021 SHRI RAMDEV MANDHANI HUF VS. ITO AY : 2016-17 - 10 - ON SALE OF LAND HAS BEEN TOWARDS PURCHASE OF OTHER LAND PARCELS WHICH IS ALSO USED FOR AGRICULTURAL PURPOSES. THE PCIT HA S MADE OUT A TOTALLY DIFFERENT CASE WHICH HAS NO RELATION WITH A PPLICATION OF SECTION 54-B OF THE ACT. THE USE OF AGRICULTURAL L AND, AFTER ITS TRANSFER TO A BUILDER, IS OF NO CONSEQUENCE FOR THE PURPOSES OF SECTION 54-B OF THE ACT. THE PCIT HIMSELF HAS ADMITTED THA T THE LAND IN SALE TO BE AGRICULTURAL LAND AND ALSO NOT DISPUTED THE P URCHASE OF AGRICULTURAL LAND BY UTILIZATION OF CAPITAL GAIN FO R AGRICULTURAL PURPOSES. THE PCIT HAS PROCEEDED TO DISTURB THE AS SESSMENT ON TOTALLY IRRELEVANT CONSIDERATION AND WITHOUT SHOWIN G ANY ERROR IN THE CLAIM. 8.2 ON APPRECIATION OF FACTS AVAILABLE BEFORE US SH OWING THE USE OF LAND FOR AGRICULTURAL PURPOSES HAVING REGARD TO THE AGREEMENT WITH FARMERS AND OTHER SUPPORTING PAPERS, WE ARE UNABLE TO DISCERN EVEN ANY REMOTE ERROR IN THE ACTION OF THE AO IN ADMITTI NG THE CLAIM OF DEDUCTION UNDER SECTION 54-B OF THE ACT. ON THE OT HER HAND, WE FIND THAT THE ACTION OF THE PCIT SUFFERS FROM VICE OF AR BITRARINESS AND TOTAL LACK OF APPLICATION OF MIND. THE PALPABLY WRONG RE VISIONAL ORDER IS ACCORDINGLY SET ASIDE AND QUASHED. 9. WE NOW ALSO ADVERT TO THE VEHEMENT OPPOSITION ON BEHALF OF THE ASSESSEE ON THE GROUND OF NON-ISSUANCE OF NOTICE AN D ON TOTAL LACK OF OPPORTUNITY WHILE CONCLUDING THE PROCEEDINGS UNDER SECTION 263 OF THE ACT. IT HAS BEEN DEMONSTRATED ON FACTS THAT ON LY SHOW CAUSE NOTICE ISSUED TO THE ASSESSEE WAS FOR ATTENDANCE ON 15.03.2021 CALLING THE ASSESSEE AT EARLIER POINT OF TIME I.E. 11.00 AM ON THE SAME DATE, WHEREAS THE NOTICE ITSELF WAS ISSUED AT 1.49 PM. W E ARE CONSTRAINT TO OBSERVE THAT SUCH CASUAL APPROACH OF A VERY SENIOR FUNCTIONARY OF THE DEPARTMENT DOES NOT AUGUR WELL IN THE EYES OF THE P UBLIC. AS STATED IN THE BAR, NO SUCH NOTICE WAS SERVED AT ALL ON THE EMAIL ID AS ITA NO. 19/ RPR/2021 SHRI RAMDEV MANDHANI HUF VS. ITO AY : 2016-17 - 11 - CLAIMED. NO OTHER NOTICE WAS SERVED. PALPABLY, IT IS A CASE OF TOTAL LACK OF OPPORTUNITY TO THE ASSESSEE TO DEFEND ITS C ASE. A QUESTION WOULD ARISE AS TO WHETHER A FAILURE TO GIVE A REASO NABLE OPPORTUNITY TO THE ASSESSEE OF BEING HEARD WAS ONLY A PROCEDURAL I RREGULARITY IN SUCH GROSS CIRCUMSTANCES AND THUS CURABLE AND DID NOT RE NDER THE ORDER PASSED BY THE PCIT AB INITIO VOID AND NON EST IN LAW PER SE. 10. IN THE CASE OF TATA CHEMICALS LIMITED VS. DCIT, ITA NO.3127/MUM/2010, ORDER DATED 30.06.2011, THE CO-OR DINATE BENCH AFTER MAKING REFERENCE TO THE DECISION IN THE JUDGM ENT IN MANEKA GANDHI VS. UNION OF INDIA, AIR 1978 SC 597, AND OTH ER JUDGMENTS OBSERVED THAT THE ORDER WHICH INFRINGES THE FUNDAME NTAL PRINCIPLE, PASSED IN VIOLATION OF AUDI ALTERAM PARTEM RULE, IS A NULLITY. WHEN A COMPETENT COURT OR AUTHORITY HOLDS SUCH AN ORDER AS INVALID OR SETS IT ASIDE, THE IMPUGNED ORDER BECOMES NULL AND VOID. O NCE IT IS CONCLUDED THAT THE ORDER IN QUESTION IS NULL AND VO ID, IT IS NOT FOR THE ADJUDICATING AUTHORITY TO ADVISE THE COMMISSIONER A S TO WHAT SHOULD HE DO. HE IS ALWAYS AT LIBERTY TO DO WHATEVER ACTI ON HE CAN TAKE IN ACCORDANCE WITH THE LAW, BUT A LIFE TO NULL AND VOI D ORDER BY REMITTING IT BACK TO THE COMMISSIONER FOR GIVING A FRESH OPPO RTUNITY OF PASSING THE ORDER AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF HEARING CANNOT BE GIVEN. IN A CASE WHERE IT IS POSSIBLE FOR THE COMM ISSIONER TO PASS A FRESH ORDER AT THIS STAGE IN ACCORDANCE WITH THE SC HEME OF THE ACT, HE CAN VERY WELL DO SO BUT IN CASE THE TIME LIMIT FOR PASSING SUCH ORDER HAS ALREADY EXPIRED, SUCH TIME LIMIT CANNOT BE EXTE NDED BY DIRECTING HIM TO PASS THE ORDER AFTER GIVING AN OPPORTUNITY O F HEARING TO THE ASSESSEE. OTHERWISE, THIS WOULD TANTAMOUNT TO GIVE PREMIUM TO THE PERSON COMMITTING DEFAULT. THE FINALITY OF THE ASS ESSMENT CANNOT BE DISTURBED FOR THE FAILURE OF THE PCIT TO OBDURATELY ADHERE TO THE EXPLICITLY PRESCRIBED REQUIREMENT OF OPPORTUNITY TO ASSESSEE. HENCE, ITA NO. 19/ RPR/2021 SHRI RAMDEV MANDHANI HUF VS. ITO AY : 2016-17 - 12 - IN THE ABSENCE OF ANY OPPORTUNITY TO THE ASSESSEE F OR WHICH THE FAULT IS ATTRIBUTABLE SQUARELY TO THE PCIT, IS FATAL AND SUC H DEFECT BEING INCURABLE, THE REVISIONARY ORDER PASSED UNDER SECTI ON 263 OF THE ACT IS ALSO REQUIRED TO BE QUASHED INDEPENDENTLY ON THI S GROUND ALSO. 11. HENCE, LOOKING FROM ANY ANGLE, THE IMPUGNED REV ISIONAL ORDER PASSED UNDER SECTION 263 OF THE ACT IS SET ASIDE AN D QUASHED. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. PRONOUNCED ON 21.10.2021 AS PER RULE 34(4) OF THE I NCOME TAX APPELLATE TRIBUNAL RULES, 1963. SD/- SD/- (N. K. CHOUDHRY) (PRADIP K UMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMB ER BT TRUE COPY / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. / ASSESSEE 3. / CONCERNED CIT 4. - / CIT (A) 5. , , / DR, ITAT, RAIPUR 6. / GUARD FILE. BY ORDER TRUE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR 1.DATE OF DICTATION ON ..08.10.2021.. 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING MEMBER 11.10.2021 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. .. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT .. 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S .. 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER.. 9.DATE OF DESPATCH OF THE ORDER