New Vistas Constructions, Hyderabad V. ITO, Ward-II, International Taxation, Hyderabad

ITA 1977/HYD/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66241 (ITAT-HYDERABAD)
• Duration Of Justice: 9 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 30-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIVEDITA BISWAS
• Assessee Lawyers: S RAVI
• Section: 201(1); 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. 1977/HYD/2011 ASSESSMENT YEAR: 2009-10 NEW VISTAS CONSTRUCTIONS, ... APPELLANT HYDERABAD VS. THE INCOME TAX OFFICER-II, RESPONDENT INTERNATIONAL TAXATION, HYDERABAD. APPELLANT BY : SMT. S. RAVI RESPONDENT BY : SMT. NIVEDITA BISWAS DATE OF HEARING : 04/09/2012 DATE OF PRONOUNCEMENT : ORDER PER ASHA VIJAYARAGHAVAN, J.M.: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGA INST THE ORDER OF CIT(A)-V, HYDERABAD DATED 16/09/2011 FOR T HE ASSESSMENT YEAR 2009-10. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE PURCHASED PREMISES BEARING NO. 12-2-710 TO 712 MEAS URING 8850 SQUARE YARDS AT HYDERABAD FOR A SALE CONSIDERA TION OF RS. 22,42,00,000/-. THE SELLER WAS SRI MURALIMOHAN KOSA RAJU, RESIDENT OF USA. SINCE NO TDS HAD BEEN DEDUCTED ON THESE PAYMENTS THE ASSESSING OFFICER ISSUED NOTICE TO THE ASSESSEE ASKING IT TO SHOW CAUSE WHY ORDERS U/S 201(1) AND 2 01(1A) ITA NO. 1977/HYD/11 NEW VISTAS CONSTRUCTIONS. 2 SHOULD NOT BE PASSED ON SUCH PAYMENTS. THE LD. AR O F THE ASSESSEE STATED BEFORE THE ASSESSING OFFICER THAT I N THE REGISTERED DEED, THE ADDRESS MENTIONED WAS OF A LOC ALITY NAMED BERBAN, HYDERABAD, THEREFORE, THE VENDOR WAS TREATED AS AN INDIAN RESIDENT AND NO TAX WAS DEDUCTED. IT W AS FURTHER STATED THAT THE VENDOR HAS GIVEN AN ORAL ASSURANCE THAT HE WOULD PAY THE CAPITAL GAINS TAX WHICH HE DID ON THE DUE DATE OF FIRST INSTALLMENT OF ADVANCE TAX I.E. 10/09/2008. I T WAS ARGUED BY THE ASSESSEE THAT IN VIEW OF THE ABOVE REASONS, NO INTEREST WOULD BE CHARGED U/S 201(1A) AS ALL THE TAXES HAD B EEN PAID BY THE ASSESSEE. THE ASSESSING OFFICER HELD THAT NO DEMAND COULD BE RAISED U/S 201(1) BECAUSE THE TAXES HAD SU BSEQUENTLY BEEN PAID. HOWEVER, FROM THE TIME UNTIL THE TAXES W ERE SUPPOSED TO BE WITHHELD TO THE DATE OF PAYMENT OF A DVANCE TAX INTEREST U/S 201(1A) WAS CHARGEABLE. 3. HENCE, THE ASSESSING OFFICER HELD THAT THE ASSES SEE HAS TO PAY THE INTEREST FOR SIX MONTHS AT THE RATE OF 1% ON THE TAX OF RS. 3,28,04,710/-, WHICH WORKED OUT TO RS. 19,68 ,283/-. 4. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE PREFERRED THE APPEAL BEFORE THE CIT(A) AND HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THE ACTION OF THE ASSESSING OFFICER IN LEVYING I NTEREST U/S 201(1A) AMOUNTING TO RS. 19,68,283/- IS CONTRAR Y TO LAW AND FACTS. 2. THE ORDER OF THE ASSESSING OFFICER IS NOT A SPEA KING ORDER. 3. THE ASSESSING OFFICER HAS NOT PROPERLY APPRECIAT ED THE RATIO OF THE DECISION OF THE SUPREME COURT IN THE C ASE OF HINDUSTAN COCA COLA BEVERAGES VS. CIT, 293 ITR 226. ITA NO. 1977/HYD/11 NEW VISTAS CONSTRUCTIONS. 3 4. THE ASSESSING OFFICER OUGHT TO HAVE SEEN THAT TH E NON- RESIDENT IS NOT LIABLE FOR TAX ON CAPITAL GAINS U/S 115 E(A)(IA). 5. THE CIT(A) ADJUDICATED THE ISSUE OF LEVY INTERES T U/S 201(1A) AMOUNTING TO RS. 19,68,283/- AND DISMISSED THE APPEAL. 6. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 7. THE LEARNED COUNSEL FOR THE ASSESSEE SHRI S. RAV I FILED ADDITIONAL GROUND OF APPEAL BEFORE US WHILE APPEARI NG BEFORE US I.E. IN A BENCH, IN RESPONSE TO THE NOTICE FIX ING THE CASE OF HEARING ON 04/09/2012. AT THE TIME OF HEARING, T HE LEARNED COUNSEL RAISED THE ISSUE OF ADMISSION OF ADDITIONAL GROUND REGARDING JURISDICTION OF THE AO, WHICH WAS NOT RAI SED BEFORE THE LOWER AUTHORITIES. WHEN THIS GROUND WAS TAKEN U P FOR HEARING, THE BENCH POINTED OUT THAT THERE WAS NO PE TITION TO JUSTIFY THE ADMISSION OF ADDITIONAL GROUND, THEREFO RE, THE BENCH WANTED THE COUNSEL TO DECIDE AS TO WHETHER TH E GROUND IS TO BE TREATED AS PRESSED OR WITHDRAWN. THE LEARN ED COUNSEL CONSENTED TO WITHDRAW THE GROUND. 8. HOWEVER, AS SOON AS THE BENCH GOT OVER, THE LEAR NED COUNSEL REQUESTED THE BENCH TO RESTORE THE GROUND I N VIEW OF THE FACTS STATED IN HIS PETITION FOR ADMISSION OF A DDITIONAL GROUND AND SUBMITTED THAT AS HE WAS PRE-OCCUPIED WITH OTHER GROUNDS, HE WAS IN TOTALLY CONFUSED STATE OF MIND A ND HENCE CONSENTED TO WITHDRAW THE GROUND. ITA NO. 1977/HYD/11 NEW VISTAS CONSTRUCTIONS. 4 9. THE BENCH DE-HEARD THE CASE AND POSTED THE SAME FOR HEARING ON 05/09/2012. 10. THE LEARNED COUNSEL FOR THE ASSESSEE HIMSELF S IGNED THE PETITION FILED FOR ADMITTING THE ADDITIONAL GROUND. HE STARTED ARGUING THE ISSUE OF JURISDICTION, WHICH HAD BEEN R AISED IN THE ADDITIONAL GROUND AND THE BENCH RAISED A QUERY TO T HE LEARNED COUNSEL WHETHER THE PETITION SIGNED BY HIM IS VALID AND MAINTAINABLE. THE LEARNED COUNSEL REPLIED TO THE QU ERY OF BENCH THAT, AS HE WAS THE POWER OF ATTORNEY HOLDER FOR THE ASSESSEE IN THE PRESENT APPEAL, HE PRESUMED THAT TH E PETITION SIGNED BY HIM IS MAINTAINABLE. 11. THE LEARNED DR SMT. NIVEDITA BISWAS OPPOSED THE ADMISSION OF THE PETITION. 12. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSI NG THE RECORD. IN THIS CASE, THE LEARNED COUNSEL FOR THE A SSESSEE HAS FILED A PETITION ON 04/09/2012, WHICH WAS SIGNED BY HIM REQUESTING TO ADMIT THE ADDITIONAL GROUND OF APPEAL . IT IS OBSERVED THAT ALL THE DOCUMENTS, WHICH ARE TO BE FI LED BEFORE THE TRIBUNAL, I.E., I) MEMORANDUM OF APPEAL INCLUDI NG GROUNDS OF APPEAL AND ADDITIONAL GROUNDS OF APPEAL, PETITIO N IN CONNECTION WITH THE ADMISSION OF ADDITIONAL GROUNDS , ARE TO BE SIGNED BY THE ASSESSEE HIMSELF AND NOT BY THE LEARN ED COUNSEL FOR THE ASSESSEE. WE ARE FORTIFIED BY THE DECISION OF CHENNAI BENCH OF ITAT IN THE CASE OF DCIT VS. HYDRAULICS LT D., [2006] 99 ITD 310 (CHENNAI). IN THIS CASE THE REVENUE FILE D M.A. ARISING OUT OF THE ORDER OF THE TRIBUNAL, WHICH WAS SIGNED BY ITA NO. 1977/HYD/11 NEW VISTAS CONSTRUCTIONS. 5 THE AR OF THE REVENUE. THE ISSUE RAISED WAS WHETHER THE MA WAS MAINTAINABLE OR NOT. IN THIS CONNECTION, THE CH ENNAI BENCH HELD AS FOLLOWS:- THE ONLY INTERESTED PERSONS IN THE RESULT CAN DRAW THE ATTENTION OF THE TRIBUNAL TO A MISTAKE IT HAS MADE AND THE TRIBUNAL HAS TO ACT ON REPRESENTATION MADE TO I T BY THE ASSESSEE OR BY THE DEPARTMENT, I.E., THROUGH TH E AO ONLY WHO IS PARTY TO THE APPEAL. THE ASSESSEE OR TH E AO HAS A RIGHT JUST LIKE A PARTY TO DRAW THE ATTENTION OF THE TRIBUNAL TO A MISTAKE IT MIGHT HAVE MADE BUT THEY H AVE A FURTHER RIGHT TO INSIST THAT THE TRIBUNAL SHALL EXA MINE THE REPRESENTATION THEY HAVE MADE. IN REGARD TO THIS AND IN VIEW OF THE ABOVE LEGAL AN D FACTUAL SITUATION, THE AUTHORIZED REPRESENTATIVE WH ETHER OF THE REVENUE OR OF THE ASSESSEE STAND IN THE SAME POSITION AS AN OUTSIDER. AS DISCUSSED ABOVE, THE ONLY PERSON COMPETENT TO SI GN AND VERIFY AN APPEAL SHOULD SIGN AND VERIFY THE VAR IOUS APPLICATIONS LIKE MISCELLANEOUS PETITION, STAY PETI TION AND OTHERS. WHERE THE SIGNATURE AND VERIFICATION ON THE MEMORANDUM OF APPEAL WAS MADE BY ANY AGENT OF THE ASSESSEE OR OF THE REVENUE AND NOT BY THE ASSESSEE OR THE AO, IT COULD NOT BE HELD THAT THE APPEAL OR ANY APPLICATION FILED WAS A VALID APPEAL OR APPLICATION . THE COMMON LAW OF SIGNATURES IS COVERED BY THE DICTUMQUI FACIT PER ALIUM FACIT PER SE. THIS DICTUM MEANS THAT A PERSON CAN DO HIMSELF WHAT CAN EQUALLY BE DO NE BY HIS AUTHORIZED AGENT. IT IS VERY WELL SETTLED THAT UNLESS THERE IS A SPECIFIC PROVISION OF LAW REQUIRING THE SIGNATURES AND VERIFICATION OF ASSESSEE THE SIGNATU RE, ETC., MAY BE VALIDLY AFFIXED BY THE CONSTITUTED ATT ORNEY; BUT AS FAR AS APPEAL TO APPELLATE TRIBUNAL IS CONCE RNED, THE SAME IS GOVERNED BY SECTION 253(6) AND MISCELLANEOUS PETITIONS ARE GOVERNED BY SECTION 254 (2). THE APPEAL TO THE TRIBUNAL IS FILED IN FORM NO. 36 WHICH STATES THAT THE APPEAL IS TO BE SIGNED AND VERIFIED BY THE ASSESSEE OR THE AO, AS THE CASE MAY BE. FURTHER, AS PER THE TRIBUNAL RULES, 1963, RULE 34A DEALS WITH THE APPLICATION U/S 254(2) AND EQUATES THE PROCEDURE FO R FILING OF APPEAL WITH THAT OF THESE APPLICATIONS UN DER SUB- ITA NO. 1977/HYD/11 NEW VISTAS CONSTRUCTIONS. 6 RULE (2) TO RULE 34A OF THE TRIBUNAL RULES, 1963. T HE ONLY EXCEPTION IS WITH THE FILING OF APPLICATIONS OR THE APPEAL BY THE ASSESSEE. THE SYSTEM AS ENUMERATED FOR FILIN G OF RETURN OF INCOME IS PROVIDED UNDER SECTION 140 WHER EIN IT IS MENTIONED THAT RETURN BY THE ASSESSEE IS TO BE S IGNED OR THE SITUATIONS AS DESCRIBED IN THE PROVISIONS WI LL APPLY TO THE APPEAL AS WELL AS VARIOUS APPLICATIONS TO BE FILED TO THE TRIBUNAL. AS FAR AS THE REVENUE IS CONCERNED, T HE MISCELLANEOUS PETITION AS WELL AS THE APPEALS ARE T O BE SIGNED BY THE AO AND NONE OTHER THAN THE AO. BUT IN THE INSTANT CASE, THE DEPARTMENT WAS AT LIBERTY TO FILE A FRESH MISCELLANEOUS PETITION THROUGH THE AO. IN VIEW OF THE LEGAL SITUATION AS DESCRIBED ABOVE, THE MISCELLANEOUS PETITION OF THE REVENUE WAS NOT MAINTAINABLE. HENCE, THE MISCELLANEOUS PETITION WAS TO BE DISMISSED AS NON-MAINTAINABLE. 13. IN VIEW OF THE LEGAL SITUATION, WE ARE OF THE O PINION THAT PETITION SIGNED BY THE LEARNED AR/COUNSEL IS NOT MA INTAINABLE. HENCE, THE PETITION IS TO BE DISMISSED AS NON-MAINT AINABLE AND, THEREFORE, THE ADDITIONAL GROUND FILED BY THE LEARNED COUNSEL FOR THE ASSESSEE IS NOT ADMITTED IN THE ABS ENCE OF VALID PETITION FOR ADMISSION OF ADDITIONAL GROUND. 14. WE SHALL NOW ADJUDICATE THE GROUNDS OF APPEAL R AISED BEFORE US, WHICH ARE AS FOLLOWS: 1. THE CIT(A) ERRED IN NOT CONSIDERING THE GROUND O F THE APPELLANT THAT THE NON-RESIDENT IS NOT LIABLE TO TA X U/S 115EA(1) OF THE ACT. 2. THE LEARNED CIT(A) ERRED IN CONCLUDING THAT THOU GH THE ASSESSEE IS AN ASSESSEE NOT IN DEFAULT, HE IS LIABL E TO PAY INTEREST U/S 201(1A). 3. THE CIT(A) HAS NOT PROPERLY APPRECIATED THE RATI O OF THE DECISION OF THE SUPREME COURT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGES LTD. VS. CIT, 293 ITR 226. ITA NO. 1977/HYD/11 NEW VISTAS CONSTRUCTIONS. 7 15. WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIES , PERUSED THE RECORD AND GONE THROUGH THE ORDERS OF T HE AUTHORITIES BELOW. WE FIND THAT GROUND NO. 1 RAISED BY THE ASSESSEE THAT THE NON-RESIDENT IS NOT LIABLE TO TAX U/S 115E A(1) OF THE IT ACT, HAS NOT BEEN DEALT WITH BY THE CIT(A) AND THE CIT(A) HAS FAILED TO CONSIDER THIS GROUND. IN T HESE CIRCUMSTANCES, WE DEEM IT FIT TO RESTORE THE MATTER TO THE FILE OF THE CIT(A) TO ADJUDICATE UPON THE GROUND RAISED BY THE ASSESSEE WITH RESPECT TO THE LIABILITY TO TAX IN TH E CASE OF NON- RESIDENT U/S 115E A(1) AND DECIDE THE ISSUE IN ACCO RDANCE WITH LAW. AT THIS STAGE, WE REFRAIN FROM GOING INTO THE GROUNDS RAISED BY THE ASSESSEE. 16. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 14/09/2012. SD/- SD/- ( CHANDRA POOJARI) (ASHAVIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 14 TH SEPTEMBER, 2012. KV COPY TO:- 1) NEW VISTAS CONSTRUCTIONS, 12-2-830/34, ALAPATINAGAR, MEHDIPATNAM, HYDERABAD. 2) ITO, INTERNATIONAL TAXATION-II, HYDERABAD. 3) THE CIT (A)-V, HYDERABAD 4) DIT(INTERNATIONAL TAXATION), HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABAD.