Dhandapani Malliga, CHENNAI V. ITO Non Corporate Ward 13(5), CHENNAI

ITA 336/CHNY/2019

AI Insights

The case involves Smt. Dhandapani Malliga, the appellant, contesting the assessment of long-term capital gains on the sale of her land, which she alleges was fraudulently sold under an irrevocable Power of Attorney (GPA). The land in question, measuring 78 cents, was sold for Rs. 2,04,04,800. The appellant argued that the sale was executed by the GPA holders without her consent and that the sale deed was contradicted by evidence in criminal proceedings, including the actual payment method which differed from what was stated in the sale deed. The Tribunal found that the Assessing Officer and the CIT(A) had not adequately examined the evidence or allowed for necessary cross-examinations, thus violating the principles of natural justice.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 135251 (ITAT-CHENNAI)
• Duration Of Justice: 4 year(s) 7 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 24-09-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 11-02-2019
• Other Referred Cases: G. Sagar Suri and another vs. State of U.P. and others
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: A. DEVANARENDRAN
• Keywords: Opportunity of being heard; Principle of natural justice; Assessment record; Set aside
• Section: 13

Judgement Text

आयकर अपीलीय अिधकरण, ‘सी’ ᭠यायपीठ,चे᳖ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI ᮰ी महावीर ᳲसह, उपा᭟यᭃ एवं ᮰ी मनोज कुमार अᮕवाल, लेखा सद᭭य के समᭃ BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENTAND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.: 336/CHNY/2019 िनधाᭅरण वषᭅ/Assessment Year: 2011-12 Smt. Dhandapani Malliga, No.53A, S.P. Koil North Mada Street, Vadapalani, Chennai – 600 026. PAN: BZSPM 1976R Vs. The Income Tax Officer, Non-Corporate Ward 13(5), Chennai. (अपीलाथᱮ/Appellant) (ᮧ᭜यथᱮ/Respondent) अपीलाथᱮ कᳱ ओर से/Appellant by : Shri A. Devanarendran, Advocate ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Shri P. Sajit Kumar, JCIT सुनवाई कᳱ तारीख/Date of Hearing : 25.09.2023 घोषणा कᳱ तारीख/Date of Pronouncement : 25.09.2023 आदेश /O R D E R PER MAHAVIR SINGH, VICE PRESIDENT: This appeal by the assessee is arising out of the order of the Commissioner of Income Tax (Appeals)-14, Chennai in ITA No.94/CIT(A)-14/2016-17 dated 19.10.2018. The assessment was framed by the Income-tax Officer, Non-Corporate Ward 13(5), Chennai u/s.143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter the ‘Act’) for the assessment year 2011-12 vide order dated 17.03.2016. - 2 - ITA No.336/Chny/2019 2. The only issue in this appeal of assessee is against the order of CIT(A) confirming the action of AO in regard to assessment of long term capital gain on account of alleged fraud sale of assessee’s land admeasuring to the extent of 78 cents comprised in S.No.97/1, as per Patta No.167 situated in Zamin Pallavaram Village, Tambaram Taluk, Kanchipuram District on the basis of alleged irrevocable Power of Attorney to and in favor of four agents namely 1. Shri R. Thirunavukkarasu (ii) Shri A. Gnanasekar (iii) Shri P.S. Rathinam and (iv) Shri R. Siva Muthukumaran for a sum of Rs.2,04,04,800/-. The first issue raised by assessee in her grounds is violation of principles of natural justice and for this, it was contended that the sale deed is executed by the same persons to whom GPA dated 25.01.2010 registered as Doc.No.68 of 2010 in SRO Pallavaram is given by the appellant. Though sale consideration is stated to have been paid in cash as per sale deed, the purchaser, The South India Assemblies of God, a registered society has statedin court proceedings in criminal OP No.9770 of 2015 that the consideration was paid by 8 pay orders bearing nos. 936815 to 936822 all dated 20.01.2010 favoring the power holders for Rs.1,73,76,000/- from the account no of New Life Assembly God Church and the balance money paid on different dates to the real estate dealer Shri Jeyaraj and the power holders thereby, totally contradicting the sale deed - 3 - ITA No.336/Chny/2019 and consequently, vitiating the sale deed completely. Forensic examination of signature and thump impression of the GPA holders in power of attorney vis-à-vis sale deed though sought for, was not undertaken by the Revenue and the cross examination of the alleged GPA holders, purchaser and witnesses though sought for by the assessee during remand proceedings was not allowed / permitted by the Revenue thereby violating the principles of natural justice for rebutting the evidence put in by the Revenue. The documents and transcript of deposition collected by the Revenue from the GPA holder, purchaser and witnesses during proceedings u/s.133(6) of the Act forming part of the assessment records were not put to the assessee for rebuttal, thereby violating the principles of natural justice completely, fully and blatantly. 2.1 The ld.counsel for the assessee now before us filed the following documents:- S.No. Date Description 1. 25.01.2010 Alleged Power of attorney 2. 02.08.2010 Alleged Sale Deed executed by POA 3. 06.06.2014 Details of payment by way of Demand drafts for Rs.1,73,76,000/- confirmed by the purchaser banker 4. 13.11.2014 Complaint made by the Assessee before Tambaram magistrate court for alleged sale deed and POA 5. 15.04.2015 Quash Petition filed by the Purchasers before High Court of Madras challenging the Complaint 6. 15.09.2016 Suit filed as OS No.186/2017 by Assessee to cancel the alleged Power of Attorney and Sale deed pending - 4 - ITA No.336/Chny/2019 before Principal District Court, Chengalpattu 7. 21.01.2019 Written statement filed in OS No.186/2017 by the 1 st Defendant in the suit & 1 st agent in the POA who executed the sale deed 8. 09.01.2018 Written statements filed in OS No.186/2017 by the purchaser in suit before Principal District Court, Chengalpattu 9. 18.08.2023 Order passed in Crl.OP.No.9770/2015 filed by the Purchasers. 2.2 The ld.counsel for the assessee stated that the civil matter is pending before Principal District Court, Chengalpattu, Kanchipuram District in OS No.186 of 2017 filed on 15.09.2016 and the criminal complaint before Judicial Magistrate, Tambaram, Chennai in C.C. No.1057 of 2014 filed on 13.11.2014 is pending against the following four power agents 1. Shri R. Thirunavukkarasu 2. Shri A. Gnanasekar 3. Shri P.S.Rathinam and 4. Shri R. Siva Muthukumaran but the Hon’ble High Court has quashed the complaint against the following two purchasers 5. Shri Abraham Thomas and 6. The South India Assemblies of God. The ld.counsel for the assessee referred to the judgment of Hon’ble Madras High Court in CRL O.P. No.9770 of 2015 & Crl M.P. No.1 of 2015 dated 18.08.2023, wherein the Hon’ble Madras High Court has only quashed the complaint in regard to accused numbers 5 & 6 vide para 12 & 13 as under:- 12. In the case on hand, the purchasers are made as co-accused. It is not the case of the complainant that petitioners tried to deceive her either by making a false or misleading representation or by any other action or omission, nor is it her case that they offered her any fraudulent or dishonest - 5 - ITA No.336/Chny/2019 inducement or to intentionally induce her to do or omit to do anything. No doubt, the opinion of the court would certainly depend on the factual matrix of each case. The instant dispute certainly involves civil nature. In such a situation continuing the criminal proceeding against the petitioners will be, an abuse of process of the court. At this juncture, it is relevant to refer the Judgment of the Hon-ble Apex Court in the Judgment in G. Sagar Suri and another vs. State of U.P. and others, reported in ((2000) 2 SCC 636), wherein it has been held as follows:- “8. Jurisdiction under Section 482 of the Code has to be exercised with great care. In exercise of its jurisdiction the High Court is not to examine the matter superficially. It is to be seen if a matter, which is essentially of a civil nature, has been given a cloak of criminal offence. Criminal proceedings are not a short cut of other remedies available in law. Before issuing process a criminal court has to exercise a great deal of caution. For the accused it is a serious matter. This Court has laid certain principles on the basis of which the High Court is to exercise its jurisdiction under Section 482 of the Code. Jurisdiction under this section has to be exercised to prevent abuse of the process of any court or otherwise to secure the ends of justice.” 13. In the result, this Criminal Original Petition is allowed and the proceedings in C.C.No.1057 of 2014, pending on the file of the learned Judicial Magistrate at Tambaram so far as it relates to the petitioners / Accused 5 & 6 alone herein, stands quashed. Consequently, the connected miscellaneous petition is closed. 2.3 In view of the above, the ld.counsel for the assessee took us through the assessment order, wherein the AO has not at all carried out any enquiry and even the CIT(A) just on the basis of submissions of assessee just drawn conclusion without any evidence or basis. Hence, he requested that matter may be restored back to the file of the AO for fresh adjudication to examine the alleged GPA holders, purchases and witnesses and then decide the issue after allowing reasonable opportunity of being heard and cross examine these parties. - 6 - ITA No.336/Chny/2019 3. When these were put to ld. Senior DR, he could not controvert the above fact situation. Hence, after hearing rival contentions and going through the facts of the case, without elaborating anything on merits or without discussing anything on merits, we set aside the order of CIT(A) and AO also and remand the matter back to the file of the AO to re-decide the issue in the light of evidences / documents. The AO will examine these parties and allow cross examination of these parties i.e., power agents as well as purchasers and then, will decide the issue accordingly. The assessment is set- aside de-novo. 4. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 25 th September, 2023 at Chennai. Sd/- Sd/- (मनोज कुमार अᮕवाल) (MANOJ KUMAR AGGARWAL) लेखा सद᭭य/ACCOUNTANT MEMBER (महावीर ᳲसह ) (MAHAVIR SINGH) उपा᭟यᭃ /VICE PRESIDENT चे᳖ई/Chennai, ᳰदनांक/Dated, the 25 th September, 2023 RSR आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy to: 1. अपीलाथᱮ/Appellant 2. ᮧ᭜यथᱮ/Respondent 3. आयकर आयुᲦ /CIT 4. िवभागीय ᮧितिनिध/DR 5. गाडᭅ फाईल/GF.