Satish Naik, (HUF), Hyderabad V. ITO, Ward-1, Hyderabad

ITA 500/HYD/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74640 (ITAT-HYDERABAD)
• Duration Of Justice: 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2003-2004
• Appeal Filed On: 09-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D SUDHAKAR RAODR
• Assessee Lawyers: A V RAGHURAM
• Keywords: Period of limitation
• Section: 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. ASSESSMENT YEAR APPELLANT RESPONDENT 497/HYD/2013 2003 - 04 SHR I SATISH NAIK L/R. OF LATE SMT. UTTARA BAI NAIK, HYDERABAD ( PAN - ABFPN 21677 G) INCOME TAX OFFICER WARD 1, HYDERABAD 498/HYD/2013 2003 - 04 SHRI SUDHIR NAIK(HUF), HYDERABAD ( PAN - A ADHN 3065 P ) INCOME TAX OFFICER WARD 1, HYDERABAD 499/HYD/2013 2003 - 04 SHRI SACHIDANANAD NAIK, HYDERABAD ( PAN - ABKPN 6312 R ) INCOME TAX OFFICER WARD 1, HYDERABAD 500/HYD/2013 2003 - 04 SHRI SATISH NAIK, HYDERABAD ( PAN - AACHW 9162 Q ) INCOME TAX OFFICER WARD 1, HYDERABAD APPELLANT S BY : SHRI A.V.RAGHURAM RESPONDENT BY : SHRI D.SUDHAKAR RAO DR - CIT DATE OF HEARING 26.2.2014 DATE OF PRONOUNCEMENT 26.2.2014 O R D E R PER SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER: TH E S E FOUR APPEAL S BY THE ASSESSEE S ARE DIRECTED AGAINST SIMILAR BUT SEPARATE ORDERS OF THE COMMISSIONER OF INCOME - TAX IV, HYDERABAD, ALL DATED 4.3.2013 /8.3.2013 , PASSED UNDER S.263 OF THE INCOME TAX ACT,1961 FOR THE ASSESSMENT YEAR 2003 - 04. SINCE FACTUAL BACK GROUND AND THE ISSUES INVOLVED IN THESE APPEALS ARE COMMON, THESE APPEALS ARE BEING DISPOSED OF WITH THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NO. 497 / HYD/20 13 AND 3 ORS SHRI S ATISH NAIK AND ORS. HYDERABAD 2 2. THE ONLY GRIEVANCE OF THE ASSESSEES IN THIS APPEAL RELATE S TO LEGALITY AND VALIDITY OF THE REVISIONARY ORDER S UNDER S.263 OF THE ACT P ASSED BY THE COMMISSIONER OF INCOME - TAX, AND THE EFFECTIVE GROUNDS OF THE ASSESSEE, COMMON IN THESE APPEALS, AS TAKEN FROM ITA NO.497/HYD/2013, READ AS FOLLOWS - 1. THE ORDER O F THE LEARNED CIT PASSED U/S. 263 OF THE I.T. AC T IS ERRONEOUS BOTH ON FACTS A ND IN L A W IN SO FAR AS IT IS PREJUDICIAL TO THE ASSESSEE. 2. THE LEARNED CIT ERRED IN INVOKING JURI S DI C T I ON U/S. 263 OF THE I.T. ACT TO REVISE THE ORDER OF ASSESSMENT WITHOUT APP RE CIATING THE FACT THAT THE ISSUE ON WHI C H REVISION IS PROPOSED DOES NO T EMANATE FROM THE O R DER THAT IS PASSED GIVING EFFECT TO THE ORDER OF THE I . T.A.T., AND THEREFORE IS BEYO N D THE PERIOD OF LIMITATION PRESCRIBED U/S. 263. 3. WITHOU T PREJUDICE TO THE ABOVE, THE LEARNED CIT FAILED TO APPRECIATE THE FACT THAT THE VERY ORDER T HAT IS PASSED AS GIVING EFFECT TO THE ORDER OF THE ITAT, IS CONTEMPTUOUS AND IS NO T IN ACCORDANCE WITH THE DIRECTIONS OF THE I.T.A.T., AND TH E R EF ORE OUGHT NOT TO HAVE REVISED SUCH INVALID ORDER. 4. THE LEARNED CIT OUGHT TO HAVE EXAMINED THE EVIDENCE THAT IS FILED BEFORE HIM TO SUBSTANTIATE THAT THE PROPOSED REVISION TO B R IN G TO TAX THE RENT FOR DELAYED POSSESSION IS WAIVED BY A DEED AND OUGHT NOT TO HAVE SET ASIDE THE O RD ER FOR VERIFYING THE SAME THEREBY VITIATED THE VERY PURPOSE O F THE PROVI S ION S OF SEC.2 63. 5 . 3. WE HEARD BOTH SIDES AND PERUSED THE IMPUGNED ORDER OF THE REVENUE AUTHORITIES AND OTHER MATERIAL AVAILABLE ON RECORD. AS MAY BE SEEN FROM THE ABOVE GROUNDS, THE ORDERS OF THE COMMISSIONER OF INCOME - TAX PASSED UNDER S.263 OF THE ACT, IMPUGNED IN THESE APPEALS, HAVE BEEN PASSED IN THE CONTEXT OF ASSESSMENTS MADE BY THE ASSESSING OFFICER IN PURSUANCE OF THE DIRECTION OF THE INCOME TAX APPELLATE TRIBUNAL. ADMITTEDL Y, THE ISSUE IN DISPUTE ARISING OUT OF THE ORIGINAL ASSESSMENTS MADE UNDER S. 1 43(3) PASSED ON 28.3.2006, WHICH WAS SUBJECT MATTER OF APPEAL BEFORE THE CIT(A) AS WELL AS THE TRIBUNAL WAS WITH REGARD TO CLAIM OF THE ASSESSEE FOR RELIEF UNDER S.54F OF THE ITA NO. 497 / HYD/20 13 AND 3 ORS SHRI S ATISH NAIK AND ORS. HYDERABAD 3 ACT . THE REASON THAT PROMPTED THE COMMISSIONER OF INCOME - TAX TO PASS THE IMPUGNED ORDERS UNDER S.263 IS THAT IN TERMS OF THE DEVELOPMENT AGREEMENT ENTERED INTO BY THE ASSESSEES, THE DEVELOPERS AGREED TO PAY PENALTY AT RS.1/ - PER MONTH, IF THE PROJECT WAS NO T COMPLETED WITHIN THE STIPULATED PERIOD OF 2 YEARS FROM THE DATE OF AGREEMENT, AND THE ASSESSEE - LANDLORDS HAVING RECEIVED THEIR SHARE OF FLATS CONSTRUCTED IN 2003, THE ASSESSEE - LANDLORDS WERE TO RECEIVE PENALTY IN TERMS OF DEVELOPMENT AGREEMENT, AND T HE SAME WAS OMITTED TO BE TAKEN INTO ACCOUNT BY THE ASSESSING OFFICER, WHILE PASSING THE IMPUGNED ORDERS OF ASSESSMENT. THAT ASPECT OF T H E MATTER WAS CONSIDERED BY THE ASSESSING OFFICER IN THE COURSE OF ORIGINAL ASSESSMENT. HOWEVER, THAT WAS NO T SUB J ECT M ATT E R OF APPEAL BEFORE THE CIT(A) AS WELL AS THE TRIBUNAL IN THE ORIGINAL ROUND . CONSEQUENTLY, THE SAID ASPECT OF THE MATTER WAS ALSO NOT PART OF THE IMPUGNED ASSESSMENTS MADE UNDER S.143(3) READ WITH S.254 OF THE ACT, IN PURSUANCE OF THE ORDERS OF THE TR IBUNAL. SINCE THE SCOPE O F THE O R DERS PASSED BY THE ASSESSING OFFICER TO GIVE EFFECT TO THE ORDER OF THE TRIBUNAL IS CONFINED TO MERE COMPLIANCE WITH THE DIRECTION OF THE TRIBUNAL, VIZ. COMPUTING AND GIVING RELIEF UNDER S.54 F OF THE ACT, THE SAME CANNOT BE FOUND TO BE EITHER ERRONEOUS OR PREJUDICIAL TO THE IN T ER E STS OF REVENUE, ON THE G R OUND THAT THE SAME HAVE NOT CONSIDERED CERTAIN OTHER ASPECTS, WHICH ARE BEYOND THE AMBIT OF THE DIRECTION OF THE TRIBUNAL. IN THIS VIEW OF THE MATTER, WE ARE OF THE VIEW THAT THE ASSESSING OFFICER, HAVING PASSED THE IMPUGNED ASSESSMENT ORDERS UNDER S.143(3) READ WITH S.254 OF THE ACT, STRICTLY IN CONFORMITY WITH THE DIRECTION OF THE TRIBUNAL, IMPUGN E D ORDERS OF THE COMMISSIONER OF INCOME - TAX PASSED UNDER S.263, DIRECTING T HE ASSESSING OFFICER TO RECOMPUTE THE CAPITAL GAINS TAKING INTO ACCOUNT THE PENALTY RECEIVABLE BY THE ASSESSEES IN TERMS OF THE DEVELOPMENT AGREEMENT , WHICH WAS BEYOND THE AMBIT OF DIRECTIONS OF THE TRIBUNAL, CANNOT BE SUSTAINED. WE DRAW SUPPORT FOR OUR CONCLUSION FROM THE DECISION OF THE APEX COURT IN THE CASE OF CIT V/S. ALEGENDRAN FINANCE LTD. (293 ITR 1)(SC). WE ACCORDINGLY CANCEL THE SAME, ACCEPTING THE GROUNDS OF THE ASSESSEES IN THESE APPEALS. ITA NO. 497 / HYD/20 13 AND 3 ORS SHRI S ATISH NAIK AND ORS. HYDERABAD 4 4. IN THE RESULT, ALL THE FOUR APPEALS OF THE ASSESSEES ARE ALLOWED. ORDER PRONOUNCED IN THE COURT AT THE CONCLUSION OF THE HEARING ON 2 6 .2.2014 SD/ - SD/ - (CHANDRA POOJARI ) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER DT/ - 2 6 TH FEBRUARY, 2014 COPY FORWARDED TO: 1. SHRI SATISH NAIK L/R. OF LATE SMT. UTTARA BAI NAIK, C/O. SHRI K.VASANT KUMAR, A.V. RAGHU RAM, ADVOCATES, FLAT NO.610, 6TH FLOOR, BABUKHAN ESTATE, BASHEERBAGH, HYDERABAD - 1. 2 . SHRI SUDHIR NAIK(HUF), C/O. SHRI K.VASANT KUMAR, A.V. RAGHU RAM, ADVOCATES, FLAT NO.610, 6TH FLOOR, BABUKHAN ESTATE, BASHEERBAGH, HYDERABAD - 1. 3. SHRI SACHIDANANAD NAIK, C/O. SHRI K.VASANT KUMAR, A.V. RAGHU RAM, ADVOCATES, FLAT NO.610, 6TH FLOOR, BABUKHAN ESTATE, BASHEERBAGH, HYDERABAD - 1. 4. SHRI SATISH N AIK, C/O. SHRI K.VASANT KUMAR, A.V. RAGHU RAM, ADVOCATES, FLAT NO.610, 6TH FLOOR, BABUKHAN ESTATE, BASHEERBAGH, HYDERABAD - 1. 5. INCOME TAX OFFICER WARD 1, HYDERABAD 6. COMMISSIONER OF INCOME - TAX IV, HYDERABAD 7. DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S