Mr Francis Lfred Misquita, Panaji V. Income Tax Officer, Intl. Taxation Ward, Panaji

ITA 57/PAN/2023

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 2975 (ITAT-PANAJI)
• Duration Of Justice: 1 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-04-2024
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: WT(D)
• Next Hearing Date: 12-12-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 26-03-2023
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: TDS; Set aside
• Section: 143(3); 260A; 250; 64; 113; 48; 22

Judgement Text

।आयकर अपीलीय अिधकरण Ɋायपीठ पणजी, पणजीमŐ। IN THE INCOME TAX APPELLATE TRIBUNAL, PANAJI BENCH : : PANAJI [VIRTUAL HEARING AT PUNE] BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.57/PAN/2023 िनधाᭅरण वषᭅ / Assessment Year : 2018-19 Mr.Francis Alfred Misquita, E-367, Miguel Vicent De Abreu Road, Near GPO, Panaji, Goa – 403001. PAN: AJJPM1507E V s The Income Tax Officer, International Taxation, Ward, Panaji. Appellant / Assessee Respondent / Revenue Assessee by Shri D.E.Robinson – AR Revenue by Shri Sridhar Dora – Sr.DR Date of hearing 15/02/2024 Date of pronouncement 15/04/2024 आदेश/ ORDER PER DR. DIPAK P. RIPOTE, AM: This appeal filed by the assessee against the order of ld.Commissioner of Income Tax(Appeals)-12, Bengaluru under section 250 of the Income Tax Act, 1961 dated 27.01.2023 emanating from order under section 143(3) of the Income Tax Act, 1961 dated 30.08.2021. The assessee has raised the following grounds of appeal : “1. The Learned Commissioner of Income Tax (Appeals) erred in directing the Assessing Officer that the notional ALV of properties ITA No.57/PAN/2023 Mr. Francis Lfred Misquita [A] 2 which were let out in earlier years but vacant for the whole of the previous year should be brought to tax. 2. The Learned Commissioner of Income Tax (Appeals) is in error in applying the ratio of judgment in the case of Susham Singla vs. CIT (2017) 81 Taxmann.com where in factually the properties were never let out in earlier years. 3. The Learned Commissioner of Income Tax (Appeals) erred in applying the ratio of judgment in Susham Singla vs. CIT (2017) 81 Taxmann to property that had been let for part of the year. 4. The learned Commissioner of Income Tax (Appeals) erred in directing enhancement of income from property let out for part of the previous year without notice to the appellant. 5. Appellant may be permitted to add to the aforesaid grounds. Such grounds as are closely associated and need to be adjudicated for better consideration of the aforesaid grounds.” Brief facts of the case : 2. Assessee is an individual. Assessee filed Return of Income for A.Y.2018-19 on 28.07.2018 declaring total income of Rs.5,07,570/-. The assessee’s case was selected for scrutiny. Assessee was provided opportunity and assessee filed replies to the notices. It was observed by AO that assessee owns Eight(08) Properties. The properties mentioned in the assessment order are as under : ITA No.57/PAN/2023 Mr. Francis Lfred Misquita [A] 3 S.No. Property Address Rent shown by assessee Monthly Rent as per the Inspector’s Report 1 Jairam Apartments, S9, Panaji, Goa – 403001. 14500 15000 2 Emid Apartment, Ground Floor, Calungute, Goa – 403001. 11500 15000 3 Trinity Valley Bambolim, Goa – 403001. Self-occupied Self-occupied 4 Sakardane Apartment, Flat 12, Panaji – 403001. 0 12000 5 Shah Arcade, Af-1, Santo Cru, Goa – 403004. 0 13000 6 Jairam Complex, S-22, 23, Rua De Orem, Panani – 403001. 31000 42000 7 Jairam Complex, S-24 to 27, Rua De Orem, Panbaji – 403001. 36667 84000 8 E-367, Minguel Vincent, De Abreu Road, Near General Post Office, Panaji – 403001. Residential Comment of appellant not available. 2.1 Assessing Officer(AO) deputed Income-tax Inspector to find out Annual Lettable Value of these properties. Accordingly, AO calculated the Annual Lettable Values of these properties, based on Inspector’s Report at Rs.19,24,981/-. Assessing Officer allowed deduction under section 24B of the Act and arrived at Income from House Property at Rs.13,47,487/-. Since assessee is governed by Portuguese Civil Code, assessee’s share was 50% of Rs.13,47,487/- i.e.Rs.6,73,744/-. In the return of income assessee had shown income from house property at Rs.3,88,486/-, the AO made addition of Rs.2,85,257/- (Rs.6,73,744/- (-) Rs.3,88,486/-). Aggrieved by the order of the AO, assessee filed appeal before ld.CIT(A). The ld.CIT(A) gave ITA No.57/PAN/2023 Mr. Francis Lfred Misquita [A] 4 partial relief to the assessee. The relevant part of the ld.CIT(A)’s order is reproduced here as under : “As per the provisions of section 23(1)(a), the annual value is to be taken as the sum for which property may reasonably be expected to be let. In the present case, the two properties at s. nos. 4 and 5 were stated to be vacant, during the year. The appellant’s contention that the ALV of these properties should be taken as nil is not in accordance with the above provisions. In the case of Susharn Sirigia vs CIT [2017] 81 taxmann.com 167 (SC), the Hon’ble Supreme Court upheld the proposition that the annual value of every second property owned by an individual, which admittedly emained vacant throughout the year, would be assessable u/s 23(1)(a). As the municipal values were not available in the present case, the AO has relied on field enquiries to determine the ALV. There is no infirmity in the method adopted by the AO and the ALV of these two properties is confirmed. As far as the property at S.No. 7 is concerned, the AO has adopted a rental value of Rs.55,000/- per month, which is the actual rent received by the appellant. However, in view of the provisions of section 23(1)(a), this amount is to be taken even for the period for which the property is stated to have been vacant. Hence no disturbance in the AO’s order is called for with respect to this property. Lastly, as far as property at s.no.6 is concerned, the AO has taken a higher rental value than the actual rent received and on which TDS was deducted. In my considered opinion, since the AO had taken the actual rent received as the rental value in respect of properties at s.nos. 1 and 2, he should have followed a consistent method and adopted the actual rent received by the appellant for property at s. no.6 as well. The AO is so directed. However, the appellant has claimed that for part of the year, he had received rent of only Rs.30,000/- for which no agreement was there. The rent agreement dated January 2018 was for a monthly rent of Rs.31,200/- which should be taken as the ITA No.57/PAN/2023 Mr. Francis Lfred Misquita [A] 5 monthly rental value for the entire year in accordance with the provisions of section 23(1 )(a) of the Act. The AO is directed to recompute the appellant’s income from house property in accordance with the above directions. The grounds of appeal raised by the appellant are therefore, partly allowed.” 2.2 Aggrieved by the ld.CIT(A)’s order, the assessee filed appeal before this Tribunal. Findings & Analysis : 3. We have heard both the parties and perused the records. We are discussing the appeal ground wise. Ground No.1, 2 & 3 : 4. Ground No.1, 2 & 3are with reference to properties mentioned at Sr.No.4 & 5 above. The assessee claimed that these properties were vacant throughout the year. However, these properties were let out in earlier year. Therefore, assessee claimed that Annual Lettable Values of these properties will be Nil as per section 23(1)(c) of the Act. The AO rejected the contention of the assessee. Ld.CIT(A) also rejected the contention of the assessee, following the Hon’ble Supreme Court’s decision in the case of Susham Singla Vs. CIT [2017]81 taxmann.com 167 (SC). ITA No.57/PAN/2023 Mr. Francis Lfred Misquita [A] 6 4.1 In this case, it is a fact that these properties were vacant during the year. Therefore, assessee claimed that Annual Lettable Value will be Nil as per section 23(1)(c) of the Act. 4.2 The undisputed facts in this case are as under: - Assessee owns more than one house property - The said property was never let out during the year. 4.3 Thus, the fact is that the property owned by the assessee was not rented out. 4.4 Assessee has mainly relied on the decision of ITAT(SMC) Bench Bangalore in the case of Dr.Paul Salin ita No.853/BAN/2018, which in turn has relied on ITAT decision in Vikas Keshav Garud Vs. ITO in ITA No.747/PUN/2014. We have distinguished these decisions in subsequent paragraphs. 5. The Hon’ble Andhra Pradesh High Court in the case of Vivek Jain Vs ACIT (2011) 337 ITR 74 (Andhra Pradesh) has held as under: Quote “4. The Income-tax Appellate Tribunal observed that it is only in cases covered by (a) and (b) that the annual let out value is to be taken as nil ; even in these two cases, as provided in section 23(4), nil value could be taken only in respect of one property if the properties in those two cases was more than one ; in the rest of the cases, i.e., those mentioned in (c) to (e), and the additional properties in (a) ITA No.57/PAN/2023 Mr. Francis Lfred Misquita [A] 7 and ( b), the value had to be determined either notionally or actually, as the case may be, and the higher of the two should prevail; it was necessary at the first instance to determine the notional value in respect of any property whether let out or not let out; if the property was not let out then the notional value should be the income from the property; this is what section 23(1)(a) provides for; however, if the property is let out, and the actual rent received or receivable is higher than the notional value, then such actual rent should be the income from the property as provided in section 23(l)(b); at times it may so happen that, despite the property being let out, it remains vacant and, on account of such vacancy, the actual rent received or receivable may be lesser than the notional value; in such a case the actual rent should only be taken as the income from property; and the Legislature had taken care to see that the assessee was not unduly taxed on that part of the income where, despite such letting out, the property remained vacant either for the whole or a part of the year, and the actual rent fell below the notional value. This benefit, provided in section 23(l)(c) of the Act, was to be extended only where the property was let out, and the actual income had fallen from what it would have been had the property not remained vacant; the benefit could not be extended to a case where the property was not let out at all; if it was not let out, then the notional value would be the income from the property ; if the assessee's argument was accepted then, in addition to the two cases where the annual let out value could be taken to be nil, there could also be a third eventuality to take the annual let out value at nil which was not envisaged by any of the provisions of the statute; and it would also render section 23(1)(a) otiose, and the scope of section 23(2) would get unduly extended. The Income-tax Appellate Tribunal concluded that, in cases where the property had not been let out at all during the year under consideration, there was no question of any vacancy allowance as provided in section 23(1)(c), and hence the order of the Commissioner of Income-tax (Appeals), determining the annual let out value of the property at Rs. 1,44,000, was being upheld. Aggrieved thereby the present appeal under section 260A of the Act. 5. The income-tax, under the head "Income from house property", is chargeable under section 22 of the Income-tax Act, 1961, on the annual value of the property, consisting of any building or land appurtenant thereto, of which the assessee is the owner. However, such portion of the property, as the assessee may occupy for the purpose of his business or profession the profits of which are chargeable to income-tax, ITA No.57/PAN/2023 Mr. Francis Lfred Misquita [A] 8 is not to be charged to income under the head "Income from house property". As income from house property is charged to tax on the annual value of the property, consisting of a building or the land appurtenant thereto, section 23 provides for the manner in which the annual value of the property is to be determined for the purpose of section 22 of the Act. Section 23(1) creates a legal fiction in that, for the purpose of section 22, the annual value of the property is to be deemed to be the sum mentioned in any one of clauses (a ) to (c) thereof. 6. Section 23(1) deals with three distinct situations enumerated in clauses (a) to (c) thereunder. Under clause (a), the annual value of the property is deemed to be the sum for which the property may reasonably be expected to let from year to year. Under clause (b), where the property, or any part thereof, is let and the actual rent received or receivable by the owner in respect thereof is in excess of the sum referred to in clause (a), the amount so received or receivable shall be the actual value of the property. While the situation to which clause (a ) relates is where the property has not been let out, (for it is in such an event alone would the question of the sum for which the property might reasonably be expected to be let from year to year arise), the situation to which clause (b) relates is when the property, or any part thereof, has been let out. Clause (b) does not relate to a situation where the rent actually received, or receivable, is less than the sum for which the property may reasonably be let from year to year. While the pre-amended section 23 did not provide for such an eventuality, section 23 was amended by the Finance Act, 2001 with effect from April 1, 2002, and clause (c) was inserted to section 23(1) to deal with such a situation. Section 23 of the Income-tax Act, which fell for consideration in Liquidator of Mahamudabad Properties (P.) Ltd. v. CIT [1980] 124 ITR 31 / 3 Taxman 47 (SC), was as it stood prior to its amendment by the Finance Act, 2001, with effect from April 1, 2002. The assessment year, in the present case, is 2002-03 and it is the amended section 23 which is applicable, and not the pre-amended provision. \ 7. Under the amended section 23(1)( c), where the property, or any part thereof, is let and was vacant during the whole or any part of the previous year and, owing to such vacancy, the actual rent received or receivable by the owner in respect thereof is less than the sum referred to in clause (a), the amount so received or receivable shall be the annual value of the property. The notes on clauses relating to the amendment to section 23(1) reads thus [2001] 248 ITR (St.) 35, 118 : ITA No.57/PAN/2023 Mr. Francis Lfred Misquita [A] 9 "Clause 14 seeks to substitute new section for section 23 of the Income-tax Act relating to determination of annual value of house property. The existing provision of the said section provides for the determination of annual value of a property in certain circumstances including where the property is let, or is self-occupied, or is vacant, or is partially let, or is let for part of the year. The annual value so determined is subject to the deductions allowable under section 24, including deductions on account of vacancy for any part of the year in respect of the property let, and on account of rent which cannot be realized. It is proposed to substitute the said section so as to provide for determination of annual value in certain circumstances specified in the proposed new section after allowing deductions in computing the annual value on account of vacancy and unrealized rent. This amendment will take effect from 1st April, 2002 and will, accordingly, apply in relation to the assessment year 2002-03 and subsequent years." 8. The effect of substitution of section 23 has been elaborately dealt with in Departmental Circular No. 14 of 2001, the relevant portion of which reads as under [2001] 252 ITR (St.) 65, 89. : "29.2. The substituted section 23 retains the existing concept of annual value as being the sum for which the property might reasonably be expected to let from year to year, i.e., annual letting value (ALV). However, in case of let out property, the concept of 'annual rent' has been removed. The new section provides that where the property or any part of the property is let and the actual rent received or receivable is in excess of the ALV, the amount so received or receivable shall be the annual value. This will be the case even if the property (or part of the property) was vacant for a part of the year, but the actual rent received or receivable during the year is higher than the ALV. Where the property or any part of the property is let and was vacant during the whole or any part of the previous year and owing to such vacancy, the actual rent received or receivable is less than the ALV, the sum so received or receivable shall ITA No.57/PAN/2023 Mr. Francis Lfred Misquita [A] 10 be the annual value. In case the actual rent received or receivable during the year is less than the ALV, but not because of vacancy, it is, the ALV which shall be taken to be the annual value." [Emphasis supplied] 9. The effect of the amendment has been succinctly explained in Sampath Iyengar's Law of Income Tax (10th edition) as under: "The new section provides that the higher of the amount as between what is actually received or receivable and the annual value in relation to what the property might reasonably fetch if let from year to year would be adopted as annual value for purposes of determination of property income. In the result, even where the property is vacant for part of the year, if the rent received for the remaining part is higher than the annual value, it is such annual value which will be adopted because for the component of actual rent what is receivable or received during the year, whichever is higher, will have to be adopted, though it is not so expressly spelt out. But if the actual rent received or receivable is less than the annual letting value, but not because of vacancy, the actual receipt will be the annual value. This impact is more implied than express. But in view of the Board's Circular No. 14 of 2001, this is a matter which is required to be borne in mind, since such an interpretation would dispense with the need for separate deduction for vacancy allowance, though the interpretation as now placed may not take into consideration, where the property is vacant for the major period during the year." [Emphasis supplied] 10. While interpreting a statute, the court may not only take into consideration the purpose for which it had been enacted, but also the mischief it seeks to suppress. Sneh Enterprises v. Commissioner of Customs [2006] 7 SCC 714. It is evident that clause (c) has been inserted as a protection to the assessee in cases where, on account of vacancy, the rent received or receivable on a property which has been let out is less than the sum referred to in clause (a ). Prior to its amendment, even in such cases it was the sum referred to in clause (a) which was to be taken as the annual value of the property. 11. In order to attract section 23(l)(c), the following requirements must be fulfilled (i) the property, or any part thereof, must be let; and (ii) it should have been vacant during the whole or any part of the previous year ; and (iii) owing to such vacancy the actual rent received or receivable by the owner in respect thereof should be less than the sum referred to in clause (a). It is only if these three conditions ITA No.57/PAN/2023 Mr. Francis Lfred Misquita [A] 11 are satisfied would clause (c) of section 23(1) apply in which event the amount received or receivable, in terms of clause (c) of section 23(1), shall be deemed to be the annual value of the property. Clause (c) does not apply to situations where the property has either not been let out at all during the previous year or, even if let out, was not vacant during the whole or any part of the previous year. Under the Explanation to section 23(1), for the purposes of clause (b) or (c), the amount actually received or receivable by the owner shall not include the amount of rent which the owner cannot realize. Self-occupation by the owner of a house would require the annual value of such house, or part of the house, to be taken as nil under section 23(2)(a) and, where the house cannot actually be occupied by the owner on account of his employment, business or profession, as nil under section 23(2)(b) provided that, in terms of section 23(3)(a), the house or part of the house had not actually been let during the whole or any part of the previous year. As a legal fiction is created the word "actually", as used in section 23(3)(c), does not find mention in section 23(1) of the Act. 12. The construction placed on section 23(l)(c), by Sri B. Chandrasen Reddy, learned counsel for the petitioner, that if there is an intention to let out the property during the relevant year, coupled with efforts being made for letting it out, it must be held the property is let, would necessitate reading words into section 23(1)(c) which do not exist. The words "where the property is let" cannot be read as "where the property is intended to be let". The provisions of a tax statute must be strictly construed. The words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning. Gurudevdatta VKSSS Maryadit v. State of Maharashtra [2001] 4 SCC 534. The Legislature may be safely presumed to have intended what the words plainly say. - Bhaiji v. Sub-Divisional Officer, Thandla [2003] 1 SCC 692. The intention of the legislation must be found in the words used by the Legislature itself. The question is not what may be supposed and has been intended but what has been said - Unique Butyle Tube Industries (P.) Ltd. v. Uttar Pradesh Financial Corpn. [2003] 113 Comp. Cas. 374 (SC). The court must look squarely at the words of the statute and interpret them. It must interpret a taxing statute in the light of what is clearly expressed. It cannot imply anything which is not expressed; it cannot import provisions in the statute so as to supply any assumed deficiency. The object of this rule is to prevent a taxing statute being construed "according to its intent, though not according to its words". It has even been ITA No.57/PAN/2023 Mr. Francis Lfred Misquita [A] 12 said that "if the provision is so wanting in clarity that no meaning is reasonably clear, the courts will be unable to regard it as of any effect - Gursahai Saigal v. CIT [1963] 48 ITR 1 (SC); Cape Brandy Syndicate v. IRC [1921] 1 KB 64 ; Bethlehem Hospital In re [1875] L.R. 19 Eq 457; A.V. Fernandez v. State of Kerala 1957 SCR 837 ; IRC v. Bladnoch Distillery Co. Ltd. [1948] 1 All ER 616 ; CST v. Modi Sugar Mills Ltd. [1961] 12 STC 182 (SC); CIT v. V. MR. P. Firm, Muar, AIR 1965 SC 1216 ; CED v. Kantilal Trikamlal [1976] 105 ITR 92 (SC); Aphali Pharmaceuticals Ltd. v. State of Maharashtra [1989] 4 SCC 378 ; Baidyanath Ayurved Bhawan (P.) Ltd. v. Excise Commissioner AIR 1971 SC 378. The question as to what is covered must be found out from the language according to its natural meaning fairly and squarely read. IRC v. Duke of Westminster [1936] AC 1 (HL), A.V. Fernandez's case (supra) Saraswati Sugar Mills v. Haryana State Board [1992] 1 SCC 418). The meaning and intention of a statute must be collected from the plain and unambiguous expression used therein rather than from any notions which may be entertained by the court as to that is just or expedient. The expressed intention must guide the court. CIT v. Shahzada Nand & Sons [1966] 60 ITR 392 (SC). The Legislature does not waste its words. Ordinary, a grammatical meaning is to be assigned to the words used while interpreting a provision to honour the rule. The Legislature chooses appropriate words to express what it intends and, therefore, must be attributed with such intention as is conveyed by the words employed so long as this does not result in absurdity or anomaly or unless material— intrinsic or external —is available to permit a departure from the rule. Harbhajan Singh v. Press Council of India [2002] 3 SCC 722. 13. The courts have adhered to the principle that effort should be made to give meaning to each and every word used by the Legislature, and it is not a sound principle of construction to brush aside words in a statute, as being inapposite surplusage, if they can have a proper application in circumstances conceivable within the contemplation of the statute. Gurudevdatta VKSSS Maryadit's case (supra), Manohar Lal v. Vinesh Anand [2001] 5 SCC 407. When the legislative intent is found specific mention and expression in the provisions of the Act itself, the same cannot be whittled down or curtailed and rendered nugatory. Bharathidasan University v. All India Council for Technical Education [201l] 8 SCC 676. The effect should be given to all the provisions and a construction that reduces one of the provisions to a "dead letter" must be avoided. Anwar Hasan ITA No.57/PAN/2023 Mr. Francis Lfred Misquita [A] 13 Khan v. Mohd. Shafi [2001] 8 SCC 540. The courts should not, ordinarily, add words to a statute or read words into it which are not there, especially when a literal reading thereof produces an intelligible result. Delhi Financial Corpn. v. Rajiv Anand [2004] 11 SCC 625 ; [2006] 131 Comp. Cas. 285 (SC). A construction which requires, for its support addition or substitution of words, or which results in rejection of words, has to be avoided. Gwalior Rayons Silk Mfg. (Wvg.) Co. Ltd. v. Custodian of Vested Forests AIR 1990 SC 1747, Shyam Kishori Devi v. Patna Municipal Corpn. AIR 1966 SC 1678, A.R. Antulay v. Ramdas Sriniwas Nayak [1984] 2 SCC 500, Dental Council of India v. Hari Prakash [2001] 8 SCC 61, J.P. Bansal v. State of Rajasthan [2003] 5 SCC 134 and State of Jharkhand v. Govind Singh [2005] 10 SCC 437. There is a line, though thin, which separates adjudication from legislation. That line should not be crossed or erased. The courts expound the law, they do not legislate. State of Kerala v. Mathai Verghese [1986] 4 SCC 746, Union of India v. Deoki Nandan Aggarwal AIR 1992 SC 96. A judge is not entitled to add something more than what is there in the statute by way of a supposed intention of the Legislature. Union of India v. Elphinstone Spg. &Wvg. Co. Ltd. [2001] 4 SCC 139. The legislative casus omissus cannot be supplied by judicial interpretative process. Maruti Wire Industries (P.) Ltd. v. STO [2001] 122 STC 410 (SC), Govind Singh's case (supra). ] 14. The contention that, as clause (c) provides for an eventuality where a property can be vacant during the whole of the relevant previous year, both situations, i.e., "property is let" and "property is vacant for the whole of the relevant previous year" cannot coexist does not merit acceptance. Clause (c) encompasses cases where a property is; let out for more than a year in which event alone would the question of if being vacant during the whole of the previous year arise. A property let out for two or more years can also be vacant for the whole of a previous year bringing it within the ambit of clause (c) of section 23(1) of the Act. 15. The contention that, if the owner had let out the property even for a day, it would acquire the status of "let out property" for the purpose of clause (c) for the entire life of the property even without any intention to let it out in the relevant year is also not tenable. The circumstances in which the annual let out value of a house property should be taken as nil is as specified in section 23(2) of the Act. Under section 23(l)(c), the period for which a let out property may remain vacant cannot exceed the period for which the ITA No.57/PAN/2023 Mr. Francis Lfred Misquita [A] 14 property has been let out. If the property has been let out for a part of the previous year, it can be vacant only for the part of the previous year for which the property was let out and not beyond. For that part of the previous year during which the property was not let out, but was vacant, clause (c ) would not apply and it is only clause (a) which would be applicable, subject of course to sub-sections (2) and (3) of section 23 of the Act. Such a construction does not lead to any hardship, inconvenience, injustice, absurdity or anomaly and, therefore, the rule of ordinary and natural meaning being followed cannot be departed from. Sneh Enterprises' case (supra). We are in agreement with the interpretation of section 23(1)(c) by the Tribunal, and are of the opinion that the benefit thereunder cannot be extended to a case where the property was not let out at all. 16. We find no merit in the submission that the words "property is let" are used in clause (c) to take out those properties which are held by the owner for self-occupation from the ambit of the said clause. As noted hereinabove, section 23(2)(a) takes out a self-occupied residential house, or a part thereof, from the ambit of section 23(1) of the Act. Likewise, under section 23(2)(b ), where a house cannot actually be occupied by the owner, on account of his carrying on employment, business or profession at any other place requiring him to reside at such other place in a building not belonging to him, the annual value of the property is also required to be treated as nil, thereby taking it out of the ambit of section 23(1) of the Act. Section 23(3)(a) makes it clear that section 23(2) would not apply if the house, or a part thereof, is actually let during the whole or any part of the previous year. Thus, only such of the properties which are occupied by the owner for his residence, or which are kept vacant on account of the circumstances mentioned in clause (b) of section 23(2), fall outside the ambit of section 23(1) provided they are, as stipulated in section 23(3)(a), not actually let during the whole or part of the previous year. Clause (c) was not inserted to take out from its ambit properties held by the owner for self- occupation inasmuch as section 23(2)(a) provides for such an eventuality. It is only to mitigate the hardship faced by an assessee, and as clause (b) does not deal with the contingency where the property is let and, because of vacancy, the actual rent received or receivable by the owner is less than the sum referred to in clause (a), was clause (c) inserted. In cases where the property has not been let out at all, during the previous year under consideration, there is no question of any vacancy ITA No.57/PAN/2023 Mr. Francis Lfred Misquita [A] 15 allowance being provided thereto under section 23(l)(c) of the Act.” Unquote 5.1 Thus, the Hon’ble High court in para 11 has categorically held, with reference to Section 23(1)(c) of the Act as under: (i) the property, or any part thereof, must be let; and (ii) it should have been vacant during the whole or any part of the previous year ; and (iii) owing to such vacancy the actual rent received or receivable by the owner in respect thereof should be less than the sum referred to in clause (a). 5.2 It is only if these three conditions are satisfied would clause (c) of section 23(1) apply in which event the amount received or receivable, in terms of clause (c) of section 23(1), shall be deemed to be the annual value of the property. Clause (c) does not apply to situations where the property has either not been let out at all during the previous year or, even if let out, was not vacant during the whole or any part of the previous year. 5.3 In this case, there is no doubt that the property was vacant during the year. It was never let out during the year. Therefore, the conditions mentioned by the Hon’ble Andhra Pradesh High Court are applicable in this case, i.e. property was never let out during the year. Therefore, as held by the Hon’ble Andhra Pradesh High Court, Section 23(1)(c) will not be applicable in ITA No.57/PAN/2023 Mr. Francis Lfred Misquita [A] 16 the case of the assessee, as the property was not let out during the year. 5.4 The Hon’ble ITAT in the case of Vikas Keshav Graud Vs ITO in ITA No.747/PN/2014 order dated 31/03/2016 has observed that the words ‘property is let’ shall also mean property was intended to be let out. The Hon’ble ITAT also observed that intention together with efforts put by the assessee in letting out the property shall be considered. If the assessee intended to let out the property but ultimately failed to let out, the actual rent received from it will have to be considered as Zero being less than the sum referred in Section 23(1)(a) of the Act. 5.4.1 However, identical arguments of ‘intention to let out, coupled with efforts’, were made before the Hon’ble Andhra Pradesh High Court in the case of Vivek Jain (supra). In para 12 of the said order, Hon’ble High Court has categorically held that the words ‘where the property is let’ cannot be read as ‘where the property is intended to be let’. The provisions of a tax statute must be strictly construed. The words of statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning. ITA No.57/PAN/2023 Mr. Francis Lfred Misquita [A] 17 5.5 Similarly, the Hon’ble Andhra Pradesh High court in the case of Vivek Jain (supra) has observed in para 14 as under: Quote “ 14. The contention that, as clause (c) provides for an eventuality where a property can be vacant during the whole of the relevant previous year, both situations, i.e., "property is let" and "property is vacant for the whole of the relevant previous year" cannot coexist does not merit acceptance. Clause (c) encompasses cases where a property is; let out for more than a year in which event alone would the question of if being vacant during the whole of the previous year arise. A property let out for two or more years can also be vacant for the whole of a previous year bringing it within the ambit of clause (c) of section 23(1) of the Act.” Unquote 5.5.1 Thus, the contention raised by the Hon’ble ITAT in the case of Vikas Keshav Garud(supra) that a property is let out during the year and the property is also vacant cannot coexist has been considered by the Hon’ble Andhra Pradesh High Court. Hon’ble Andhra Pradesh High court has categorically stated that this contention does not merit acceptance. Thus, the said contention has been ruled out by the Hon’ble Andhra Pradesh High Court. 5.6 Hon’ble Punjab & Haryana High Court in the case of Susham Singla Vs. CIT [2016] 76 taxmann.com 349 (Punjab & Haryana) has held as under: ITA No.57/PAN/2023 Mr. Francis Lfred Misquita [A] 18 “Thus, the annual value of the properties like the ones in the case in hand which are more than one, owned by the assessee and which admittedly remained vacant throughout the previous year would not be assessed under Section 23(1)(c) but under Section 23(1)(a). The annual value would, therefore, be determined notionally as done in the case in hand by the Assessing Officer and concurrently upheld by the Commissioner and the Tribunal.” 5.7 Thus, there are two Hon’ble High Courts, i.e. Hon’ble Andhra Pradesh High court and Hon’ble Punjab & Haryana High Court who have held that Section 23(1)(c) will not be applicable if the property was vacant throughout the previous year and it was not let out at all. As per judicial precedents, whenever jurisdictional High Court’s decision is not available on a particular issue but non-jurisdictional High Court’s decision is available, then the non-jurisdictional High court’s decision is binding on all lower authorities. Therefore, the decision of the Hon’ble Andhra Pradesh High Court is a binding precedence and it is binding on us. Hon’ble Andhra Pradesh High Court has interpreted Section 23(1)(c), which is a legal issue. In the case under consideration, the issue is interpretation of Section 23(1)(c), the facts are identical to the facts mentioned by the Hon’ble Andhra Pradesh High court in the case of Vivek Jain (supra). Therefore, the said decision of the Hon’ble Andhra Pradesh High court is binding on us. Therefore, there is no ITA No.57/PAN/2023 Mr. Francis Lfred Misquita [A] 19 binding force in the order of the Hon’ble Pune ITAT in the case of Vikas Keshav Garud (supra). 5.7.1 The Hon’ble Bombay High Court in the case of Smt.Godavaridevi Saraf Vs. CIT, 113 ITR 589 (Bom) has held as under : Quote , “ Until contrary decision is given by any other competent High Court, which is binding on a Tribunal in the State of Bombay, it has to proceed on the footing that the law declared by the High Court, though of another State, is the final law of the land. When the Tribunal set aside the order of penalty it did not go into the question of intra vires or ultra vires. It did not go into the question of constitutionality of section 140A(3). That section was already declared ultra vires by a competent High Court in the country and an authority like an Income- tax Tribunal acting anywhere in the country has to respect the law laid down by the High Court, though of a different State, so long as there is no contrary decision of any other High Court on that question.” Unquote 5.8 In this case, it is an admitted undisputed fact that the property was vacant throughout the year. No decision of the Hon’ble Bombay High Court which is jurisdictional High Court was brought to our notice which was contrary to the decision of the Hon’ble Andhra Pradesh High Court. Therefore, we are of the opinion that as held by the Hon’ble Bombay High Court in the case of Smt.Godavaridevi Saraf(supra), the decision of ITA No.57/PAN/2023 Mr. Francis Lfred Misquita [A] 20 Hon’ble High Courts of other States are binding on this Tribunal (Pune Bench). Therefore, respectfully following the Hon’ble Andhra Pradesh High Court in the case of Vivek Jain (supra) and the Hon’ble Punjab & Haryana High Court in the case of Sushma Singla (supra), we hold that the assessee’s rent for the said property shall be calculated as per provisions of Section 23(1)(a) of the Act and Section 23(1)(c) will not be applicable in the case of assessee for the said property. 5.9 Accordingly, we uphold the order of ld.CIT(A) on this issue. Accordingly, Ground No.1, 2 and 3 of the assessee are dismissed. Ground No.4 : 6. With reference to the property at Sr.No.6, the assessee claimed that assessee entered into agreement on January, 2018. As per the agreement, assessee was receiving monthly rental of Rs.31,200/-. However, assessee also claimed that before January 2018, assessee received a monthly rental of Rs.30,000/- only, however, assessee claimed that there was no written agreement. Ld.CIT(A) held that since as per written agreement which was for the period starting from January 2018, monthly rental was ITA No.57/PAN/2023 Mr. Francis Lfred Misquita [A] 21 Rs.31,200/-, for the entire year, Annual Lettable Value to be calculated based on monthly rental Rs.31,200/-. The assessee has not filed any evidence to prove that prior to January 2018, the rent was Rs.30,000/- per month. Therefore, in the absence of any evidence, we uphold the order of ld.CIT(A), accordingly, appeal of the assessee is dismissed. Ground No.5 : 7. Assessee has not added any ground during the proceedings, hence, Ground No.5 is dismissed. 8. In the result, appeal of the assessee is dismissed. Order pronounced in the open Court on 15 th April, 2024. Sd/- Sd/- (S.S.GODARA) (DR. DIPAK P. RIPOTE) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ᳰदनांक / Dated : 15 th April, 2024/ SGR* आदेश कᳱ ᮧितिलिपअᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The CIT(A), concerned. 4. The Pr. CIT, concerned. 5. िवभागीयᮧितिनिध, आयकर अपीलीय अिधकरण, पणजी बᱶच, नागपुर/ DR, ITAT, Bench, Panaji. 6. गाडᭅ फ़ाइल / Guard File. ITA No.57/PAN/2023 Mr. Francis Lfred Misquita [A] 22 आदेशानुसार / BY ORDER, // TRUE COPY // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे/ITAT, Pune.