Smt. Annapurna Mishra, Bhubaneswar V. ITO, Ward-3(1), Bhubaneswar

ITA 70/CTK/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5085 (ITAT-CUTTACK)
• Duration Of Justice: 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 05-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: B.B.SAHUB.R.PANDA
• Keywords: Capital asset; Rectification of order; Capital Gains
• Section: 154; 201

Judgement Text

P A G E 1 | 7 IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE SHRI CHANDRA MOHAN GARG , JUDICIAL MEMBER ITA NO. 70 /CTK/201 9 ASSESSMENT YEA R: 2015 - 16 SMT. ANNAPURNA MISHRA, B - 2, P.S.KHANDAGIRI , SAINATH PLACE, JAGAMOHAN NAGAR, BHUBANESWAR. VS. ITO, WARD 3(1), BHUBANESWAR PAN/GIR NO. AHQPM 1284 M (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI B.B.SAHU/B.R.PANDA, AR REVENUE BY : SHRI SUBHENDU DUTTA, DR DATE OF HEARING : 0 2 / 0 5 / 201 9 DATE OF PRONOUNCEMENT : 16 / 0 5 / 201 9 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS) - 2 , BHUBANESWAR DATED 31.8.2018 IN I.T.APPEAL NO.0280/2017 - 18 FOR THE ASSESSMENT YEAR 201 5 - 16. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: I. FOR THAT THE ORDER OF THE FORUMS BELOW ARE ILLEGAL, UNJUST AND EXCESSIVE IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND BEYOND JURISDICTION AS SUCH SHOULD HAVE BEEN PASSED GIVING EFFECT TO THE CBDT CIRCULAR ALONGWITH CIRCULAR OF MINISTRY OF ROAD TRANSPO RTATION AND HIGHWAYS AND THE PRINCIPLES OF LAW ITA NO.70/CTK/2019 ASSESSMENT YEAR:2015 - 16 P A G E 2 | 7 DECIDED BY HONBLE APEX COURT. HENCE, THE ORDERS PASSED HAVE TO BE QUASHED IN TOTO. II . FOR THAT THE POINTS OF LAW RAISED BEFORE THE CIT(A) - II, BHUBANESWAR IN FILING OF THE MODIFICATION/RECTIFICATION PETITION SUBMITTING THAT THE APPELLANT RECEIVED THE COMPENSATION FROM THE GOVERNMENT OF INDIA, MINISTRY OF ROAD TRANSPORT AND HIGHWAYS AMOUNTING TO RS. 12,93,070/ - SHOULD HAVE BEEN REDUCED IN VIEW OF CBDT CIRCULAR NO.36 VIDE DT. 25.10.2016 AND THE POINTS OF LAW DE CIDED BY THE HON'BLE APEX COURT AS WELL AS RFCTLARR ACT OF 2013 APPLICABLE TO THE FACTS OF THE CIRCULAR OF MINISTRY OF ROAD TRANSPORT & HIGHWAYS. THEREFORE THE CAPITAL GAIN IS NOT TO BE LEVIED IN THE FACTS OF THE CASE AND THAT HAS TO BE EXEMPTED ENTIRELY. THEREFORE FAILURE OF THE FORUMS BELOW TO APPRECIATE BUT TO SKIP OVER THE RELEVANT PROVISIONS CAUSED ILLEGALITY AND DENIAL OF STATUTORY LAW ALREADY SETTLED. III. FOR THAT DUE CONSIDERATION SHOULD HAVE BEEN MADE TO THE REPORT OF THE QUALIFIED VALUER AN D ALSO THE DETERMINATION OF COMPENSATION BY NATIONAL HIGHWAY AUTHORITIES. FURTHER ALL THESE GROUNDS RAISED BEFORE THE ID. ASSESSING OFFICER AS WELL AS THE ID. FIRST APPELLATE AUTHORITY REGARDING THE EXISTENCE OF STRUCTURE, PAYMENT OF ELECTRICITY BILL, MUNI CIPALITY TAX, ETC. WERE AVOIDED AND IGNORED AND NO CONSIDERATION AS SUCH WERE MADE WITH OBSERVATION THAT THERE WAS NO EVIDENCE REGARDING WATCH AND WARD AND CONSTRUCTION OF GROUND FLOOR AND FIRST FLOOR ALLEGED WERE BEYOND HIS KNOWLEDGE, AS SUCH OPPORTUNITY TO EXPLAIN THE DETAILS COULD HAVE BEEN EXTENDED.. HENCE THE ORDER PASSED BY THE FORUMS NEEDS TO BE QUASHED AND VACATED. IV. FOR THAT THE PROVISION OF SEC.96 OF THE RFCTLARR ACT, 2013 AND THE POINTS OF LAW RAISED BEFORE THE ID. CTT(APPEALS) - II IN FILING OF THE MODIFICATION/RECTIFICATION PETITION AS WELL AS THE ORDER PASSED REJECTING TO ENTERTAIN THE CIRCULARS ARE BAD IN LAW. AS SUCH ORDERS PASSED BY THE FORUMS NEED TO BE QUASHED AND VACATED. 3. IT HAS BEEN BROUGHT TO MY NOTICE THAT THIS APPEAL WAS BELATEDLY FILED BEFORE THE TRIBUNAL. THIS APPEAL IS LATE BY 110 ITA NO.70/CTK/2019 ASSESSMENT YEAR:2015 - 16 P A G E 3 | 7 DAYS. IN THIS REGARD, LD A.R. HAS PLACED CERTAIN INFORMATION ON RECORD TO ESTABLISH THAT THE ORDER OF THE CIT(A) IS DATED 31.8.2018 AND THE ASSESSEE FILED A PETI TION FOR MODIFICATION AND RECTIFICATION OF MISTAKE BEFORE THE CIT(A) INVOKING SECTION 154 OF THE ACT TO CONSIDER THE CBDT CIRCULAR. THE PETITION U/S.154 WAS DISPOSED BY THE CIT(A) ON 13.2.2019 RECEIVED BY THE ASSESSEE ON 22,.2.2019, AND, THEREFORE, AS SOO N AS THE ORDER WAS RECEIVED, THE APPEAL WAS FILED BEFORE THE TRIBUNAL. CONSIDERING THE REASONS GIVEN IN THE CONDONATION PETITION, I HEREBY CONDONE THE DELAY AND ADMIT THIS APPEAL FOR ADJUDICATION. 4 . I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE REL EVANT MATERIALS ON THE RECORD OF THE TRIBUNAL. LD A.R. OF THE ASSESSEE SUBMITTED THAT THE PROPERTY OF THE ASSESSEE WAS COMPULSORILY ACQUISITIONED BY NATIONAL HIGH WAY, KEONJHAR THROUGH NOTIFICATION MADE BY COLLECTOR KEONJHAR IN THE FINANCIAL YEAR 2014 - 15 AND THE ASSESSEE WAS PAID A COMPENSATION OF RS.12,93,070/ - ON 31.3.2015. LD A.R. SUBMITTED THAT THE ASSESSEE WAS UNDER BONAFI D E BELIEF THAT THE COMPULSORY ACQUISITION OF LAND AND BUILDING IS EXEMPT FROM INCOME TAX AS PER RFCTLARR ACT, 2013 AND T HE ASSESSEE BEING A LADY SPENT THE SAID AMOUNT FOR RENOVATION OF VILLAGE TEMPLE. LD A.R. ALSO SUBMITTED THAT THE ITA NO.70/CTK/2019 ASSESSMENT YEAR:2015 - 16 P A G E 4 | 7 CIT(A) OVERLOOKED THE CBDT CIRCULAR NO.36 OF 2016 DATED 25.10.2016 AND CIRCULAR NBO.11011/30/2015 - LA GOVT OF INDIA, MINISTRY OF ROAD TRANSPORT & HIGHWAYS REGARDING APPLICABILITY OF RFCTLARR ACT 2013 ON LAND ACQUISITION UNDER NATIONAL HIGH WAYS ACT, 1956 REGARDING EXEMPTION OF TAX ON LAND . LD A.R. SUBMITTED THAT AS PER THE DECISION OF HONBLE APEX COURT IN THE CASE OF BALKRISHNA VS UNION OF INDI A AND OTHERS TO SUPPORT THE ISSUE OF EXEMPTION , THE ASSESSEE FILED A PETITION U/S.154 OF THE I.T.ACT FOR RECTIFICATION AND MODIFICATION OF ORDER PASSED BY THE CIT(A) DATED 31.8.2018, WHICH WAS REJECTED WITH THE OBSERVATION THAT THESE CIRCULARS WERE NEITHER PRODUCED AT THE TIME OF ASSESSMENT PROCEEDINGS NOR AT THE TIME OF FIRST APPELLATE PROCEEDINGS AND, THEREFORE, THERE IS NO MISTAKE IN THE ORDER WHICH REQUIRES RECTIFICATION U/S.154 OF THE ACT. 5 . LD A.R. SUBMITTED THAT CBDT CIRCULAR NO.36 OF 2016 STATED TH AT U NDER THE EXISTING PROVISIONS OF THE INCOME - TAX ACT 1961 ('THE ACT'), AN AGRICULTURAL LAND WHICH IS NOT SITUATED IN SPECIFIED URBAN AREA, IS NOT REGARDED AS A CAPITAL ASSET . HENCE, CAPITAL GAINS ARISING FROM THE TRANSFER (INCLUDING COMPULSORY ACQUISITI ON] OF SUCH AGRICULTURAL LAND IS NOT TAXABLE. FINANCE (NO, 2] ACT, 2004 INSERTED SECTION 10(37) IN THE ACT FROM 01.04.2005 TO PROVIDE SPECIFIC EXEMPTION TO THE CAPITAL GAINS ARISING TO AN INDIVIDUAL OR A ITA NO.70/CTK/2019 ASSESSMENT YEAR:2015 - 16 P A G E 5 | 7 HUF FROM COMPULSORY ACQUISITION OF AN AGRICULTURAL L AND SITUATED IN SPECIFIED URBAN LIMIT, SUBJECT TO FULFILMENT OF CERTAIN CONDITIONS. THEREFORE, COMPENSATION RECEIVED FROM COMPULSORY ACQUISITION OF AN AGRICULTURAL LAND IS NOT TAXABLE UNDER THE ACT (SUBJECT TO FULFILMENT OF CERTAIN CONDITIONS FOR SPECIFIED URBAN LAND). 6 . HE ALSO STATES THAT T HE RFCTLARR ACT WHICH CAME INTO EFFECT FROM 1ST JANUARY, 2014, IN SECTION 96, INTER ALIA , PROVIDES THAT INCOME - TAX SHALL NOT BE LEVIED ON ANY AWARD OR AGREEMENT MADE [EXCEPT THOSE MADE UNDER SECTION 46) UNDER THE RFC TLARR ACT THEREFORE, COMPENSATION RECEIVED FOR COMPULSORY ACQUISITION OF LAND UNDER THE RFCTLARR ACT (EXCEPT THOSE MADE UNDER SECTION 46 OF RFCTLARR ACT), IS EXEMPTED FROM THE LEVY OF INCOME TAX. 7 . LD A.R., SUBMITTED THAT SINCE BOTH THESE CIRCULARS ARE NOT CONSIDERED BY THE LOWER AUTHORITIES, THE MATTER MAY BE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER TO PASS DENOVO ASSESSMENT CONSIDERING THE CIRCULARS. 8 . IN REPLY, LD D.R. SUBMITTED THAT BOTH THE CIRCULARS WERE NOT AVAILABLE EITHER BEFORE THE ASSESSING OFFICER OR BEFORE THE CIT(A) AND, THEREFORE, THERE HAD NO OCCASION TO CONSIDER THE CIRCULARS. LD D.R. ALSO SUBMITTED EVEN THOUGH THE CIT(A) OUGHT TO HAVE CONSIDERED THE CIRCULARS, HE WAS DUTY B OUND TO REMAND THE MATTER ITA NO.70/CTK/2019 ASSESSMENT YEAR:2015 - 16 P A G E 6 | 7 BACK TO THE FILE OF THE AO FOR GIVING A REMAND REPORT. THEREFORE, IN ORDER TO AVOID THE MULTIPLICITY OF PROCEEDINGS, HE HAD NO ISSUE IF THE MATTER IS RESTORED TO THE FILE OF AO. 9 . ON CONSIDERATION OF THE RIVAL SUBMISSIONS, I AM OF THE VIEW THAT THE DEPARTMENT IS DUTY BOUND TO ADHERE TO THE INSTRUCTION OF THE CBDT WHILE DISPOSING THE PROCEEDINGS BEFORE THEM. THERE IS NO DISPUTE THAT BOTH THE CIRCULARS NOW REFERRED BY THE LD A.R. OF THE ASSESSEE WERE NOT FURNISHED BEFORE THEM. TH EREFORE, THEY HAD NO OCCASION TO CONSIDER THE SAME. BE THAT IT MAY, LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, I CONSIDER IT PROPER AND JUSTIFIABLE THAT IN ORDER TO RENDER SUBSTANTIAL JUSTICE, THE MATTER NEEDS TO BE RESTORED BACK TO THE FILE OF T HE ASSESSING OFFICER TO CONSIDER THE CBDT CIRCULAR NO.36 OF 2016 AND CIRCULAR NO.11011/30/2015 - LA BEFORE MAKING DENOVO ASSESSMENT. THE ASSESSEE IS DIRECTED TO FILE BOTH THE CIRCULARS BEFORE THE ASSESSING OFFICER . AFTER THAT THE ASSESSING OFFICER IS DIRE CTED TO CONSIDER THE APPLICABILITY OF CIRCULARS AND OTHER PROVISIONS OF LAW. WITH THESE DIRECTIONS, THE APPEAL IS RESTORED TO THE FILE OF THE ASSESSING OFFICER. ITA NO.70/CTK/2019 ASSESSMENT YEAR:2015 - 16 P A G E 7 | 7 10. . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 16 / 0 5 /201 9 . S D/ - ( CHANDRA MOHAN GARG ) JUDICIALMEMBER CUTTACK; DATED 16 / 0 5 /20 9 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER SR. PVT. SECRETARY, ITAT, CUTTAC K 1. THE APPELLANT : SMT. ANNAPURNA MISHRA, B - 2, P.S.KHANDAGIRI, SAINATH PLACE, JAGAMOHAN NAGAR, BHUBANESWAR 2. THE RESPONDENT. ITO, WARD 3(1), BHUBANESWAR 3. THE CIT(A) - 2, BHUBANESWAR 4. PR.CIT - 2, BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//