Appeal details
Counselvise Citation
[2023] 140 COUNSELVISE.COM (IT) 301741 (ITAT-SURAT)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 17 day(s)
Appellant
Respondent
Appeal Type
Income Tax (Search & Seizure) Appeal
Pronouncement Date
25-06-2023
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
DB
Next Hearing Date
10-05-2023
Assessment Year
2012-2013
Appeal Filed On
07-06-2022
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JM & DR. A. L. SAINI, AM आयकर अपील सं./IT(SS)A No.41/SRT/2022 Assessment Year: (2012-13) (Physical Hearing) Janakbhai Punabhai Talaviya (Individual), 8, Manthan park Society, Near Kapodara Police Station, Varachha Road, Surat – 395009. Vs. The DCIT, Central Circle-2, Surat. èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AAWPT1266H (Appellant) (Respondent) Appellant by Shri Rasesh Shah, CA Respondent by Shri Ashok B. Koli, CIT(DR) Date of Hearing 11/05/2023 Date of Pronouncement 26/06/2023 आदेश / O R D E R PER DR. A. L. SAINI, AM: Captioned appeal filed by the assessee, pertaining to assessment years (AY) 2012-13, is directed against the order passed by the Learned Commissioner of Income Tax (Appeals)-4, Surat [in short ‘the Ld. CIT(A)’], in Appeal No. CIT(A), Surat-4/11067/2015-16, dated 03.03.02022, which in turn arises out of an assessment order passed by the Assessing Officer under section 143(3) r.w.s 153A of the Income Tax Act, 1961 (hereinafter referred to as the “Act”). 2. The grounds of appeal raised by the assessee are as follows: “1. The learned CIT(A) has erred in giving direction u/s. 150(1) without giving opportunity to the Janakbhai Punabhai Talaviya – HUF. The learned CIT(A) has not issued any notice to Janakbhai Punabhai Talaviya as required under clause (b) of Explanation 2 to Section 153. 2. The learned CIT(A) has erred in giving direction u/s. 150(1) in the case of Janakbhai Punabhai Talaviya – HUF although no appeal was pending in this case.” Page | 2 IT(SS)A Nos.41/SRT/2022 Janakbhai P. Talaviya 3. We note that appeal filed by the assessee for assessment year 2012-13, is barred by limitation by eighteen (18) days. The assessee has moved a petition for condonation of delay, requesting the Bench to condone the delay. The contents of the petition for condonation of delay are reproduced below: “2. The assessee received the order of the CIT(A) on 22.03.2022. So the appeal was required to be filed before limitation period expiring on 21.05.2022. However, assessee filed appeal on 08.06.2022 causing a delay of 18 days. 3. The assessing officer made the addition in the hands of the assessee on account of the capital gain on sale of two plots of land although the properties were belonging to the Janak Talaviya -HUF in whose case assessee duly offered capital gain in the return of income. The ld. CIT(A) deleted the addition in case of the assessee but has given direction u/s. 150(1) to assess the capital gain in the hands of the HUF. 4. As the assessee's HUF could have raised the issue on merits after the reopening of the assessment in case of Janakbhai Punabhai Talaviya - HUF after direction of CIT(A), initially he didn't contemplate to file the appeal before Honourable Tribunal. However, the undersigned advised the briefing counsel who appeared before CIT(A) to file the appeal before Your Honourable Tribunal as the direction given by the CIT(A) was not in accordance with the law. Assessee was therefore prevented by reasonable and sufficient cause for not filing appeal in time. 5. Your honours are therefore requested to condone the delay as the case is meritorious one and requires consideration to condone the delay in filling appeal.” 4. The ld Counsel relied on the contents of the petition for condonation of delay and submitted that assessee has explained the delay with sufficient reasons therefore delay should be condoned. On the other hand, ld DR for the Revenue opposed the prayer for condonation of delay. 5. We are of the view that provisions of law have to be adhered strictly and that one cannot be allowed to act in leisure and make a mockery of enacted law, because law and provisions are laid down to benefit both sides of litigation. Be that as it may, we have to do justice Page | 3 IT(SS)A Nos.41/SRT/2022 Janakbhai P. Talaviya and the Hon’ble Supreme Court in the case of Collector, Land Acquisition vs Mst. Katiji and others, reported in 167 ITR 471, (1988 SC 897)(7) has observed as follows: “4. When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non- deliberate delay.” 6. When we weigh this aspect, then the side of justice becomes heavier and casts a duty on us to deliver justice. The reasons given in the petition for condonation of delay are convincing and these reasons would constitute reasonable and sufficient cause to condone delay. We, therefore, condone the delay and admit the appeal for hearing. 7. At the outset, Learned Counsel for the assessee, begins by pointing out that Ld. CIT(A) has given the wrong direction under section 151(1) of the Act. The Ld. Counsel pointed out that Ld. CIT(A) ought to have given an opportunity to the Janakbhai Punabhai Talaviya-HUF, hence such direction issued by ld CIT(A) under section 150(1) of the Act, without giving opportunity to the Janakbhai Punabhai Talaviya-HUF, is against the provisions of Income Tax Act. The Ld. Counsel further pointed out that before giving direction under section 150(1) of the Act, the Ld. CIT(A) ought to have issued a notice to Janakbhai Punabhai Talaviya (Individual) also, as required under clause (b) of explanation (3) of section 153 of the Act. Since, wrong direction given by the Ld. CIT(A) to tax the income, in the hands of HUF, under section 150(1) of the Act which was without giving any notice to the assessee as per erst while old provisions in explanation (3) of section 153(1) of the Act. Hence, ld Counsel requested the Bench to quash such direction. Page | 4 IT(SS)A Nos.41/SRT/2022 Janakbhai P. Talaviya 8. On the other hand, Learned Departmental Representative (Ld. DR) for the Revenue reiterated the stand taken by the Ld. CIT(A) and stated the ld CIT(A) has power to give direction under section 150(1) of the Act. 9. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. The Law is well settled that when the statute requires to do certain thing in certain way, the thing must be done in that way or not at all. Other methods or mode of performance are impliedly and necessarily forbidden. The aforesaid settled legal proposition is based on a legal maxim ‘Expressio unius est exclusion alteris’, meaning there by that if a statute provides for a thing to be done in a particular manner, then it has to be done in that manner and in no other manner and following of other course is not permissible. (Nazir Ahmed v. King Emperor AIR 1936 PC 253; Ram Phal Kundu v. Kamal Sharma [2004] 2 SCC 759 and Indian Bank's Association v. Devkala Consultancy Service (AIR 2004 SC 2615). Similar view has been expressed in the Orissa Rural Housing Development Corpn. Ltd, 343 ITR 316 (Orissa). 10. In view of the above facts and circumstances it is evident that Ld. CIT(A) has neither issued notice to HUF nor given an opportunity to the assessee to represent his case. The ld CIT(A) has to issue notice to HUF, which he has failed to do so, therefore direction given by the Ld. CIT(A) is not in accordance with law. Hence, direction given by the Ld. CIT(A) to tax the income in the hands of the HUF is not tenable and it should be quashed. For that, we rely on the judgment of Hon'ble Gujarat High Court in the case of A. B. Parikh, (1993) 203 ITR 186 (Guj.), wherein it was held as follows: Page | 5 IT(SS)A Nos.41/SRT/2022 Janakbhai P. Talaviya “Section 149 lays down the time limits for issuance of notice under section 148. Section 150(1) forms an exception to it and provides that a notice under section 148 could be issued at any time for the purpose of making an assessment or reassessment or recomputation in consequence of or to give effect to, any finding or direction contained in an order in appeal, reference or revision under the Act. Similarly, section 153(3)(ii) using the same language, provides that no time limit applies for completion of assessment which is made in consequence of, or to give effect to, any such finding or direction. Exclusion of time limit will depend on the same contingencies in both the cases. Explanation 2 and 3 to section 153 deem certain assessments to have been made in consequence of, or to give effect to, a finding or direction. Fiction created in Explanation 3 referring to 'another person' applies for the purposes of both sections 150 and 153. This is evident from the user therein of the set of expressions 'for the purposes of section 150 and this section'. The result is that for the purpose of section 150, so as to enable the authority to issue the notice under section 148 at any time without being curtailed by the time limit prescribed under section 149, there must be satisfaction of the ingredients under Explanation 3 to section 153. The first ingredient is that there must be a finding that the income excluded from the total income of one person is the income of another person. The second ingredient is that the order must be one which has come to be passed after the other person was given an opportunity of being heard. In the instant case, there was no notice served on the petitioner in respect of the proceedings prosecuted before the Tribunal and he was not called upon to answer any proposition for holding the income to be only that of his and not of the firm. The intendment of the Explanation 3 to section 153 when it says ‘such other person was given an opportunity of being heard before the said order was passed’ is apparent. The person concerned must be put on notice that the consequence of the income being held as his is likely to follow in the proceedings prosecuted. Further more, he must be given an opportunity of being heard on that question. All these features must be borne out by records. In the instant case, there was no record to show that the petitioner was representing the cause of the firm before the Tribunal in consequence of whose finding alone, the instant proceedings for escaped assessment were stated to have been initiated. Even if he had so represented, that position could not be straightaway equated to participation in the proceedings pursuant to an opportunity being afforded on the question before the order was passed, within the meaning of Explanation 3 to section 153. The Court cannot act on presumptive level. Therefore, the initiation of proceedings under section 147(b) was barred by limitation.” 11. Therefore, we note that Ld. CIT(A) has erred in giving direction under section 150(1) without giving opportunity to the Janakbhai Page | 6 IT(SS)A Nos.41/SRT/2022 Janakbhai P. Talaviya Punabhai Talaviya (HUF) and we also note that Ld. CIT(A) has not issued any notice to Janakbhai Punabhai Talaviya (Individual) as required in clause (b) of explanation (3) of section 153 of the Act, therefore we note that such direction given by the Ld. CIT(A) is not sustainable in the eye of law and therefore direction given by Ld. CIT(A) to tax the income in the hands of HUF is hereby quashed. 12. Since, we have quashed the direction given by Ld. CIT(A) to tax the income in the hands of HUF, therefore second ground raised by the assessee does not require any adjudication, as it becomes infructuous. 13. In the result, appeal filed by the assessee is allowed in above terms. Order is pronounced on 26/06/2023 in the open court. Sd/- Sd/- (PAWAN SINGH) (Dr. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER lwjr /Surat Ǒदनांक/ Date: 26/06/2023 SAMANTA Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // TRUE COPY // Assistant Registrar/Sr. PS/PS ITAT, Surat
AI Insights
The case involves an appeal by Janakbhai Punabhai Talaviya against the order of the Learned Commissioner of Income Tax (Appeals)-4, Surat, which directed the assessment of capital gains in the hands of Janakbhai Punabhai Talaviya - HUF for the sale of two plots of land. The original assessment was made under section 143(3) read with section 153A of the Income Tax Act, 1961. The Tribunal noted that the CIT(A) had not issued a proper notice to the HUF nor provided an opportunity to contest the assessment, leading to the quashing of the CIT(A)'s direction.
