ITO Ward 1(1), Pune V. Chhatrapati Constructions Pvt Ltd, Pune

MA 63/PUN/2013

• Counselvise Citation: [2015] 124 COUNSELVISE.COM (IT) 3711 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 26 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 06-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 17-01-2014
• Assessment Year: 1992-1993
• Appeal Filed On: 10-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift
• Section: 90; 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUN E , , !'!! # , $ % BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM '!'! !& / MA NO.63/PN/2013 (ARISING OUT OF ITA NO.1477/PN/1996) $& ' !(' / ASSESSMENT YEAR : 1992-93 ACIT, CENTRAL CIRCLE - 1(1 ), PUNE . / APPLICANT V/S CHHATRAPATI CONSTRUCTIONS PVT. LTD., CHHATRAPATI HOUSE, PAUD ROAD, PUNE 411 038 . / RESPONDENT APPLICANT BY : SHRI RAJESH DAMOR RESPONDENT BY : SHRI M.K. KULKARNI / DATE OF HEARING : 11-09-2015 / DATE OF PRONOUNCEMENT : 06-11-2015 ) / ORDER PER VIKAS AWASTHY, JM : THE MISCELLANEOUS APPLICATION HAS BEEN FILED BY THE DEPARTME NT FOR RECALLING THE ORDER OF TRIBUNAL DATED 31-03-2011 IN IT A NO.1477/PN/1996. THE TRIBUNAL VIDE ORDER UNDER REFERENCE HAD DISMISSED THE APPEAL OF THE DEPARTMENT AS NOT MAINTAINABLE IN VIEW OF THE DECLARATION GIVEN BY THE ASSESSEE UNDER KAR VIVAD S AMADHAN SCHEME, 1988 (HEREINAFTER REFERRED TO AS KVSS) AND ACC EPTED BY THE DEPARTMENT. 2. THE ASSESSEE HAD FILED ITS RETURN OF INCOME FOR THE A.Y . 1992-93 ON 31-12-1992 DECLARING TOTAL INCOME OF RS.6,10,611/-. IN S CRUTINY 2 MA 63/PN/2013 A.Y. 1992-93 ASSESSMENT PROCEEDINGS THE AO COMPUTED NET TAXABLE INC OME OF THE ASSESSEE AS RS.94,77,930/- AFTER MAKING CERTAIN ADDITIONS/ DISALLOWANCE. AGGRIEVED BY THE ASSESSMENT ORDER DATED 21-03-1995, T HE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). THE CIT(A ) VIDE ORDER DATED 11-09-1996 PARTLY ACCEPTED THE APPEAL OF THE AS SESSEE AND GRANTED RELIEF OF RS.71,08,850/- AND REDUCED THE ASSESSED INCOME OF THE ASSESSEE TO RS.23,69,080/-. THUS, THE CIT(A) SUSTAINED THE ADDITION OF RS.17,58,468/-. AGAINST THE ORDER OF CIT(A) BOTH, THE ASSESSEE AS WELL AS THE DEPARTMENT PREFERRED RESPECTIVE APPEALS BEFORE THE TRIBUNAL. DURING THE PENDENCY OF THE AFORESAID APPEALS , THE ASSESSEE FILED DECLARATION U/S.88 FOR TAKING THE BENEFIT OF KV SS WITH REGARD TO THE DISPUTED ADDITION OF RS.17,58,468/-. THE CIT -II, PUNE VIDE ORDER DATED 15-03-1999 ACCEPTED THE CONTENTION O F THE ASSESSEE UNDER THE SCHEME. THUS, THE DISPUTE REGARDING ADDITION OF RS.17,58,468/- REACHED FINALITY. ACCORDINGLY, THE ASSESSEE W ITHDREW ITS APPEAL PENDING BEFORE THE TRIBUNAL ON 16-04-1999. 3. IN THE APPEAL FILED BY THE DEPARTMENT THE TRIBUNAL VID E ORDER DATED 31-03-2006 PARTLY ACCEPTED THE APPEAL AND REST ORED SOME ISSUES BACK TO THE FILE OF AO TO DECIDE THE ISSUE AFRESH A FTER VERIFICATION. AGAINST THE SAID ORDER OF TRIBUNAL THE ASSESS EE FILED AN APPEAL BEFORE THE HONBLE BOMBAY HIGH COURT. THE HONBLE HIGH COURT RESTORED THE MATTER BACK TO THE TRIBUNAL FOR RE CONSIDERATION IN VIEW OF THE DECLARATION MADE BY THE ASSESSEE UNDER KVSS . THE TRIBUNAL BY PLACING RELIANCE ON THE DECISION OF (I) HONBLE MAD HYA PRADESH HIGH COURT IN THE CASE OF AGRO ENG. (M) P. LTD. VS. CIT, (II) NISHIT CONSTRUCTION PVT. LTD. VS. ITO AND (III) ALL INDIA FEDERAT ION OF TAX PRACTITIONERS VS. UNION OF INDIA AND OTHERS, DISMISSED T HE APPEAL OF THE REVENUE AS NOT MAINTAINABLE VIDE ORDER DATED 31-03-2011. 3 MA 63/PN/2013 A.Y. 1992-93 4. THE LD. DR SUBMITTED THAT ALTHOUGH AT THE TIME OF PAS SING OF THE ORDER DATED 31-03-2011, THE DEPARTMENT DID NOT DIS PUTE THAT THE ASSESSEE HAD PAID RS.4,34,111/- AS TAX ARREARS IN FULL AND FINAL SETTLEMENT UNDER KVSS AS PER THE ORDER OF CIT-II, PUNE DATED 15-03-1999, BUT THE SAID DEMAND WAS PAID BY ASSESSEE O NLY IN RESPECT OF THE ADDITION SUSTAINED BY THE CIT(A). AS FAR A S THE RELIEF GRANTED BY THE CIT(A) THE DEPARTMENT WAS IN APPEAL BEFO RE THE TRIBUNAL AND THE ISSUE HAD NOT ATTAINED FINALITY. THUS, THE IS SUES RAISED BY THE REVENUE IN APPEAL WERE STILL UNDER LITIGATION AND THE ASSESSEE HAD NOT PAID ANY AMOUNT ON THE ISSUES CHALLENG ED BY THE DEPARTMENT BEFORE THE TRIBUNAL. THUS, THE PROVISIONS OF KVSS WERE NOT APPLICABLE ON THE SAID PART OF THE AMOUNT IN DISPUTE. 5. THE LD. DR FURTHER SUBMITTED THAT AS PER SECTION 95 OF THE FINANCE(NO.2) ACT, 1998, NO APPELLATE AUTHORITY SHALL PROCEED TO DECIDE ANY ISSUE RELATING TO THE DISPUTED CHARGEABLE EXPE NDITURE, DISPUTED CHARGEABLE INTEREST, DISPUTED INCOME, DISPUTED WEA LTH, DISPUTED VALUE OF GIFT OR TAX ARREAR SPECIFIED IN THE DECLAR ATION AND IN RESPECT OF WHICH AN ORDER HAD BEEN MADE UNDER SECTION 93 BY THE DESIGNATED AUTHORITY OR THE PAYMENT OF THE SUM DETERMIN ED UNDER THAT SECTION. THE APPELLATE AUTHORITY IS PRECLUDED FROM PRO CEEDING IN THE APPEAL WHICH RELATE TO THE DISPUTED INCOME ONLY COVE RED BY THE DECLARATION MADE UNDER KVSS. AS PER SECTION 90 OF CHAPTE R IV OF KAR VIVAD SAMMAN SCHEME, 1988, 'DECLARANT' MEANS A PERSON M AKING DECLARATION UNDER SECTION 91 OF THIS SCHEME. THE ASSESSEE MADE THE DECLARATION UNDER KVSS WITH REGARD TO THE APPEAL FILED BY THE ASSESSEE AGAINST THE DISPUTED ADDITION OF RS.17,58,468/- SU STAINED BY THE CIT(A) VIDE ORDER DATED 11-09-1996 AND THE SAME WAS WITHDRAWN ON 16-04-1999 AFTER THE CERTIFICATE WAS ISSUED BY CIT-II, PUNE. THE TAX ARREARS WERE OUTSTANDING AS ON 31- 03-1 998 WITH 4 MA 63/PN/2013 A.Y. 1992-93 REGARD TO ADDITION OF RS.17,58,468/-. SINCE NO TAX ARREARS WERE OUTSTANDING WITH REGARD TO THE RELIEF GRANTED BY THE CI T(A), THE ASSESSEE DID NOT FILE ANY DECLARATION OF THE SAID AMOUNT UN DER KVSS NOR PAID ANY TAX THEREON. ON THE RELIEF GRANTED BY THE CIT(A), THE DEPARTMENT FILED APPEAL BEFORE TRIBUNAL. THUS, THE DEPARTME NT'S APPEAL IS NOT HIT BY SECTION 95 OF THE FINANCE (NO.2) ACT, 1998. IN THE BACKDROP OF THESE FACTS THE LD. DR PRAYED FOR RECALLING THE ORDER OF TRIBUNAL DATED 31-03-2011 IN ITA NO. 1477/PN/19 96 FOR A.Y.1992-93 AND TO DECIDE THE APPEAL OF DEPARTMENT ON MERIT. 6. ON THE OTHER HAND, SHRI M.K. KULKARNI APPEARING ON BEH ALF OF THE ASSESSEE SUBMITTED THAT THE MISCELLANEOUS APPLICATION FILED BY THE DEPARTMENT FOR RECALLING OF THE ORDER OF THE TRIBUNAL DATED 31-03-20 11 IS WITHOUT ANY MERIT AND DESERVES TO BE DISMISSED. THE L D. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE HONBLE DELHI HIGH CO URT IN THE CASE OF ALL INDIA FEDERATION OF TAX PRACTITIONERS VS. UNION OF INDIA A ND OTHERS REPORTED AS 236 ITR 1 HAS STRUCK DOWN THE PR OVISO TO SECTION 92 BEING ULTRA VIRES TO ARTICLE 14 OF THE CONSTITUTION. ON CE THE ASSESSEE HAS PAID THE DEMAND RAISED UNDER KVSS AND T HE DEPARTMENT HAS ACCEPTED THE SAME, THERE IS NO REASON FOR THE DEPARTMENT TO REVIVE THE ISSUE AGAIN. THE DEPARTMENT IS ESTOPPED BY ITS OWN ACT AND CONDUCT IN REVIVING THE SETTLED ISSUE. 7. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESEN TATIVES OF RIVAL SIDES. THE FACTS NARRATED IN PARAS 2 AND 3 ABOVE A RE NOT IN DISPUTE. THE CONTENTION OF THE LD. COUNSEL FOR THE ASSES SEE IS THAT ONCE THE ISSUE HAS BEEN LAID TO REST UNDER KVSS IT CANN OT BE REVIVED. THE LD. COUNSEL FOR THE ASSESSEE HAS FURTHER POINTED T HAT PROVISO TO SECTION 92 HAS BEEN STRUCK DOWN BY THE HONBLE DELHI HI GH COURT WHERE IT WAS PROVIDED THAT IN APPEALS FILED BY THE DEPARTM ENT RELATING 5 MA 63/PN/2013 A.Y. 1992-93 TO THE DISPUTED CHARGEABLE EXPENDITURE, DISPUTED CHARGEA BLE INTEREST, DISPUTED INCOME ETC. THE APPELLATE AUTHORITIES SHALL DECIDE T HE APPEAL IRRESPECTIVE OF SUCH DECLARATION. BEFORE PROCEEDING FURTHE R, IT WOULD BE RELEVANT TO REFER TO THE PROVISIONS OF SECTION 92 OF KV SS WHICH READS AS UNDER : 92. APPELLATE AUTHORITY NOT TO PROCEED IN CERTAIN CASES. NO APPELLATE AUTHORITY SHALL PROCEED TO DECIDE ANY ISSUE RELATING TO THE D ISPUTED CHARGEABLE EXPENDITURE, DISPUTED CHARGEABLE INTEREST, DISPUTED INCOME, DISPUTED WEALTH, DISPUTED VALUE OF GIFT OR TAX ARREAR SPECIF IED IN THE DECLARATION AND IN RESPECT OF WHICH AN ORDER HAD BEEN MADE UNDE R S. 90 BY THE DESIGNATED AUTHORITY OR THE PAYMENT OF THE SUM DETE RMINED UNDER THAT SECTION : PROVIDED THAT IN CASE AN APPEAL IS FILED BY A DEPAR TMENT OF THE CENTRAL GOVERNMENT IN RESPECT OF SUCH ISSUE RELATING TO THE DISPUTED CHARGEABLE EXPENDITURE, DISPUTED CHARGEABLE INTEREST, DISPUTE INCOME, DISPUTED WEALTH, DISPUTES VALUE OF GIFT OR TAX ARREAR (EXCEP T WHERE THE TAX ARREAR COMPRISES ONLY PENALTY, FINE OR INTEREST), THE APPE LLATE AUTHORITY SHALL DECIDE THE APPEAL IRRESPECTIVE OF SUCH DECLARATION. A CONJOINT READING OF PROVISIONS OF SECTION 92 AND PROVISO TO THE SAID SECTION WHICH HAS BEEN STRUCK DOWN BY THE HONBLE DELHI HIGH COURT IT IS CLEAR THAT THE PROVISO RELATES TO THE DISPUTE D AMOUNT WHICH HAS BEEN DECLARED BY THE ASSESSEE U/S.90 OF THE KVSS. THE ASSESSEE CANNOT TAKE ADVANTAGE OF THE STRIKING DOWN OF SAID PROVIS O IN RESPECT OF THE ADDITION FOR WHICH NO DECLARATION HAS BEEN MADE UND ER KVSS AND THE DEPARTMENT IS IN APPEAL AGAINST THE DELETING OF S UCH ADDITION BY THE FIRST APPELLATE AUTHORITY. 8. IN THE PRESENT CASE, THE ASSESSEE HAD MADE DECLARA TION UNDER KVSS OF THE AMOUNT ONLY TO THE EXTENT IN RESPECT OF WH ICH THE ASSESSEE HAD FILED APPEAL BEFORE THE TRIBUNAL. IN SO FAR AS THE ADDITION/DISALLOWANCE DELETED BY THE CIT(A) AGAINST WHICH THE DEPARTMENT WAS IN APPEAL BEFORE THE TRIBUNAL THE ASSESSE E HAD NOT MADE ANY DECLARATION UNDER THE SCHEME. THEREFORE, THE SAID AMOUNT IS NOT COVERED UNDER THE KVSS. WE FIND MERIT IN THE CONT ENTIONS OF 6 MA 63/PN/2013 A.Y. 1992-93 THE DEPARTMENT. ACCORDINGLY, WE RECALL THE ORDER OF THE TRIBUNAL IN ITA NO.1477/PN/1996 DATED 31-03-2011. THE REGISTRY IS DIRECTED TO RESTORE THE APPEAL TO ITS O RIGINAL NUMBER AND LIST THE SAME FOR HEARING IN THE DUE COURSE AFTER INFORMING BOTH THE SIDES. THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE IS THUS ALLOWED. ORDER PRONOUNCED ON FRIDAY, THE 06 TH DAY OF NOVEMBER, 2015. SD/- SD/- (R.K. PANDA) (VIKAS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER / PUNE; / DATED : 06 TH NOVEMBER, 2015 SATISH/RK )*+$,-'.'(, / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT. 2. / THE RESPONDENT. 3. CIT(A)-I, PUNE 4. CIT-I, PUNE 5. '#$ %%&' , ! &' , () , / DR, ITAT, A BENCH, PUNE. 6. $*+,-! / GUARD FILE. // '% // TRUE COPY// . / BY ORDER, %/ &) / PRIVATE SECRETARY, ! &' / ITAT, PUNE