Shri.Jaya Prakash, Bangalore V. The Income Tax Officer Ward-4(3)(5), Bangalore

MA 91/BANG/2021

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3613 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s) 9 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 11-10-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 01-09-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: IC PRABHAKAR J
• Assessee Lawyers: H GURUSWAMY ITP; RAVI KIRAN
• Keywords: Capital asset; Procedural lapse; Competent authority; TDS; Set aside; FORM 26AS
• Section: 264

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER M.P NO.91/BANG/2021 (IN ITA NO.1374/BANG/2018 ASSESSMENT YEAR : 2014-15 SHRI JAYA PRAKASH, NO.26, NARAYANAGHATTA VILLAGE, SARJAPURA HOBLI, ANEKAL, BENGALURU-560 099. PAN AETPJ 8946 B. VS. THE INCOME-TAX OFFICER, WARD-4(3)(5), BENGALURU. APPELANT RESPONDENT APPELLANT BY : SHRI H GURUSWAMY, I.T.P & SHRI RAVI KIRAN, C.A RESPONDENT BY : SHRI IC PRABHAKAR, JCIT(DR) DATE OF HEARING : 08.10.2021 DATE OF PRONOUNCEMENT : 11.10.2021 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS MISC. PETITION IS FILED BY THE ASSESSEE WHEREI N ASSESSEE IS SEEKING CLARIFICATION ON THE FINDING GI VEN BY THE TRIBUNAL IN PARA 7 AT PAGE 15 OF ITS ORDER DATE D 16/4/2021. THE ASSESSEE HEREIN CAME IN APPEAL BEFO RE THE TRIBUNAL AND RAISED THE ISSUE WITH REGARD TO TA XABILITY M.P NO.91/BANG/2021 PAGE 2 OF 9 OF RS.4,88,75,000/- ON THE BASIS OF FROM NO.26AS. ON THIS ISSUE TRIBUNAL OBSERVED AS FOLLOWS:- 7. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED TH E MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. ADMITTEDLY IN THIS CASE, THE CIT(A) DETERMIN ED THE SALE CONSIDERATION ON THE BASIS OF FORM 26AS WITHOUT SEE ING THE ACTUAL SALE DEED ENTERED BY THE ASSESSEE WITH CONCERNED PA RTIES. IN OUR OPINION, SALE CONSIDERATION CANNOT BE DETERMINED ON LY ON THE BASIS OF FORM 26AS. THE PROVISIONS OF S.2(47)(V) CAN BE APPL IED ONLY IF THERE IS A WRITTEN CONTRACT COUPLED WITH THE TRANSFER OF POSSESSION IN TERMS OF S.53A OF THE TRANSFER OF PROPERTY ACT. IN ENGLIS H LAW, THE CONTRACT TO WHICH THE DOCTRINE OF PART-PERFORMANCE APPLIES M AY BE ORAL. HOWEVER, S. 53A OF THE TRANSFER OF PROPERTY ACT EXP RESSLY REQUIRES THAT THE CONTRACT MUST BE IN WRITING BY HIM OR ON H IS BEHALF FROM WHICH THE TERMS NECESSARY TO CONSTITUTE THE TRANSFE R CAN BE ASCERTAINED WITH REASONABLE CERTAINTY. THUS S. 53A DOES NOT RECOGNIZE AN ORAL CONTRACT. THE WRITING IS AN ESSENTIAL SINE QUA NON FOR THE APPLICABILITY OF THE DOCTRINE OF PART-PERFORMANCE. THE LOWER AUTHORITIES MUST HAVE CONSIDERED THE RELEVANT SALE DEED SO AS TO COMPUTE THE CORRECT VALUE OF SALE CONSIDERATION AND DURING THE YEAR OF ASSESSMENT. BEING SO, THE ASSESSMENT FRAMED ON T HE BASIS OF FORM 26AS IS SET ASIDE. HOWEVER, WE MAKE IT CLEAR THAT I F THE REVENUE FINDS THAT THERE IS MATERIAL EVIDENCE IN SUPPORT OF THE T RANSFER OF LAND BY ASSESSEE TO M/S. NAMBIARS PVT. LTD. WHO HAD DEDUCTE D TDS IN ANTICIPATION OF TRANSFER OF LAND IN THIS A.Y. UNDER CONSIDERATION THAT TO BE BROUGHT TO TAX. IN OTHER WORDS, IF THE REVENU E FINDS THAT THERE WAS A TRANSFERABLE LAND BY THE ASSESSEE IN FAVOUR O F THE DEDUCTOR OF TDS I.E. NAMBIARS PVT. LTD. IN THE A.Y. BY EXECUTIN G A PROPER SALE DEED TOWARDS TRANSFER OF THE IMPUGNED PROPERTY, THE SAME MAY BE EXAMINED IN ACCORDANCE WITH LAW. AT THIS STAGE, WE REFRAIN FROM COMMITTING ANYTHING ON STATUS OF THE ASSESSEE IN WH OSE NAME CAPITAL GAIN TO BE TAXED AS WE HAVE SET ASIDE THE ASSESSMEN T. IT IS KEPT OPEN 2. NOW THE CONTENTION OF AR IS THAT THE AO MISUNDERSTOOD THE ORDER OF THE TRIBUNAL DATED 16.4. 2021. THE LD.AO WAS OF THE OPINION THAT THE DISPUTED ISSU E WAS REMITTED BACK TO HIM TO DO FRESH ASSESSMENT. AS SUC H THE M.P NO.91/BANG/2021 PAGE 3 OF 9 LD.AR SEEKS CLARIFICATION ON THE ABOVE FINDINGS OF THE TRIBUNAL. 3. THE DR SUBMITTED THAT THERE IS NO MISTAKE APPARE NT FROM THE RECORD WHICH REQUIRES ANY CLARIFICATION O N THE ISSUE RAISED BY THE ASSESSEE BEFORE THE TRIBUNAL. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS. ADMITTEDLY, THE TRIBUNAL ON EARLIER OCCASI ON CATEGORICALLY HELD THAT THE ASSESSMENT FRAMED BY AO ON THE BASIS OF FORM 26AS WAS SET ASIDE. NOW, THE CONTENTION OF THE AR IS THAT THE AO IS NOT UNDERSTO OD THE ABOVE ORDER OF THE TRIBUNAL AND PASSED FRESH ORDER THOUGH THERE WAS NO SUCH DIRECTION BY THE TRIBUNAL. IN THIS CASE, TRIBUNAL SET ASIDE THE EARLIER ORDER OF THE AO WHICH IS PASSED ON THE BASIS OF FORM 26AS. NOW WE WILL CLARIFY THE MEANING OF THE WORD SET ASIDE. 5. WE FIND THAT AS PER BLACKS LAW DICTIONARY, SIXT H EDITION AT PAGE 1372, THE WORDS 'SET ASIDE' MEANS : 'TO REVERSE, VACATE, CANCEL, ANNUL OR REVOKE A JUDG MENT, ORDER, ETC.' 6. FURTHER THE MEANING OF THE WORD ANNUL AT PAGE 90 OF THE BLACKS LAW DICTIONARY HAS GIVEN AS UNDER : 'TO REDUCE TO NOTHING; ANNIHILATE; OBLITERATE; TO MAKE VOID OR OF NO EFFECT; TO NULLIFY; TO ABOLISH; TO M.P NO.91/BANG/2021 PAGE 4 OF 9 DO AWAY WITH. TO CANCEL; DESTROY; ABROGATE. TO ANNUL A JUDGMENT OR JUDICIAL PROCEEDING IS TO DEPRIVE IT OF ALL FORCE AND OPERATION, EITHER AB IN ITIO OR PROSPECTIVELY AS TO FUTURE TRANSACTION.' 7. AND THE MEANING OF THE WORD ANNULMENT IS GIVEN AT PAGE 91 AS UNDER : 'TO NULLIFY, TO ABOLISH, TO MAKE VOID BY COMPETENT AUTHORITY. AN 'ANNULMENT' DEFERS FROM A DIVORCE IN THAT A DIVORCE TERMINATES A LEGAL STATUS WHEREAS AN ANNULMENT ESTABLISHES THAT A MARITAL STATUS NEVER EXISTED. WHEALTON V. WHEALTON, 67 CAL. 2 D 656, 63 CAL RPTR. 291, 294, 432 P. 2 D 979. GROUNDS AND PROCEDURES FOR ANNULMENT OF MARRIAGE ARE GOVERNED BY STATE STATUTES.' 8. IN THE CASE OF KALYAN KUMAR ROY TRUST, 75 ITD 36 (CAL), THE HONBLE TRIBUNAL HAS HELD THAT : '7. WE HAVE NO HESITATION IN ACCEPTING MR. RAYAS CONTENTIONS. THERE IS A DIFFERENCE BETWEEN 'ANNULMENT' OF AN ASSESSMENT AND 'SET ASIDE' OF THE SAME ONLY IN THE SENSE THAT IN THE FORMER, THE PROCEEDINGS CANNOT BE GENERALLY REVIVED, WHEREAS IN THE LATTER, THEY CAN BE REVIVED IF THERE ARE CLE AR DIRECTIONS TO THAT EFFECT; THEY ARE SIMILAR IN THE SENSE THAT 'BOTH WIPE OUT THE ORIGINAL ORDERS' SEE THE JUDGMENT IN THE CASE OF SEGHU BUCHIAH SETTYS CASE (SUPRA) AT PAGE 544 (SC). SECTION 251(1)(A) OF THE INCOME-TAX ACT, 1961 WHICH IS IN PARI MATERIA WITH SECTION 31(3)(A) AND 31(3)(B) OF THE INCOME- TAX ACT, 1922 CONFERS UPON THE FIRST APPELLATE AUTHORITY THE POWER TO ANNUL THE ASSESSMENT AS WELL AS THE POWER TO SET ASIDE THE ASSESSMENT. M.P NO.91/BANG/2021 PAGE 5 OF 9 HOWEVER, THE POWER TO SET ASIDE THE ASSESSMENT IS CIRCUMSCRIBED BY THE CONDITION THAT IN SUCH A CASE HE SHOULD REFER THE CASE BACK TO THE ITO FOR MAKING A FRESH ASSESSMENT IN ACCORDANCE WITH HIS DIRECTIONS. THE REASON FOR THE DIFFERENCE IS CLEAR. AN ASSESSMENT IS ANNULLED WHEN THERE IS A LACK OF PECUNIARY JURISDICTION OR TERRITORIAL JURISDICTION OR JURISDICTION OVER THE SUBJECT-MATTE R OF THE PROCEEDING. IN SUCH A CASE AFTER THE ASSESSMENT IS ANNULLED, THERE IS NO SCOPE FOR PASSING A FRESH ASSESSMENT. HOWEVER, IF THE ASSESSMENT IS SET ASIDE IT IS GENERALLY DONE ONLY IF THERE IS A PROCEDURAL IRREGULARITY WHICH CAN BE CURED OR IF THE ASSESSMENT IS MADE WITHOUT PROPERTY ENQUIRY, ETC. IN SUCH CASES, THE ASSESSMENT WILL HAVE TO BE SET ASIDE BUT SINCE THERE IS NO LACK OF JURISDICTION, THE APPELLATE AUTHORITY WOULD BE BOUND IN LAW TO DIRECT THE ASSESSING AUTHORITY TO MAKE A FRESH ASSESSMENT AFTER CURING THE IRREGULARITY. THERE ARE ANY NUMBER OF AUTHORITIES LAYING DOWN THE PRINCIPLES AS TO WHEN AN ASSESSMENT IS TO BE ANNULLED AND WHEN IT IS TO BE ONLY SET ASIDE FOR BEING REDONE AFRESH. BUT THAT IS NOT THE POINT THAT ARISES IN TH E PRESENT APPEALS AND, THEREFORE, THERE IS NO NEED TO REFER TO THEM. THE POSITION MADE CLEAR BY SECTION 251(1)(A) IS THAT THAT IT WOULD BE THE DUTY OF THE APPELLATE AUTHORITY TO GIVE CLEAR DIRECTIONS FOR MAKING A FRESH ASSESSMENT IN CASE HE DECIDES TO SET ASIDE THE ASSESSMENT. IT FOLLOWS THEREFROM THAT IF THERE ARE NO SUCH DIRECTIONS, THE ITO WOULD NOT HAVE THE POWER TO REFRAME THE ASSESSMENT SINCE A MERE SET ASIDE OF THE ASSESSMENT AS HELD BY THE SUPREME COURT IN THE JUDGMENT CITED SUPRA, WOULD ALSO WIPE OUT OR DESTROY THE M.P NO.91/BANG/2021 PAGE 6 OF 9 ASSESSMENT ORDER JUST AS IN THE CASE OF ANNULMENT.' 9. IN VIEW OF THE ABOVE DISCUSSION, WE ARE OF THE O PINION THAT TRIBUNAL HAS SET ASIDE THE ASSESSMENT MEANS TH AT IT HAS ANNULLED THE ASSESSMENT, SINCE IT HAS NOT GIVEN ANY DIRECTION TO RE-DO THE ASSESSMENT. THIS VIEW OF OUR S IS SUPPORTED BY THE JUDGMENT OF THE HONBLE CALCUTTA H IGH COURT IN THE CASE OF FU SHEEN TANNERY, 264 ITR 456, WHEREIN IT WAS HELD THAT : 'IT WAS CLEAR THAT THE APPELLATE AUTHORITY WAS CONS CIOUS OF THE ADMISSION OF THE ASSESSING AUTHORITY THAT IF TH E MATTER WAS REMANDED FOR FRESH ASSESSMENT IT WOULD REQUIRE CONSIDERABLE TIME TO EXPLORE, INVESTIGATE, ENQUIRE TO ASCERTAIN THE ACTUAL POSITION AND, THUS, DECIDED TO SET ASIDE THE ORDER OF ASSESSMENT WITHOUT GIVING ANY DI RECTION FOR A FRESH ASSESSMENT. THE ORDER AMOUNTED TO ANNUL MENT OF THE ASSESSMENT IN TOTO. THE ORDER OF FRESH ASSES SMENT WAS NOT VALID.' 10. THE WORD SET ASIDE MEANS THAT THE EARLIER ASS T. ORDER HAS BEEN QUASHED AND THERE WAS NO DIRECTION B Y THE TRIBUNAL TO DO ANY FRESH ASSESSMENT ON THE SAME IS SUE. WHEN THERE IS NO DIRECTION TO DO THE FRESH ASST. AN D ORDER FOR EARLIER ASST. YEAR HAS BEEN SET ASIDE, THE AO CANNOT TAKE ADVANTAGE OF PASSING REMARK/OBSERVATION ON TH E TRIBUNAL ORDER SO AS TO FRAME FRESH ASST. ON THE SA ME ISSUE. OUR VIEW HAS BEEN FORTIFIED BY THE ORDER O F THE CHENNAI BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS . M.P NO.91/BANG/2021 PAGE 7 OF 9 JAYA PUBLICATION 123 ITD 53, WHEREIN IT IS HELD THA T WHEN THE CIT(A) SET ASIDE ASST. WHICH MEANS HE ACTUALLY QUASHED THE ASST. SINCE HE HAS NOT GIVEN ANY DIREC TION TO REDO ASST. AS SUCH, THE AO HAS NO JURISDICTION TO P ASS ANY FURTHER ORDER ORDER AND HE HAS TO BE DUTY BOUND TO FOLLOW THE DIRECTION OF THE CIT(A) AND THEREFORE CANNOT SI T OVER THE ORDER OF CIT(A), WHICH IS THE STATUTORY AUTHORI TY. THE REMEDY LIES WITH THE DEPARTMENT ELSEWHERE AND HE HA S TO FILE APPEAL AGAINST THE ORDER OF THE CIT(A) IF HE H AS ANY GRIEVANCES. THIS VIEW IS ALSO BEEN SUPPORTED BY HO NBLE SUPREME COURT IN THE CASE OF SEGHU BUCHHAIAH SHETT Y 52 ITR 532. THE SAME VIEW HAS BEEN TAKEN IN THIS CA SE ALSO. ACCORDINGLY IN OUR OPINION, ON EARLIER OCCAS ION, THE TRIBUNAL HAD QUASHED THE ASST. ORDER PASSED BY THE AO WHICH IS ON THE BASIS OF 26AS AND THERE IS NO DIREC TION TO DO ANY FRESH ASSESSMENT. 11. IN THE RESULT, THE MISC. PETITION FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH OCT, 2021 . SD/- SD/- (BEENA PILLAI) ( CHANDRA POOJARI) JUDICIAL MEMBER A CCOUNTANT MEMBER BANGALORE, DATED, 11 TH OCT , 2021 / VMS / M.P NO.91/BANG/2021 PAGE 8 OF 9 COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, B ANGALORE. M.P NO.91/BANG/2021 PAGE 9 OF 9 1. DATE OF DICTATION 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO SR.P.S .. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER .. 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S. .. 6. DATE OF UPLOADING THE ORDER ON WEBSITE.. 7. IF NOT UPLOADED, FURNISH THE REASON FOR DOING SO .. 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. DATE ON WHICH ORDER GOES FOR XEROX & ENDORSEMENT 10. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 11. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER . 12. THE DATE ON WHICH THE FILE GOES TO DISPATCH SEC TION FOR DISPATCH OF THE TRIBUNAL ORDER . 13. DATE OF DESPATCH OF ORDER. ..