SMT. SAKHSHI KHANNA, JALANDHAR V. A.C.I.T., CIRCLE-3, JALNDHAR

SA 11/ASR/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3316 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 7 month(s) 6 day(s)
• Appeal Type: Income Tax (International Taxation) Appeal
• Pronouncement Date: 20-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 14-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S KANWAL LD
• Assessee Lawyers: VINEET KRISHAN LD
• Keywords: Recovery proceedings; Application of stay; Non passing of speaking order
• Section: 54F; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH. T. S. KAPOOR, ACCOUNTANT MEM BER AND SH. N. K. CHOUDHRY, JUDICIAL MEMBER S. A. NO. 11/(ASR)/2017 (ARISING OUT OF I.T.A . NO.564/(ASR)/2017) ASSESSMENT YEAR: 2013-14 PAN: AIVPK8355C SMT. SAKSHI KHANNA, 334, NEW JAWAHAR NAGAR, JALANDHAR. VS. A. C. I. T., CIRCLE- 3 JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY : SH. VINEET KRISHAN (LD. ADV.) RESPONDENT BY: SH. S. S. KANWAL (LD. D. R.) DATE OF HEARING: 03.11.2017 DATE OF PRONOU NCEMENT: 09.11.2017 ORDER PER N. K. CHOUDHRY (JM): THIS IS AN APPLICATION FOR GRANT OF STAY FILED BY ASSE SSEE FOR FEELING AGGRIEVED AGAINST THE DEMAND RAISED BY THE A SSESSING OFFICER AND CONFIRMED BY THE CIT(APPEAL) VIDE ITS ORDER DATED 17.07.2017. IN BRIEF THE FACTS AS DEMONSTRATED BY THE LD. DR ARE A S UNDER: THAT RETURN OF INCOME WAS FILED BY THE ASSESSEE BY DECLARI NG AN INCOME OF RS.46,70490/- FOR THE A. Y. 2013-14 AND DUR ING THE RELEVANT ASSESSMENT YEAR, THE APPELLANT WAS CARRYING ON THE BUSINE SS OF FUEL FILLING STATION IN THE NAME OF M/S SAKSHI KSK FUELS AS P ROPRIETOR AND CARGO HANDLING IN THE NAME OF M/S STAR ENTERPRISES AS PROPRIETOR AND DURING THE RELEVANT ASSESSMENT YEAR, THE ASSESSEE HAD SOLD T HE ASSETS AT DHANDARI KHURD, MOJA DHANDARI KHURD, BHATNURA AN D MOJA DHANDARI KHURD, ALL SITUATED AT LUDHIANA AND THE SAME HAVE B EEN SHOWN UNDER THE HEAD CAPITAL GAINS BY TREATING AS THE SALE PROCEEDS F ROM THE SALE OF S.A. NO.11 (ASR)/2017 (ARISING OUT OF IT A NO. 564 (ASR)/2017) ASST. YEAR: 2013-14 2 THE SAID ASSETS WERE CLAIMED AS EXEMPT U/S 54F OF THE INCO ME TAX ACT, 9161 FOR THE CONSTRUCTION OF A NEW RESIDENTIAL HOUSE . THE CASE ON SCRUTINY OF THE CASE OF THE ASSESSEE, THE LD. ASSESSING OFFICER DISALLOWED THE CLAIM OF ASSESSEE TO THE TUNE OF RS.2,83,25 ,754/- AS CLAIMED U/S 54F OF THE I. T. ACT. AGAINST WHICH THE ASSE SSEE PREFERRED THE FIRST APPEAL BEFORE THE CIT(APPEALS), JALANDHAR A ND PARTLY ALLOWED THE APPEAL. HENCE THE ASSESSEE PREFERRED THE SECOND APPEAL BEFORE THIS FORUM WHICH IS YET TO BE FIXED FOR HEARING. 2. THE LD. COUNSEL ARGUED THAT THE ORDER PASSED BY THE CIT(APPEALS) AS A NON SPEAKING ORDER, CRYPTIC AND PERVE RSE ORDER IN WHICH SUBMISSIONS, EVIDENCE, CASE LAWS AND DECISION OF VARI OUS COURTS HAVE BEEN OVERLOOKED. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE/APPLICANT HAS UTILIZED MORE THAN 3 CRORE IN THE CO NSTRUCTION OF NEW RESIDENTIAL HOUSE, HOWEVER THE REVENUE AUTHORI TY HAS NOT GIVEN BENEFIT OF SECTION 54F AND PASSED THE ORDER ON T HE BASIS OF WHIMS, SURMISES AND ILLOGICAL REASONING AND THEREFORE THE PRIMA-FACIE CASE IS IN FAVOUR OF ASSESSEE AND THERE IS EVERY LIKELIHOOD THAT THE ASSESSEE GET SUCCEED AND EVEN OTHERWISE THE TOTAL DEMAND RA ISED IS RS.75,49,900/- AND THE ASSESSEE HAS ALREADY PAID MORE THA N 30%, THEREFORE THE BALANCE OF CONVENIENCE IS ALSO LIES IN FAVO UR OF ASSESSEE. THE ADJUDICATION OF THE APPEAL OF ASSESSEE SHALL TAKE A REASONABLE TIME, THEREFORE THE ASSESSEE IS ENTITLED TO GET THE DEMA ND STAY TILL DISPOSAL OF THE APPEAL. IT IS FURTHER ARGUED BY THE LD. COUNSEL THAT IN CASE, T HE STAY IS NOT GRANTED THEN CERTAINLY THE ASSESSEE SHALL SUFFER IRR EPARABLE FINANCIAL LOSS AND WILL CRUMBLE THE DAY TO DAY RUNNING BUSINESS OF THE ASSESSEE/APPLICANT, BECAUSE THE ASSESSING OFFICER HAS REJECTED TH E STAY APPLICATION AND ALREADY INITIATED COERCIVE MEASURES BY ISSUING ATTACHMENT ORDER TO THE BANKERS OF THE ASSESSEE, THEREFOR E THERE IS S.A. NO.11 (ASR)/2017 (ARISING OUT OF IT A NO. 564 (ASR)/2017) ASST. YEAR: 2013-14 3 EVERY LIKELIHOOD THAT THE ASSESSEE SHALL SUFFER A IRREPAR ABLE LOSS AND HINDRANCES IN THE BUSINESS. FURTHER ARGUED THAT RECENTLY JURISDICTIONAL HIGH COURT LAID DOWN CONTAIN PARAMETERS TO BE FOLLOWED WHILE CONSIDERING STAY APPLICATION DURING APPEAL THEREFORE O N THE PARAMETERS AS WELL THE ASSESSEE IS ENTITLED FOR GRANT OF STAY OF RECO VERY PROCEEDINGS. 3. ON THE CONTRARY, IT WAS SUBMITTED BY THE LD. DR TH AT THE ASSESSEE HAS FAILED TO DEMONSTRATE HIS FINANCIAL DIFFICULTIE S, THEREFORE DOES NOT ENTITLE TO GET THE RELIEF OF STAY. WITH REGA RD TO THE PARAMETERS LAID DOWN BY JURISDICTIONAL HIGH COURT IN THE CASE OF P UNJAB INSTITUTE OF MEDICAL SCIENCES VS. DCIT AND OTHERS, 397 ITR 273(P&H), I T WAS SUBMITTED THAT THE DIRECTIONS HAVE BEEN ISSUED ONLY TO T HE CIT WHILE CONSIDERING THE FIRST APPEAL ONLY, HOWEVER THIS BENCH I S DEALING WITH THE SECOND APPEAL THEREFORE EMPOWERED TO CONSIDER THE STAY APPLICATION IN ITS OWN PERSPECTIVE WITHOUT BEING INFLUE NCED BY THE SAID JUDGMENT. 4. WE HAVE GONE THROUGH WITH THE FACTS AND CIRCUMSTANCES OF THE CASE AND RIVAL SUBMISSIONS OF THE PARTIES AS IN THE INSTA NT CASE, THE ASSESSEE HAS CLAIMED EXEMPTION U/S 54 OF THE I. T. ACT BY CL AIMING THE CAPITAL GAIN TO HAVE BEEN UTILIZED FOR THE CONSTRUCTI ON OF NEW RESIDENTIAL HOUSE, HOWEVER THE PLEA OF THE ASSESSEE WAS NO T ACCEPTED BY THE ASSESSING OFFICER BY HOLDING THAT THE ASSESSEE HAS NOT ACQUIRED ANY PROPERTY AS THE ALLEGED AGREEMENT TO PURCHASE WAS N OT A REGISTERED DOCUMENT AND ALSO COULD NOT PRODUCE ANY PROOF THAT SHE IS IN POSITION OF THE NEW ASSETS. THE OWNERSHIP OF LAND AND SUPERSTRUCTURE ARE IN THE NAME OF M/S ANITA KHANNA (MOT HER IN LAW) OF THE ASSESSEE AND THE SALE PROCEEDS OF THE LONG TERM ASSETS WE RE UTILIZED BY THE ASSESSEE ON THE VERY NEXT DAY IN BUYIN G SOME OTHER PROPERTIES AND MONEY WHICH WAS CLAIMED TO BE INVESTED I N S.A. NO.11 (ASR)/2017 (ARISING OUT OF IT A NO. 564 (ASR)/2017) ASST. YEAR: 2013-14 4 CONSTRUCTION, IS NOT IN THE NAME OF ASSESSEE AND THE CLAIM O F THE ASSESSEE REGARDING COMMENCEMENT AND COMPLETION OF THE CONSTRUCTION OF THE NEW ASSETS WERE NOT FOUND GENUINE, HE NCE THE CLAIM OF ASSESSEE THAT SHE HAS INVESTED IN THE CONSTRUCTION O F NEW ASSETS ALSO HELD IN GENUINE IN APPEAL. THE LD. CIT(APPE ALS) PARTLY CONFIRMED THE ADDITION OF THE ASSESSING OFFICER BY HOLDI NG THAT THE APPELLANT HAS FAILED TO PRODUCE ANY EVIDENCE WITH REGA RD TO THE EXECUTION OF SALE DEED FOR PURCHASE OF PLOT OF LAND AGA INST THE CONSTRUCTION OF WHICH CLAIM OF EXEMPTION U/S 54F HAS BEEN MADE AND IN APPELLATE PROCEEDINGS, IT WAS ACCEPTED BY THE APPEL LANT THAT NO SALE DEED HAS BEEN EXECUTED TILL DATE IN FAVOUR OF THE APP ELLANT AND IT WAS ALSO ACCEPTED THAT NO BUILDING PLAN APPROVED BY THE MU NICIPAL AUTHORITY HAS BEEN FILED EITHER BEFORE THE ASSESSING OF FICER OR IN THE COURSE OF PRESENT PROCEEDINGS AND FURTHER FAILED TO PRO DUCE ANY EVIDENCE WITH REGARD TO CERTIFICATE OF COMPLETION OF B UILDING FROM ANY OF CIVIL/MUNICIPAL AUTHORITY. THEREFORE THE LD. CIT (APPEAL) CONFIRMED THE ORDER, HOWEVER AS IT WAS SUBMITTED BY THE LD. COUN SEL THAT ALL CONDITIONS OF CLAIM OF EXEMPTION U/S 54F OF THE I. T. A CT WERE FULFILLED BY ASSESSEE/APPLICANT AND THE REVENUE AUTHORITY FAILED T O APPRECIATE THAT THE APPLICANT IS THE 1/5 TH OWNER OF THE RESIDENTIAL LAND ON WHICH THE CONSTRUCTION OF RESIDENTIAL HOUSE WAS MADE BY THE APP ELLANT AND EVEN OTHERWISE, IT WAS OBSERVED BY THE INSPECTOR THAT TH E ASSESSEE HAS CARRIED OUT THE CONSTRUCTIONS RECENTLY WHICH GOES TO SHO W THAT ASSESSEE IS CLAIMING EXEMPTION U/S 54F OF I. T. ACT BY CLAIM ING THE ACQUIRING OF NEW ASSETS. 5. RECENTLY THE JURISDICTIONAL HIGH COURT IN THE CASE OF PUNJAB INSTITUTE OF MEDICAL SCIENCES VS. DCIT AND OTHERS, 397 ITR 273(P&H), LAID DOWN CERTAIN PARAMETERS. AS WE OBSERVED FROM THE D IRECTIONS GIVEN IN THE JUDGMENT, THE JURISDICTIONAL HIGH COURT DEALT WITH THE SITUATION WHERE THE STAY APPLICATION WAS FILED BEFORE THE FIRST APPELLATE AUTHORITY AND DIRECTIONS HAVE BEEN ISSUED TO THE AUTH ORITIES OF THE S.A. NO.11 (ASR)/2017 (ARISING OUT OF IT A NO. 564 (ASR)/2017) ASST. YEAR: 2013-14 5 REVENUE TO CONSIDER THE AFORESAID PARAMETERS WHILE DEAL ING WITH THE APPLICATION FOR GRANT OF STAY. HENCE THE SAME IS NOT APPL ICABLE TO US BEING 2 ND APPELLATE AUTHORITY HOWEVER IT CAN ONLY BE CONSIDERED AS GUIDING FACTOR. 6. WE OBSERVED THAT IN THE INSTANT CASE, PRIMA FACIE, IT APPEARS THAT THE ASSESSEE HAS RAISED THE DEBATABLE ISSUES WHICH REQUIRES TO BE ADJUDICATED, THE ASSESSEE HAS ALREADY DEPOSITED MORE THAN 30% OF THE DEMANDED AMOUNT AND FURTHER OFFERED TO DEPOSIT 10% O F THE DEMANDED AMOUNT, THEREFORE WE ARE OF THE VIEW THAT THE BALANCE OF CONVENIENCE ALSO LIES IN FAVOUR OF ASSESSEE/APPLICANT. AS T HE ASSESSEE IS RUNNING A BUSINESS AND THE DEMANDED AMOUNT IS HUGE AM OUNT AND IF THE SAME IS RECOVERED DURING THE PENDENCY OF THE APPEAL THEN CERTAINLY IT WOULD AMOUNT TO IRREPARABLE LOSSES TO THE ASSESSEE SPECIFICALLY IN VIEW OF THE FACT THAT THE REVENUE DEPAR TMENT WOULD BE IN POSITION TO REALIZE THE 40% OF THE DEMANDED AMOUN T. THE HON'BLE APEX COURT IN THE CASE OF ITO V. MOHD. KU NHI, (1969) 71 ITR 815 ANALYZED THE POWERS OF THE TRIBUNA L FOR GRANT OF STAY AND LAID DOWN THE FOLLOWING RATIO WHICH IS GUIDIN G FACTOR FOR DISPOSAL OF STAY APPLICATION :- SECTION 255(5) OF THE ACT DOES EMPOWER THE APPELLATE TRIBUNAL TO REGULATE ITS OWN PROCEDURE, B UT IT IS VERY DOUBTFUL IF THE POWER OF STAY CAN BE SPELT OUT FROM THAT PROVISION. IN OUR OPINION THE APPELLATE TRIBUNAL MUST BE HELD TO HAVE THE POWER TO GRANT ST AY AS INCIDENTAL OR ANCILLARY TO ITS APPELLATE JURISDI CTION. THIS IS PARTICULARLY SO WHEN S. 220(6) DEALS EXPRES SLY WITH A SITUATION WHEN AN APPEAL IS PENDING BEFORE T HE APPELLATE ASSISTANT COMMISSIONER, BUT THE ACT IS SI LENT IN THAT BEHALF WHEN AN APPEAL IS PENDING BEFORE THE APPELLATE TRIBUNAL. IT COULD WELL BE SAID THAT WHEN S. 254 CONFIRMS APPELLATE JURISDICTION, IT IMPLIEDLY G RANTS THE POWER OF DOING ALL SUCH ACTS, OR EMPLOYING SUCH MEANS, AS ARE ESSENTIALLY NECESSARY TO ITS EXECUTI ON S.A. NO.11 (ASR)/2017 (ARISING OUT OF IT A NO. 564 (ASR)/2017) ASST. YEAR: 2013-14 6 AND THAT THE STATUTORY POWER CARRIES WITH IT THE DU TY IN PROPER CASES TO MAKE SUCH ORDERS FOR STAYING PROCEEDINGS AS WILL PREVENT THE APPEAL IF SUCCESSFU L FROM BEING RENDERED NUGATORY. A CERTAIN APPREHENSION MAY LEGITIMATELY ARISE IN THE MINDS OF THE AUTHORITIES ADMINISTERING THE ACT THAT IF THE APPELLATE TRIBUNA LS PROCEED TO STAY RECOVERY OF A TAXES OR PENALTIES PA YABLE BY OR IMPOSED ON THE ASSESSEES AS A MATTER OF COURS E THE REVENUE WILL BE PUT TO GREAT LOSS BECAUSE OF TH E INORDINATE DELAY IN THE DISPOSAL OF THE APPEALS BY THE APPELLATE TRIBUNALS. IT IS NEEDLESS TO POINT OUT TH AT THE POWER OF STAY BY THE TRIBUNAL IS LIKELY TO BE EXERC ISED IN A ROUTINE WAY OR AS A MATTER OF COURSE IN VIEW OF T HE SPECIAL NATURE OR TAXATION AND REVENUE LAWS. IT WIL L ONLY BE WHEN A STRONG PRIMA-FACIE CASE IS MADE OUT THAT THE TRIBUNAL WILL CONSIDER WHETHER TO STAY THE RECOVERY PROCEEDINGS AND ON WHAT CONDITIONS AND THE STAY WIL L BE GRANTED IN MOST DESERVING AND APPROPRIATE CASES WHE RE THE TRIBUNAL IS SATISFIED THAT THE ENTIRE PURPOSES OF APPEAL WILL BE FRUSTRATED OR RENDERED NUGATORY BY ALLOWING THE RECOVERY PROCEEDINGS TO CONTINUE DURIN G THE PENDENCY OF THE APPEAL. 7. COMING TO THE INSTANT CASE AS THE ASSESSEE HAS RAISED T HE DEBATABLE ISSUES AND ALREADY DEPOSITED MORE THAN 30% O F THE DEMANDED AMOUNT AND FURTHER EXPRESSED TO DEPOSIT 10% O F THE DEMANDED AMOUNT, IN OVERALL WHICH IS 40% OF THE DEMAN DED AMOUNT OUGHT TO HAVE BEEN REALIZED. AS THE APPEAL IN WHICH S TAY IS INVOLVED AS PER ORDERS OF THE HON'BLE PRESIDENT, ITAT, IS SUPPOSED TO BE FIXED ON OUT OF TURN BASIS. 8. IN THE RESULT, THE STAY APPLICATIONS FILED BY TH E ASSESSEE IS ALLOWED SUBJECT TO DEPOSIT 10% OF THE DEMANDED AMOUNT WITHIN 10 DAYS TO THE REVENUE AUTHORITIES. THE REVENUE AUTHORITY IS DIRECTED NOT TO PROCEED WITH THE RECOVERY PROCEEDINGS TILL THE DISPOSAL OF APPEAL. S.A. NO.11 (ASR)/2017 (ARISING OUT OF IT A NO. 564 (ASR)/2017) ASST. YEAR: 2013-14 7 REGISTRY IS DIRECTED TO FIX THE APPEAL OF THE ASSESSEE ON 12.12.2017. COPY OF THE ORDER BE GIVEN DASTI TO THE PARTIES CON CERNED. ORDER PRONOUNCED IN THE OPEN COURT ON 09.11.2017. SD/- SD/- (T. S. KAPOOR) (N. K. CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 09.11.2017 /GP/SR.PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER