SRI SNEHASISH BHAUMIK,KOLKATA V. PCIT-17, KOLKATA

ITA 303/KOL/2024

AI Insights

This case involves an appeal by Sri Snehasish Bhaumik against the revisionary order passed by the Principal Commissioner of Income Tax (PCIT) under section 263 of the Income Tax Act, concerning the assessment year 2014-15. The PCIT had revised the assessment order, claiming it was erroneous and prejudicial to the interest of the Revenue, as it failed to account for a Short-Term Capital Gain and incorrectly calculated the Long-Term Capital Gain on the sale of a property. The assessee argued that the revision was based on incorrect premises and that the original assessment had been thoroughly examined and was correct. The Tribunal, after considering the facts and legal precedents, decided in favor of the assessee, emphasizing that substantial justice should prevail over technicalities and that the revisionary jurisdiction was improperly exercised.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 360648 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2014-2015
• Other Referred Cases: Collector Land Acquisition Vs. Mst. Katiji & Others, Improvement Trust vs. Ujagar Singh & Ors., Malabar Industrial Co. Ltd. Vs. CIT
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P.N. BARNWAL
• Assessee Lawyers: SOUMITRA CHOUDHURY; PRANABESH SARKAR; ARS
• Keywords: Set aside; Cost of acquisition; Wrong claim; Assessment record; Revision of order
• Section: 143(3); 263

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRI SONJOY SARMA, JM ITA No.303/KOL/2024 (Assessment Year:2014-15) Sri Snehasish Bhaumik A-3/2, Labony Estate, Salt Lake, Kolkata, West Bengal, 700064 Vs. PCIT-17 Uttarapan Complex, Maniktala Civic Centre, Block-DFS-4, Kolkata, West Bengal, 700054 (Appellant) (Respondent) PAN No. ADYPB8516H Assessee by : Shri Soumitra Choudhury & Shri Pranabesh Sarkar, Ars Revenue by : Shri P.N. Barnwal, DR Date of hearing: 08.05.2025 Date of pronouncement : 22.05.2025 O R D E R Per Rajesh Kumar, AM: This is an appeal preferred by the assessee against the order of the Commissioner of Income-tax (Appeals), Kolkata-17 (hereinafter referred to as the “Ld. CIT(A)”] dated 18.03.2019 for the AY 2014-15. 02. At the outset, the ld. Counsel for the assessee brought to our notice that there is a delay in filing the appeal by 1722 days, for which the condonation petition along with affidavit dated 26.04.2024 was also filed. The ld. Counsel for the assessee submitted that due to the wrong advice of the counsel, the assessee could not file the appeal against the revisionary order passed by the ld. PCIT u/s 263 of the Act. The ld. Counsel for the assessee submitted that the revisionary order was passed by ld. CIT (A) on 18.03.2019. The ld. Counsel for the assessee further submitted that the said order u/s 263 of the Act Page | 2 ITA No.303/KOL/2024 Sri Snehasish Bhaumik; A.Y. 2014-15 was handed over to the Counsel of the assessee Shri PJ Bhide, FCA, who appeared in the set aside proceeding before the ld. AO and the assessment order u/s 143(3)/ 263 of the Act came to be passed on 12.12.2019. The ld. AR submitted that the appeal was preferred before the ld. CIT (A) against the said order on 16.10.2020 and appellate order was passed on 31.10.2023. The counsel of the assessee submitted that the said order was appealed before the Tribunal on 21.12.2023. It was only then the assessee was advised by the present Counsel Shri Soumitra Choudhury, advocate to file the appeal against the revisionary order passed u/s 263 of the Act dated 18.03.2019, with a condonation petition and accordingly, the same was prepared and filed before the Tribunal. The ld. Counsel for the assessee submitted that the delay in filing the appeal was totally beyond the control of the assessee and it was not for any ulterior purposes. The ld. AR further submitted that the assessee is not benefitted in any manner with the late filing of the appeal. The ld. AR thereafter by relying on the decision of Hon'ble Supreme Court in case of Hon'ble Supreme court from the decision in the case of Collector Land Acquisition Vs. Mst. Katiji & Others, 1987 AIR 1353 and in the case of Improvement Trust vs. Ujagar Singh & Ors. [2010] 6SCC 786 (SC). Finally, the Ld. A.R prayed that the appeal may be admitted for hearing. 03. The ld. DR on the other hand strongly opposed the argument of the counsel of the assessee by submitting that there was no reasonable and sufficient cause for not filing the appeal therefore, the condonation deserves to be dismissed in limine. 04. After hearing the rival contentions and perusing the materials available on record, we find that in this case, the assessee has not filed the appeal against the order passed u/s 263 of the Act dated Page | 3 ITA No.303/KOL/2024 Sri Snehasish Bhaumik; A.Y. 2014-15 18.03.2019, under the advice of the Counsel Shri P.J. Bhide. Thereafter the assessment was completed in the set aside proceeding vide order dated 12.12.2019, passed u/s 143(3)/ 263 of the Act, against which was appealed before the first appellate authority on 16.01.2020 and finally, the appellate order came to be passed on 31.10.2023. The assessee preferred the appeal before the Tribunal on 21.12.2023, against the said appellate order. It is only then the assessee was advised by the Counsel Shri Soumitra Choudhury, Advocate to file an appeal against the revisionary order dated 18.03.2019, should be preferred along with application of condonation of delay. Accordingly, the appeal documents were prepared, signed and appeal was filed with a delay of 1705 days. In our opinion, the delay is purely due to the reasons beyond the control of the assessee and the assessee should not suffer due to the wrong advice of the counsel of the assessee. In our opinion, the case of substantial justice should prevail over the technicalities and assessee should not be denied the opportunity to present its case on merit. 05. We have duly considered the rival contentions and gone through the record carefully. Sub-section 5 of Section 253 contemplates that the Tribunal may admit an appeal or permit filing of memorandum of cross-objections after expiry of relevant period, if it is satisfied that there was a sufficient cause for not presenting it within that period. This expression \"sufficient cause\" employed in this Section has also been used identically in sub-Section 3 of Section 249 of the Act, which provides power to the Id. Commissioner to condone the delay in filing of the appeal before the Commissioner. Similarly, it has been used in Section 5 of the Indian Limitation Act, 1963. Whenever interpretation and consideration of this expression has fallen for consideration before the Hon'ble High Courts as well as before the Hon'ble Supreme Court Page | 4 ITA No.303/KOL/2024 Sri Snehasish Bhaumik; A.Y. 2014-15 then, the Hon'ble Courts were unanimous in their conclusion that this expression has to be construed liberally. We may make reference to the following observations of the Hon'ble Supreme court from the decision in the case of Collector Land Acquisition Vs. Mst. Katiji & Others, 1987 AIR 1353: \"1. Ordinarily a litigant does not stand to benefit by lodging an appeal late. 2. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties. 3. \"Every day's delay must be explained\" does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational common sense pragmatic manner. 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. 5. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact he runs a serious risk. 6. It must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so.\" 06. In the light of above, if we examine the facts of the present case and observe that substantial justice must prevail over technicalities. Moreover, making the appeal time-barred has not been used by the assessee as a tactics to avoid the litigation with the Revenue because such strategy would not give any benefit to the assessee in this type of litigation. Therefore, we condone the delay and proceed to decide the appeal on merit. 07. The only issue raised by the assessee is against the revisionary order passed u/s 263 of the Act, which is completely arbitrary, unjustified and illegal and prayed to be quashed. Page | 5 ITA No.303/KOL/2024 Sri Snehasish Bhaumik; A.Y. 2014-15 08. The facts in brief are that the assessment order u/s 143(3) came to be passed on 26.10.2016, determining the total income at ₹10,83,350/-. The ld. PCIT on examination of the assessment record found that the ld. AO had completed the assessment without making necessary enquiry/ verification and thus, failed to bring on record the Short-Term Capital Gain of ₹30,36,003/- by accepting the assessee’s claim of Long-Term Capital Gain of ₹4,12,278/-. The ld. PCIT noted that the ld. AO has wrongly allowed ADSR (Assistant District Sub- Registrar) value of ₹41,39,900/- as cost of acquisition against the actual cost of ₹23,27,257/- in calculation of Long-Term Capital Gain. Accordingly, the order passed is erroneous and prejudicial to the interest of the Revenue. The ld. PCIT issued notice u/s 263 of the Act on 08.02.2019, as to why the impugned assessment framed should not be revised which was replied by the assessee by submitting that during the assessment proceedings, the ld. AO has examined the Long-Term Capital Gain of ₹ 4,12,278/- on sale of immovable property (Flat). It was submitted that the total consideration of the property was ₹57,00,000/-, whereas, the value as per stamp valuation was 57,06,200/-. It was submitted that assessee purchased the said flat at a consideration of ₹23,27,257/- and same was registered on 12.12.2011 with stamp valuation of ₹41,39,900/-. The assessee further submitted that the flat was purchased vide agreement dated 15.09.2009 and the possession was handed over to the assessee on 03.04.2010. The purchase deed in favour of the assessee was executed on 12.12.2011 and the flat was sold on 17.09.2019. It was submitted that the possession of the flat was given to the assessee on 15.04.2010 and before that date the assessee has paid the entire consideration of the said flat. It was submitted that in order to calculate the capital gain the period of holding has to be computed from the date of possession and not from the date of registration of Page | 6 ITA No.303/KOL/2024 Sri Snehasish Bhaumik; A.Y. 2014-15 sale deed in favour of the assessee. Therefore, the assessee has rightly claimed the Long-Term Capital Gain at ₹4,12,278/-. The said submission of the assessee did not find favour with the PCIT and finally he revised the assessment vide order dated 18.03.2019, directing the ld. AO to pass a fresh assessment after making proper enquiries and after examination of claim made by the assessee in the light of applicable laws. 09. After hearing the rival contentions and perusing the materials available on record, we find that in this case, the assessee has entered into a purchase agreement dated 15.09.2009 for purchase of flat which was handed over to the assessee physically on 15.09.2010. We note that the assessee has made all the payments towards the purchase of flat prior to the date of possession. The said flat was registered in the name of the assessee on 12.12.2011. During the year, the assessee sold the flat 17.09.2013, calculating the Long-Term Capital Gain thereon at ₹4,12,278/-. The ld. PCIT on the other hand was of the view that the purchase date should be taken from the registration of the agreement in favour of the assessee on 12.12.2011 and not from the date of possession. In our opinion, the issue has been raised by the ld. AO during the assessment proceedings and has been examined thoroughly and only after examining all these documents and evidences, the ld. AO accepted the contention of the assessee qua the Long-Term Capital Gain of ₹4,12,278/-. In our opinion, the said assessment framed by the ld. AO dated 26.102.16, u/s 143(3) is neither erroneous nor prejudicial to the interest of the Revenue. Therefore, invoking the revisionary jurisdiction u/s 263 of the Act is bad in law and so is the order passed u/s 263 of the Act. The case of the assessee find force from the decision of Hon'ble Apex Court in the case of Malabar Industrial Co. Ltd. Vs. CIT (2000) 243 Page | 7 ITA No.303/KOL/2024 Sri Snehasish Bhaumik; A.Y. 2014-15 ITR 83 (SC), wherein it has been held that in order to invoke the jurisdiction u/s 263 of the Act, the assessment order has to be erroneous as well as the jurisdiction to the interest of the Revenue. However, in the present case this is not so and therefore, the ld. PCIT has wrongly exercised the jurisdiction. Besides even on merit we note that the assessee correctly calculated the Long-Term Capital Gain on the sale of flat by taking the date of possession as the date of acquisition and accordingly, there is no mistake or wrong claim by the assessee qua the Long-Term Capital Gain. In view of these facts and circumstances, we are inclined to quash the revisionary order passed by the ld. Pr. Commissioner of Income Tax. The appeal of the assessee is allowed. 010. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 22.05.2025. Sd/- Sd/- (SONJOY SARMA) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 22.05.2025 Sudip Sarkar, Sr.PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata "