Income Tax Appellate Tribunal - Ahmedabad
Sureshchandra Chimanlal Patel, ... vs The Pr. Cit-3, Ahmedabad on 24 February, 2022
आयकर अपीलीय अिधकरण,
अिधकरण अहमदाबाद यायपीठ 'B' अहमदाबाद।
IN THE INCOME TAX APPELLATE TRIBUNAL
"B" BENCH, AHMEDABAD
(Conducted Through Virtual Court)
]
]
BEFORE MS.ANNAPURNA GUPTA, ACCOUNTANT MEMBER
AND
T.R. SENTHIL KUMAR, JUDICIAL MEMBER
WTA No.01 AND 02/Ahd/2021
Assessment Year : 2014-15 AND 2013-14
Sureshchandra Chimanlal Patel The Pr.CIT-3
F/501, Dhan Vihar Residency Vs Ahmedabad.
New C.G. Road
Chandkheda
Ahmedabad 382 424.
PAN : ABZPP 0977 F
अपीलाथ / (Appellant) यथ / (Respondent)
Assessee by : Shri M.K. Patel, AR
Revenue by : Shri Sanjeev Jain, CIT-DR
सन
ु वाई क तार ख/ Date of Hearin g : 09 /02/2022
घोषणा क तार ख / Date of Pronouncement: 24 /02/2022
आदे श/O R D E R
PER T.R. SENTHIL KUMAR, JUDICIAL MEMBER:
These two appeals are filed by the assessee against the revision orders dated 28.3.2021 passed under section 25 of the Wealth Tax Act, 1957 (equivalent to section 264 of the Income Tax Act, 1961) relating to the wealth tax assessment years 2014-15 and 2013-14. We dispose of both these appeals together by this consolidated order as identical issue involved in both the appeals.
2. Common grounds of appeal raised by the assessee are as follows:
"(1) That on facts, and in law, the learned PCIT-3 AHMEDABAD has grievously erred in rejecting the revision application u/s 25 of the wealth tax act 1957.
WTA No.01 and 02/Ahd/2021 2 (2) Having regard to the facts and circumstances of the case of your appellant, the relief claimed in revision application is allowed.
(3) Your appellant craves leave to add/alter or amend any of the grounds till the appeal is finally heard and decided."
3. Brief facts of the case is that the assessee is an individual filed his Return of wealth for the Asst.Years 2013-14 on 31.3.2014 declaring wealth of Rs.4,74,20,794/- and paid wealth-tax of Rs.4,79,744/-. Similarly for the Asstt.Year 2014-15, the assessee filed wealth tax return on 29.5.2015 declaring wealth of Rs.2,82,33,390/- and paid wealth tax of Rs.2,72,518/-. Main asset in the wealth, is relating to "Urban Land" valued at Rs.2,82,33,390/- . There was an amendment to the definition of wealth-tax relating to "urban land" whereby the "asset" would not include, lands classified as agriculture lands in the record of the Government and used for agriculture purpose by the Finance Act 2013 by making amendment to section 2(b) to Explanation 1 to clause (ea) of the Wealth Tax Act. This amendment is applicable with retrospective effect from 1.4.1993. In this regard, Central Board of Direct Taxes (CBDT) has issued a circular bearing No.11 of 2015 dated 11th June, 2015 taking into account retrospective amendment, wherein time limit for filing revised return or application for rectification for the purpose of claiming refund has expired in several cases. This circular was issued to entertain application for refund by various assessees of wealth-tax paid in applicable assessee within one year from the date of issue of circular.
3.1 The assessee by his letter dated 25.2.2016 addressed to ITO, Ward-2, Patan, referred to the CBDT Circular No.11 of 2015 and requested for refund of wealth tax paid of Rs.4,79,744/- and Rs.2,72,518/- for the Asstt.Years 2013-14 and 2014-15. This letter WTA No.01 and 02/Ahd/2021 3 was sent by the assessee by RPAD post. Again on 16.4.2016 one more letter was addressed to ITO, Patan which was received by the ITO on 105.2016 requesting for refund of wealth-tax paid. As there was no reply from the AO, one more application was made by the assessee dated 22.6.2017 and marked a copy thereof to Pr.Commisisoner of Income-tax, Gandhinagar with a request to treat the letter as application under section 25 of the Wealth-tax Act. Again on 26.9.2018, the assessee made an application for revision under section 25 of the Act before the Pr.Commissioner of Wealth- tax, Gandhinagar, which was received by his office on 8.10.2018.
3.2 The ld.CWT after affording an opportunity to the assessee, rejected the application of the assessee vide impugned order dated 28.3.2021. Relevant para-4 and 5 of the impugned order are as follows:
"4. The contentions put forth by the assessee have duly been considered. It is seen that the assessee has filed revision application on 12/01/2018 i.e. after lapse of 30 months, i.e. beyond the period of one year from the date of issue of the Board's Circular No.11/2015 dated 11/06/2015. Thus, as per the said circular, no such claim is to be admitted after expiry of one year from the date of issue of said circular. There is no provision for condonation of delay in this matter. Further, it is noticed that the assessee has now contended after issue of show cause notice that rectification application was filed before the AO, however, no documents has been submitted related to the matter before the jurisdictional AO for consideration of rectification application for issue of refund. There is no mention of such rectification application in the revision petition. The assessee has contended that as huge amount of refund pending since long despite rectification application filed, revision petition u/s. 25 of the W.T.Act has been filed.
5. In view of the above facts, the contention of the assessee is not acceptable, as the issue of refund has been raised after a lapse of 30 months. Hence, revision petition filed by the assessee dated 12/01/2018 is hereby "rejected" and treated as "filed".
WTA No.01 and 02/Ahd/2021 4
4. Aggrieved against the rejection of the revision applications, the assessee is before us.
5. The ld.counsel for the assessee submitted that the "assets" as per section 2(e)(a) is nothing but agriculture land owned by the assessee which is not taxable under the Wealth-tax Act because of the amendment was brought on statute by the Finance Act, 2013 with retrospective effect from 1.4.1993 and consequently wealth-tax paid in respect of such agriculture land is required to be refunded to the assessee. The ld.representative of the assessee further pleaded that the assessee has filed rectification application and reminders before the AO and brought to the attention of the CBDTs Circular No.11 of 2015. However, the AO neither replied to the said letters nor placed the application before the competent authority, namely, Pr.Commisisoner of wealth-tax to entertain these refund applications. It is thereafter, the assessee made applications under section 25 of the WT Act before the Pr.Commissioner, Gandhinagar on 8.12.2018, but the ld.Pr.Commissioner without fully appreciating the circular no.11 of 2015 rejected the Revision Application by holding that the revision/refund application was made after lapse of 13 months, which is against the law. Further, Ld.AR Quoting Circular No.11 of 2015, contended that the Pr.Commisioner shall not set aside any order of refund claim, and while disposing of such application and he ought to have called for a report from the AO and thereafter disposed application.
6. Per contra the ld.DR contended that the application made under section 25 of the Wealth-tax Act are being legally rejected by the ld.Pr.Commissioner of Wealth-tax as per circular no.11 of 2015, wherein it is clearly mentioned that refund application is to be made within one year from the date of issue of this circular i.e. on WTA No.01 and 02/Ahd/2021 5 11.6.2015. Further, in the present case this application is filed before the ld.Pr.Commissioner of WT only 8.12.2018, thereby the Ld.Pr.Commissioner has no power to condone the delay of filing such application beyond one year as prescribed in the Circular. Therefore, the impugned order does not require any interference and requested to uphold the same.
7. We have given our thoughtful consideration and perused material available on record and paper book filed by the assessee. By Finance, 2013 sub-clause (b) of Explanation 1 to clause (ea) of section 2 of the Wealth Tax Act, 1957 was amended to provide the meaning of term "urban land" which would not include land classified as agriculture land in the records of the Government and used for agriculture purpose. Accordingly, such land stands exempt from Wealth Tax, with retrospective effect from 1.4.1993. Since this amendment is retrospective w.e.f 1.4.1993, various representations from the assessee to the CBDT wherein the assessee paid wealth-tax on such agriculture land, which is not payable as per the amendment by the Finance Act, 2013, wherein time limit for filing application or rectification for claiming refund has been expired in several cases. In order to circumvent this, the CBDT vide Circular No.11 of 2015 dated 11.6.2015 has provided as one time measurements allowed assessee's to make such an application within one year from the date of the said circular. The said Circular reads as follows:
Circular No.11/2015F.No.325/02/2014-WT Government of India Ministry of Finance Deaprtment of Revenue Central Board of Direct Taxes New Delhi, the 11th June, 2015 WTA No.01 and 02/Ahd/2021 6 "Order under section 10(2)(b) of the..Wealth-tax Act Prior to amendment by Finance Act 2013-, sub clause (b) of Explanation 1 to clause (ea) of section 2 of the Wealth- tax Act 1957 (Act) provided that an urban land shall be chargeable to wealth-tax.
This inter alia included land situated in any area which is comprised within the jurisdiction of a municipality or. a cantonment board and which has population of not less than ten thousand according to the last preceding census; or land situated in any area within such distance not being more than eight kilometers from the local limits of any municipality or cantonment board as the Central government may, having regard to the extent of, and scope for, urbanization of that area and other relevant considerations specify in this behalf by notification in the official gazette. Subsequently, by Finance Act 2013 the said sub clause (b) of Explanation 1 to clause (ea) was amended to provide that the term "urban land" would not include land classified as agricultural land in the records of the Government and used for agricultural purposes. Accordingly, such land stands exempt from wealth-tax. This amendment was done with retrospective effect from 1.4.1993.
2. Various representations in this regard have been received in the Central Board of Direct Taxes( the Board) that assessees had paid wealth-tax on such agricultural land as per the provisions of the Act as they existed -prior to Finance Act 2013. In view of the amendment brought by the Finance Act 2013 w.r.e.f. 1.4.1993, the wealth-tax paid in respect of such land is required to be refunded. However, the time-limit for filing revised return or application for rectification for the purpose of claiming refund has expired in several cases.
3. With a view to avoid genuine hardship and in exercise of the powers conferred under Section 10(2)(b) of the Wealth-tax Act, the Board hereby authorizes Principal Commissioners/Commissioners of Wealth-tax to admit application for ^revision under "section 25 of the Act from assessees seeking refund arising due to the aforesaid amendment, after the expiry of the period specified under the said section and to deal with it on merits as per law.
4. The Principal Commissioner/ Commissioner of Wealth-tax shall dispose of such applications within one year from the end of the financial year in which the application is received. However, the Principal Commissioner/Commissioner shall not set-aside any order. While disposing the application, the Principal Commissioner/Commissioner may for deciding the matter call for a report from the assessing officer and seek relevant information from the assessee. In case such order results in refund, the assessee shall be entitled to interest on such refund at the rate specified in the Act in this behalf.
WTA No.01 and 02/Ahd/2021 7
5. The application for such claim shall be made by the assessee within, one year from the date of issue of this order. After expiry of the said period, no such claim shall be admitted.
Sd/-
(Ekta Jain) Deputy Secretary to the Government of India
8. On going through the above circular, it could be seen that this circular has been issued by the CBDT with a view to avoid genuine hardship faced by the assessees in claiming refund in accordance with the amendment brought in by the Finance Act, 2013 with retrospective effect from 1st April, 1993 in the matters of wealth-tax paid by the assessee. The case before us is relating to the wealth- tax for the assessment years 2013-14 and 2014-15 wherein time limit for filing application for rectification under section 35 of the Wealth Tax Act are four years (similar to section 154 of the Income Tax Act). Before expiry of this four years period, the assessee herein has filed letters to the AO on 25.2.2016, 16.4.2016, 22.6.2017 with copy marked to Pr.CWT. As there was no response forthcoming from the AO, to the rectification application made by the assessee, he made final application before the Pr.CWT on 23.8.2019 under section 25 of the Act. In other words, the object behind the issuance of this circular by the CBDT is not fully attracted in the case of the assessee, as there were time limit available under section 35 of the WT Act for filing rectification before the AO, which was being exercised by the assessee thrice. Since there was no proper response from the AO, the assessee was forced to make an application under section 25 of the WT Act on 23.8.2019. However, Ld.Pr.CWT passed the impugned order without considering all these facts and the application filed by the assessee, but simply held that rectification application was filed after a lapse of 13 months (i.e. beyond the period of one year from the date of issue of Board WTA No.01 and 02/Ahd/2021 8 Circular No.11 of 2015). As per the Circular no claim can be admitted after expiry of one year from the date of issue of the circular. However, the Ld.Pr.CWT held that there is no provision for condonation of delay in exercising the circular no.11 of 2015. Further, no documents were submitted by the assessee before the jurisdictional AO for consideration of rectification application for issue of refund. We find that the ld.Pr.CWT has not noticed the assessee's letter dated 16.4.2016 which was being received by the department and acknowledged the same on 10.5.2016 and another letter of the assessee dated 25.2.2016 received by speed post and postal acknowledgement which are placed before us in page no.7 to 10 of the paper book filed by the assessee. Thus, the observation of the Pr.CWT is not correct, and also time limit of one year has been expired, is not applicable to the present cases.
9. That apart, there are no record shown before us by the assessee that the said agriculture land are registered with Government or local authority and used for agriculture purpose by the assessee, during the assessment years 2013-14 & 2014-15 to claim exemption under the amended Wealth Tax. Without verification of these material facts, Ld.Pr.CWT ought not to have rejected the application of the assessee as time barred.
10. It is well settled principle of law that Revenue authority cannot collect or retain taxes, when the same is not taxable by virtue of subsequent amendment having retrospective effect, particularly, when Article 265 of the Constitution of India provides that taxes not to be imposed save without Authority of Law. No taxes shall be levied or imposed except by the authority of law. For this, we find support from the following judicial authorities:
WTA No.01 and 02/Ahd/2021 9 10.1. The Hon'ble Bombay High Court in the case of Nirmala L. Mehta vs. A. Balasubramaniam, C.I.T. (2004) 269 ITR 1 (Born) has held that "There cannot be any estoppel against the statute. Article 265 of the Constitution of India in unmistakable terms provides that no tax shall be levied or collected except by authority of law. Acquiescence cannot take away from a party the relief that he is entitled to where the tax is levied or collected without authority of law."
10.2 In the case of Balmukund Acharya vs DCIT, CIT and UOI 310 ITR 310 (Bom) has held that "Tax can be collected only as provided under the Act. If any assessee, under a mistake, misconception or on not being properly instructed is over assessed, the authorities under the Act are required to assist him and ensure that only legitimate taxes due are collected."
10.3 In Sanchit Software & Solutions (P.) Ltd. vs CIT [2012] 349 ITR 404 (Bombay) it has been held that "In any civilized system, the assessee is bound to pay the tax which he liable under the law to the Government. The Government on the other hand is obliged to collect only that amount of tax which is legally payable by an assessee. The entire object of administration of tax is to secure the revenue for the development of the Country and not to charge assessee more tax than that which is due and payable by the assessee. It is in aforesaid circumstances that as far back as in 11/04/1955 the Central Board of Direct Tax had issued a circular directing Assessing Officer not to take advantage of assessee's ignorance and/or mistake."
10.4 Further Circular No. 14(XL-35) of 1955, dated 11.4.1955, issued by the Central Board of Direct Taxes reads as under:
"Officers of the department must not take advantage of ignorance of an assessee as to his rights. It is one of their duties to assist a tax payer in every reasonable way, particularly in the matter of claiming and securing reliefs and in this regard the officers should take the initiative in guiding a tax payer where proceedings or other particulars before them indicate that some refund or relief is due to him. This attitude would, in the long run, benefit the department, for it would inspire confidence in him that he may be sure of getting a WTA No.01 and 02/Ahd/2021 10 square deal from the department. Although, therefore, the responsibility for claiming refunds and reliefs rests with the assesses on whom it is imposed by law, officers should -
(a) draw their attention to any refunds or reliefs to which they appear to be clearly entitled but which they have omitted to claim for some reason or other;
(b) freely advise them when approached by them as to their rights and liabilities and as to the procedure to be adopted for claiming refunds and reliefs"-.
11. In view of the ratio of the above judgments, circulars, we set aside the common order dated 28.3.2021 passed by the Pr.CWT and remand the Revision Petition to the file of the Ld.Pr.CWT with a direction to reconsider the issue in accordance with the amended provisions of the Act and issue refund of wealth tax in accordance with the amended provision of Wealth tax Act. We request the Ld.Pr.CWT to dispose of the applications within a period of three months from the date of receipt of this order. Needless to state that the assessee also produce that the assets are classified by Government/ Local Authority as "Agricultural Lands" so as to satisfy the conditions as prescribed in the amended Wealth Tax Act.
13. In the result, both the appeals filed by the assessee are allowed for statistical purposes.
Order pronounced in the Court on 24th February, 2022 at Ahmedabad.
Sd/- Sd/- (ANNAPURNA GUPTA) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad, dated 24/02/2022 vk*