Income Tax Appellate Tribunal - Indore
Late Smt ,Nanhi Walia ( Through Iegal ... vs Acit Central -1, Bhopal on 23 July, 2024
आयकर अपील य अ धकरण, इंदौर यायपीठ, इंदौर
IN THE INCOME TAX APPELLATE TRIBUNAL
INDORE BENCH, INDORE
BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER
AND
SHRI B.M. BIYANI, ACCOUNTANT MEMBER
M.A. NO.41/Ind/2024
Arising out of
ITA No.142/Ind/2021
(Assessment Year: 2011-12)
Late Smt. Nanhi J. Walia, ACIT Central-1),
(Through Legal Heir Shri Jasjeet Bhopal
Singh Walia),
188, Raijwan Bagh,
Vs.
VIP Road,
Lalghati,
Bhopal
(Appellant / Assessee) (Respondent/ Revenue)
PAN: AABPW2476M
Assessee by Shri Sumit Nema, Sr. Advocate &
Shri Gagan Tiwari, ARs
Revenue by Shri Ashish Porwal, Sr.DR
Date of Hearing 28.06.2024
Date of Pronouncement 23.07.2024
ORDE R
Per Vijay Pal Rao, JM:
By way of this Miscellaneous Application assessee is seeking recalling of order dated 13.07.2023 qua adjudication of Ground No.2 of the Revenue's appeal.
M.A.No.41/Ind/2024Arising out of ITA No.142/Ind/2021 Late Smt. Nanhi J. Walia
2. Ld. DR has raised an objection about the maintainability of the Miscellaneous Application filed by the assessee after the limitation period provided u/s 254(2) of the Act. He has submitted that the impugned order was passed on 13.07.2023 and the order was also received by the counsel of the assessee on 23.08.2023 but the present Miscellaneous Application has been filed on 29.4.2024 which is barred by limitation. To meet out this objection the assessee has filed the affidavit along with an affidavit of Shri Narayan Gupta, CA the briefing counsel in the case of the assessee Ld. Senior Counsel submitted that after receiving the impugned order alongwith the brief from Ms. Nisha Lahoti, CA in the month of September,2023 the briefing Counsel misunderstood the implications of the impugned order of the Tribunal setting aside the matter to the record of the A.O and was of the opinion that the matter has been remanded and the A.O will issue notice for reassessing the matter pursuant to the directions of this Tribunal and therefore, he could not immediately inform the legal heir of the assessee Shri Jasjeet Singh Walia about the impugned order due to his preoccupation in filing the returns and audit work in the month of September. Thereafter on 28.2.2024 the legal heir of the deceased assessee came to the office of the briefing counsel to discuss about the appeal giving effect order passed by the A.O dated 29.11.2023 making the addition in respect of the issue involved in Ground No.2 of Revenue's appeal decided by this Tribunal. After going through the appeal effect order the counsel immediately re-examined the order of this Tribunal dated 2 M.A.No.41/Ind/2024 Arising out of ITA No.142/Ind/2021 Late Smt. Nanhi J. Walia 13.7.2023 and realized that the Tribunal has already decided the issue regarding Ground No.2 against the assessee and consequently advised the legal heir of the assessee to file the Miscellaneous Application before the Tribunal or challenge the order before the Hon'ble High Court as per the advise of Senior Advocate. The Ld. Senior Counsel has submitted that the assessee received the impugned order only on 28.02.2024 and therefore the Miscellaneous Application filed on 29.4.2024 is within the period of limitation reckoning from the date of knowledge and receipt of the impugned order. In support of his contention he has relied upon the judgment of Hon'ble Delhi High Court in case of Specific Projects Ltd V/s ACIT 430 ITR 522 and submitted that the Hon'ble High Court has held that the limitation would begin to run when the affected person has the knowledge of the decision and the date when the order was passed cannot be solely determined by the referring to the date when the same was signed by ITAT. He has further submitted that the law stipulates that the ITAT shall send a copy of order passed by it to the assessee and the Principal Commissioner as per the mode of services provided u/s 282 of the Act. Ld. Counsel has further contended that handing over the copy of the order to the arguing counsel is not a proper service mode as per Section 282 of the Act. Therefore the date of actual knowledge is a reckoning date for filing Miscellaneous Application. The impugned order was received by the arguing counsel and thereafter, finally handed over to the assessee on 28.2.2024. The Ld. Senior Counsel has referred to Rule 35 of the ITAT rules, 1963 3 M.A.No.41/Ind/2024 Arising out of ITA No.142/Ind/2021 Late Smt. Nanhi J. Walia and submitted that it does not provide any mode of communication and therefore the mode of communication provided u/s 282 of the Act is relevant for this purpose. Ld. Senior Counsel has also relied upon the decision of this Tribunal in case of ACIT V/s Manish Kedia 153 Taxmann.com 202 (Indore) as well as the decision in case of Dhanwan Leasing and Finance Co. Ltd V/s ITO 205 ITD 259 (Indore).
3. On the other hand Ld. DR has submitted that the assessee has concocted an after thought story to cover the delay and latches in filing the present Miscellaneous Application. Once the order was received by the arguing counsel of the assessee it is a proper service of the impugned order of the Tribunal and therefore, the limitation will run from the end of the month in which the impugned order was received by the Counsel of the assessee. The assessee has not disputed that Ms. Nisha Lahoti, CA received the impugned order of Tribunal on 23.8.2023 which was also handed over to the alleged briefing counsel Shri Ram Narayan Gupta, CA in the month of September, 2023 therefore, the limitation will reckon from the end of August, 2023 and 6 month would expire at the end of February, 2024. Hence, Ld. DR has submitted that the decision of Hon'ble 4 M.A.No.41/Ind/2024 Arising out of ITA No.142/Ind/2021 Late Smt. Nanhi J. Walia Delhi High Court in case of Pacific Projects Ltd V/s ACIT (supra) is not applicable on the facts of the present case.
4. We have considered the rival submissions and carefully perused the relevant materials on record on the point of limitation of filing the present Miscellaneous Application. There is no dispute that the impugned order of the Tribunal was received by the arguing Counsel of the assessee Ms. Nisha Lahoti, CA on 23.08.2023. The assessee has also admitted the fact that Ms. Nisha Lahoti, CA sent the case file along with the impugned order of this Tribunal to the briefing Counsel Shri Ram Narayan Gupta, CA in the first week of September, 2023 itself. The assessee has filed an affidavit explaining the fact that the assessee has received the impugned order only on 28.4.2024 when the legal heir of the deceased assessee visited the office of Shri Ram Narayan Gupta, CA to discuss about the appeal giving effect order was passed by the A.O as per the directions of this Tribunal. This fact is also corroborated in the affidavit of Shri Ram Narayan Gupta who has stated on solemn oath as under:
5 M.A.No.41/Ind/2024Arising out of ITA No.142/Ind/2021 Late Smt. Nanhi J. Walia 6 M.A.No.41/Ind/2024 Arising out of ITA No.142/Ind/2021 Late Smt. Nanhi J. Walia 7 M.A.No.41/Ind/2024 Arising out of ITA No.142/Ind/2021 Late Smt. Nanhi J. Walia 8 M.A.No.41/Ind/2024 Arising out of ITA No.142/Ind/2021 Late Smt. Nanhi J. Walia 9 M.A.No.41/Ind/2024 Arising out of ITA No.142/Ind/2021 Late Smt. Nanhi J. Walia 10 M.A.No.41/Ind/2024 Arising out of ITA No.142/Ind/2021 Late Smt. Nanhi J. Walia 4.1 Thus in his affidavit Shri Ram Narayan Gupta, CA has explained that he initially misunderstood the outcome and implication of the impugned order of this Tribunal and was of the opinion that the matter is simply remanded to the A.O who will issue the notice for reassessing the matter pursuant to the decision of the Tribunal but only when Shri Jasjeet Singh Walia the legal heir of the deceased assessee came to his office on 28.2.2024 to discuss the appeal given effect order passed by the A.O as per the directions of the Tribunal, he realized that the issue raised by the department in Ground No.2 has already been decided by this Tribunal against the assessee and the matter was remanded to the A.O for limited purpose of giving effect to the findings of the Tribunal and not for readjudication of the issue. Thus Shri Ram Narayan Gupta has reaffirmed the fact that the impugned order was handed over to the assessee's legal heir only on 28.4.2024.
The Ld. DR raised the objection that the service of the order shall be deemed on the date when the arguing counsel has received the order on behalf of the assessee. However, it is pertinent to note that the effective service of the order is considered only when the affected party came to the knowledge of the order passed by this 11 M.A.No.41/Ind/2024 Arising out of ITA No.142/Ind/2021 Late Smt. Nanhi J. Walia Tribunal and if there is a delay in the transit of communication from counsel to the briefing counsel and finally to the assessee then the service of the impugned order would be treated on the date when the affected party and in this case the assessee through her legal heir came to know about the impugned order of the Tribunal.
The statements made in the affidavit of the assessee as well as the briefing counsel go to prove that the assessee had no knowledge of the impugned order prior to 28.2.2024 when it was handed over to the legal heir of the deceased assessee by the briefing counsel. We may take an instance of service and communication of the orders passed by this Tribunal through the office of the Ld. DR but the date of service is considered only when the order of the Tribunal is finally received in the office of Principal CIT as provided u/s 254(3) of the Income Tax Act as under:-
"254. xxxxxxxx (3) The Appellate Tribunal shall send a copy of any orders passed under this section to the assessee and to the Commissioner".
4.2 Further Rule 35 of the ITAT Rules, 1963 also contemplates that the Tribunal shall communicate the order to the assessee and to the Commissioner. Since there is no mode of communication is 12 M.A.No.41/Ind/2024 Arising out of ITA No.142/Ind/2021 Late Smt. Nanhi J. Walia provided in Rule 35 of the ITAT Rules therefore, the mode of communication as provided u/s 282 is relevant for this purpose which reads as under:
282. [ Service of notice generally. [ Substituted by Act 33 of 2009, Section 77 (w.e.f. 1.10.2009).] (1)The service of a notice or summon or requisition or order or any other communication under this Act (hereafter in this section referred to as "communication") may be made by delivering or transmitting a copy thereof, to the person therein named,
(a)by post or by such courier services as may be approved by the Board; or
(b)in such manner as provided under the Code of Civil Procedure, 1908 (5 of 1908) for the purposes of service of summons; or
(c)in the form of any electronic record as provided in Chapter IV of the Information Technology Act, 2000 (21 of 2000); or
(d)by any other means of transmission of documents as provided by rules made by the Board in this behalf.
(2)The Board may make rules providing for the addresses (including the address for electronic mail or electronic mail message) to which the communication referred to in sub-section (1) may be delivered or transmitted to the person therein named.Explanation. - For the purposes of this section, the expressions "electronic mail" and "electronic mail message" shall have the meanings as assigned to them in Explanation to section 66-A of the Information Technology Act, 2000 (21 of 2000).] 4.3 In the case in hand the order was to be communicated physically and not electronically and the mode of the 13 M.A.No.41/Ind/2024 Arising out of ITA No.142/Ind/2021 Late Smt. Nanhi J. Walia communication provided in Clause(a) of Section 282(1) is through post or courier. Hence, the order handed over to the arguing counsel by the registry is not a mode provided u/s 282 of the Act and therefore, so long the order is finally handed over to the assessee it will not be regarded as order is communicated or delivered to the assessee. Even otherwise an omission or lapse on the part of the counsel in communicating the order to the affected party (assessee) cannot take away the right of the affected party/assessee to avail legal remedy against such order. The Hon'ble Delhi High Court in case of Pacific Projects Ltd V/s ACIT in para 7 to 9 observed as under:
"7. This Court is also of the view that the ITAT has erroneously concluded that the miscellaneous application filed by the petitioner was barred by limitation under Section 254(2) of the Act inasmuch as the petitioner had filed the miscellaneous application within six months of actual receipt of the order. If the petitioner/assessee had no notice and no knowledge of the order passed by the ITAT, it cannot be said that the limitation would start from the date the order was pronounced by the Tribunal.
8. In fact, the issue raised in the present petition is squarely covered in favour of the petitioner/assessee by way of the Division Bench judgment of this Court in 'Golden Times Services Pvt. Ltd. Vs. DCIT' being W.P. (C) No. 402/2020 dated 13th 2010 wherein it has been held as under:
10. Be that as it may, the real question before us is as to what would be the relevant date for the purpose of commencement of period of limitation. To hold the date of the order to be the relevant date for the purpose of calculating the period of six months envisaged under Section 254(2) of the Act, can lead to several absurd and anomalous situations. An order passed without the knowledge of the aggrieved party, would render the remedy against 14 M.A.No.41/Ind/2024 Arising out of ITA No.142/Ind/2021 Late Smt. Nanhi J. Walia the order meaningless as the same would be lost by limitation while the person aggrieved would not even know that an order has been passed. Such an interpretation would not advance the cause of justice and would not be the correct approach and thus cannot be countenanced. A person who is aggrieved or concerned with an order would legitimately be expected to exercise his rights conferred by the provision and unless the order is communicated or is known to him, either actually or constructively, he would not be in a position to avail such a remedy. The words "six months from the end of the month in which the order was passed" therefore, cannot be given a narrow and restrictive interpretation. There are several decisions of the Apex Court and other High Courts, where similar question came up for consideration. The Courts have always leaned in favour of an interpretation which would enable an aggrieved party to avail its remedy in a meaningful manner, so that the right conferred by a provision does not remain fanciful or illusionary.
xxxx xxxx xxxx xxxx
12. As noted above, Section 254(2) of the Act has undergone certain amendments. However, there is no dispute that the provision still retains the distinctive two parts as observed by the Supreme Court in the above noted case. We are presently concerned with a scenario under Section 254 (2) of the Act where the assessee has invoked its jurisdiction seeking rectification / amendment of the order passed by the ITAT. In this situation, the assessee has claimed that it did not have the knowledge of the earlier order passed by the ITAT on 18.10.2016 and the period of limitation of six months should commence from the date of the receipt of the order. In our opinion, the limitation would begin to run when the affected person has the knowledge of the decision. The date when the order was passed cannot be solely determined by referring to the date when the same was signed by the ITAT. We further find that under Section 254 (3) of the Act, the law stipulates that the ITAT shall send a copy of the order passed by it to the assessee and the Principal Commissioner. Further, Rule 35 of the ITAT Rules also requires that the orders are required to be communicated to the parties. For ready reference, Section 254 (3) of the Act and the relevant rule are reproduced hereinunder:
"254. Orders of Appellate Tribunal.
xxxx xxxx xxxx (3) The Appellate Tribunal shall send a copy of any orders passed under this section to the assessee and to the Principal Commissioner or Commissioner.15 M.A.No.41/Ind/2024
Arising out of ITA No.142/Ind/2021 Late Smt. Nanhi J. Walia
35. Order to be communicated to parties. The Tribunal shall, after the order is signed, cause it to be communicated to the assessee and to the Commissioner."
13. From the above noted provisions, it emerges that the Section and the Rule mandates the communication of the order to the parties. Thus, the date of communication or knowledge, actual or constructive, of the orders sought to be rectified or amended under Section 254(2) of the Act becomes critical and determinative for the commencement of the period of limitation. The ITAT has not applied its mind on this aspect and has been swayed by the literal and mechanical construction of the words "six months from the end of the month in which the order was passed". The ITAT failed to even delve into the question whether the affected party, either actually or constructively, was in knowledge of the order passed by the ITAT.
xxxx xxxx xxxx xxxx
15. The assessee had challenged the ex parte order dated 18.10.2016 and consequently, keeping in view, the aforesaid decisions, we are of the considered opinion that the starting point of limitation provided under Section 254 (2) of the Act has to commence from the date of the actual receipt of the judgment and order passed by the ITAT which is sought to be the reviewed."
9. For the foregoing reasons, the course adopted by the ITAT at the first instance, by dismissing the appeal for non-prosecution, and then compounding the same by refusing to entertain the application for recall of the order, cannot be sustained. We, therefore have no hesitation in quashing the impugned order. Accordingly, the present petition is allowed. The order dated 29th July, 2019 is quashed and in the peculiar facts and circumstances of the case, we also set-aside the ex-parte order dated 1st September 2017 with a direction that the www.taxguru.in WP(C) 2080/2020 Page 6 of 6 ITAT shall hear and dispose of ITA No. 6686/De1/2013 on merits after affording the parties an opportunity of hearing."
4.4 The Hon'ble High Court has observed that the order passed without the knowledge of the aggrieved party would render the remedy against the order meaningless as the same would be lost 16 M.A.No.41/Ind/2024 Arising out of ITA No.142/Ind/2021 Late Smt. Nanhi J. Walia by limitation while the person aggrieved would not even known that an order has been passed. Unless the order is communicated or is known to the aggrieved party, either actually or constructively, he would not be in a position to exercise his rights conferred by the law and otherwise it is legitimately be expected. By following the above decision of Hon'ble Delhi High Court this Tribunal in case of ACIT V/s Manish Kedia (supra) has held in para 8 as under:
"8. We have considered rival submissions of both sides and perused the provisions of section 254(2) in the light of decisions cited before us. After a mindful consideration, we find that the Hon'ble Delhi High Court in Pacific Projects Limited (supra) has made a detailed analysis of the provision of section 254(2) and categorically held that the time-limit of 6 months would have to be computed with reference to the actual receipt of order by the parties. We have also perused the decision of Hon'ble Punjab & Harayana High Court in Raja Malwinder Singh (supra) and find that the said decision was concerned with a different controversy and it did not deal the issue as to whether or not the time-limit shall be computed with reference to actual receipt of order by parties. Therefore, the said decision does not resolve the controversy involved in present- appeal. Another decision of ITAT, Pune in Shri Kasturilal Sardarilal Luthra, Nashik (supra) relied upon by Ld. AR has, though held that the time-limit cannot be reckoned from date of actual receipt of order, but the same is given by ITAT which is a lower forum than the Hon'ble High Court of Delhi. Therefore, we are duty bound to follow the judicial discipline and obey the decision of Hon'ble Delhi High Court in the case of Pacific Projects Limited (supra) which has clearly held that the time-limit has to be computed with reference to the date of receipt of order. No other decision of any High Court against this proposition held by Hon'ble Delhi High Court has been cited before us. Therefore, respectfully following the decision in Pacific Projects Limited (supra), we are inclined to hold that in the present case, the Revenue's M/A filed on 25.08.2022 within 6 months with reference to the date of actual receipt of order by Revenue is valid. Consequently, the objection raised by Ld. DR is rejected."17 M.A.No.41/Ind/2024
Arising out of ITA No.142/Ind/2021 Late Smt. Nanhi J. Walia 4.5 Thus the limitation will reckoned from the date of actual receipt of order by the adversely effected or the aggrieved party for filing the Miscellaneous Application u/s 252(2) of the Act.
Accordingly in the facts and circumstances of the case we are satisfied that the assessee received the impugned order only on 28.2.2024 and prior to the said date the assessee through its legal heir has no knowledge about the impugned order and consequently the Miscellaneous Application filed by the assessee on 29.4.2024 is considered as within the period of limitation reckoning from the date of actual communication of the impugned order to the assessee i.e. 28.4.2024.
4.6 On the mistake apparent from the record the Ld. Senior Counsel has submitted that the first mistake occurred in para 8 of the impugned order of the Tribunal where the Tribunal has considered provisions of Section 50C to uphold the additions made by the A.O ignoring the fact that the provisions of Section 50C are not applicable in case a buyer and this provision is applicable only in the case of seller for computation of capital gain. Thus by adopting fair market value as per the provisions of Section 50C this 18 M.A.No.41/Ind/2024 Arising out of ITA No.142/Ind/2021 Late Smt. Nanhi J. Walia Tribunal while held upholding the addition made by the A.O is a mistake apparent from the record.
5. The second mistake as occurred in para 10 & 11 of the impugned order wherein the Tribunal has considered the alleged statement of the husband of the assessee which is in the nature of confection for on-money payment for purchase of the properties by the assessee. However, there is no such statement either on record of the A.O or confronted to the assessee by the A.O before this same was made a basis of addition. He has further submitted that CIT(A) has categorically stated in the impugned order that no evidence is on record to show the alleged on-money payment by the assessee.
He has referred to the addendum to the Miscellaneous Application and submitted that the A.O has simply made sweeping remarks about the confessional statement of Shri Jasjeet Singh Walia for on-
money payment without having the alleged statement that the A.O or on record as well as without confronting the statement with the assessee. Therefore, the A.O has not brought any material on record to show that any on-money has actually been paid by the assessee. Ld. Sr. Counsel has referred to the decision of this Tribunal dated 18.11.2022 in case of DCIT V/s Jasjeet Singh Walia 19 M.A.No.41/Ind/2024 Arising out of ITA No.142/Ind/2021 Late Smt. Nanhi J. Walia ITA No.183/Ind/2020 and submitted that while deciding the appeal of the Revenue in case of Jasjeet Singh Walia the Tribunal has upheld the order of CIT(A) deleting the addition made on factual incorrect footings that the assessee has purchased lands and paid on-money. The A.O has made addition on the basis of the alleged statement recorded by the department regarding the on-money payment but such statement/investigation was never confronted to the assessee or placed on record by the A.O or before the Tribunal consequently considered the alleged statement by the Tribunal which is neither brought on record nor confronted to the assessee would amount an apparent mistake on record to be rectified u/s 254(2) of the Act. He has relied upon the decision of the Hyderabad Tribunal dated 6.5.2022 in case of GVPR Engineers Limited V/s ACIT in M.A. Nos. 58 & 59/Hyd/2022 in ITA Nos.1617& 1618/ Hyd/2017.
5.1 On the other hand Ld. DR has submitted that the Tribunal has given the finding on merits after considering all the relevant facts as well as contentions of the parties and therefore there is no apparent mistake from the record which can be rectified u/s 254(2) of the Act. He has relied upon the judgment of Hon'ble Delhi High 20 M.A.No.41/Ind/2024 Arising out of ITA No.142/Ind/2021 Late Smt. Nanhi J. Walia Court in case of CIT V/s Maruti Insurance Distribution Services Ltd 212 Taxman 123(Delhi) and submitted that only the mistake apparent from the record is rectifiable. The power to rectify the mistake u/s 254(2) does not cover the cases wherein a revision or review of order is intended. A mistake apparent from record does not cover any mistake which may be discovered by a complicated process of investigation, argument or proof. It does not extend to cover the errors of law or re-appreciate factual findings. Therefore, the Ld. DR has submitted that the Miscellaneous Application of the assessee is seeking readjudication of facts and reasoning. He has also relied upon The decision of the Hon'ble Gujarat High Court in case of Vrundavan Ginning and Oil Mill vs. Assistant Registrar / President [2021] 434 ITR 583 (Guj)
6. We have considered the rival contentions as well as relevant material on record. The grievance of the assessee in the present Miscellaneous Application is regarding the finding of the Tribunal in respect of Ground No.2 recorded in Para 9 to 11 of the impugned order which is reproduced as under:
"9. We have considered the rival submissions as well as relevant material on record. The Assessing Officer has given details of the fair market value and the valuation shown by the assessee of the properties purchased 21 M.A.No.41/Ind/2024 Arising out of ITA No.142/Ind/2021 Late Smt. Nanhi J. Walia during the year under consideration in table given in para 8 at serial 2 to 4 as under:
Sr. Description of Seller Seller
No properties Registered Fair Market
value (in Rate (in Rs.)
Rs.)
Land bearing Mrs. 85,00,000 1,93,60,000
Khasara Namrata
No.18/2/1/6/3(18 Chopra
/2/1 w/o Dr.
/6/4 Sandeep
chopra, R/o
Dr.
Chopra
Niwas,
52,Almeda
Park, Bandra
Mumbai
(M.H. and
Shri Rajesh
Kokane R/s:
A-706,
Empress
Court,survey
no.67/B,
Empress
county,
Sopan Bagh,
Pune-
411001
No.18/2/1/6/3(18 Dr. H.S. 42,50,000 1,29,32,000
/2/1 Kapoor
/6/4 measuring S/0
0.222 late Shri
hec. Village- Prakas
Kohefiza, Ph no. 23, h
Vikaskhand-Fanda, Chand
The-Huzur, Bhopal Kapoor
DOR: , R/s.
23.02.2011 102-H, Ridge
Road,
Idgah Hills
Bhopal
22
M.A.No.41/Ind/2024
Arising out of ITA No.142/Ind/2021
Late Smt. Nanhi J. Walia
Land bearing Dr. Rajdeep 72,50,000 2,06,50,500
Khasra Kapoor
no.18/2/1/6/6/3 S/on Dr. H.S.
18/2/1/6/6/4/4 Kapoor
measuring 0.222 R/o 102 H,
hec. (i.e.- 0.55 acre) Rij
with constructed Road
are Idgah Hills
a measuring on Bhopal
ground floor is
857.41 sq.mt and
on
1 st floor is 428.73
sq
mt. village-Kohefiza,
Phno.23, Ward no.5
Vikashkhand
Fanda,
The-Huzur, Bhopal
DOR-23.02.2011
10. From the details as recorded by the AO it is clear that the notified circle rate/the stamp duty valuation of all these properties is ranging from 200% to 300% of the purchase consideration shown in the sale deed. Though the assessee has objected to the adoption of the fair market value as the actual purchase consideration paid by the assessee however, it is not case of the assessee that these properties are having any disadvantage or defects due to bad location or narrow excess etc. which may lead to the market price of the property less than the prevailing fair market value and stamp duty valuation. It is well known fact that in Indian it is almost impossible to find the market rate of land less than the notified circle rate being stamp duty valuation and that too only 1/3 or ½ of the stamp duty valuation. It is beyond conceivable possibilities that a land situated in the capital city of the State having no defect or disadvantage could be available at price of 1/3 or ½ of the notified circle rate or stamp duty valuation. Therefore, this glaring facts lead to the only logical conclusion that purchase consideration shown in the sale deed is not real consideration. The AO has considered the crucial fact revealed by the husband of the assessee in the statement that on-money was paid for purchase of properties. The AO has adopted the stamp duty valuation as fair market price and held that the assessee had paid the purchase consideration at least equivalent to stamp duty valuation. The assessee 23 M.A.No.41/Ind/2024 Arising out of ITA No.142/Ind/2021 Late Smt. Nanhi J. Walia has not produced any material in support of the claim that actual fair market value of these properties is the purchase consideration shown in the sale deed. As regards the order of this Tribunal dated 18.11.2022 in case of DCIT vs. Shri Jasjeet Singh Walia (supra) the Tribunal has upheld the finding of Ld. CIT(A) as under:
"23. During first-appeal, the assessee made a detailed submission to Ld. CIT(A). After considering submission of assessee, Ld. CIT(A) deleted additions by observing and holding as under: "4.6.1 I have considered the facts of the case, plea raised by the appellant and findings of the AO. The appellant before me has strongly contended that the said properties were not purchased by the appellant, however, the said properties were sold by appellant. Since the lands were rural agricultural lands and therefore, capital gain from such sale was exempt u/s 10(37) of the Act. In support appellant has filed copies of registered deeds. On perusal of copies of registered deed it was found that the observations made by the AO were factually incorrect. The appellant has sold the above mentioned lands. Both the lands were rural agricultural lands. Since, the lands under consideration were rural land, therefore, the capital gain arising on same of such land is exempt uls 10(37) of the Act which has been claimed & quot; by the appellant in return of income at Rs. 11,11,220/-. The AO has accepted the exemption claimed by the appellant and no addition was made on this account. 4.6.2 In. view of the above discussion, the addition made by the AO was factually incorrect and deserves to be deleted. Thus, addition made by the AO amounting to Rs. 64,35,000/- is Deleted. Therefore, appeal on this ground is Allowed."
24. On a careful consideration, we observe that the Ld. CIT(A) has clearly observed that the Ld. AO has made addition on a factually incorrect footing that the assessee had purchased the lands. In fact, the assessee has sold the lands and not purchased as claimed by Ld. AO. Thus, the very foundation of addition adopted by Ld. AO is incorrect. We further observe that the Ld. CIT(A) has also found that the impugned lands sold by assessee were rural agricultural lands whose capital gain was not taxable under the scheme of Income-tax Act. During hearing before us, the Ld. DR could not contradict these finding made by Ld. CIT(A). Therefore, we have no reason to upset the finding of Ld. CIT(A). Consequently, we are inclined to uphold the action of Ld. CIT(A). Thus, Ground No. 9 of Revenue is also dismissed."
11. It is clear from the facts recorded in the case of DCIT vs. Shri Jasjeet Singh Walia (supra) that it was a case of capital gain on sale of agricultural land exempted u/s 10(37) of the Act and therefore, the Ld. CIT(A) deleted the addition made by the AO on account of capital gain on the ground that it will not have any revenue effect as the capital gain 24 M.A.No.41/Ind/2024 Arising out of ITA No.142/Ind/2021 Late Smt. Nanhi J. Walia arising from agricultural land is exempted u/s 10(37) of the Act. In the said case there was no finding of fact that the assessee did not receive any amount over and above the sale consideration shown in the sale deed. Even otherwise in case of capital gain the provisions of section 50C are applicable which are deeming provisions and therefore, the question of actual sale consideration received by the assessee is irrelevant. Accordingly, the said decision of the Tribunal does not cover the issue involved in the case of the assessee before us. The stamp duty valuation is a matter of record and not disputed by the parties being recorded in the sale deed itself at the time of registration. Therefore, in absence of any other material or evidence produced by the assessee the stamp duty valuation is relevant and material evidence on the issue of on-money exchanged hands. The AO had given details of stamp duty valuation of each land and purchase consideration claim to have been paid by the assessee as shown in the sale deed which are not in dispute. Therefore, by considering facts and circumstances of the case the only logical conclusion can be arrive that the purchase consideration shown by the assessee in the sale deed is not the real payment made by the assessee and hence addition deleted by the CIT(A) by ignoring the glaring facts and undisputed fair market value is not justified. Accordingly, we set aside the impugned order of ld. CIT(A) and restored the matter of the AO."
6.1 The Ld. Sr. Counsel of the assessee has raised two points to show that there is an apparent mistake in the impugned order of the Tribunal adjudicating Ground No.2 of the Revenue appeal. The first mistake is referred to is adoption of fair market value as per Section 50C of the I.T Act and contended that the provisions of Section 50C are not applicable in case of the buyer as this provision are deeming provisions specifically for computation of capital gain in the hands of seller. The second mistake is pointed put in respect of the addition made by the A.O on the basis of alleged statement of Shri Jasjeet Singh Walia the husband of the deceased 25 M.A.No.41/Ind/2024 Arising out of ITA No.142/Ind/2021 Late Smt. Nanhi J. Walia assessee which has been affirmed by the Tribunal without even verifying the fact whether the said statement was part of the assessment recorded or not and further it was never confronted to the assessee by the A.O before making the same a basis of the addition. So far as the first mistake is concerned we find that the Tribunal has not given the finding that the provisions of Section 50C are applicable in case of the buyer but the finding is given that while determining the quantum of on-money payment the fair market price as per circle rates/stamp duty Valuation can be taken as guidance. Therefore, to that extent the finding of the Tribunal does not suffer from any mistake apparent from the record. So far as the alleged confession on the part of the husband of the assessee regarding payment of on-money is concerned we find that though the A.O has made the statement of the husband as basis of the addition but what are the contents of the alleged statement are not either discussed or reproduced by the A.O in the assessment order.
Now the assessee has specifically contended that the alleged statement was not a part of assessment record nor was confronted with the assessee before it was made a basis of the addition. It is settled proposition on the point that assumption of incorrect facts 26 M.A.No.41/Ind/2024 Arising out of ITA No.142/Ind/2021 Late Smt. Nanhi J. Walia or presumption of non-existing facts while passing the order on factual issue is certainly amounts to a mistake apparent from the record. There is no quarrel on the point that the scope and jurisdiction u/s 254(2) is very limited and circumscribed only to rectify the mistake apparent from the record however, non consideration of crucial relevant facts certainly constitutes the mistake apparent from record. The Hyderabad Benches of this Tribunal in case of GVPR Engineers Limited V/s ACIT (supra) has cited various judgments wherein the Hon'ble High Courts as well as Hon'ble Supreme Court has analysed and interpreted the scope of mistake apparent from the record, which are reproduced by the Tribunal in Para 28 of the said order as under:
"28. The mistake apparent from record had not been defined in the I.T Act, however there are many mistakes which had been considered by the Hon'ble Supreme Court and High Courts as mistake apparent from record.
I. M/s.Universal Cold Storage Ltd Vs. DCIT (2020) 168 Taxman 178 (Mad) - When the Tribunal passed order dismissing the appeal of assessee on account of non- appearance of the assessee, then it has power to recall its order.
II. Hon'ble Supreme Court of India in Assistant Commissioner of Income Tax vs. Saurashtra Kutch Stock Exchange Limited (2008) 219 CTR (SC) 90 settled long ago that non-consideration of the decision of the jurisdictional High Court /Supreme Court constitutes mistake apparent from record and is rectifiable within the meaning of section 254(2) of the Income Tax Act, 1961.
27 M.A.No.41/Ind/2024Arising out of ITA No.142/Ind/2021 Late Smt. Nanhi J. Walia III. Non-consideration of the decisions of the constitutional/writ court touching upon the issue under consideration and ignored by the Hon'ble tribunal while MA Nos.58 & 59/Hyd/2022 GPVR Engineers Limited adjudicating the matter in dispute, Amore Jewels (2018) 2 NYPCTR 734 (Bom) holding that non consideration of case laws cited and hence covered under s 254(2) (4) R.A. Boga vs. AAC (1977) 110 ITR 1 (P&H)(FB), IV. A mistake apparent from record means an 'obvious or patent mistake' or a 'glaring and obvious mistake'. Hotly debatable issues are excluded; hardly debatable issues are included. The issue may be complicated, yet the mistake may be simple. It is a mistake apparent from record. The test is not complexity of the issue but simplicity of the mistake.
V. Sun Engineering Works (P) Ltd. (1992) 198 ITR 297 (SC), "it is neither desirable nor permissible to pick out a word or a sentence from the judgment of this Court, divorced from the context of the question under consideration, and to treat it to be complete law declared by this Court". The Tribunal has ended up doing something which, as is the law laid down by the Hon'ble Supreme Court, is impermissible in law. That cannot but be a glaring, obvious and patent error and, accordingly, liable to be rectified under s. 254(2) of the Act. To suggest that a conscious mistake, even if that be a mistake apparent from record, cannot be rectified under s. 254(2) is somewhat devoid of logic and rationale. If a conscious mistake is a mistake apparent from record, there is no reason for not rectifying the same under the provisions of law. To err is human but there cannot be any justification for perpetuating an error.
VI. In Laxmi Electronic Corporation Ltd. vs. CIT (1991) 188 ITR 398 (All) the Tribunal had omitted to consider a preliminary objection that the appeals were barred by time although the same had been urged in arguments before the Tribunal. The Court held that the proposition that a contention urged but not dealt with by the Tribunal can be taken as having been negatived is not inconsistent with the power of the Tribunal to reopen the appeal where it is brought to its notice that an important contention raised by the party was not dealt with by the Tribunal in its order. The Court held that such a power must be held to be inherent in the Tribunal since it would be a case where the party has suffered prejudice for no fault of his and on account of the mistake or error on the part of the Tribunal. It held that the failure to deal with the preliminary objection relating to the maintainability of the appeal on the ground of limitation amounted to an error apparent on the face of the record which empowered the Tribunal to reopen the appeal and rectify the mistake if it was so satisfied.
28 M.A.No.41/Ind/2024Arising out of ITA No.142/Ind/2021 Late Smt. Nanhi J. Walia VII. In Kil Kotagiri Tea and Coffee Estates Company Ltd. vs. ITAT (1988) 174 ITR 579 the Kerala High Court held that where the Tribunal had relied on a decision of a single Judge of the Kerala High Court which was subsequently overruled the order passed by the Appellate Tribunal disclosed a mistake apparent from the record and that the Tribunal ought to have exercised its powers under Section 254(2) and rectified its order on the basis of the assessee's application for rectification.
VIII. Non consideration of a provision of law which would have material bearing on the decision is a glaring obvious and self-evident mistake apparent from the record. Such a mistake would be required to be corrected (CIT vs. Quilon Marine Produce Co. (1986) 157 ITR
448). Modu Finblo vs. 1st WTO (1995) 53 ITD 53 (Pune) (TM) ITO vs. Gilard Electronics (1986) 18 ITD 176 (JP), ACIT vs. Sornamy Alkington Ltd. (1994) 49 ITD 207 (Delhi). Similarly, non consideration of a Rule World also be rectifiable CIT vs. Ballabh Prasad Agarwalla (1997) 90 Taxman 283 (Cal.) IX. 257 ITR 440 (Raj) - CIT vs. S.S.Gupta - A finding of fact was reached against the Assessee on the basis of material which was conveyed to the Tribunal after the hearing was over without affording an opportunity to the assessee to explain the information, which information apparently vitiated the order. On a miscellaneous application filed by the assessee the Tribunal recalled its order and reheard the appeals. The High Court on an appeal preferred by the department confirmed the order of the Tribunal.
X. 179 CTR 265 (SC) - Jyotsna Suri vs. ITAT - The Tribunal decided the matter on merits without considering the application for adducing additional evidence pending before it. The Assessee filed a rectification application which was rejected. The High Court while deciding the appeal on merits affirmed the view of the Tribunal and held that no application u ITR s 254(2) would lie in the circumstances. On an appeal, the Supreme Court set aside the order of the High Court and remanded the matter back to the file of the Tribunal to decide the application u ITR r 29 on merits and thereafter dispose of the appeal on merits.
XI. 261 ITR 49 (Del - Seth Madanlal Modi vs. CIT - The Tribunal admittedly relied on a wrong section while passing the order on merits. The Assessee filed an application for rectification on that ground. The Tribunal upheld the application MA Nos.58 & 59/Hyd/2022 GPVR Engineers Limited and recalled its order. The Department went in appeal, the High Court upheld the decisions of 29 M.A.No.41/Ind/2024 Arising out of ITA No.142/Ind/2021 Late Smt. Nanhi J. Walia the Tribunal inasmuch as reliance on a wrong provision of law tantamount to an error apparent on record. Also see 267 ITR 450 (Mad) Prithviraj Chohan vs. CIT.
XII. Similarly, in case the Tribunal had dismissed the appeal of the assessee on account of low tax effect as per the CBDT Circular. or case of the assessee falls in any exceptions mentioned in board circular, then in our view the Tribunal has power to recall the order as the mistakes are apparat on the face of the record.
XIII. Lastly, in the case of Cumbum Co-operative Town Bank Limited, Prakasam in M.A. 89/Hyd/2021 in ITA No.2040/Hyd/2018 dt. 05.05.2022, the Tribunal has recalled its order, as the Tribunal had allowed the appeal of the assessee by relying upon the wrong provisions of law."
6.2 The CIT(A) while deleting the addition has recorded that the A.O has not brought any evidence on record to show that there was a on-money payment by the assessee for purchase of property. This recording of the CIT(A) though challenged by the department in the appeal however, nothing has been brought on record or contended to show that the alleged statement which is the basis of the addition is a material evidence and available with the A.O and also brought on record at the time of making this addition. It is also undisputed that such statement was not confronted by the A.O to the assessee therefore, if the addition is made by the A.O in the absence of such statement and without confronting to the assessee is highly questionable action on the part of the A.O. Thus, not offering an opportunity to the assessee on this point of confessional statement of the husband of the assessee is certainly an apparent mistake on the record which requires to be rectified. Accordingly in the facts and circumstances of the case and in the interest of 30 M.A.No.41/Ind/2024 Arising out of ITA No.142/Ind/2021 Late Smt. Nanhi J. Walia justice we recall the impound order qua finding of Ground No.2 recorded in Para 9 to 11 of the impugned order for limited purpose of hearing and adjudication of Ground No.2 of the revenue appeal afresh. The registry is directed to refix the appeal of the revenue for hearing and adjudication of Ground No.2 on 29.08.2024. Notice to be issued to the parties.
7. In the result Miscellaneous Application appeal of the assessee is allowed.
Order pronounced in the open court on 23.07.2024.
Sd/- Sd/-
(B.M. BIYANI) (VIJAY PAL RAO)
Accountant Member Judicial Member
Indore,_ 23.07.2024
Dev/Sr. PS
Copies to: (1) The appellant
(2) The respondent
(3) CIT
(4) CIT(A)
(5) Departmental Representative
(6) Guard File
By order
UE COPY
Sr. Private Secretary
Income Tax Appellate Tribunal
Indore Bench, Indore
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