Income Tax Appellate Tribunal - Delhi
Sh. Surinder Singh, New Delhi vs Ito, New Delhi on 11 October, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH 'G' NEW DELHI
BEFORE SHRI G.D. AGRAWAL, HON'BLE PRESIDENT
AND
SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER
ITA No. 3450/Del/2017
AY: 2009-10
Shri Surinder Singh, vs Income Tax Officer,
C/o M/s Manoj Kumar Mittal & Co., Ward-48(4),
CAs, 305, Dakha Chamber, New Delhi.
2068/38, Nai Wala,
Karol Bagh,
New Delhi-110005
ITA No. 4796/Del/2015
AY: 2009-10
Shri Suridner Singh, vs Pr. CIT,
C/o M/s Manoj Kumar Mittal & Co., Delhi-XVI,
CAs, 305, Dakha Chamber, New Delhi.
2068/38, Nai Wala,
Karol Bagh,
New Delhi-110005
(PAN: APXPS4486C)
(Appellant) (Respondent)
Assessee by: Shri Manoj Kumar, CA
Department by : Shri S.S. Rana, CIT DR
Date of hearing: 19.07.2018
Date of pronouncement: 11.10.2018
ORDER
PER BENCH Both these appeals have been preferred by the assessee. ITA No. 4796/Del/2015 is preferred against the order dated 10.1.2014 passed u/s 263 of the Income Tax Act, 1961 ITA No.3450/Del/2017 ITA No. 4796/Del/2015 Assessment year 2009-10 (hereinafter referred to as "the Act") by the Ld. Commissioner of Income Tax -X, New Delhi for assessment year 2009-10 wherein vide the impugned order, the Ld. CIT has set aside the original assessment order dated 30.12.2011 passed u/s 143(3) of the Act. ITA No. 3450/Del/2017 is assessee's appeal against order dated 1.8.2016 passed by the Ld. CIT (Appeals)-16, New Delhi wherein vide the impugned order, the Ld. CIT (A) has dismissed the assessee's appeal against the consequential assessment order passed u/s 143(3) of the Act subsequent to the proceedings u/s
263. Both the appeals were heard together and for the sake of convenience, they are being disposed of by this common order. 2.0 Brief facts of the case are that the return of income was filed declaring an income of Rs.6,40,430/-. The case was selected for scrutiny under CASS and the original assessment was completed at Rs.55,30,884/- after making an addition of Rs. 48,59,495/- on account of unexplained cash credit u/s 68 of the Act. Additions were also made on account of interest income and disallowance out of vehicle expenses and depreciation on car. Subsequently, the Ld. CIT initiated proceedings u/s 263 of the Act on the ground that the assessee had claimed deduction of Rs. 17,33,046/- u/s 54 of the Act although, as per the Ld. CIT, the 2 ITA No.3450/Del/2017 ITA No. 4796/Del/2015 Assessment year 2009-10 assessee was not eligible for such deduction as the assessee was not the legal owner of the property for which he had claimed deduction u/s 54 of the Act. The Ld. CIT observed that while claiming the benefit of exemption u/s 54, the assessee had claimed benefit of exemption of property purchased from his wife which was transferred to the assessee by his wife by a General Power of Attorney instead of a sale deed. After issuing show cause notice and taking the submissions of the assessee on record, the Ld. CIT reached the conclusion that the case required a deeper investigation by the Assessing Officer. He, accordingly, set aside the file to the office of the Assessing Officer with the direction to re-examine the entire matter. The assessee is in appeal against this order passed u/s 263 in ITA No. 4796/Del/2015.
2.1 Thereafter, subsequently, the Assessing Officer completed the assessment u/s 143(3) r/w section 263 on 31.03.2015 by making an addition of Rs. 17,33,046/- by holding that the assessee's claim u/s 54 of the Act was not allowable. The assessee's appeal against this assessment was dismissed by the Ld. CIT (A) and the assessee has approached the ITAT 3 ITA No.3450/Del/2017 ITA No. 4796/Del/2015 Assessment year 2009-10 challenging the disallowance of claim of exemption u/s 54 T in ITA No. 3450/Del/2017. 3.0 At the outset, the Ld. AR submitted that there was a delay in filing the appeal bearing caption ITA No. 4796/Del/2016 by 478 days. The Ld. AR submitted that the assessee had earlier appointed Shri Hari Ram Aggarwal, CA to represent the assessee in the proceedings u/s 263 before the Ld. CIT and thereafter after the receipt of the order u/s 263, the assessee was not guided by the afore said AR that a remedy was available to the assessee by preferring an appeal against the order passed u/s 263 before the ITAT. It was prayed that the delay be condoned and the appeal be admitted to be decided on merits. 4.0 The Ld. CIT DR opposed the assessee's application for condonation of delay.
5.0 Having heard both the parties on the issue of condonation of delay and after perusal of the records, we note that the averment of the assessee that he was not properly guided by the Ld. AR for preferring an appeal against the order passed u/s 263 of the Act before the ITAT is not borne out from the records. Although the assessee has filed an affidavit in this regard but we are of the considered opinion that the assessee also did not 4 ITA No.3450/Del/2017 ITA No. 4796/Del/2015 Assessment year 2009-10 exercise proper care and diligence in looking after his own income tax assessment proceedings. We are of the considered opinion that the assessee cannot entirely shift the onus of carelessness to the AR in this regard and we are not inclined to condone the delay of 478 days. It is settled law that an avoidable cause for delay by due care and attention cannot be sufficient cause. Cause attributable to negligence or inaction of the party cannot be sufficient cause. Negligence and laches on the part of the counsel cannot be condoned. Accordingly, we dismiss the assessee's application for condonation of delay. 6.0 Accordingly, the assessee's appeal preferred against the order passed u/s 263 in ITA No. 4796/Del/2015 is dismissed as un-admitted.
7.0 We now take up the assessee's appeal in ITA No. 3450/Del/2017. The Ld. AR has submitted that the only ground for reopening the assessment u/s 263 of the Act was that the impugned property was not transferred by sale deed but by a General Power of Attorney which did not make the assessee a full legal owner of the property. It has been further submitted that the assessee had submitted various documents to support the purchase transaction like payment receipt, agreement to sell, 5 ITA No.3450/Del/2017 ITA No. 4796/Del/2015 Assessment year 2009-10 possession letter and also copy of the bank statement of the wife to demonstrate that payment had, in fact, been made for the purchase of property. It has also been submitted that the General Power of Attorney was duly registered. It has also been submitted that this transfer was covered under the definition of transfer as envisaged in section 2(47)(v) of the Act. The Ld. AR has also placed reliance on judicial precedents in support of the contention that the disallowance of claim made u/s 54 had been incorrectly made by the Assessing Officer and incorrectly upheld by the Ld. CIT (A).
8.0 In response, the Ld. CIT DR has placed extensive reliance on the order of the lower authorities.
9.0 We have heard the rival submissions and perused the material available on record. We find that in the instant case, the issue is squarely covered in favour of the assessee by the judgment of the Hon'ble Delhi High Court in the case of Pace Developers & Promoters (P) Ltd. vs. Government of NCT reported in (2013) 33 taxmann.com 99 (Delhi). The Hon'ble Delhi High Court in this case, while referring to section 2(47) of the Act, has held that conveyance of immoveable property by a General Power of Attorney constituted transfer of capital asset. The Hon'ble 6 ITA No.3450/Del/2017 ITA No. 4796/Del/2015 Assessment year 2009-10 Delhi High Court also held that the Circular directing Registrars not to register conveyance of immoveable property by a General Power of Attorney was contrary to the observation of the Hon'ble Apex Court and was liable to be set aside. In the assessee's case, the only objection of the various authorities to allowing the benefit of claim made u/s 54 of the Act is that the property was transferred by a General Power of Attorney. That the payment had been made from the husband to the wife for purchase of property is undisputed and is evidenced by the bank statement of the assessee's wife. Further, possession letter is also on record. Therefore, in view of the binding judgment of the Hon'ble Delhi High Court in the case of Pace Developers & Promoters (P) Ltd. vs Government of NCT (supra), we are unable to concur with the findings of the lower authorities and we set aside the order of the Ld. CIT(A) and direct the Assessing Officer to allow benefit of exemption u/s 54 of the Act to the assessee. Accordingly, ITA No. 3450/Del/2017 stands allowed.
10.0 In the result, ITA No. 4796/Del/2015 is dismissed and ITA No. 3450/Del/2017 stands allowed.
7 ITA No.3450/Del/2017 ITA No. 4796/Del/2015 Assessment year 2009-10 Order pronounced in the open court on 11th October, 2018.
Sd/- Sd/-
(G.D. AGRAWAL) (SUDHANSHU SRIVASTAVA)
PRESIDENT JUDICIAL MEMBER
Dated: 11th OCTOBER , 2018
'GS'
Copy forwarded to: -
1. Appellant
2. Respondent
3. CIT
4. CIT(A)
5. DR, ITAT
By Order
ASSTT. REGISTRAR
Date of dictation
Date on which the typed draft is placed before the dictating Member Date on which the typed draft is placed before the Other Member Date on which the approved draft comes to the Sr.PS/PS Date on which the fair order is placed before the Dictating Member for pronouncement Date on which the fair order comes back to the Sr.PS/PS Date on which the final order is uploaded on the website of ITAT Date on which the file goes to the Bench Clerk Date on which the file goes to the Head Clerk The date on which the file goes to the Assistant Registrar for signature on the order Date of dispatch of the Order 1 8