Shree Rama Keshavdas Pai Bangalore v. Commissioner Of Income Tax A 1 Bangalore

In The Income Tax Appellate Tribunal A Bench Bangalore Before Shri Arun Kumar Garodia Accountant Member A Nd Shri Lalit Kumar Judicial Member Ita No S 756 To 758 Bang 201 7 Assessment Year S 2009 10 2010 11 Smt Rama Keshavadaspai Vishwashanthi Ashrama Trust No 24 K M Tumkur Road Arshinakunte Nelamangala Bangalore 562 123 Pan Afypk 4971 P Vs The Commissioner Of Income Tax Appeals 1 Bangalore Appellant Respondent Assessee By Ms Veena J Kamath Advocate Revenue By Shri B R Ramesh Jcit Dr Date Of Hearing 1 4 1 2 2017 Date Of Pronouncement 1 5 12 2017 O R D E R Per Bench All These Three Appeals Are Filed By The Same Asses See And Out Of These One Appeal Is For Assessment Year 2009 10 In Quantum Pr Oceedings The Second Appeal Is For Assessment Year 2010 11 In Quantum Pr Oceedings And The Third Appeal Is For The Same Year I E Assessment Year 20 10 11 In Penalty Proceedings U S 271 1 C Of The It Act All The Se Three Appeals Are Directed Against Three Separate Orders Of Ld Cit A 1 Ban Galore All Dated 31 01 2017 All These Appeals Were Heard Together And Are Being Disposed Of By Way Of This Common Order For The Sake Of Convenience 2 First We Take Up The Quantum Appeal For Assessme Nt Year 2009 10 In Ita No 756 Bang 2017 The Grounds Raised By The Assessee Are As Under 1 The Impugned Order Dated 31 01 2017 Passed By Th E Commissioner Of Income Tax Appeals 1 Bengaluru I N Proceedings In Appeal Ita No 163 Cit A 1 Br 15 16 Ther Eby Rejecting The Appeal Petition Filed By The Appellant Challenging The Order Dated 20 12 2011 Passed By The Income Tax Officer Ward 8 4 Ita Nos 756 To 758 Bang 2017 Page 2 Of 9 Bengaluru Under Section 143 3 Of The Income Tax A Ct Declining To Condone The Delay In Filing Appeal Petition Is High Ly Illegal Improper Unjust And Also Violative Of The Principles Of Natu Ral Justice 2 The Lower Appellate Authority Seriously Erred In Not Considering And Appreciating The Principles Of Law Laid Down By The Honble Supreme Court Of India In The Case Of Land Acquisit Ion Officer Vs Katiji Reported In Air 1987 Sc 1353 For Condoning The Delay In Presentation Of The Appeal Petition Despite The Sam E Was Cited Before Him 3 In The Instant Case The Appellant Is A Grand Old Senior Citizen Suffering From Serious Ailment Of Cancer And Normal Ly Residing Outside The Country On Account Of Her Children Sett Led In The United States Of America And A Valid Reason Of Not Presenting The Appeal Petition Within The Time And Condonation Of Such An Unintentional Delay Would Have Had The Advancement Of Cause Of Justice Against A Helpless Widowed Woman By Not Co Ndoning The Delay By Applying The Principles Of Law Laid Down B Y The Honble Supreme Court Of India The Lower Appellate Authori Ty Has Seriously Erred In Failing To Uphold The Principles Of Justice Expected Of Him As An Appellate Authority 4 The Appellant Had Urged Substantial Grounds On M Erits In Challenging The Very Legality Of The Orders Passed By The Income Tax Officer Ward 8 4 Bengaluru Under Section 143 3 Of The Income Tax Act On The Face Of The Records And Despi Te Knowing The Same The Learned First Appellate Authority Has Preferred To Render Injustice To The Appellant On Technical Grou Nds And Thereby Uphold The Illegal Order Framed By The Lowe R Authorities 5 The Learned First Appellate Authority Seriously Erred In Not Appreciating The Valid Reasons Supported By The Doc Umentary Evidences For The Unintentional Delay In Presenting The Appeal Petition And Therefore The Appellant Most Humbly Prays To Re Consider The Same As Part And Parcel Of This Grounds Of Appeal 6 The First Appellate Authority Has Failed To Cons Ider The Provisions Of Section 10 37 Of The Income Tax Act 1961 As It Stood Then Read With Section 2 14 Iii That The Appellant Is Leg Ally Entitled And Claimed The Exemption The Compensation Received On Compulsory Acquisition Of Agricultural Land By National Highwa Y Authority 7 The Article 265 Of The Constitution Of India Lay S Down That No Tax Shall Be Levied Except By The Authority Of Law Hence Only Legitimate Tax Can Be Recovered And Even A Concession By A Tax Payer Does Not Give Authority To The Tax Collector To Recover More Than What Is Due From Him Under The Law 8 The Respondent Has Completely Failed To Apprecia Te The True Spirit With Which The Circularissued By The Central Board Of Direct Ita Nos 756 To 758 Bang 2017 Page 3 Of 9 Taxes Bearing Circular No 14 Xl 35 Dated April 1 1 1955 Directing That Officers Of The Department Must No T Take Advantage Of Ignorance Of An Assessee As To His Rig Hts It Is One Of Their Duties To Assist The Tax Payer In Every Reaso Nable Way Particularly In The Matter Of Claiming And Securing Reliefs And In This Regard The Officers Should Take The Initiative In Guiding The Taxpayer Where Proceedings Or Other Particulars Bef Ore Them Indicate That Some Refund Or Relief Is Due To Him This Attitude Would In The Long Run Benefit The Department It Would I Nspire Confidence In Assessee That He May Be Sure Of Getting Square D Eal From The Department Although Therefore The Responsibility For Claiming Refunds And Reliefs Rests With Assessee On Whom It Is Imposed By Law Officers Should A Draw Their Attention To Any Refunds Or Reliefs To W Hich They Appear To Be Clearly Entitled But Which They Omitte D To Claim For Some Reason Or Other B Freely Advise Them When Approached By Them As To Th Eir Rights And Liabilities As To The Procedure To Be Adopted F Or Claiming Refunds And Reliefs 3 Regarding Ground No 1 In Respect Of Non Condon Ation Of Delay In Filing Appeal Before The Cit A It Was Submitted By Ld Ar Of As Sessee That As Per The Copy Of Form Of Form No 35 Filed Before The Ld Cit A Available On Record It Can Be Seen That The Order Of Ao Was Passed On 20 12 2011 And The Same Was Served On The Assessee On 02 01 2012 And The Appeal Was Fi Led Before The Cit A On 13 01 2012 And Therefore Under These Facts It Can Be Seen That There Is No Delay In Filing The Appeal Before The Cit A But As Per The Order Of Cit A He Has Noted On Page No 1 Of His Order That The Appea L Was Filed Before Him On 29 07 2013 Which Is Incorrect Thereafter She Poi Nted Out That In Para No 4 1 Of His Order The Cit A Has Held That Delay In Fi Ling Of Appeal Is Not Condoned And On This Basis He Dismissed The Appeal Of The A Ssessee In Reply It Was Submitted By Ld Dr Of Revenue That The Date Of Fil Ing Of Appeal Is 29 07 2013 As Noted By Cit A On Page No 1 Of His Order And Ther Efore There Is Delay In Filing Of Appeal But He Could Not Point Out Any Defect In Form No 35 Filed By The Assessee Along With The Appeal Memo As Per Which Th E Appeal Was Filed Before Cit A On 13 01 2012 Ita Nos 756 To 758 Bang 2017 Page 4 Of 9 4 We Have Considered The Rival Submissions We Fi Nd That The Cit A Has Reproduced The Statement Of Facts On Page No 2 Of His Order And As Per That The Assessment Order Was Passed On 20 12 2011 As Per The Copy Of Form No 35 Also The Assessment Order Is Dated 20 12 2011 A S Per Form No 35 Available On Record Being Filed By The Assessee Alo Ng With The Appeal Memo It Is Seen That The Appeal Was Filed Before Cit A On 13 01 2012 And Therefore There Is No Delay In Filing The Appeal Before The C It A The Date Of Filing Of Appeal Noted By Cit A On Page No 1 Of His Order A S 29 07 2013 Appears To Be Incorrect Even If The Assessment Order Was Served On The Assessee On The Date Of Passing I E 20 12 2011 Then Also Filing O F Appeal Before Cit A On 13 01 2012 Is Not Time Barred Hence We Restore T He Entire Matter Back To The File Of Cit A For Decision On Merit Because We Fin D That The Appeal Filed By The Assessee Before The Cit A Is In Time And There Is No Delay In Filing The Appeal Before The Cit A In View Of The Above Decision No Adjudication Is Called For On Merit As Per Various Other Grounds Raised By The Assessee 5 In The Result The Appeal Of The Assessee For As Sessment Year 2009 10 Is Allowed For Statistical Purposes 6 Now We Take Up The Assessees Appeal For Assessm Ent Year 2010 11 In Quantum Proceedings In Ita No 757 Bang 2017 The Grounds Raised By The Assessee Are As Under 1 The Impugned Order Dated 31 01 2017 Passed By Th E Commissioner Of Income Tax Appeals 1 Bengaluru I N Proceedings In Appeal Ita No 164 Cit A 1 Br 16 17 Thereby Partly Dismissing The Appeal Petition Filed By The Appellant Against The Order Dated 03 12 2012 Passed By The In Come Tax Officer Ward 8 4 Bengaluru Under Section 143 3 Read With Section 147 Of The Income Tax Act For The Assessmen T Year 2010 11 Is Highly Illegal Improper Unjust And Also Vio Lative Of The Principles Of Natural Justice 2 Both The Lower Authorities Have Seriously Erred In Not Recording Their Findings On The Specific Grounds Ur Ged By The Appellant That The Agricultural Property Situated W Ithin Eight Kilometers From The Notified Municipalities And Cantonment Boards For The Purpose Of Section 2 14 Iii B Of The Income Tax Alone Is Liable For Capital Gain Tax And The Ag Ricultural Property Of The Appellant Not Having Situated Withi N Eight K M Ita Nos 756 To 758 Bang 2017 Page 5 Of 9 From Any Of The Notified Municipal Or Cantonment Areas The Very Levy Of Capital Gain Tax Either At The Instanc E Of The Innocent And Ignorant Admission Of The Appellant Or Under The Provision Of Law Is Illegal And Unenforceable 3 Both The Lower Authorities Have Erred In Not Rec Ognizing The Fact That The Income Earned On The Compulsory Acqui Sition Of Agricultural Property For The Purpose Of Road Widen Ing Acquired By The Central Government Of India Is Entitled For Exemption From Capital Gain Under The Provisions Of Section 1 0 37 Of The Income Tax Act 1961 And By Passing The Impugned Ord Ers The Officer Has Levied Illegal Tax And The First Appell Ate Authority Has Illegally Ratified The Same And Therefore The O Rders Of Both The Lower Authorities Requires To Be Quashed As Ill Egal In So For As Levy Of Capital Gain Tax On The Income Received From The Compulsory Acquisition Of Agricultural Land By The Government Of India 4 The Learned First Appellate Authority Despite Re Cording The Grounds Of Appeal As Well As Written Arguments Have Miserably Failed To Record The Findings Even While Illegally Dismiss Ing The Appeal Petition 5 The Appellant Had Urged Substantial Grounds On M Erits In Challenging The Very Legality Of The Orders Passed By The Income Tax Officer Ward 8 4 Bengaluru Under Section 143 3 R W S 147 Of The Income Tax Act On The Face Of The Records And D Espite Knowing The Same The Learned First Appellate Autho Rity Has Preferred To Render Injustice To The Appellant By U Phold The Illegal Order Framed By The Lower Authorities 6 The First Appellate Authority Has Failed To Cons Ider The Provisions Of Section 10 37 Of The Income Tax Act 1961 As It Stood Then Read With Section 2 14 Iii That The Appellant Is Legally Entitled And Claimed The Exemption The Com Pensation Received On Compulsory Acquisition Of Agricultural Land By National Highway Authority 7 The Article 265 Of The Constitution Of India Lay S Down That No Tax Shall Be Levied Except By The Authority Of Law Hence Only Legitimate Tax Can Be Recovered And Even A Concession By A Tax Payer Does Not Give Authority To The Tax Collector To Recover More Than What Is Due From Him Under The Law 8 The Respondent Has Completely Failed To Apprecia Te The True Spirit With Which Thecircular Issued By The Central Board Of Direct Taxes Bearing Circular No 14 Xl 35 Dated April 11 1955 Directing That Officers Of The Department Mus T Not Take Advantage Of Ignorance Of An Assessee As To His Rig Hts It Is One Of Their Duties To Assist The Tax Payer In Every Re Asonable Way Ita Nos 756 To 758 Bang 2017 Page 6 Of 9 Particularly In The Matter Of Claiming And Securing Reliefs And In This Regard The Officers Should Take The Initiative In Guiding The Taxpayer Where Proceedings Or Other Particulars Bef Ore Them Indicate That Some Refund Or Relief Is Due To Him This Attitude Would In The Long Run Benefit The Department It W Ould Inspire Confidence In Assessee That He May Be Sure Of Getti Ng Square Deal From The Department Although Therefore The Respo Nsibility For Claiming Refunds And Reliefs Rests With Assessee On Whom It Is Imposed By Law Officers Should A Draw Their Attention To Any Refunds Or Reliefs To W Hich They Appear To Be Clearly Entitled But Which They Omitte D To Claim For Some Reason Or Other B Freely Advise Them When Approached By Them As To Th Eir Rights And Liabilities As To The Procedure To Be Adopted F Or Claiming Refunds And Reliefs 7 At The Outset It Was Submitted By Ld Ar Of Ass Essee That The Written Submissions Made By The Assessee Before The Cit A Are Reproduced By Cit A On Pages 10 To 12 Of His Order And As Per Pa Ra No 8 Of The Written Submissions It Was The Claim Of The Assessee That The Assessees Income Is Exempt U S 10 37 Of The It Act R W S 2 14 Iii And This Issue Has Been Raised Before Cit A In The Additional Grounds Filed Befo Re The Cit A In The Appellate Proceedings She Also Submitted That Copy Of Addit Ional Grounds Filed Before Cit A Is Also Enclosed In The Appeal Memo And The Same Were Filed Before Cit A On 18 05 2016 But This Aspect Of The Matter Has Not Been Decided By Ld Cit A And Therefore The Same Should Be Decided At The Tribunal Level Or It May Be Restored Back To The File Of Cit A For Deci Ding This Aspect Of The Matter The Ld Dr Of Revenue Supported The Order Of Cit A 8 We Have Considered The Rival Submissions First We Reproduce The Provisions Of Section 10 37 Of The It Act Which Are As Under 10 37 In The Case Of An Assessee Being An Indiv Idual Or A Hindu Undivided Family Any Income Chargeable Under The H Ead Capital Gains Arising From The Transfer Of Agricultural La Nd Where I Such Land Is Situate In Any Area Referred To In Item A Or Item B Of Sub Clause Iii Of Clause 14 Of Section 2 Ii Such Land During The Period Of Two Years Imm Ediately Preceding The Date Of Transfer Was Being Used For Agricultural Purposes By Such Hindu Undivided Family Or Individu Al Or A Parent Of His Ita Nos 756 To 758 Bang 2017 Page 7 Of 9 Iii Such Transfer Is By Way Of Compulsory Acquisi Tion Under Any Law Or A Transfer The Consideration For Which Is D Etermined Or Approved By The Central Government Or The Reserve B Ank Of India Iv Such Income Has Arisen From The Compensation O R Consideration For Such Transfer Received By Such As Sessee On Or After The 1st Day Of April 2004 Explanation For The Purposes Of This Clause The E Xpression Compensation Or Consideration Includes The Compen Sation Or Consideration Enhanced Or Further Enhanced By Any C Ourt Tribunal Or Other Authority 9 We Also Find That As Per Para No 3 Of Statement Of Facts Reproduced By Cit A On Page No 2 Of His Order The Land In Question Be Longing To The Assessee Was Acquired By The National Highways Authority Of Indi A Nhai In Lieu Of Which The Assessee Was Paid Compensation Of Rs 39 84 300 As Per Clause Iii Of Sub Section 37 Of Section 10 As Reproduced Above If Th E Transfer Of Capital Asset Is By Way Of Compulsory Acquisition Under Any Law Or A Transfer The Consideration For Which Is Determined Or Approved By The Central Government Or The Reserve Bank Of India Then There May Be The Case Of Exempti On Under This Sub Section 37 Of Section 10 If Other Conditions Are Satisfied Such As That The Land Was Used For Agricultural Purposes During The Period Of Two Years Immediately Preceding The Date Of Transfer And The Requirements Of Item A And Item B Of Sub Clause Iii Of Clause 14 Of Section 2 Are Being Complied With On This As Pect The Matter Is Not Decided By Cit A And Before Us Also The Complete Relevant Facts For Deciding This Aspect Are Not Available And Ther Efore We Deem It Fit And Proper To Restore This Matter Back To The File Of C It A For Deciding This Additional Ground Raised Before Him By Assessee After Providin G Adequate Opportunity Of Being Heard To Both Sides Since This Issue Goes T O The Root Of The Matter On Other Aspects Of This Matter Also We Feel That The Same Should Be Decided By Cit A Afresh If The Assessee Does Not Succeed On T His Aspect We Order Accordingly 10 In The Result The Appeal Of The Assessee For A Ssessment Year 2010 11 In Quantum Proceedings Is Also Allowed For Statistical Purposes Ita Nos 756 To 758 Bang 2017 Page 8 Of 9 11 Now We Take Up The Third Appeal Of The Assessee For Assessment Year 2010 11 In Respect Of Penalty Proceedings U S 271 1 C In Ita No 758 Bang 2017 The Grounds Raised By The Assessee Are As Under 1 The Impugned Order Dated 31 01 2017 Passed By Th E Commissioner Of Income Tax Appeals 1 Bengaluru In Proceedings In Appeal Ita No 162 Cit A 1 Br 16 17 Agai Nst The Appeal Petition Filed By The Appellant On The Order Dated 26 06 2013 Passed By The Income Tax Officer Ward 8 4 Bengaluru Under Section 271 1 C Of The Income Tax Act For The Assessment Ye Ar 2010 11 Is Highly Illegal Improper Unjust And Also Violative Of The Principles Of Natural Justice 2 The Said Order Have Been Challenged By The Appel Lant On Substantial Grounds As The Appellant Had Surrendere D The Property To The National Highway Authority Of India In The C Ourse Of Their Compulsory Acquisition Which Were Falling Outside T He Notified Area As Notified By The Central Government Not Requiring To Levy Any Capital Gains Tax For Such Mandatory Acquisition By A Statutory Authority For A Public Purpose Since The Very Levy Of Income Tax Has Been Challenged The Penalty Levied Under The P Rovisions Of Section 271 1 C Also Requires To Be Quashed For The Same Reasons As The Appellant Had Not Concealed Any Income And O N The Contrary Received The Compensation For The Compulsory Acquis Ition Of Agricultural Property In A Statutory Proceedings No T Involving Any Suppression Much Less Concealment Of Income The Ap Pellant Had Also Made Separate Prayers To Club Both The Appeals Together As The Question Of Law As Well As The Facts Is Common To T He Issues Involved In Both The Cases 3 That The Learned Respondent Has Erred Both In Fa Cts And Circumstances Of The Case In Upholding And Ratifyin G The Order Passed By The Assessing Officer U S 271 1 C Of I Ncome Tax Act 12 In View Of This Fact That In Quantum Proceeding S For The Same Year We Have Restored Back This Matter To The File Of Cit A For Fresh Decision Penalty Issue Is Also Required To Be Restored Back To The File Of Ci T A For Fresh Decision Simultaneously With The Fresh Decision In Quantum P Roceedings And Therefore No Adjudication Is Called For At The Present Stage We Restore Back This Matter To The File Of Cit A For Fresh Decision Simultaneo Usly With The Decision In Quantum Proceedings After Providing Adequate Opport Unity Of Being Heard To Both Sides Ita Nos 756 To 758 Bang 2017 Page 9 Of 9 13 The Appeal Of The Assessee For Penalty Proceedi Ngs Is Also Allowed For Statistical Purposes 14 In The Combined Result All The Three Appeals F Iled By The Assessee Are Allowed For Statistical Purposes Order Pronounced In The Open Court On The Date Ment Ioned On The Caption Page Sd Sd Lalit Kumar Arun Kumar Garod Ia Judicial Member Accountant Member Bangalore Dated The 15 Th December 2017 Ms Copy To 1 App Ellant 2 Respondent 3 Cit 4 Cit A 5 Dr Itat Bangalore 6 Guard File By Order Senior Private Secretary Income Tax Appellate Tribunal Bangalore