TMI Blog2011 (10) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... - Devi Prasad Singh, Dr. Satish Chandra, JJ. Appellant's Counsel :- S.K.Garg, W.U.Ahmad Respondent Counsel :- D.D.Chopra Dr. Satish Chandra, J. This appeal under section 260-A of the Income Tax Act has been filed by the assessee against the judgment and order dated 29.12.2006 passed by the Income Tax Appellate Tribunal in I.T.A.No.187/Luc/2006 for the assessment year 2001-2002. On 24.07.2007, a Coordinate Bench of this Court has admitted the present appeal on the following substantial questions of law: 1. Whether on true and correct interpretation of the provisions to section 250 of the Act the Tribunal was legally correct in holding that the assessee's claim for being assessed as per second proviso to section 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... viso to section 112 (1) of the Act. Not being satisfied, the department has filed an appeal before the Tribunal, who observed in its impugned order that the assessee has shown the long term capital gain at the rate of 20%. The assessee has not filed any revised return, so assessee can not raise the ground before the first appellate authority. By relying the ratio laid down by Hon'ble Supreme Court in the case of Goetze (India) Ltd. Vs. CIT, (2006) 284 ITR, 323 (SC), the appeal of the department was allowed. Being not satisfied, the assessee has knocked the door of this Court by filing the present appeal. With this background, Sri Asish Bansal, holding brief of Sri S.K.Garg, learned counsel for the assessee submits that as per proviso of sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration and assessee was not aware about latest amendment introduced by the Finance Act, 1999 w.e.f. 01.04.2000. Though ignorance of law has no excuse, but it can be excused in tax matter as per the ratio laid down in the case of P.V.Devassy Vs. CIT, 84 ITR 502 Kerla. It is not expected that the Department shall take the advantage of assessee's ignorance as per C.B.D.T. Circular No.14 (XL- 35)1955 dated 11 April 1955. Even under the bonafide belief, the assessee has shown the long term capital gain at the rate of 20%, but it was expected from the A.O. to know the latest amendment. The mistake might have been corrected by passing an order under section 154 of the Act. In the case of CIT Vs. Mahalaxmi Sugar Mills Co. Ltd. (1986) 160 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the proviso to subsection (1) of section 112 to provide that long-term capital gains arising from transfer of units of Unit Trust of India and units of Mutual Funds specified under section 10 (23D) of the Income-tax Act shall also not exceed 10% of the capital gains before allowing adjustment for Cost inflation Index. 42.3 This amendment takes effect retrospectively from the 1st day of April, 2000 and shall accordingly apply in relation to the assessment year 2000-2001 and subsequent years. In the instant case, the Tribunal heavily relied on the ratio laid down in the case of Goetze (India) Ltd. Vs. CIT, (2006) 284 ITR, 323 (SC), where a Division Bench of Hon'ble Supreme Court observed that: The decision in question is that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Larger Bench of Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd. Vs. Commissioner of Income Tax (2006) 229 ITR 383 (SC) observed that the question of law which arose from the fact has found by the Income Tax Authority and legal issue can be raised at any stage. Hon'ble Supreme Court observed that: Where the Tribunal is only required to consider a question of law arising from the facts which are on record in the assessment proceedings we fail to see why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee. Similarly, in the case of CIT Vs. Jai Parabolic Springs Ltd. (2008) 306 ITR 42 (Del). it was observed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the light of above discussion, we are of the view that the assessee is entitled to raise the legal issue before the first Appellate Authority, which possessed co-terminus powers similar to the A.O. as per ratio laid down by Hon'ble Supreme Court in the case of Jute Corporation of India Ltd. (supra). Hence, CIT (A) has rightly adjudicated the statutory right of the assessee and directed to allow the long term capital gain at the of 10%. The justice must not only be done but seem to have been done as observed by Lord Hewart C.J. in R. Vs. Susses Justices (1924) 1KB 256/9. Therefore, we set aside the impugned order passed by the Tribunal and restore the order of the CIT (A). The answer to the substantial question of law is affirmat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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