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2016 (3) TMI 28 - PUNJAB AND HARYANA HIGH COURT

2016 (3) TMI 28 - PUNJAB AND HARYANA HIGH COURT - [2016] 383 ITR 71 - Rectification of mistake - Whether the income clearly exempted from ambit of Income Tax Act can constitute basis for claim of tax, interest, penalty, only on the ground that factum of non taxability of the sale proceeds, being outside the purview of capital gain as per notification of Central Government was not known to the assessee at the stage of filing return under section 139 of Income Tax Act? - Held that:- As rightly rec .....

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ee could file a petition for revision within one year from the date on which the order in question was communicated to him or the date on which he otherwise came to know of it whichever was earlier. The assessee chose not to adopt any of the options for getting the revision of the claim. The Tribunal concurred with the findings recorded by the CIT(A) and the Assessing Officer in rejecting the assessee's rectification application because the mistake sought to be amended was not prima facie mistak .....

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rred by the appellant-assessee under Section 260A of the Income Tax Act, 1961 (in short, the Act ) against the order dated 23.5.2014, Annexure A.14 passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (in short, the Tribunal ) in ITA No.579/(Asr)/2011 for the assessment year 2008-09, claiming following substantial questions of law:- i) Whether the income clearly exempted from ambit of Income Tax Act can constitute basis for claim of tax, interest, penalty, only on the ground tha .....

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pital gain by also declining to remand back the matter to the Assessing Officer in exercise of the jurisdiction vested in the authorities below under section 250(4) of Income Tax Act and whether resultantly the impugned order being made by material irregularity in exercise of jurisdiction vested in the said authority under section 250(4) of Income Tax Act is sustainable in the eyes of law? iv) Whether the learned Appellate Tribunal has not grossly erred in failing to judiciously consider the mat .....

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aw? 2. A few facts relevant for the decision of the controversy involved as narrated in the appeal may be noticed. The appellant filed his income tax return for the financial year 2007-08 relating to assessment year 2008-09 through his Chartered Accountant declaring gross income of ₹ 2,24,44,720/- on 26.3.2009 though the due date was 31.7.2008 on account of the reasons beyond his control. Further, due to inadvertent error in the office of the Chartered Accountant of the appellant, the self .....

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District Amritsar which was falling outside the notified 6 kilometers range from the municipal limits was sold for a total consideration of ₹ 2.50 crores vide sale deed dated 25.3.2008, Annexure A.3. According to the appellant, this land being outside 6 kilometers of municipal limits is not capital asset as per section 2(14) of the Act as applicable to the relevant date and proceeds of the sale in respect of the said land are not subject to capital gain tax. The Assessing Officer treated t .....

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#8377; 50 lacs was assailed by the appellant before the Commissioner of Income Tax (Appeals) [CIT(A)]. Subsequently, as per the notification regarding exemption of the capital gain in respect of land of the appellant being 6 kilometers of the municipal limits, it was noticed that no liability could be fastened on the appellant. An application was moved by the appellant in the pending appeal. The CIT(A) dismissed the appeal of the appellant and passed impugned order dated 7.10.2011 under Section .....

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y the appellant before the Assessing Officer which was dismissed vide order dated 16.2.2012, Annexure A.9. The appellant filed appeal against the said order before CIT(A) under Section 250(6) of the Act. Vide order dated 15.1.2014, Annexure A.11, the appeal was dismissed by the CIT(A). Still not satisfied, the appellant filed appeal before the Tribunal. An application for amendment of the grounds of appeal was also filed before the Tribunal. Vide order dated 23.5.2014, Annexure A.14, the Tribuna .....

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n, he could have furnished a revised return at any time before the expiry of one year from the end of the relevant assessment year or before completion of assessment whichever was earlier under section 139(5) of the Act. Alternatively, under Section 264 of the Act, the assessee could file a petition for revision within one year from the date on which the order in question was communicated to him or the date on which he otherwise came to know of it whichever was earlier. The assessee chose not to .....

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f the Act. The relevant findings recorded by the Tribunal read thus:- We have heard the rival contentions and perused the facts of the case. As regards the additional ground raised by the assessee at this juncture with regard to the mistake on the legal advice of the counsel for the assessee who stated to have included wrongly the capital gains, infact this is not proper forum to revise the claim by taking the shelter of additional ground. If the return had been filed wrongly and claim had been .....

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cated to him or date on which he otherwise came to know of it, whichever is earlier. But the assessee just chose not to adopt any of the courses for getting the revision of the claims. Therefore, the additional ground raised by the assessee cannot be admitted and therefore rejected. 9.1 As regards other grounds, the order passed under section 143(1) by the AO created a demand of ₹ 67,31,830/- against the assessee, as the assessee did not deposit tax under section 140A of the Act. The retur .....

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,31,260/- was found to be wrong since no taxes have been paid and wrong verification in the return of income was made. The intimation for the wrong and incorrect claim made by the assessee was given on 21.10.2009 to the assessee. Infact, the assessee submitted that the amount given to M/s Nijjer Agro Foods, a family concern unless is received back, no taxes and interest can be paid by him. Such an explanation by the assessee cannot go to prove a good and sufficient cause for not paying taxes und .....

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to any penalty merely by reason of the fact that before the levy of penalty he has paid to the tax. Infact, in the present case, the penalty under section 221(1) of the Act was levied on 30.12.2009 on which date, the assessee was enjoying the money by investing the same in his sister concern in which he is stated to have incurred losses and by placing balance sheet of such company cannot help the assessee to prove good and sufficient cause and such action of investing money in the said concern .....

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is dismissed. 10. Now we take up appeal of the assessee in ITA No.187(Asr)/ 2014. The brief facts of the case are that the assessee filed an application under Section 154 of the Act dated 3.2.2012 alongwith copy of letter dated 1.2.2012 with the report of the Tehsildar I, Amritsar. The AO rebutted the case laws relied upon on the plea that some case laws are not applicable being quite distinguishable from the facts of the present case, whereas in all the stated case laws rectification was sough .....

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from record must be obvious and patent mistake and not something which can be established by a long drawn process of reasons on points on which there may conceivably be two opinions. Moreover, the documents outside the records and the law is impermissible when applying the provisions of section 154 of the Act. 11. The learned CIT(A) confirmed the order of the Assessing Officer. 12. We have heard the rival contentions and perused the facts of the case. The brief facts in the present case are tha .....

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l land situated beyond 6 kilometers from Amritsar Municipal corporation limits and as such does not fall as a capital asset under section 2(14) of the Act but has suo moto determined his self assessment tax liability of ₹ 50 lacs. This return was processed under section 143(1) on 20.10.2009 creating a demand of ₹ 67,31,830/-. Later on the assessee sought reversal of his returned income claiming exempt LTC gain which has been erroneously shown by him. However, the AO has rejected the .....

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the mistake sought to be amended is not a prima facie mistake. Secondly, the assessee is submitting corroborating evidence with the rectification application which requires investigations and verification and as such the same is outside the purview of provisions of section 154 of the Act. However, the correct course would have been by seeking remedy by moving revision application under section 264 before the CIT II Amritsar soliciting for revision of order passed under section 143(1) of the Act .....

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