TMI Blog2021 (1) TMI 1239X X X X Extracts X X X X X X X X Extracts X X X X ..... ed a calculation sheet claiming exemption instead of filing a revised return disclosing income arisen from transfer of long terms capital asset due to transfer of his landed property at Bokaro through registered sale deed dated 24.06.2013. It is well settled that such additional claim cannot be made before the assessing officer under the Act to make an amendment in the return without filing a revised return. This Court in the facts and circumstances of the present case, noted above, finds that there is lack of bonafides on the part of the petitioner. On the one hand, he has not disclosed the assets in any of the returns of three previous years to the year i.e. F.Y 2013-14 corresponding to A.Y. 2014-15. On the other hand, after his case being taken up for scrutiny, without filing the revised return, he sought to raise additional claim for exemption under section 54 F of the Act by filing calculation sheet before the Assessing Officer which was rightly denied in the light of the decision Goetze (India) Limited [ 2006 (3) TMI 75 - SUPREME COURT] - He straightaway approached the Revisional Authority. Before the Revisional Authority, he failed to appear despite repeated notices. Giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1961 in revision, the petitioner has approached this Court. The Revisional authority upheld the order passed by the learned Assessing authority under Section 143(3) of the Act dated 26.10.2016 (Annexure-4) for the F.Y. 2013-14 corresponding to A.Y. 2014-15 also impugned herein where under the assessing authority respondent no.3 has rejected the claim of the petitioner for exemption under Section 54 F of the Act and levied the tax thereupon and also recommended for initiation of penalty proceeding under Section 271(1)(c) of the Act. Petitioner is also aggrieved by the order of penalty dated 26.09.2019 (Annexure-9) passed by the respondent no.3 under Section 271(1)(c) of the Act. 3. Petitioner has raised the following questions of law for determination in the instant writ petition. a) Whether the benefit of exemption under Section 54F of the Act can be denied merely because petitioner did not claim the same while furnishing the returns? b) Whether the claim made at the stage of assessment or before the revisional authority would be denied on the misinterpretation of decision of the Apex Court in the case of Goetze (India) Ltd Vs. CIT reported in (2006) 284 ITR 323 (SC) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 26.03.2018 (Annexure- 8). Proceedings under Section 271(1) (c) of the Act ended up in imposition of penalty three times by order dated 26.09.2018 (Annexure- 9). Thereafter the present writ petition has been preferred. 5. In the counter affidavit respondents have taken the following stand: A plea of alternative remedy has been raised against the order imposing penalty as is available under Section 246 A(1)(i)(B) of the Act. Respondents have contended that petitioner did not disclose the income out of sale consideration amount of ₹ 59,49,000/- in his return or otherwise before the Department prior to the case being selected for scrutiny. It was during the assessment proceedings initiated after the scrutiny, the concealed income was discovered. Petitioner had not even disclosed that he had landed asset/ property in any of the previous return filed with the respondent department in at least last three assessment year prior to A.Y. 2014-15 in which he concealed the sale transaction. Therefore, he had concealed the sale transaction while furnishing his return. In that case, he is not entitled to get any exemption from payment of income tax on the said concealed income. Pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is chargeable under the head income from house property, the assesse has to within a period of one year before or two year after the date on which the transfer took place or within a period of three years after that date construct one residential house in India, then he would be entitled to exemption from income being charged to tax. The purchase of the property at Punjab prior to the execution of registered sale deed would make no difference to his entitlement. Petitioner being an ordinary citizen, ignorant of the law, has admitted his mistake when his case was taken up for assessment upon scrutiny. The assessing officer is under an obligation to guide the assesse as to the correct provision of law in the light of the circular dated 11.04.1955. If at the stage of assessment, even after scrutiny, the income under capital gains is eligible for exemption under Section 54 or Section 54 F, the assessing officer ought to have allowed it instead of adding it to his income for the purposes of imposing tax, interest and initiating penalty proceedings. The facts of the case of the petitioner does not show a deliberate concealment of income rather a bonafide mistake. 7. The decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner has challenged it in the present proceeding instead of splitting his cause of action and moving in appeal against it. Therefore, all the reliefs are maintainable under writ jurisdiction in the light of the settled principles governing the exercise of powers of judicial review. The assesse/ petitioner should not be made to suffer on account of bonafide mistake if the entitlement to exemption is made out on the facts of the case at hand under the provision of Section 54 or 54 F of the Act. 9. Learned counsel for the Revenue in reply refers to the registered sale deed at page 62 of the writ petition. He submits that the recital of the deed itself makes it clear that there are no residential building subjected to transfer. It is only the vacant land described in the deed which have been sold. As such, provisions of section 54 would not apply. Petitioner is himself not sure as to under which provision section 54 or 54F such an exemption can be claimed. Learned counsel for the revenue further submits that if the petitioner did not show the income in its return, he cannot claim exemption at the stage of assessment proceedings by filing a calculation sheet only, without filing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction of the assesse is not bonafide. 10. We have considered the submission of learned counsel for the parties in the light of the pleadings of record and also taken into account the decisions relied upon by them in support of their submission. The factual matrix of the case undisputed on the part of the parties show that the petitioner failed to disclose the income arising out of transfer of long terms capital assets to the tune of ₹ 59,49,000/- in the return filed in the A.Y. 2014-15 despite the sale of his landed property at Bokaro through registered sale on 24.06.2013 i.e., in the F.Y. 2013-14. Petitioner had not disclosed his assets before the income tax department in any of the preceding three assessment years. It was only upon perusal of CIB information extracted from ITD application that it was found that he had sold immovable property of ₹ 59,49000/-but neither the sale consideration nor capital gains was shown by him in the return filed in the A.Y. 2014-15. In those circumstances his case was selected for scrutiny under CASS for assessment. During the course of assessment, petitioner filed a calculation sheet claiming exemption instead of filing a revised r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rlier point of time, the assets were disclosed to the department nor had he disclosed it after its disposal till his case was selected for scrutiny. It is not a case where the assesse had filed inaccurate returns in respect of details of income. The earlier income received from transfer of long term capital gains was not shown in the IT return filed before the department. Even at the stage of the revisional proceedings, the petitioner was not sure as to under which provision, his claim for exemption is admissible under Section 54 or 54F of the Act. Considering those circumstances, the revisional authority did not find any substance in the claim of exemption put forward by the assesse. 12. The case of pruthvi Broker and Shareholders Pvt. Ltd (Supra), relied upon by the petitioner, is distinguishable on facts. The Assessee / Respondent in that case had filed his return for A.Y. 2004-05 on 18.10.2004. The same was processed under section 143(1) of Income Tax Act on 31.03.2005. A notice under section 143(2) of the I.T. Act was issued on 10.08.2005. The Respondent was also served with a letter dated 24.06.2006 calling for certain information. During the proceedings, it was noticed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground that the Appellate Authority had no jurisdiction to do so. The I.T.A.T disposed of the appellant- Revenue s appeal which was the subject matter of Tax Appeal No. 3908/2010 (Commissioner of Income Tax, Central -I verses Pruthvi Brokers and Shareholders Pvt. Ltd. decided by the learned Division Bench of the Bombay High Court. In this factual canvass, the learned Division Bench answered the substantial questions of law i.e. a. Whether an assessee can amend a return filed by him for making additional claim for deduction other than filing a revised return? b. Whether on the facts and circumstances of the case, the I.T.A.T, in law, was right in holding that the claim of deduction not made in the original return and not supported by a revised return, is admissible? c. Whether on the facts and in the circumstances of the case, the Hon ble Tribunal, in law, was right in not appreciating the fact that the A.O has no power to entertain a claim made by an assessee after filing a original return otherwise than filing a revised return? 14. The Bombay High Court relying upon the decision of the Hon ble Supreme Court in the case of Jute Corporation of India Limited versu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls) allowed the assessee s appeal. The Tribunal, however, allowed the department s appeal. Before the Hon ble Supreme Court, the assessee relied upon the judgment in the case of Thermal Power Company Limited versus Commissioner of Income-Tax [(1997) 7 SCC 489] contending that it was open to the assessee to raise the points of law even before the Tribunal. The learned Division Bench then referred to para-4 of the judgment in the case of Goetze (India) Limited (Supra), which is as under: 4. The decision in question is that the power of the Tribunal under section 254 of the Income-tax Act, 1961, is to entertain for the first time a point of law provided the fact on the basis of which the issue of law can be raised before the Tribunal. The decision does not in any way relate to the power of the Assessing Officer to entertain a claim for deduction otherwise than by filing a revised return. In the circumstances of the case, we dismiss the civil appeal. However, we make it clear that the issue in this case is limited to the power of the assessing authority and does not impinge on the power of the Income-tax Appellate Tribunal under section 254 of the Income-tax Act, 1961. There s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er which provisions of section 54 or 54 F is he seeking exemption. (iii) The writ petitioner has thereafter invoked the writ jurisdiction of the Court. In the case of Pruthvi Brokers and Shareholders Pvt. Ltd. (Supra), wherein the order of the Appellate Authority was challenged before the I.T.A.T and thereafter, the Revenue being aggrieved by the orders of both the Appellate Authority and learned Tribunal preferred Tax Appeal under section 260-A of the Income Tax Act, 1961. The scope and powers of judicial review are distinct from that of the powers exercisable under section 260-A of the Act. The scope of judicial review under Article 226 of the Constitution of India has been well settled in the case of Syed Yakoob versus K.S. Radhakrishnan and others [AIR 1964 SC 477]. Illuminating opinion of the Hon ble Supreme Court at para-7 and 8 thereof are extracted hereunder: 7. The question about the limits of the jurisdiction of High Courts in issuing a writ of certiorari under Article 226 has been frequently considered by this Court and the true legal position in that behalf is no longer in doubt. A writ of certiorari can be issued for correcting errors of jurisdiction committ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R 1240: (AIR 1958 SC 398) and Kaushalya Devi v. Bachittar Singh, AIR 1960 SC 1168. 8. It is, of course, not easy to define or adequately describe what an error of law apparent on the face of the record means. What can be corrected by a writ has to be an error of law; but it must be such an error of law as can be regarded as one which is apparent on the face of the record. Where it is manifest or clear that the conclusion of law recorded by an inferior Court or Tribunal is based on an obvious mis- interpretation of the relevant statutory provision, or sometimes in ignorance of it, or may be, even in disregard of it, or is expressly founded on reasons which are wrong in law, the said conclusion can be corrected by a writ of certiorari. In all these cases, the impugned conclusion should be so plainly inconsistent with the relevant statutory provision that no difficulty is experienced by the High Court in holding that the said error of law is apparent on the face of the record. It may also be that in some cases, the impugned error of law may not be obvious or patent on the face of the record as such and the Court may need an argument to discover the said error; but there can be n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht of the decisions referred to hereinabove and relied upon by the parties, we do not find any error in law or on facts warranting interference in the impugned orders in exercise of writ jurisdiction. 19. Learned counsel for the petitioner however submits that petitioner may be allowed liberty to assail the order of penalty before the Appellate Authority under Section 246(1)(i) (B) of the Act. We may observe herein that this Court has refused to interfere in the order of the Assessing Authority and the Revisional Authority on consideration of the grounds available under the powers of judicial review. We however leave it to the petitioner to approach the Appellate Authority, as per the provisions under the Income Tax Act, 1961 against the order of penalty dated 26.09.2018 (Annexure-9) passed by the respondent no.3- Assessing Officer under Section 271(1) (c) of the Act, if permissible in law. It is made clear that the Appellate Authority may consider the plea of the petitioner uninfluenced by any of the observations of this Court hereinabove. 20. However, for the reasons recorded hereinabove, the writ petition being devoid of merits, is dismissed. - - TaxTMI - TMITax - Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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