TMI Blog1988 (6) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... arned CIT observed that in their returns of income the appellants had stated that a sum of Rs. 1,54,974 received by each of the appellants from Gujarat Industrial Development Corporation (G. I. D. C) as compensation for acquisition of their agricultural lands was invested in National Rural Development Bonds within six months of the receipt of compensation amount by them as required under section 54E of the Act. The appellants had claimed exemption of their respective invested amounts and the ITO while accepting their claims had charged no capital gains tax from any of them. In the opinion of the learned CIT the orders passed by the ITO in the cases of the appellants were erroneous and prejudicial to the interests of revenue inasmuch as the 'further enquiries' had revealed that the entire capital gain, arising out of the acquisition of the agricultural land, which, though stood recorded in the names of the appellants and some others, was not their ancestral property but was the separate and exclusive property of one Sri V. O. Mehta, the deceased assessee-appellant, accrued to the said deceased appellant only and should have been brought to tax in the case of the said deceased assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of CIT v. Badri Prasad Bianwalla [1982] 133 ITR 433 (Cal.) in support of this argument. No doubt Mr. A. K. Hajela, the learned Departmental Representative submitted that the assessment orders in the cases of the persons named by Mr. Kaji were passed under section 143(3) as back as on 7-3-1984 yet he could not say with authority whether the same had ever been communicated to them. 4. Section 263 confers jurisdiction upon a Commissioner of Income-tax to revise such orders only as are considered by him to be erroneous and prejudicial to the interests of revenue. Only an enforceable and effective orders may be, it is erroneous, can have the characteristic of causing prejudice to a party. An order is ineffective qua the person concerned, unless it has been communicated to him. Pronouncement of an order is simply a form of its communication to others. It follows, therefore, that the effectiveness, enforceability and validity of an order very much depends upon its having been communicated to the person concerned. Communication of an order of assessment to the assessee concerned is thus an essential requirement for the effectiveness and validity of such an order. This view, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bhanabhai Prajapati [1974] 33 STC 147 (Guj.) and Jagatjit Distilling Allied Industries Ltd. v. State [1971] 28 STC 709 (Punj. Har.). 7. In reply Mr. Hajela referred to the statement of late Shri V. O. Mehta as contained in the note appended below the computation of total income in the statement of income submitted by the said assessee and urged that from the words "being my share in ancestral agricultural land" as used in the said note the CIT had come to know of the true facts about the ownership of the land acquired and the real recipient of the compensation awarded by Land Acquisition Officer. Mr. Hajela thus submitted that the CIT had kept himself confined to the record as it stood at the time the ITO passed his orders and, therefore, the principles enunciated in the cases relied upon by Mr. Kaji were not attracted. 8. It is a well established proposition of law that the validity and legality of an order passed by lower or subordinate authority should be judged by the revisional authority on the record as stood at the time of passing the questioned order by the lower authority. Material or evidence collected subsequent to the passing of the impugned order by the lowe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the Record of Right of Revenue Department, in the names of other persons, including the appellants before us. Mr. Hajela submitted that such a fictitious transaction could not be allowed to frustrate the just and legal claim of Revenue for taxes and, therefore, on such facts, no fault could be found with the action taken by the learned CIT. We find it difficult to accept the contention of Mr. Hajela on the fact and circumstances of the present cases. 11. The material placed before us brings out appellants' version about the ownership of the land in question like this, Oghadbhai Mehta, the father of the deceased appellant Sri V. O. Mehta, constituted his HUF consisting, inter alia, of himself and his three sons, viz., Veni Ram (late V. O. Mehta), Bhanu Shankar and Ravi Shankar. Ravi Shankar had separated from the family and he or his descendants, allegedly, have no concern with the land in question. The joint Hindu Family of the rest of the two brothers and their father is stated to have purchased the lands bearing S. Nos. 207/4, 207/1 part and 216 from the erstwhile Ruler of Rajkot. S. No. 216 was subsequently exchanged for S. No. 207/1 part. Another part of S. No. 207/1 was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue record (7/12 Village Form) even if be correct and is accepted would not change the established position that the land acquired was having the basic character of ancestral property. Once a property bears that character the absence of mention in the relevant record of rights of the names of one or the other member of the HUF, owning that property, can hardly affect its basic character as an ancestral property and the missing of the name of one of the other coparcener in the HUF from the record of rights maintained in respect of such property can hardly result in depriving such a coparcener of his share of right to and title in that property. 15. Assuming without holding that the land acquired was the separate or self-acquired property of the late appellant Sri V. O. Mehta, the same conclusion cannot be avoided. Undisputedly Sri Mehta was the karta of his HUF also consisting of other appellants besides some others. As a member of a HUF he had every right to throw his self-acquired or separate property in the common hotchpotch and make other members share it with him. There was nothing bad in that. It was legally permissible for him to do that, may be to save himself from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interpreted as may give them sense and meaning intended by the Legislature to be conveyed through them. The construction made and interpretation done must fit in the message or mandate made in and intended to be conveyed by a particular provision in a statute. A letter, word, phrase or clause, used in a particular provision of a statute should not be so interpreted and construed as might make a mockery of the relevant provision. The rule of reasonable construction should normally be preferred to the rule of literal and liberal or strict interpretation particularly in the field of socio-economic legislation. The adoption of such a rule of construction of statute would help achieve the aim and object of that particular legislation and would lead to justiciable destination which is the ultimate objective of all legislations in a civilized society. 19. The message which the Legislature intend to convey to the recipients of capital gains on transfer of their capital assets through the language of sec. 54E of the Act is simply this that if they, within a period of six months after the date of transfer of their capital assets bringing capital gains to them, would invest or deposit the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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