TMI Blog1982 (5) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... taxed on the basis of a 'deemed gift' in respect of the said sale, the GTO issued a notice under section 16(1) of the Act on 29-9-1974, i. e., during the pendency of the proceedings for the assessment on the basis of the return filed by the assessee on 14-5-1970. Thereafter, various notices were issued. Explanations were called for and filed, and eventually on 20-3-1979, the GTO completed one more assessment in respect of deemed gifts under section 15(5). There were thus two assessments completed by the GTO on the same date for one and the same assessment year being under section 15(1) and section 15(5), respectively. In the assessment completed under section 15(5), the value of the deemed gift was determined at Rs. 28,26,000. 3. The assessee filed an appeal on 27-4-1979 against the order of the assessment under section 15(5). However, after this date, but before the appeal was disposed of by the Commissioner (Appeals) on 11-3-1980, the Commissioner felt that the GTO's action in passing two orders of the assessments on the same date in the aforesaid manner was erroneous and prejudicial to the interests of the revenue. He issued a notice on 24-8-1979 under section 24(2) requiring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a case where, after issuing a show cause notice under section 24(2), the Commissioner felt that the notice was vague and not clear. He could have certainly clarified the notice by some other communication. Instead he has chosen, and according to us rightly so, to cancel the first notice as distinct from dropping the proceedings and issued a fresh notice which clearly brought out why he was contemplating action under section 24(2). The fact that when the Commissioner issued the latter notice under section 24(2), the other assessment under section 15(5) was existing and that the Commissioner was not proposing to cancel that order, is to our mind, not relevant at all for the following reasons, viz : 1. The said order was bad and illegal on the face of it and could therefore be treated as non est by any authority including the Commissioner. 2. The effect of the order of the Commissioner (Appeals) dated 11-3-1980 cancelling the said order of the assessment under section 15(5) is that, it could be taken by any authority at any time that no assessment under section 15(5) was ever made particularly when the said order is final, the department having accepted it. In the circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is that when the Commissioner was reviewing an order of the assessment passed by the GTO under section 15(1), he has no alternative but to direct that the fresh assessment should also be completed under section 15(1). In other words, his submission is that when an assessment is made under section 15(1) and the Commissioner exercising his powers under section 24(2), cancels the assessment and directs the GTO to make a fresh assessment, but fresh assessment would also have to be made under section 15(1) so much so that it has got to be an assessment accepting the assessee's return. This contention is also, according to us, too good to be accepted. Once the assessment is cancelled by the Commissioner, no assessment remains, and the fresh assessment can be completed by the GTO depending upon the circumstances of each case under section 15(1), or section 15(3) or even section 15(4). This contention is therefore rejected. 7. The last contention raised on behalf of the assessee is that the 'deemed gift', if any, as a result of sale, of the assessee's two-third interest in the immovable property Ready Money House, Bombay, is not taxable in the assessment year 1970-71 as the sale was not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apati Venkataramiah v. CIT [1965] 57 ITR 185 to show that the observation of the Supreme Court in Bhurangya Coal Co. was in a different context and that the Supreme Court has all along taken a view that the sale of an immovable property is complete only on the execution and registration of deed of conveyance and not before. 10. Before we proceed to consider the rival contentions, it may be stated, that the two deeds of conveyance in this case though executed on 23-10-1969 and presented for registration to the Registrar on 19-11-1969, were actually registered on 13-10-1970 and 10-11-1970, respectively. 11. There can be no dispute that gifts made by a person on or after 1-4-1958 are chargeable to gift-tax as laid down under section 3 of the Act and that 'gift' defined in section 2(xii) of the Act is 'transfer' by one person to another of existing movable or immovable property, etc. However, when and in what circumstances the 'transfer' of an immovable property is or can be said to be complete has not been defined or indicated in the Act. It is for this reason that both the assessee and the department have placed reliance upon the provisions relating to the transfer of an immovabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egistration of the instrument of sale is completed cannot be said to have been completed earlier because by virtue of section 47 the instrument by which it is effected, after it has been registered, commences to operate from an earlier date. AIR 1926 All. 548 ; 95 Ind. Cas 138, overruled." As pointed out by the departmental representative, this decision apparently makes section 47 of the Registration Act otiose. But at best it represents the minority view in the aforesaid decision which remains a minority view only. The minority judges have themselves observed : "The principles underlying sections 61(2) and 47 are not divergent. It is not as if, that any delay by the registering officer which might take place owing to the pressure of work in his office or for other reason, has any effect on the rights of parties, quod their property or the time from when the deed operates, or as regards the effectiveness of the transaction, . . . not as if, documents executed on different dates, the parties intending them to operate at different times, have their intentions modified, if not nullified by the action or inaction of the registering officer, or any delay that might take place in his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case before the Gujarat High Court was that of a direct gift and not of a deemed gift and, therefore, the High Court was concerned with the interpretation of sections 122 and 123 of the Transfer of Property Act. However, neither there is any suggestion nor are we aware of any distinction between the completion of gift in respect of the immovable property and the transfer of property arising out of sale of an immovable property. In the circumstances, we hold that the ratio of the Gujarat High Court decision in Darbar Shivrajkumar's case squarely covers the dispute before us. Accordingly, we have no hesitation in holding that the sale, i. e., the transfer of the immovable property, in this case, was completed in the subsequent assessment year only. 14. As regards the Supreme Court decision in the case of Bhurangya Coal Co. which was relied upon by the departmental representative, on going through the decision carefully, we find that the dispute between the parties in that case was relating to the completion of transfer in respect of movable property and not immovable property. Infact, both the parties had agreed that the title to the immovable property covered by the sale deed ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
