MS.GAYATHRI VISWANATHAN vs. THE ADDITIONAL COMMISSIONER

TCA No.858 of 2019 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 21.07.2020 CORAM: THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM and THE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN Tax Case Appeal No.858 of 2019 M/s.Gayathri Viswanathan, L/H of (Late) M.E.Duraiswamy, No.3-D, East Palms, Vingate Garden, No.4, School Road, Mandaveli, Chennai - 600 028. .. Appellant versus The Additional Commissioner of Income-Tax (i/c) Salary Range II, 121, Nungambakkam High Road, Chennai - 600 034. .. Respondent Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961, against the order made in ITA No.261/Mds/2012 dated 27.05.2013 passed by the Income Tax Appellate Tribunal, 'B' Bench, Chennai, for the Assessment Year 2004-05. For Appellant : Mr.G.Baskar For Respondent : Mrs.R.Hemalatha Senior Standing Counsel Page 1 of 7 http://www.judis.nic.in TCA No.858 of 2019 JUDGMENT T.S.SIVAGNANAM, J. This appeal filed by the revenue under Section 260A of the Income Tax Act, 1961 (the 'Act' for brevity), is directed against the order dated 27.05.2013 passed by the Income Tax Appellate Tribunal, 'B' Bench, Chennai, in ITA No.261/Mds/2012 for the Assessment Year 2004-05. 2. The appeal was admitted on 13.11.2019 on the following substantial question of law : "Whether on the facts and in the circumstances of the case the Income-tax Appellate Tribunal is right in law in observing that the date Viz., 27.02.2002 cannot be considered as the date of acquisition, while remitting the matter back to the Commissioner of Income-tax (Appeals) for fresh consideration?" 3. Heard Mr.G.Basker, learned counsel for the appellant/assessee and Mrs.R.Hemalatha, learned Senior Standing counsel for the respondent/revenue. 4. The order impugned before us is an order of remand, by the tribunal to Commissioner of Income Tax (Appeals) - IV, Chennai (the Page 2 of 7 http://www.judis.nic.in TCA No.858 of 2019 CIT(A), for brevity) to examine and reconsider the issue with regard to the assessee's claim for exemption under Section 54 of the Act. 5. The assessee is not aggrieved by the order of remand, but only with regard to the finding rendered by the tribunal as to what should be the date of sale in the factual situation. Argument of the assessee was rejected by the tribunal because of the fact that there were writ petitions filed before this Court in WP Nos.7910 and 20469 of 2002 challenging the proceedings initiated under Section 269UD(1) of the Act, by the appropriate authority under the Income Tax Act, which order was set aside. Therefore, the tribunal opined that the date of acquisition cannot be considered as 27.02.2002. 6. The learned counsel appearing for the appellant/assessee submitted that after the decision of the tribunal, the Hon'ble Supreme Court in the case of Sanjeev Lal Vs. Commissioner of Income-Tax, Chandigar, reported in [2014] 365 ITR 389 (SC) has held that where the assessee executed an agreement to sell in respect of a house property, purchased a new residential property within one year from the date of agreement to sell and subsequently the sale deed could not be executed Page 3 of 7 http://www.judis.nic.in TCA No.858 of 2019 within a prescribed time due to an order passed by the competent Court, in such peculiar facts, a valid transfer did take place within the meaning of Section 2(47) of the Act, by even executing agreement to sell. 7. It is submitted that this decision of the Hon'ble Supreme Court was followed by the High Court of Bombay in Amarjeet Thapar Vs. Income Tax Officer, reported in [2019] 411 ITR 0626 (Bom), wherein the Court accepted the case of the assessee that the execution of the sale deed by virtue of the judgment of the High Court would relate back to the original agreement to sell. 8. Further, the High Court of Gujarat in the case of Kishorbhai Harjibhai Patel vs. Income Tax Officer, reported in [2019] 417 ITR 0547 (Guj) had followed the decision of the Hon'ble Supreme Court in the case of Sanjeev Lal [cited supra] and granted relief to the assessee. 9. Therefore, it is the submission of the learned counsel for the assessee that the matter may be remanded to the CIT(A), by way of a open remand so as to enable the assessee to canvass all issues. Page 4 of 7 http://www.judis.nic.in TCA No.858 of 2019 10. The said argument of the learned counsel for the appellant/assessee is vehemently opposed by the learned senior standing counsel for the respondent/revenue and has pointed out the relevant paragraphs of the assessment order to justify the finding of the tribunal with regard to the date of transfer. 11. In our considered view, since the tribunal has remanded the matter for fresh consideration to the CIT(A), and in the meantime, the Hon'ble Supreme Court in Sanjeev Lal's case [cited supra] has rendered a decision, it would be just and proper to permit the CIT(A) to take a decision on merits in its entirety instead of remanding the matter for a limited purpose. We do not propose to render any finding as regards the effect of decision in the case of Sanjeev Lal [cited supra] on the assessee's case and leave it to the decision of the CIT(A) to consider the same and take a decision, in accordance with law. 12. For the above reasons, the Tax Case Appeal is allowed and the observations made by the tribunal that the date of acquisition cannot be taken as 27.02.2002, is set aside and the matter is remanded to the CIT(A), to take a fresh decision on merits and in accordance with law. Page 5 of 7 http://www.judis.nic.in TCA No.858 of 2019 We leave it open to the assessee to canvass all issues both on law as well as on facts. The substantial question of law is answered in favour of the assessee. No Costs. [T.S.S., J.] [V.B.S., J.] 21.07.2020 Index : Yes/No Internet : Yes Speaking/Non-speaking order. ars To The Additional Commissioner of Income-Tax (i/c) Salary Range II, 121, Nungambakkam High Road, Chennai - 600 034. Page 6 of 7 http://www.judis.nic.in TCA No.858 of 2019 T.S.SIVAGNANAM, J. AND V.BHAVANI SUBBAROYAN, J. ars TCA No.858 of 2019 21.07.2020 Page 7 of 7 http://www.judis.nic.in