MR. SAMUEL THANGARAJ PONNIAH,SALEM vs. ITO WARD 1 (5), SALEM

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ITA 1773/CHNY/2018Status: DisposedITAT Chennai07 February 2020AY 2010-114 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee is entitled to claim the deduction under Section 54F even if not claimed in the original return, as per Apex Court judgments. The Pr. CIT's revisionary power under Section 263 was not justified as the Assessing Officer had made a proper inquiry and finding.

What were the facts?

The assessee claimed exemption under Section 54F of the Income Tax Act, 1961, for long-term capital gains. The Principal Commissioner of Income Tax (Pr. CIT) revised the assessment, directing the Assessing Officer to withdraw this exemption. The assessee argued that the Assessing Officer had properly considered the issue and allowed the deduction.

What were the issues?

Whether the Pr. CIT was justified in invoking Section 263 to withdraw the Section 54F exemption when the Assessing Officer had already considered and allowed it. Whether a deduction can be claimed during assessment proceedings even if not initially declared in the return.

Which sections of the Income-tax Act were involved?

Section 54F,Section 263,Section 50C,Section 148

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, ‘’B’ BENCH, CHENNAI,

Before: SHRI N.R.S. GANESAN & SHRI S. JAYARAMAN

For Respondent: Shri S. Bharath, CIT
Hearing: 07.02.2020Pronounced: 07.02.2020

आदेश /O R D E R

PER N.R.S. GANESAN, JUDICIAL MEMBER:

1.

This appeal of the assessee is directed against the order passed by the Principal Commissioner of Income Tax, Salem dated 01.03.2018 and pertains to the assessment year 2010-11.

2.

Shri T.S. Lakshmi Venkataraman, Ld. Representative for the assessee submitted that the Pr. CIT revised the assessment by issuing direction to the Assessing Officer to withdraw the exemption granted u/s. 54 of the Income Tax, 1961 (for short ‘the Act’). The Pr. CIT has also directed the Assessing Officer to rework the long term capital gain after considering the provisions of Sec. 50C of the Act. As far as the second direction with regard to reworking of the capital gain become infructuous since, the Assessing Officer has considered and decided the matter. As far as the exemption claimed u/s. 54 of the Act, the Ld. Representative submitted that the Assessing Officer after considering the entire issue found that the long term capital gain was Rs. 5,24,278/- and accordingly, allowed the deduction u/s. 54F of the Act. Since the Assessing Officer has made proper enquiry and recorded a finding there is no error in the order of Assessing Officer. Therefore, the Pr.CIT is not justified in invoking his jurisdiction u/s. 263 of the Act.

3.

On the contrary, Shri S. Bharath, the Ld. Departmental Representative submitted that the assessee has not claimed deduction u/s. 54F of the Act in the original return. No deduction was also claimed in the return filed consequent to the notice issued u/s. 148 of the Act. Moreover, in the course of the assessment proceedings, the assessee filed a letter claiming deduction u/s.54F of the Act. Therefore, the Pr. CIT found that the assessee is not entitled for deduction u/s. 54F of the Act. The Ld. Departmental Representative placed reliance on the judgment of Apex Court in the case of Goetze (India) Ltd vs. CIT, 284 ITR 323 (SC).

4.

Having heard the Ld. Representative for the assessee and the Ld. Departmental Representative and perused the relevant material available on record. We also carefully gone through the judgment of Apex In the very same judgment, the Apex Court categorically found that the power of this Tribunal will not impinge to admit additional or any other ground. Therefore, there is no impediment for this Tribunal to consider the claim u/s.54F of the Act. Moreover, the Apex Court in the case of CIT vs. Shelly Products and Another, (2003) 261 ITR 367 had categorically found that it is open to the assessee to bring to the notice of the Assessing Officer any claim in the course of the assessment proceedings even though it was not claimed in the return of income. This judgment of the Apex Court was not considered by the latest judgment in Geozte (India)

Ltd (supra). Therefore the judgment of Apex Court in the case of Geozte (India) Ltd is per incuriam and not applicable to the present case. Since, the assessee admittedly invested in a residential flat and Assessing Officer admitted the claim of the assessee, this Tribunal is of the considered opinion that there is no justification for exercising the jurisdiction u/s.263 of the Act. In view of the above, we are unable to uphold the order of the Pr.CIT and accordingly the order of the Pr. CIT is set aside.

5.

In the result, the appeal filed by the assessee in 2010-2011 is allowed.

Order pronounced in the open court on 7th February, 2020 at Camp at Coimbatore.

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