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Income Tax Appellate Tribunal, “A” BENCH : KOLKATA
Before: Hon’ble Shri Aby. T. Varkey, JM & Shri M.Balaganesh, AM ]
IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH : KOLKATA [Before Hon’ble Shri Aby. T. Varkey, JM & Shri M.Balaganesh, AM ] I.T.A No. 1065/Kol/2016 Assessment Year : 2010-11 Daulal Kothari -vs- DCIT, Circle-44, Kolkata [PAN: AIYPK 2894 C] (Appellant) (Respondent)
For the Appellant : Shri Anil Kochar, Advocate For the Respondent : Shri Sallong Yaden, Addl. CIT Date of Hearing : 15.02.2018 Date of Pronouncement : 07.03.2018
ORDER Per M.Balaganesh, AM
This appeal is directed against 154 order passed by the Learned Commissioner of Income Tax (Appeals)-13, Kolkata (in short the Ld. CIT(A)] in appeal No. 1144/CIT(A)-13/Kol/Circle-44/2010-11/2014-15 dated 15.03.2016 seeking to rectify his own order passed on 30.12.2015 which was against the order passed by the DCIT, Circle-44, Kolkata (in short the ld. AO) u/s 147/143(3) of the Income Tax Act, 1961 (in short the Act) on 04.03.2015 for the assessment year 2010-11.
The only issue is to be decided in this appeal is as to whether the Ld. CIT(A) was justified in disturbing the value of sale consideration in the proceedings u/s 154 of the Act, in the facts and circumstances of the case.
2 ITA No.1065/Kol/2016 Daulal Kothari A.Yr.2010-11 3. The brief facts of this issue is that the assessee is an individual and had filed his return of income in the assessment year 2010-11 on 30.07.2010 declaring total income of Rs. 16,54,428/-. The assessment was originally completed u/s 143(3) of the Act on 26.11.2012 determining the total income at Rs. 64,35,080/-. Later the assessment was reopened u/s 147 of the Act and the reassessment was completed u/s 147/143(3) of the Act on 04.03.2015 determining the total income at Rs. 74,29,230/- . In the re assessment, a sum of Rs. 9,94,152/- was added by the ld. AO towards long term capital gain. Brief facts of this addition is that the assessee sold two properties during the year under appeal and had reported sale consideration of Rs. 6 lacs. and computed capital gains accordingly in the return of income. The value determined by the Stamp Valuation Authority for the subject mentioned properties (i.e. value as per section 50C of the Act) was Rs. 17,28,634/- (10,22,519 + 7,06,115). On objection of the adoption of this value by the assessee, the ld. AO referred the matter to Assistant Valuation Officer, Income Tax Department, Jodhpur who valued the property and accordingly, the long term capital gain of the subject mentioned properties was worked out at Rs. 9,94,152/- (666500 + 327652). The ld. AO completed the reassessment by adding the sum of Rs. 9,94,152/- towards long term capital gain. The assessee preferred an appeal against this year before the ld. CIT(A) who disposed off the same in appeal no. 1144/CIT(A)-13/Kol/Circle-44/2010-11/2014-15 dated 30.12.2015 by observing as under:
“6. Decision: 6.1. I have gone through the facts submitted by the assessee and the ground on which the ld. AO has made addition. The AO has simply relied on the valuation report made by the Registered valuer and disbelieved, the explanation & stand taken by the assessee that the property was in the property was in the possession of his staff and sale consideration was set by his staff, treating it to be a concocted story to avoid the legitimate tax on Capital Gain on the sale of these properties. 6.2 In this regard it is to point out that the valuation department did not consider the dispute over the property, which was going on since long as this information was not 2
3 ITA No.1065/Kol/2016 Daulal Kothari A.Yr.2010-11 in their possession. During the course of appellate proceeding the assessee has submitted the copy of civil suit relating to disputed property which was on going from 10.07.1990 and the same was disposed off on 27.11.2008. This fact clearly shows that the property was under dispute and it was sold to the same person who was occupying it since long. The buyer is the same person with whom the property was under possession and was in litigation. It was a distress sale basically which has been mentioned in the last para of the sale deed “the property is sold under settlement at a lower price in comparison to market rate.” Considering the above fact the contention of the assessee is accepted. Hence, the addition is deleted. 7. The appeal is allowed.”
Against the order of the Ld. CIT(A), the revenue did not prefer any appeal before this Tribunal. The Ld. CIT(A) later on issued notice u/s 154 of the Act dated 15.02.2016 seeking to revise his order by substituting the sale consideration figure and accordingly reworked the capital gains. The assessee did not respond before the Ld. CIT(A) for the said 154 notice accordingly the Ld. CIT(A) passed the order u/s 154 of the Act in appeal no. 1144/CIT(A)-13/Kol/Circle-44/2010-11/2014-15 dated 15.03.2016 by observing as under:
“ The mistake is legal one and apparent from record and to be rectified as per provision of section 154 of the Act. A show cause notice to rectify the mistake as per provision of section 154 of the Act in appeal order to replace the value of sale consideration as per stamp valuation of Rs. 12,08,400/- and relief allowed of Rs. 9,94,152/-. Notice was issued to the appellant dated 15.02.2016 fixing the hearing on 19.02.2016 in order to give him an opportunity to know his version against proposal of aforesaid 154 of the I.T. Act. The appellant has not submitted any argument or written up nor attended the same. Considering the fact that it was prima facie mistake therefore the allowance/relief of appeal made to the appellant on this issue is hereby withdrawn. The addition made by the AO on this issue is confirmed for calculating long term capital gain at Rs. 12,08,400/- on stamp value. The grounds of appeal of the appellant is not allowed. The appeal on this issue may be treated as dismissed. The relief given on this issue is withdrawn.”
Aggrieved by this order of Ld. CIT(A) dated 15.03.2016 (i.e. the order passed by Ld. CIT(A) u/s 154, the assessee is in appeal before us on the following grounds: 3
4 ITA No.1065/Kol/2016 Daulal Kothari A.Yr.2010-11 1. For that the Ld. CIT(A) having passed order on the appeal submitted by the appellant in Appeal No. 1144/CIT(A)-13/Kol/Cir-44/2010-11/2014-15 on 30.12.2015 could not assume jurisdiction u/s 154 of the Income Tax Act to rectify his order passed on 30.12.2015.
For that there was no mistake apparent from the record that could be rectified by assuming jurisdiction u/s 154 of the Income Tax Act and as such the order framed by the Ld. CIT(A) on 15.03.2016 is entirely uncalled for and liable to be set aside. 3. For that the order passed by the Ld. CIT(A) on 30.12.2015 could be appealed against by the AO u/s 251 of the Income Tax Act, 1961 but the authority passing its order has no jurisdiction to alter the same with regard to the fundamental decision and there being no mistake apparent from the record.
For that further grounds of appeal may kindly be allowed to be taken at the time of hearing of the appeal.
We have heard the rival submissions. The ld. AR placed reliance on the provision of section 154(1A) of the Act and accordingly pleaded that the relief sought to be withdrawn by the Ld. CIT(A) in the proceedings u/s 154 of the Act was not in accordance with the provision of section 154 of the Act. In response to this, the ld. DR vehemently relied on the order of the Ld. CIT(A). We find that the provision of section 154(1) and 154(1A) read as under:
Section 154 - Rectification of mistake (1) 3 With a view to rectifying any mistake apparent from the record an income- tax authority referred to, in section 116 may,- (a) amend any order passed by it under the provisions of this Act; (b) amend any intimation sent by it under sub- section (1) of section 143, or enhance or reduce the amount of refund granted by it under that sub- section.] (c) amend any intimation under sub-section (1) of Section 200A; (d)amend any intimation under sub-section (1) of section 206CB.] Section 154 (1A) (1A) 4 Where any matter has been considered and decided in any proceeding by way of appeal or revision relating to an order referred to in sub- section (1), the authority passing 4
5 ITA No.1065/Kol/2016 Daulal Kothari A.Yr.2010-11 such order may, notwithstanding anything contained in any law for the,, time being in force, amend the order under that sub- section in relation to any matter other than the matter which has been so considered and decided.]
From the plain reading of aforesaid provisions, we understand that the Ld. CIT(A) is also one of the Income Tax authorities referred to in section 116 and accordingly he is entitled to amend his order passed by him under the provisions of the Act. However, the rider has been placed in section 154(1A) of the Act, wherein, it stipulates that an order earlier passed by Income Tax authorities could be subject matter of amendment/rectification in terms of section 154(1), only in relation to matter other than the matter which has been so considered/decided by such authority earlier in his order. In the instant case, the Ld. CIT(A) had accepted the sale consideration reported by the assessee and also appreciated the fact that it was a distress sale made by the assessee after taking into account the existence of the dispute for 28 years and that the assessee was forced to sell subject mentioned properties to the existing persons who was occupying the subject mentioned properties itself. Hence, the Ld. CIT(A) has categorically given his finding in his original order dated 30.12.2015 with regard to the adoption of the sale consideration of the subject mentioned properties for the purpose of capital gains and also after appreciating the fact that the valuation officer had not considered the existing disputes over the subject mentioned properties , while valuing the property. Hence, the entire gamut of consideration of the subject mentioned properties has been duly considered and decided by the Ld. CIT(A) earlier in his order dated 30.12.2015. Hence, the said finding of facts cannot be disturbed by him by way of seeking recourse to section 154 in view of specific rider or prohibition provided in section 154(1A) as enumerated supra. If at all the revenue is aggrieved, against the earlier order passed by the Ld. CIT(A) dated 30.12.2015, the proper recourse would be to prefer to such appeal before Tribunal which the revenue had not filed.
6 ITA No.1065/Kol/2016 Daulal Kothari A.Yr.2010-11 5.In view of the aforesaid facts and with reference to specific provisions of Section 154(1A) of the Act, we hold that the Ld. CIT(A) was not authorized as per law to pass an order u/s 154 of the Act by withdrawing the relief already granted to the assessee in the instant case. Accordingly, grounds raised by the assessee are allowed.
6.In the result, the appeal of the assessee is allowed.
Order pronounced in the Court on 07.03.2018
Sd/- Sd/- [A.T. Varkey] [ M.Balaganesh ] Judicial Member Accountant Member Dated : 07.03.2018
SB, Sr. PS Copy of the order forwarded to: 1. Daulal Kothari, c/o S.L. Kochar, Advocate, 86, Canning Street, Kolkata-1. 2. DCIT, Circle-44, Kolkata, 3, Govt. Place (W), Kolkata-700001. 3. C.I.T(A)- , Kolkata 4. C.I.T.- Kolkata. 5. CIT(DR), Kolkata Benches, Kolkata.