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Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI
Before: SHRI MANJUNATHA. G & SHRI MANOMOHAN DAS
This appeal by the assessee is directed against the order of the learned Commissioner of Income-Tax (Appeals)-16, Chennai [CIT(A)] dated 07-07-2023 passed u/s. 154 of the Act and pertains to the Assessment Year [AY] 2015-16. The grounds of appeal of the assessee are as under:
“1. The order of the CIT(Appeals) - 16 dated 07.07.2023 vide DIN & Order No. ITBA/COM/M/17 /2023-24/1054221469(1) for the above mentioned Assessment Year is contrary to law, fact and in circumstances of the case.
The CIT(Appeals) - 16 erred in assuming jurisdiction under Section 154 of the-Act at the instance of the JAO and consequently erred in restoring the assessment order dated 30.12.2017 by reserving the earlier First Appellate order dated 27.06.2022 without assigning proper reasons and justification.
3. The CIT(Appeals) - 16 failed to appreciate that the mistake pointed out by the JAO in the petition dated 27.04.2023 based on the provisions of Section 4(7) of the VSVS Act, 2020 was completely erroneous and mis-directed and thereby vitiating the request for restoring the assessment order on technical grounds as the impugned order passed thereon.
4. The CIT(Appeals) - 16 failed to appreciate that the order of the Appellate Tribunal in restoring the matter to the file of the First Appellate Authority in the order dated 27.04.2021 was not opposed to the provisions of Section 4(7) of the VSVS ACT, 2020, thereby fortifying / validating the decision rendered by the First Appellate Authority on 27.06.2022 on merits in consequence to the Appellate Tribunal's directions.
5. The CIT(Appeals) - 16 failed to appreciate that having not acted on the dispute resolution initiated by the appellant under the VSVS Act, 2020, the order passed by the Appellate Tribunal after hearing the appellant on 23.03.2021 was legally sustainable and ought to have appreciated that the provisions of Section 4(7) should be read harmoniously with the other provisions of the said Act including Section 4(6) and 5(1).
The CIT(Appeals) -16 failed to appreciate that prayer by the JAO for the reserving of the earlier First Appellate Authority's order dated 27.06.2022 was completely invalid, not maintainable, erroneous and filed on the complete mis-reading of the provisions ofVSVS Act, 2020, thereby vitiating the various findings incorporated in the impugned order dated 07.07.2023, including the findings from para 6.2.
The CIT(Appeals) - 16 failed to appreciate that the order passed by the Appellate Tribunal in MA No. 2/CHNY/2023 was passed after taking note of facts of the present case so as to validate the First Appellate Authority's order passed on 27.06.2022.
8. The CIT(Appeals) - 16 failed to appreciate that the impugned order was passed out of time, invalid, passed without jurisdiction and not sustainable both on facts and in law.
The CIT(Appeals) - 16 failed to appreciate that there was no effective/proper opportunity given before passing the impugned order and any order passed in violation of the principles of natural justice is nullity in law.
The Appellant craves leave to file additional grounds / arguments at the time of hearing.”
2. The ld. CIT(A) vide his order dated 07-07-2023 passed u/s 154 of the Act revived the order passed by the ld. CIT(A) dated 09-08-2018 vide which the ld. CIT(A) had dismissed the appeal of the assessee through an ex-parte order.
The facts leading to the present appeal that the assessee is a non-resident. He filed his return of income for the AY 2015-16 on 06- 10-2016 admitting a total income of Rs.2,50,250/-. The return was processed u/s 143(1) of the Act on 15-10-2016. Subsequently, the case was selected for ‘Complete Scrutiny’ through CASS. Statutory notices served upon the assessee and the assessee responded to such notices.
The assessee vide his return of income claimed a long term capital gains to the tune of RS. 83,70,827/- and accordingly claimed deduction u/s. 54F of the Act. The assessee also claimed that he invested an amount of Rs. 2,50,00,000/- by purchasing of a villa house out of the proceeds of the sale of plot of land.
The learned Assessing Officer [AO] after considering the submissions of the assessee rejected the claims of the assessee. The ld. AO vide order dated 30-12-2017 completed the assessment and added Rs.83,70,827/- by disallowing the claim of the assessee under the head ‘Log Term Capital Gains’. The ld. AO also added Rs.12,10,943/- as income from other sources on account of purchasing of a villa house including other disallowances.
6. Being aggrieved, the assessee filed an appeal before the ld. CIT(A). The ld. CIT(A) vide order dated 28-01-2018 dismissed the appeal of the assessee. The ld. CIT(A) passed an ex-parte order as the assessee after filing of the appeal did not attend the hearing as per notices served upon him. The ld. CIT(A) vide this ex-parte order confirmed the order of the ld. AO.
7. Dissatisfied with the ex-parte order passed by the ld. CIT(A), the assessee filed appeal No. ITA 2962/Chny/2018 before the Tribunal.
The assessee pleaded before the Tribunal that the impugned appeal was decided without giving an opportunity and sought at least one effective opportunity of being heard before the ld. CIT(A). The Hon’ble Tribunal accepted the pleadings of the assessee and vide order dated 27-04-2021 set aside the ex-parte order passed by the ld. CIT(A) and remitted the issue back to the ld. CIT(A) for fresh decision.
The ld. CIT(A) in compliance to the order of the Hon’ble Tribunal heard the appeal afresh on merit and disposed of the appeal in favour of the assessee vide order dated 27-06-2022.
9. Thereafter, the Department filed a Miscellaneous Application No. 112/Chny/2022 before the Tribunal for rectification of certain mistakes which were apparent in the order of the Hon’ble Tribunal. The Department submitted that the Hon’ble Tribunal passed the order for fresh examination by the ld. CIT(A) after the assessee had filed Declaration in Form No. 1 and 2 of Direct Taxes Vivad Se Viswas Act of 2020 on 31-03-2021 and the Commissioner of Income Tax, International Taxation, Chennai had also passed order u/s 5(1) of DTVSV Act, 2020 in Form No. 3 on 21-04-2021. The Hon’ble Tribunal vide order dated 04th November, 2022 dismissed the Miscellaneous Application of the Department on the submission of the assessee that he has settled the disputed demand under that VSVS, 2020.
10. Thereafter, the assessee filed a Miscellaneous Application No.2/Chny/2023 before the Tribunal stating that the matter was not resolved under VSVS Act, 2020, but the proceedings reached finality in view of the order of the ld. CIT(A) dated 27-06-2022 as was passed in the remand proceedings. The Hon’ble Tribunal vide order dated 21- 02-2023 dismissed the MA of the assessee observing that it was academic in nature as the order of the ld. CIT(A) attained finality due to non-filing of any appeal by the Revenue against that order of the ld. CIT(A).
After the disposal of the MA of the assessee by the Hon’ble Tribunal vide order dated 21-02-2023, the ld. AO vide letter dated 27- 04-2023 requested the ld. CIT(A) for rectification of the order dated 27- 06-2022 passed by the ld. CIT(A) in ITA No. 24/CIT-16/2021-22. The ld. AO, inter alia, cited the reasons for rectification of the order of the ld. CIT(A) that the assessee failed to inform the ITAT about the exercise of option to avail the benefit of VSVS 2020 while the ITAT passed order for fresh examination of the appeal of the assessee by setting aside the ex-parte order dated 27-06-2022 of the ld. CIT(A).
The ld. AO further stated that no appellate forum or arbitrator, conciliator or in the declaration in respect of which an order has been made under sub-section (1) of section 5 by the designated authority or the payment of sum determined under that section etc. Thus, the ld. AO invited the attention of the ld. CIT(A) that the order passed by the ld. CIT(A) is erroneous as no order could be passed when Form No. 3 is issued and requested the ld. CIT (A) to rectify his order dated 09-08- 2018 passed in compliance to the order of the Tribunal for fresh examination of the appeal of the assessee.
The ld. CIT(A) accepted the aforesaid feedback given by the ld. AO and vide order dated 07-07-2023 and under section 154 of the Act revived the order dated 09-08-2018 by holding that the appeal of the assessee raised therein are dismissed. The ld. CIT(A) also ordered that the assessee cannot avail the benefit of DTVSV Act, 2020. The ld. CIT(A) observed that the order passed on 27-06-2022 was based on false evidence. The Hon’ble ITAT was not made aware of fresh facts while passing its first order on 27-04-2021, on which basis, my order was passed. As the Hon’ble ITAT order passed on 27-04-2022, was passed on the basis of incomplete information, my order passed on 27-06-2022, also becomes an order based on a mistake apparent from record. Thus, grounds of appeal raised by the appellant as ground of appeal Nos. 1 to 15 are dismissed. The order passed by CIT(A)-16 vide order No. 54/CIT(A)-16/2015-16 on 09-08-2018 stands revived.
No relief is allowed to the appellant. The appellant misutilized the provisions of DTVSV Act, 2020 and therefore, he cannot avail the benefit of DTVSV Act, 2020 also.
Being aggrieved, the assessee filed the present appeal before the Tribunal.
Heard the representatives of both the parties and perused the materials on record. The Ld. AR submitted that the order dated 27-06- 2022 passed by the ld. CIT(A) has attained the finality as there was no appeal against that order by the Revenue. Accordingly, the ld. CIT(A) cannot revive his order dated 09-08-2018 under section 154 of the Act which was not a mistake apparent from record. On the other hand, the Ld. DR supports the order passed under section 154 of the Act.
We carefully considered the submissions of both the parties and perused the materials on records. We observe that the Department did not file any appeal against the order dated 27-06-2022 passed by the ld. CIT(A) in compliance to the remission of the case by the Hon’ble Tribunal. The ld. CIT(A) disposed of the appeal on merit. As no appeal was filed by the Revenue against that order of the ld. CIT(A) dated 27- 06-2022, the same has attained the finality and binding on both the parties. Therefore, it is our considered opinion that the appeal filed by the assessee against the order of the ld. CIT(A) passed under section 154 of the Act has to be allowed. Accordingly, we set aside the order of the ld. CIT(A) dated 07-07-2023 passed u/s 154 of the Act.
In the result, the appeal of the assessee is allowed.
Order pronounced on 19th January, 2024.