Dukhan Prasad Singh Son Of Late Bhagwat Singh, Resident Of Danapur Kantroad, Khagaul, Mustafapur, Khagaul, P.s. Danapur District Patna v. The Union Of India To The Principal Chief Commissioner Of Income Taxhaving Its Office At Central Revenue Building, Veerchand Patel Path, Patna

IN THE HIGH COURT OF JUDICATURE AT PATNACivil Writ Jurisdiction Case No.625 of 2022 ====================================================== Dukhan Prasad Singh Son of Late Bhagwat Singh, Resident of Danapur KantRoad, Khagaul, Mustafapur, Khagaul, P.S. Danapur District Patna. ... ... Petitioner/s Versus 1.The Union of India to the Principal Chief Commissioner of Income Taxhaving its office at Central Revenue Building, Veerchand Patel Path, Patna.having its office at Central Revenue Building, Veerchand Patel Path, Patna. 2.The Principal Chief Commissioner of Income Tax, having its office atCentral Revenue Building, Veerchand Patel Path, Patna.Central Revenue Building, Veerchand Patel Path, Patna. 3.The Chief Commissioner of Income Tax having its office at Central RevenueBuilding, Veerchand Patel Path, Patna.Building, Veerchand Patel Path, Patna. 4.The Joint Commissioner of Income Tax, Jay Prakash Lok Nayak Bhawan,Dak Bungalow Road, Patna.Dak Bungalow Road, Patna. 5.The Deputy Commissioner of Income Tax, Jay Prakash Lok Nayak Bhawan,Dak Bungalow Road, Patna.Dak Bungalow Road, Patna. 6.The Assistant Commissioner of Income Tax, Jay Prakash Lok NayakBhawan, Dak Bungalow Road, Patna.Bhawan, Dak Bungalow Road, Patna. 7.The Income Tax Officer, Ward 6 (3), Jay Prakash Lok Nayak Bhawan, DakBungalow Road, Patna.Bungalow Road, Patna. ... ... Respondent/s ======================================================Appearance :For the Petitioner/s: Mr.Mohit Agarwal, AdvocateFor the Respondent/s: Mr.Rishi Raj Sinha, Advocate ====================================================== CORAM: HONOURABLE THE CHIEF JUSTICE and HONOURABLE MR. JUSTICE S. KUMAR ORAL JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE) (The proceedings of the Court are being conducted by Hon’ble the ChiefJustice/Hon’ble Judges through Video Conferencing from theirresidential offices/residences. Also the Advocates and the Staffs joined theproceedings through Video Conferencing from their residences/offices.) Date : 24-01-2022 Petitioner has prayed for the following relief(s): “i) For quashing of the final show cause for proposed addition bearing No. ITO/Ward-6(3)/Pat/JAD/2019- 20/1231 dated 23.09.2019, withrespect to Financial Year 2014-15, issued under thesignature of the Respondent No. 7 whereby an amountof Rs.46,01,025/- was proposed to be treated as LongTerm Capital Gain and complete the assessment in thecase of the petitioner under Section 144 read withSection 147 of the Income Tax Act, 1961 as the sameis on basis of hypothecated assumption of income onmere execution of development agreement; ii)For quashing of the consequential assessment orderissued under the signature of the Respondent No. 7vide letter bearing No. ITBA/COM/F/17/2019-20/1021167982(1) dated 27.11.2019 passed underSection 143(3) read with Section 147 of the IncomeTax Act, 1961 whereby an amount of Rs. 9,47,811/-was assessed as Long-Term Capital Gain Tax and afurther sum of Rs.6,06,599/- and Rs. 6,44,511/- wasimposed as interest under Section 234(A) and Section234(B) of the Income Tax Act, 1961 respectively forbeing assessed on the basis of hypothecated gain and apre-mature assessment of tax; iii) For holding a declaration that the tax on long termcapital gain on joint development agreement can onlybe assessed upon issuance of completion certificate ofthe said project by the competent authority or in theevent when the assessee has transferred his share in theproject on or before date of issuance of completioncertificate; iv) For holding that in the facts of the present case ofthe Petitioner, the passing of impugned assessmentorder is pre-mature and without authority of law asneither the completion certificate of the project hasbeen issued by the competent authority nor theassessee/petitioner has transferred his share in theproject on or before date of issuance of completioncertificate; iii) For holding a declaration that the tax on long termcapital gain on joint development agreement can onlybe assessed upon issuance of completion certificate ofthe said project by the competent authority or in theevent when the assessee has transferred his share in theproject on or before date of issuance of completioncertificate; iv) For holding that in the facts of the present case ofthe Petitioner, the passing of impugned assessmentorder is pre-mature and without authority of law asneither the completion certificate of the project hasbeen issued by the competent authority nor theassessee/petitioner has transferred his share in theproject on or before date of issuance of completioncertificate; v) For a declaration that the benefits of incorporationof sub-Section (5A) in Section 45 of the Income TaxAct, 1961 vide amendment of 2018 be made applicable upon the projects in which either the completion certificate has not been issued by the competentauthority or the land-owner has not executed anytransfer deed with respect to his purported share in theproject prior to completion of project even though thedevelopment agreement has been executed in financialyears prior to 2008-19, as is the case of the Petitioner, vi) For a declaration that in the present case theRespondent Assessing Officer had no jurisdiction toassess tax under Section 147 of the Income Tax Act,1961 as the event to assess or term the income oncapital gain as escaped income has not arisen; vii) For a declaration that merely on the basis ofexecution of a Joint Development Agreement dated03.12.2013 and in absence of completion of thebuilding and handing over the physical possession ofthe share of the petitioner to him by the developer, theaction of the Respondent for assessing Long TermCapital Gain to the tune of Rs. 46,01,025/- is arbitraryas the tax assessed is merely on basis of hypothecatedgain assumed to be accrued by the Petitioner; and/orfor any other relief(s) for which the Petitioner may befound entitled to in the facts & circumstances of thepresent case.” After the matter was heard for some time, finding the Bench not to be agreeable with the submissions made bylearned counsel for the petitioner, learned counsel for thepetitioner, under instructions, submits that petitioner shall becontent if the petition is disposed of with a direction to theauthority concerned to consider and decide the appeal to be filedby the petitioner within a period of four weeks, within a periodof three months from the date of its presentation. Shri Rishi Raj Sinha, learned counsel for therespondents, states that if the petitioner prefers an appeal withinthe time stipulated above, limitation shall not come in the wayof its consideration and decision on merits in view of the currentPandemic Covid-19 and the pendency of the present petitionbefore this Court. Statement accepted and taken on record. Without expressing any opinion on merits of theclaim, petition is disposed of with the liberty aforesaid. Allissues on facts and law are left open. Needless to say that while considering such appeal,principles of natural justice shall be followed and dueopportunity of hearing afforded to the parties. If aggrieved by the said order, the petitioner shall haveliberty to approach this Court by way of separate petition(s), ifso required and desired. Equally, liberty is reserved to the petitioner to takerecourse to such alternative remedies as are otherwise availablein accordance with law. We are hopeful that as and when petitioner takesrecourse to such remedies, as are otherwise available in law,before the appropriate forum, the same shall be dealt with, in accordance with law and with reasonable dispatch. The petition stands disposed of in the aforesaid terms. Interlocutory application, if any, shall also stand disposed of. (Sanjay Karol, CJ) ( S. Kumar, J) K.C.Jha/DKS AFR/NAFRCAV DATEUploading Date28.01.2022Transmission Date