Income Tax Appeal v. Satyaprakash Singh

24 itxa 463 of 2017 .doc IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.463 OF 2017 …Principal Commissioner of Income Tax-31Appellant versus…Satyaprakash Singh Respondent Mr. Arvind Pinto, for Appellant. Ms. Neelam C. Jadhav, for Respondent. CORAM: AKIL KURESHI & S.J. KATHAWALLA, JJ. DATE: 22nd JULY, 2019 P.C.: 1.This Appeal is filed by the Revenue to challenge the judgment of the Income Tax Appellate Tribunal (“the Tribunal” for short). The Appeal arises out of the return of income filed by the Respondent-assessee for the assessment year 2007-08. The question involved is of taxing the capital gain arising at the hands of the assessee for transfer of a long term capital asset. By the impugned judgment, the Tribunal held that the same could be taxed only in the assessment year 2003-04 and not in the present assessment year. The Tribunal relied on a decision of this Court in the case of 1.Chaturbhu Dwarkadas Kapadia V/s. Commissioner of Income Tax 2.In this context, the main anxiety for the Revenue was that since the Tribunal in the impugned judgment had not given consequential directions for taxing such gain 1[2003] 260 ITR 491 (Bom.) SSP 1/4 24 itxa 463 of 2017 .doc in hands of the assessee in the year 2003-04, the assessee could take an objection ofthe assessment for the said year having become time barred, prohibiting the assessingofficer from taxing the income in the said year. The case of the revenue appears to bethat if the Tribunal had given such consequential directions, the Assessing Officer interms of Section 150 of the Income Tax Act, 1961 could have brought such income totax at least in the assessment year 2003-04. 2.In our order dated 10[th] June, 2019, we had summerized the position as under and called upon the Respondent to be ready for final disposal of the Appeal : “1.This appeal is filed by the Revenue. 2. The question relates to in which assessment year, the assessee’stransaction of sale of immovable property can be brought to capital gaintax. Initially, the assessee had contended that the same would be inassessment year 2007-08. However, much later before the Income TaxAppellate Tribunal, the assessee raised additional contention stating thatthe development agreement was executed during the period relevant toassessment year 2003-04. The assessee relied on the decision of theDivision Bench of this Court in case of Chaturbhuj Dwarkadas KapadiaVs. CIT (Bom) and pointed out that even possession of the land in questionwas handed over to the developer. The Tribunal allowed the assessee toraise the additional contention and also accepted the contention placingreliance on the decision of this Court in case of Chaturbhuj DwarkadasKapadia (supra). The Tribunal by the impugned judgment held that thecapital gain tax could have been levied only in the assessment for theassessment year 2003-04. SSP 2/4 24 itxa 463 of 2017 .doc 3. Learned counsel for the Revenue submitted that even if the Tribunalwas to make such a declaration, particularly looking to the fact that theassessee had raised such a contention for the first time before the Tribunalmaterially altering his own contention earlier, the Tribunal ought to havegiven consequential directions for taxing the capital gain in the assessmentyear 2003-04 failing which the assessee would be liable to pay no capitalgain tax either in assessment year 2007-08 or in the assessment year2003-04. 4. Though served the Advocate’s notice, no one appeared for therespondent. 5. Let there be notice of final disposal returnable on 8th July, 2019. Tobe placed on admission board. 6. Revenue shall ensure service of this order to the respondent.” 24 itxa 463 of 2017 .doc 3. Learned counsel for the Revenue submitted that even if the Tribunalwas to make such a declaration, particularly looking to the fact that theassessee had raised such a contention for the first time before the Tribunalmaterially altering his own contention earlier, the Tribunal ought to havegiven consequential directions for taxing the capital gain in the assessmentyear 2003-04 failing which the assessee would be liable to pay no capitalgain tax either in assessment year 2007-08 or in the assessment year2003-04. 4. Though served the Advocate’s notice, no one appeared for therespondent. 5. Let there be notice of final disposal returnable on 8th July, 2019. Tobe placed on admission board. 6. Revenue shall ensure service of this order to the respondent.” 3.Consequently, we have heard the Counsel for the parties. We are of theopinion that even if the Tribunal found the facts of the present case akin to thosearising in the decision of Chaturbhuj Dwarkadas Kapadia (supra), in facts of the case,the consequential directions for taxing the income in the assessment year 2003-04outhg to have been granted. In absence of any such specific direction, there is a risk ofthe assessee arguing that the assessing officer cannot reopen the assessment, sincethere is no directions issued by the Tribunal for taxing the income for the said year. Toput the entire issue beyond the possibility of doubt or debate, we issue such directions.We are informed that subsequent to the Tribunal passing the impugned judgment, the SSP 3/4 24 itxa 463 of 2017 .doc Assessing Officer has already passed a fresh order of the assessment for theassessment year 2003-04 taxing the capital gain in the said year. It is therefore,clarified that the above direction would operate from the date of the judgment of the Tribunal, which in any case the Tribunal ought to have issued. In the result, theAppeal is disposed of in above terms. ( S.J.KATHAWALLA, J. ) ( AKIL KURESHI, J. ) SSP 4/4