Itta/145/2019 Of Comissioner Of Income Tax v. Tatineni Meher Prasad

THE HONOURABLE SRI JUSTICE M. SEETHARAMA MURTI AND THE HONOURABLE MS. JUSTICE J.UMA DEVI I.T.T.A. No.145 of 2019 JUDGMENT: (Per the Hon’ble Sri Justice M.Seetharama Murti) This is an appeal under Section 260A of the Income Tax Act, 1961 (‘the Act’ for brevity) against the order, dated 05.09.2018, passed in I.T.A.No.155/Viz/2018 by the Income Tax Appellate Tribunal, Visakhapatnam. 2. We have heard the submissions of Mrs.K.Mamata Choudary, learned standing counsel for Income Tax Department, appearing for the appellant. We have perused the material record. 3. From the submissions made and the contents of the material record, the following facts are discernible: ‘The assessee, a non-resident, sold immovable property along with another for certain consideration under a registered sale deed, dated 11.02.2008. During scrutiny proceedings for the assessment year 2008-09, it was found that the proportionate fair market value (as per the value of SR’s Office) of the subject property was Rs.58,03,000/- and that the assessee did not file his return of income disclosing capital gains arising from the sale of the subject property. It was further noticed that during the remittance of sale consideration to the assessee, deduction under Section 195 of the Act was not made by the purchaser of the property. An order under Section 163(1) of the Act, dated 20.03.2015, was passed treating the purchaser of the property as the representative assessee of the non-resident assessee. Pursuant to the order under Section 163(1) of the Act, a notice, dated 25.03.2015, under Section 148 of the Act was issued to the representative assessee. The assessment was completed under Section 144 r/w Section 147 of the Act, vide order, dated 16.03.2016, and the tax payable was determined at Rs.10,50,367/-. The representative of the assessee preferred an appeal before the Commissioner of Income Tax (Appeals). The said appeal was dismissed by an order, dated 12.02.2018. Aggrieved thereof, the representative of the assessee preferred an appeal before the Income Tax Appellate Tribunal. Vide common order, dated 05.08.2018, the Income Tax Appellate Tribunal, allowed the appeal and set aside notice under Section 148 of the Act and consequently, held that the assessment proceedings are voidab initio. Aggrieved thereof, the present appeal is preferred.’ 4. It is not in dispute that as per Circular No.3 of 2018, dated 11.07.2018, of the Central Board of Direct Taxes, an appeal shall not be filed in cases, where the tax effect does not exceed the monetary limit of Rs.50,00,000/- in the event, the appeal is to be instituted before a High Court. In that view of the matter, this appeal is liable for dismissal. 5. Be that as it may, Clause 10 of the said Circular carves out exceptions and states that certain appeals can be contested on merits notwithstanding that the tax effect entailed is either less than the monetary limit specified in the Circular or there is no tax effect. In this appeal, though the constitutional validity of the provision viz., Section 149(3) of the Act is not under challenge, the contention of the appellant is that the instant appeal is entertainable, as the effect of the amendment of limitation period prescribed under section 149 (3) of the Act is involved and as the appellant is of the opinion that this appeal be considered to be falling within the exceptions carved out under clause 10 of the above circular. Therefore, we have examined the said aspect of the matter. 5. Be that as it may, Clause 10 of the said Circular carves out exceptions and states that certain appeals can be contested on merits notwithstanding that the tax effect entailed is either less than the monetary limit specified in the Circular or there is no tax effect. In this appeal, though the constitutional validity of the provision viz., Section 149(3) of the Act is not under challenge, the contention of the appellant is that the instant appeal is entertainable, as the effect of the amendment of limitation period prescribed under section 149 (3) of the Act is involved and as the appellant is of the opinion that this appeal be considered to be falling within the exceptions carved out under clause 10 of the above circular. Therefore, we have examined the said aspect of the matter. 6. As already noted, the Income Tax Appellate Tribunal, while allowing the appeal of the representative of the assessee, recorded a finding that the amendment to Section 149 (3) of the Act which came into force with effect from 01.04.2012 was not applicable retrospectively and that the amendment made subsequent to the expiry of time limit cannot be made applicable to the assessment, which was already closed. The Tribunal also enunciated the legal position obtaining in support of tis findings by making a reference to a decided case wherein the case facts are identical to the instant case and also to the precedential guidance in the decision of the Supreme Court and further held that that the assessment related to 2008-09 and that the time limit for issuance of notice under section 148, which is two years, had expired in the year 2010-11, before the amendment came into force. Having regard to the facts, the legal position referred to in the impugned order and the contents of the Circular referred to supra, we are of the view that the contention of the appellant that this appeal is to be considered to be falling within the exceptions contemplated in Clause 10(a) of Circular No.3 of 2018 is devoid of merit. 7. Having thus given earnest consideration, we hold that, in the facts and circumstances of the case, the contention that the appeal can be instituted on the above ground urged by the appellant is untenable, and that there is also no substantial question of law involved and that therefore, the present appeal, in view of the contents of the afore-stated Circular and the well reasoned sustainable findings of the Income Tax Appellate Tribunal, is liable for dismissal at the stage of admission. 8. In the result, the appeal is dismissed. As a sequel, pending miscellaneous petitions, if any, shall stand dismissed. No order as to costs. _________________________ M. SEETHARAMA MURTI, J 12[th] July, 2019 ghn _____________ J.UMA DEVI, J