M/S.palghat Credit Corporation v. The Principal Commissioner Of Income Tax-3 Room

THE HONOURABLE MR.JUSTICE C.SARAVANAN M/s.Palghat Credit Corporation,Represented by its Partner,D.Meera,No.B-1/S-3, Navins Clarmount Court,Nelson Manickam Road, Aminjikarai,Chennai – 600 029. ... Petitioner Vs 1.The Principal Commissioner of Income Tax-3 Room No.410, 4[th] Floor, Main Building, 121, Uthamar Gandhi Salai, Chennai – 34. 2.The Assistant Commissioner of Income Tax, Non-Corporate Circle-10(1), Chennai – 600 001....Respondents Prayer: Writ Petition filed under Article 226 of theConstitution of India to issue a writ of Certiorari or any otherappropriate writ, direction or order in the nature of a writcalling for the records of the first respondent in PAN: dated 26.03.2018 passed under Section 264 of theIncome Tax Act, 1961 for the assessment year 2014-15. The petitioner is aggrieved by the impugned order dated26.03.2018 passed by the first respondent under Section 264 ofthe Income Tax Act, for the Assessment Year 2014-2015. https://hcservices.ecourts.gov.in/hcservices/ 2. By the impugned order, the first respondent has rejectedthe application filed by the petitioner for revising theAssessment order dated 21.12.2016 passed by the secondrespondent under Section 143(3) of the Income Tax Act. 3. Challenge to the order dated 21.12.2016 of the secondrespondent before the first respondent was primarily on theground that petitioner has not claimed depreciation underSection 32 of the Income Tax Act, 1961 in respect of four of itsproperties which were later sold during the course of Financialyear 2013-2014 pursuant to an auction and then the petitionercannot be perforce given the benefit of Section 15(2) of theIncome Tax Act, 1961 instead of indexation under Section 48. 4. It is the case of the petitioner that the last returnthat was filed by the petitioner was for the Assessment year2001-2002. Thereafter, for the next 11 years, the petitionerhad not filed returns as was neither having any income nor lossfrom the business. 5. It is the further case of the petitioner that the fourproperties which came to be auctioned and sold resulted incapital gains and therefore the petitioner claimed indexationunder Section 48 of the Income Tax Act. 6. It is submitted that the second respondent while passingAssessment order on 21.12.2016 under Section 143(3) denied theindexation under Section 48 of the Income Tax Act,1961 andimpose Section 15(2) of the Income Tax Act, 1961. Even though,Section 15(2) of the Income Tax applies only to depreciableassets. 7. It is submitted that under Section 50(2) of the IncomeTax Act, 1961, where any block of assets ceases to exist assuch, for the reason that all the assets in that block aretransferred during the previous year, the cost of acquisition ofthe block of assets shall be the written down value of the blockof assets at the beginning of the previous year, as increased bythe actual cost of any asset failing within that block ofassets, acquired by the assessee during the previous year andthe income received or accruing as a result of such transfer ortransfers shall be deemed to be the capital gains arising fromthe transfer of short- term capital assets. 8. In this connection, learned counsel for the petitioneralso drew attention to Section 43(6) of the Income Tax Act, 1961which defines the expression “written down value” as follows: Section 43(6) in The Income- Tax Act, 1995“(6) " written down value" means- https://hcservices.ecourts.gov.in/hcservices/ (a) in the case of assets acquired in the previousyear, the actual cost to the assessee; 8. In this connection, learned counsel for the petitioneralso drew attention to Section 43(6) of the Income Tax Act, 1961which defines the expression “written down value” as follows: Section 43(6) in The Income- Tax Act, 1995“(6) " written down value" means- https://hcservices.ecourts.gov.in/hcservices/ (a) in the case of assets acquired in the previousyear, the actual cost to the assessee; (b) in the case of assets acquired before theprevious year, the actual cost to the assesseeless all depreciation actually allowed to himunder this Act, or under the Indian Income- taxAct, 1922 (11 of 1922 ), or any Act repealed bythat Act, or under any executive orders issuedwhen the Indian Income- tax Act, 1886 (2 of1886 ), was in force: Provided that indetermining the written down value in respect ofbuildings, machinery or plant for the purposes ofclause (ii) of sub- section (1) of section 32,"depreciation actually allowed" shall not includedepreciation allowed under sub- clauses (a), (b)and (c) of clause (vi) of sub- section (2) ofsection 10 of the Indian Income- tax Act, 1922 (11of 1922 ), where such depreciation was notdeductible in determining the written down valuefor the purposes of the said clause (vi);] (c) in the case of any block of assets,- (i) in respect of any previous year relevant tothe assessment year commencing on the 1st day ofApril, 1988 , the aggregate of the written downvalues of all the assets falling within that blockof assets at the beginning of the previous yearand adjusted,- (A) by the increase by the actual cost of anyasset falling within that block, acquired during theprevious year; and (B) by the reduction of the moneys payable inrespect of any asset failing within that block, whichis sold or discarded or demolished or destroyed duringthat previous year together with the amount of thescrap value, if any, so, however, that the amount ofsuch reduction does not exceed the written down valueas so increased; and (C) in the case of a slump sale, decrease by theactual cost of the asset falling within that block asreduced—(a) by the amount of depreciationactually allowed to him under this Act or underthe corresponding provisions of the Indian Income-tax Act, 1922 (11 of 1922) in respect of anyprevious year relevant to the assessment yearcommencing before the 1st day of April, 1988; and(b) by the amount of depreciation thatwould have been allowable to the assessee for any assessment year commencing on or after the 1st dayof April, 1988 as if the asset was the only assetin the relevant block of assets, so, however, that the amount of suchdecrease does not exceed the written down value;"; (ii) in respect of any previous year relevant to theassessment year commencing on or after the 1st day ofApril, 1989 , the written down value of that block ofassets in the immediately preceding previous year asreduced by the depreciation actually allowed inrespect of that block of assets in relation to thesaid preceding previous year and as further adjustedby the increase or the reduction referred to in item(i).] Explanation 1-When in a case of succession in businessor profession, an assessment is made on the successorunder sub- section (2) of section 170 the written downvalue of[ 1] any asset or any block of assets] shall bethe amount which would have been taken as its writtendown value if the assessment had been made directly onthe person succeeded to. Explanation 2.- Where in any previous year, any blockof assets is transferred,- Explanation 1-When in a case of succession in businessor profession, an assessment is made on the successorunder sub- section (2) of section 170 the written downvalue of[ 1] any asset or any block of assets] shall bethe amount which would have been taken as its writtendown value if the assessment had been made directly onthe person succeeded to. Explanation 2.- Where in any previous year, any blockof assets is transferred,- (a) by a holding company to its subsidiarycompany or by a subsidiary company to its holdingcompany and the conditions of clause (iv) or, as thecase may be, of clause (v) of section 47 aresatisfied; or(b) by the amalgamating company to the amalgamatedcompany in a scheme of amalgamation, and theamalgamated company is an Indian company, then,notwithstanding anything contained in clause (1), theactual cost of the block of assets in the case of thetransferee- company or the amalgamated company, as thecase may be, shall be the written down value of theblock of assets as in the case of the transferor-company or the amalgamating company for theimmediately preceding previous year as reduced by theamount of depreciation actually allowed in relation tothe said preceding previous year.) Explanation 2A.—Where in any previous year, any assetforming part of a block of assets is transferred by ademerged company to the resulting company, then, notwithstanding anything contained in clause (1), thewritten down value of the block of assets of thedemerged company for the immediately precedingprevious year shall be reduced by the book value ofthe assets transferred to the resulting companypursuant to the demerger. Explanation 2B.—Where in a previous year, any assetforming part of a block of assets is transferred by ademerged company to the resulting company, then,notwithstanding anything contained in clause (1), thewritten down value of the block of assets in the caseof the resulting company shall be the value of theassets as appearing in the books of account of thedemerged company immediately before the demerger : Explanation 3.- Any allowance in respect of anydepreciation carried forward under sub- section (2) ofsection 32 shall be deemed to be depreciation"actually allowed". 1 Explanation 4.- For the purposesof this clause, the expressions" moneys payable" and"sold" shall have the same meanings as in theExplanation below sub- section (4) of section 41]” 9. The learned counsel for the petitioner therefore submitsthat the second respondent in its Assessment order hascalculated the depreciation which was never claimed by thepetitioner for all the years during which period the petitionerhas never filed returns after Assessment year 2001-2002. 10. Even though, the petitioner had not claimed depreciationall along, the petitioner had treated the income from rentreceived from the four properties which were sold during theFinancial Year 2014-2015 prior to 2001 as income from rentalproperty under Section 14 of the Income Tax Act, 1961. 11. It is submitted that the income from the rental propertywas never treated as an income from the business or professionof the petitioner and therefore the second respondent was notjustified in imposing depreciation Section 32 of the Income TaxAct, 1961 read with Explanation 5 to Section 32 and Section 15(2) of the Income Tax Act, 1961. 12. The learned counsel for the petitioner further submitsthat the law and the subject is well settled. The heads of theincome cannot be altered. All along the immovable property weretreated as a house property from which rent was the incomewhich was never treated as a business income and therefore whenthe properties were sold in the year 2013-2014, naturally, thepetitioner was entitled to claim indexation for the purpose of https://hcservices.ecourts.gov.in/hcservices/ computation of the Long term capital gains under Section 48 ofthe Income Tax Act. 12. The learned counsel for the petitioner further submitsthat the law and the subject is well settled. The heads of theincome cannot be altered. All along the immovable property weretreated as a house property from which rent was the incomewhich was never treated as a business income and therefore whenthe properties were sold in the year 2013-2014, naturally, thepetitioner was entitled to claim indexation for the purpose of https://hcservices.ecourts.gov.in/hcservices/ computation of the Long term capital gains under Section 48 ofthe Income Tax Act. 13. In this connection, the learned counsel for thepetitioner refers to the decision of the Hon'ble Supreme Courtin the following cases: 1.East India Housing & Land Development TrustLtd. Vs. CIT [42 ITR 49-Supreme Court] 2.CIT Vs. Express Newspapers Ltd. [53 ITR250 – Supreme Court] 3.CIT Vs. Chugandas & Co. [55 ITR 007 – Supreme Court] 4.KS.Venkataraman & Co. (P) Ltd Vs. Stateof Madras [60 ITR 112 – Supreme Court] 5.Nalinikant Ambalal Mody Vs. SAL.NarayanaRao, CIT [61 ITR 428 – Supreme Court] 6.CIT Vs. Stanes Motors (South India) Ltd. [105 ITR 289- Madras HC] 14. The learned counsel specifically drew attention to thedecision in Nalinikant Ambalal Mody Vs. SAL.Narayana Rao, CIT(61 ITR 428 (Supreme Court)) wherein it has been observed asunder: 4.As to the general principles, we firstobserve that as the heads of income aremutually exclusive, if the receipts can bebrought under the fourth head, they cannot bebrought under the residuary head. It is saidby the Revenue that as the receipts cannot bebrought to tax under the fourth head theycannot fall under that head and musttherefore fall under the residuary head.This argument assumes, in our view, withoutjustification, that an income falling underone head has to be put under another head ifit is not chargeable under the computingsection corresponding to the formed head. Ifthe contention of the Revenue is right, theposition would appear to be that professionalincome of an assessee who keeps his accounton the cash basis would fall under the fourthhead if it was received in a year in whichthe procession was being carried on, but itwould take a different character and fallunder the residuary head if received in ayear in which the profession was not beingcarried on. We are unable to agree that thisis a natural reading of the provisionsregarding the heads of income in the Act. Whether an income falls under one head oranother has to be decided according to thecommon notions of practical men for the Actdoes not provide any guidance in the matter.The question under which head an income comescannot depend on when it was received. If itwas the fruit of professional activity, ithas always to be brought under the fourthhead irrespective of the time when it wasreceived. There is neither authority norprinciple for the proposition that an incomearising from a particular head ceases toarise from that head because it is receivedat a certain time. The time of the receiptof the income has nothing to do with thequestion under which particular head ofincome it should be assessed. 15. The learned counsel for the petitioner further submitsthat if the petitioner was to claim depreciation in respect ofthese properties on an earlier occasion it would not haveclaimed a meagre depreciation for a sum of Rs.17,383.98 underSection 32 of the Income Tax Act. The property was nevertreated as a business assets. What was claimed was onlydepreciation of the furnitures, electric motors, dieselgenerators etc., and therefore claimed minuscule depreciation ofRs.17,383.98 only as against the total value of the assets atRs.43,39,835.76/- as on 31.03.2001. 15. The learned counsel for the petitioner further submitsthat if the petitioner was to claim depreciation in respect ofthese properties on an earlier occasion it would not haveclaimed a meagre depreciation for a sum of Rs.17,383.98 underSection 32 of the Income Tax Act. The property was nevertreated as a business assets. What was claimed was onlydepreciation of the furnitures, electric motors, dieselgenerators etc., and therefore claimed minuscule depreciation ofRs.17,383.98 only as against the total value of the assets atRs.43,39,835.76/- as on 31.03.2001. 16. It submitted that where the depreciation was neverclaimed and therefore question of invoking Section 43(6)(b) didnot arise. In this connection, a reference was made to thedecision of the Hon'ble Supreme Court in Madeva Upendra SinaiVs Union of India [1975 (3) SCC 765] wherein while dealing withthe concept of written down value under the provisions of theIncome Tax Act, the Court observed as under: The situation before us is materiallydifferent. Here, no depreciation was evercomputed or actually allowed to the assesseesunder the Protuguese law. Indeed, under thatlaw the tax was levied not on net income buton gross turnover of the business. Therewas, strictly speaking, no assessment of taxon real ''profits and gains'' of a business,the tax being levied on gross receipts on adhoc basis. Allowing or taking into accountdepreciation of assets was of question inthat process of assessment. In the case inhand, the impugned proviso seeks to introduce a new concept of calculating depreciation.Byreplacing''depreciationactuallyallowed'' with ''depreciation deemed to haveallowed'' by a fiction of law, even where nodepreciation was at all allowed under any lawoutside the taxable territories, it, ineffect, attempts to change the fundamentalscheme of the Act. 17. The learned counsel for the petitioner further submitsthat Explanation 5 to Section 32 cannot be imported into Section50(2) of the Income Tax Act, 1961 and thereby deny the benefitof indexation under Section 48 of the Income Tax Act, 1961. 18. Defending the impugned order, the learned counsel forthe respondent submits that the petitioner had an opportunity tofile an appeal under Section 246 of the Income Tax Act beforethe Commissioner of Income Tax (Appeals). She further submitsthat scope of revision under Section 264 is limited andtherefore, the respondent has rightly rejected the application.Hence, the writ petition was liable to be dismissed as there isno case made out for quashing the impugned order of the secondrespondent. 19. She further submits that the appeal proceedings arecontinuation of the assessment proceedings and thereforeCommissioner of Income Tax (Appeals) can call for a report fromthe Assessing Officer while passing orders under Section 246 ofthe Income Tax Act. However, the Chief Commissioner of IncomeTax while exercising its power under Section 246 of the IncomeTax Act cannot exercise such power as the scope of the provisionunder Section 264 is limited. The learned counsel for therespondent placed the reliance on the decision of the Hon'bleAllahabad High Court and the the Hon'ble Karnataka High Court inthe following cases: 1.Ajai Kumar Singh Khaldelial Vs.Principal Commissioner of Income Tax [2020]122 taxmann.com 103 (Allahabad).2.Nataraju(HUF)Vs.PrincipalCommissioner of Income Tax, Mysuru [2018] 91taxmann.com 467 (Karnataka). 20. The learned counsel for the respondent specificallysubmits that under Article 226 of the Constitution of theIndia, and it has been held in Tata Cellular V. Union of India,(1994) 6 SCC 651] that while exercising the jurisdiction underArticle 226 of the Constitution of India, the Court have toexamine the followings:77.The duty of the court is to confineitself to the question of legality. Its https://hcservices.ecourts.gov.in/hcservices/ 1.Ajai Kumar Singh Khaldelial Vs.Principal Commissioner of Income Tax [2020]122 taxmann.com 103 (Allahabad).2.Nataraju(HUF)Vs.PrincipalCommissioner of Income Tax, Mysuru [2018] 91taxmann.com 467 (Karnataka). 20. The learned counsel for the respondent specificallysubmits that under Article 226 of the Constitution of theIndia, and it has been held in Tata Cellular V. Union of India,(1994) 6 SCC 651] that while exercising the jurisdiction underArticle 226 of the Constitution of India, the Court have toexamine the followings:77.The duty of the court is to confineitself to the question of legality. Its https://hcservices.ecourts.gov.in/hcservices/ concern should be:1.Whether a decision-making authorityexceeded its powers?2.Committed an error of law.3.Committed a breach of the rules ofnatural justice.4.reached a decision which no reasonabletribunal would have reached or,5.abused its powers. 21. Since none of the above situation are attracted, thelearned counsel for the respondent submits that the writpetition was liable to be dismissed. 22. She further submits that the Hon'ble Karnataka HighCourt in the above cited case has dismissed the case on theground that the assessee erred invoking the jurisdiction of theChief Commissioner of Customs under Section 264 of the IncomeTax Act instead of filing regular appeal before the Commissionerof Income Tax (Appeal) as the case may be. She submits that theHon'ble Karnataka High Court in Nataraju (HUF) Vs. PrincipalCommissioner of Income Tax, Mysuru [2018] 91 taxmann.com 467(Karnataka) has held as follows:“10.Even otherwise, the ignorance of lawis no excuse and no such presumption asprayed for, can be drawn in favour of thepetitioners-assessees. The remedy by way ofa revision under Section 264 of the Actobviously lies in a narrow compass and thesaid remedy cannot be treated as a regularremedy by passing the regular remedy ofappeals against the impugned assessmentorders and one cannot be allowed to availthe said revisional remedy under Section 264of the Act in a routine manner by passingthe requirement of payment of tax andallowing the regular appellate authoritiesto apply their minds of the relevant factsand evidence on record.” 23. On merits, the learned counsel for the respondentsubmits that the petitioner was required to file regular returnsunder Section 139 of the Income Tax Act, even if the petitionerwas making loss and therefore the petitioner cannot make avirtue out of a situation where the petitioner did not fileregular returns under Section 139, after Assessment Year 2001-2002. 24. She further submits that for the Assessment order forthe Assessment year 2001-2002, as the last Assessment order was https://hcservices.ecourts.gov.in/hcservices/ passed under Section 143(1). There was no scrutiny. Shetherefore submits that the second respondent had correctlyallowed depreciation in Explanation 5 to Section 32 of theIncome Tax Act, 1961 while computing the tax liability. 25. The learned counsel for the respondent further submitsthat the first respondent could not have examined the issue onmerits under Section 264 of the Income Tax Act, 1961 as thecontent of the returns filed by the petitioner which has beenextracted in the order passed by the second respondent also doesnot disclose as to whether depreciation was confined only to oldfurniture and miscellaneous assests or to the other assets other than the buildings. 26. Since the scope of Revision under Section 264 of theIncome Tax was limited, she further submits that the orderpassed by the first respondent was liable to be confirmed andthe present writ petition liable to be dismissed. 25. The learned counsel for the respondent further submitsthat the first respondent could not have examined the issue onmerits under Section 264 of the Income Tax Act, 1961 as thecontent of the returns filed by the petitioner which has beenextracted in the order passed by the second respondent also doesnot disclose as to whether depreciation was confined only to oldfurniture and miscellaneous assests or to the other assets other than the buildings. 26. Since the scope of Revision under Section 264 of theIncome Tax was limited, she further submits that the orderpassed by the first respondent was liable to be confirmed andthe present writ petition liable to be dismissed. 27. By way of rejoinder, the learned counsel for thepetitioner submits that the decision followed by the Hon'bleAllahabad High Court in Aja Kumar Singh Khaldelial Vs. PrincipalCommissioner of Income Tax [2020] 122 taxmann.com 103(Allahabad) itself states that the Writ Petition can beentertained where the orders passed on account of error on law. 28. I have heard the learned counsel for the petitioner andthe learned counsel for the respondent Income Tax Department.Facts are not in dispute. The petitioner had filed last returnsof income or for the assessment year 2001-2002 on 21.04.2001 andthereafter had not filed any returns for the subsequentassessment year till returns were filed for the assessment year2014-2015. In the returns filed for the assessment year 2000-2001, the petitioner claims to have declared rental income fromthese properties located in Chennai and Hyderabad. 29. Similarly, in the returns filed for the assessment year2001-02 also the petitioner has shown rental income from theseproperties. The petitioner has purportedly claimed depreciationon some of the assets and declared the written down value of theproperty as on 31.03.2001. 30. These properties were reportedly auctioned and soldduring the financial year 2013-2014 and therefore liable to taxunder the corresponding assessment year 2014-2015. Thepetitioner therefore filed a return on 29.07.2014 for theassessment year 2014-2015. 31. In the returns filed by the petitioner for theassessment year 2014-15 on 29.07.2014, the petitioner declared a https://hcservices.ecourts.gov.in/hcservices/ total income of Rs.7,79,98,230/-. The petitioner claimed longterm capital gains. The entire income from the sale of the fourhouse property were shown as long-term capital gains in thehands of the petitioner. The returns were also processedaccepting the income return by an order dated 22.04.2015 underSection 143(1) of the Income Tax Act, 1961. 32. Thereafter, an assessment order dated 21.2.2016 came tobe passed and the total income was re-determined asRs.12,41,30,000/- by computing the income from the sale of ahouse properties as short term capital gains in the hands of thepetitioner. 33. The petitioner thereafter preferred an application undersection 264 of the Income Tax Act, 1961 before the firstrespondent for revision of the aforesaid assessment order dated21.12.2016, instead of filing an appeal against the said orderunder Section 246 of the Income Tax Act, 1961 before theCommissioner of Income Tax (Appeals), within the limitationprescribed under the Act. 34. The first respondent has rejected the application forrevision filed by the petitioner under Section 264 of the IncomeTax Act, 1961 with the following observation:- “(a) The assessee is a firm and ought to havefiled return of income till its disolution whetherthe firm incurred loss or profit. But the assesseefirm has stopped filing its return of income from2002-03. The reason for the same is not explainedproperly. 34. The first respondent has rejected the application forrevision filed by the petitioner under Section 264 of the IncomeTax Act, 1961 with the following observation:- “(a) The assessee is a firm and ought to havefiled return of income till its disolution whetherthe firm incurred loss or profit. But the assesseefirm has stopped filing its return of income from2002-03. The reason for the same is not explainedproperly. (b) The depreciation statement filed alongwith the income tax return for A.Y.2001-02 clearlyshows that the four impugned properties sold duringthe F.Y.2013-14 are business assets anddepreciation was claimed u/s.32 and the sameallowed under limitation u/s. 143(1). (c) the depreciation statement has notclearly mentioned the nature of land and buildingwith the breakup of depreciable asset and non-depreciable within the block of assets”.(d) Authorised Representative's claim of thecost of depreciable asset of Rs.1,73,850/- is notacceptable as the record does not show any suchbreak up relating to cost of land, builing andother depreciable assets as per assessee's claimeither before the Assessing Officer or before theundersigned. 35. Capital gain, arises when the net sale considerationof a capital asset is more than the “cost of its acquisition”.Cost of acquisition is indexed to allow a taxpayer tofactor the impact of inflation on the cost so as to allow atax payer topay tax on lower amount of capital gains thanits historical cost. In this case, when the returns were takenup for scrutiny under section 143 (3) of the Income Tax Act,1961 on 19.8.2016, petitioner’s representative was called uponto explain the manner in which the claim was made. 36. During the course of the hearing the authorisedrepresentative the petitioner merely filed a copy of thedepreciation statement as on 31.3.2001 which was purportedlyfiled along with the returns for the assessment year 2001-02. 37. The authorized representative of the petitioner washowever unable to substantiate the claim vis-a-vis claim ofexpenditure towards cost of improvement in respect of theAynavaramProperty. Since the petitioner had failed tosubstantiate its claim with regard to the cost of acquisitionand cost of improvement which was indexed to compute the taxablelong-term capital gains, short term capital gains has beenapplied under Section 50 (2) of the Income Tax Act, 1961. 38. While it is not clear on what basis the first respondenthas come to a conclusion that the properties that were sold inan auction during the financial year 2013-14 were businessassets and therefore income from sale thereof were liable to taxas short term capital gain and only depreciation under section32 of the Income Tax Act, 1961 was to be allowed by invokingsection 50 (2) of the Income Tax Act, 1961, the fact that noperiodical returns were filed by the petitioner does not raisean suspicion regarding the claim of the petitioner that theassets were house properties and not business assets. 39. If the properties were house properties fetching rentalincome, then the petitioner would have filed periodical returnsyear after year and claimed applicable depreciation/deduction inthe returns. Thus, the inference that can be drawn is that theassets were indeed not house property and were not fetching anyincome and were a Business asset which were sold during 2013-14.Therefore, the petitioner could not claim long term capitalgains. 39. If the properties were house properties fetching rentalincome, then the petitioner would have filed periodical returnsyear after year and claimed applicable depreciation/deduction inthe returns. Thus, the inference that can be drawn is that theassets were indeed not house property and were not fetching anyincome and were a Business asset which were sold during 2013-14.Therefore, the petitioner could not claim long term capitalgains. 40. The petitioner has now made several legal submission inthe course of hearing of this writ petition. These were not thebasis of the revision petition was filed before the 1[st]respondent. The petitioner ought to have filed an appealagainst the assessment order dated 21.12.2016 of the 2[nd]respondent passed under Section 143(3). It is evident thathaving missing an opportunity to file an appeal under Section246 of the Income Tax Act, 1961 before the AppellateCommissioner against the order dated 21.12.2016 the secondrespondent passed under Section 143(3) of the Income Tax Act,1961, the petitioner approached 1[st] respondent under Section 264of the Income Tax Act, 1961. However, the powers of the Istrespondent are limited. He cannot revise any order or againstthe order under the following cases: (a)where an appeal against the order lies to theDeputy Commissioner (Appeals)] or to theCommissioner (Appeals)] or to the AppellateTribunal but has not been made and the timewithin which such appeal may be made has notexpired or, in the case of an appeal to theCommissioner (Appeals) or] to the AppellateTribunal, the assessee has not waived his rightof appeal; or(b)where the order is pending on an appeal beforethe Deputy Commissioner (Appeals)]; or(c)where the order has been made the subject of anappeal 3to the Commissioner (Appeals) or] to theAppellate Tribunal. 41. Therefore, this Court cannot find any fault with theimpugned order of the 1[st] respondent. Further, in the exerciseof its power under Article 226 of the Constitution of India,this Court cannot give its verdict based on disputed question offacts. Since, the limitation to file had already expired, onelast opportunity is given to the petitioner to file a statutoryappeal under Chapter XX of Income Tax Act, 1961, before theAppellate Authority, within a period of 30 days from the date ofreceipt of this order against the assessment order dated21.12.2016 of the 2[nd] respondent passed under Section 143(3) ofthe Income Tax Act. 42. If such an appeal is filed within a period of 30 daysfrom the date of receipt of copy of this order before theAppellate Authority, the Appellate Authority shall dispose theappeal on merits in accordance with the law uninfluenced by anyof the observation contained touching herein on the merits ofthe case. 43. This writ petition is disposed of with the aboveobservation. No costs. Consequently, connected MiscellaneousPetition is closed. Sd/- Assistant Registrar(CS VII) //True Copy// Sub Assistant Registraribm/drlTo1.The Principal Commissioner of Income Tax-3 Room No.410, 4[th] Floor, Main Building, 121, Uthamar Gandhi Salai, Chennai – 34.2.The Assistant Commissioner of Income Tax, Non-Corporate Circle-10(1), Chennai – 600 001.+1cc to Ms.Hema Muralikrishnan, Advocate Sr.23074W.P.No.16955 of 2018andM.P.No.20167 of 2018ajs[co]srg 12/07/2021