Samuel v. The Income Tax Officer, Ward-4, Tirunelveli

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED : 07.04.2022 CORAM THE HONOURABLE MR.JUSTICE C.SARAVANAN W.P(MD).No.19814 of 2021 andW.M.P(MD).Nos.16502 and 16503 of 2021 Samuel ... Petitioner Vs. 1.The Central Board of Direct Taxes, Represented by its Chairperson, Department of Revenue – Ministry of Finance, Government of India, New Delhi.2.The Additional/Joint/Deputy/Assistant Commissioner, of Income Tax/Income Tax Officer, National e-Assessment Center, Delhi. 3.The Income Tax Officer, Ward-4, Tirunelveli. ...Respondents Prayer: Writ Petition filed under Article 226 of the Constitutionof India, praying this Court to issue a Writ of CertiorarifiedMandamus, calling for the records on the file of the secondrespondent and quash the impugned order in ITBA/AST/S/144/2021-22/1035945220(1) dated 27.09.2021 passed under Section 144 read withSection 254 read with section 144B if the Income Tax Act, 1961 bythe 2nd Respondent as illegal and consequently direct the thirdrespondent to conduct the proceedings in accordance with theprinciples of natural justice. For Petitioner : Mr.M.Veerabathran PrasanthFor Respondents : Mr.N.DilipkumarSenior Standing Counsel ORDER The petitioner has challenged the impugned assessment orderdated 27.09.2021. The challenge to the impugned order is primarilyon the ground that it is in violation of the principles of naturaljustice, as the petitioner was not heard before the impugned orderwas passed. The second ground on which the impugned order ischallenged is on account of the fact that despite the petitionerhttps://hcservices.ecourts.gov.in/hcservices/ requesting for cross-examination of the persons from whom astatement was obtained by the Income Tax Department, they were notallowed to be cross-examined. The petitioner had specificallyrequested for cross-examination of buyer also namely, V.Palanikumar,which was denied. 2. It is submitted that on an earlier occasion on 23.09.2021,the petitioner was called to furnish the PAN numbers of therespective parties and therefore, the petitioner should provide thePAN numbers of the persons to whom the petitioner wishes to cross-examine. It is submitted that the statements of the petitioner'sbrothers, sister and the buyer were obtained. However, none of thepersons were allowed to be cross-examined and the impugned order hasto go in the light of the decision of the Hon'ble Supreme Court inKishanchand Chellaram vs. CIT [1980 (125) ITR 713 (SC)] and thedecision of the Hon'ble Supreme Court followed in Dy. CIT vs. RogerEnterprises (P.) Ltd., [2012 SCC Online ITAT 11821] and in the caseof Briji Bhushan Singhal vs. ACIT [2018 SCC Online ITAT 2891]. 3. The learned counsel for the petitioner submits that theproperty in question was under litigation and that a total extent of8.59 Acres of lands were transferred and the dispute pertains to1.01 Acres of land and that no sale consideration was received bythe petitioner from the buyer namely, V.Palanikumar. It issubmitted that even though the petitioner's brothers and sister havestated that they have not received any consideration, the factremains that the petitioner has also not received any considerationfrom the buyer V.Palanikumar, who offered to buy the property underlitigation between the petitioner and Matheesa Pandian andDuraipandian, the two brothers and that the documents were presentedfor registration, but could not be completed for want of income taxclearance. 3. The learned counsel for the petitioner submits that theproperty in question was under litigation and that a total extent of8.59 Acres of lands were transferred and the dispute pertains to1.01 Acres of land and that no sale consideration was received bythe petitioner from the buyer namely, V.Palanikumar. It issubmitted that even though the petitioner's brothers and sister havestated that they have not received any consideration, the factremains that the petitioner has also not received any considerationfrom the buyer V.Palanikumar, who offered to buy the property underlitigation between the petitioner and Matheesa Pandian andDuraipandian, the two brothers and that the documents were presentedfor registration, but could not be completed for want of income taxclearance. 4.In this connection, a reference was made to the decision ofthis Court in Crl.O.P.(MD)Nos.1682 of 2012 and 11750 of 2013, dated06.06.2018, in the cases filed under Section 482 of Cr.P.C. by oneof the petitioner's buyer namely, V.Palanikumar and one KaruppasamyPandian. That apart, the learned counsel for the petitioner hasalso placed reliance on the Circular, dated 06.09.2021, which wasmodified later on 22.09.2021, prior to the impugned order. It issubmitted that as per the above Circular, the Range Head maycompulsorily be involved in the finalization of assessment of suchcases transferred to JAO, for which the provisions of Section 144-Aof the Income Tax Act may suitably be invoked. 5.The learned counsel for the petitioner further submits thathaving invoked Section 144 of the Income Tax Act, it was mandatoryon the part of the respondents to have given personal hearing to thepetitioner, as under the scheme of the Act, any order passed inviolation of principles of natural justice will be non est in law.https://hcservices.ecourts.gov.in/hcservices/ In this connection, a reference was made to sub-clause (9) toSection 144-B of the Income Tax Act. 6. In support of his submissions, the learned counsel for thepetitioner relied on the following judgments:- (i) Trendsutra Client Services (P.) Ltd. vs. AssistantCommissioner of Income Tax [2021 (132) taxmann.com 104 (Bombay)] (ii) A decision of the Delhi High Court in Bharat AluminiumCompany Ltd. vs. Union of India and others [W.P.(C)No.14528 of 2021and CM APPL.No.45702 of 2021, dated 14.01.2022] (iii) M/s.Arun Excello Foundations, Rep. by its Partner,Mr.P.Suresh vs. The Additional/Joint/Deputy Assistant Commissionerof Income Tax, Delhi [W.P.No.19552 of 2021, dated 01.02.2022](iv) Fifth Field Relators (P.) Ltd., vs. Assistant Commissionerof Income Tax, National e-Assessment Centre, Delhi [2022 (135)taxmann.com 76 (Madras)] (v) C.V.Ravi vs. Income Tax Officer Business Ward-11(4),Chennai [2021 (124) taxmann.com 438 (Madras)](vi) Ponmani Suresh vs. Deputy Commissioner of Income Tax Non-Corporate Ward 2, Chennai [2020 (120) taxmann.com 207 (Madras)](vii) Vetrivel Minerals vs. Assistant Commissioner of IncomeTax, Central Circle -2, Madurai [2021 (12) taxmann.com 126 (Madras)](viii) Karti P.Chidambaram vs. Additional Commissioner ofIncome Tax, Central Range – 2, Chennai [2021 (129) taxmann.com 36(Madras)] 7. Opposing the prayer, the learned Senior Standing Counsel forthe respondents submits that this is a second round of litigation bythe petitioner. (v) C.V.Ravi vs. Income Tax Officer Business Ward-11(4),Chennai [2021 (124) taxmann.com 438 (Madras)](vi) Ponmani Suresh vs. Deputy Commissioner of Income Tax Non-Corporate Ward 2, Chennai [2020 (120) taxmann.com 207 (Madras)](vii) Vetrivel Minerals vs. Assistant Commissioner of IncomeTax, Central Circle -2, Madurai [2021 (12) taxmann.com 126 (Madras)](viii) Karti P.Chidambaram vs. Additional Commissioner ofIncome Tax, Central Range – 2, Chennai [2021 (129) taxmann.com 36(Madras)] 7. Opposing the prayer, the learned Senior Standing Counsel forthe respondents submits that this is a second round of litigation bythe petitioner. 8. The learned Senior Standing Counsel for the respondentssubmits that challenge to the impugned order is based on CentralBoard of Direct Taxes Circular/Instructions, dated 06.09.2021 incircular F.No. 187/3/2020-ITA-I as modified by an order inF.No.225/97/2021-ITA-II, dated 22.09.2021. It is not applicable tothe facts of the case inasmuch as Paragraph iv (b) of circular,which is one of the exemption for faceless assessment under Section144 B of the Act. It applies to a situation, where time limit forcompletion of assessment expires on 30.09.2021 pending with thejurisdictional Assessing Officer as on 11.09.2021 or thereafter,were cannot complete as per the procedure laid down under Section144 B of the Act due to technical procedure constrains in the givenperiod of limitation. It is therefore submitted that there is noerror committed by the respondents while completing the assessmentpursuant to the remand order, dated 08.08.2019 of the ITA in ITANo.288/CHNY/2019. 9. The learned Senior Standing Counsel for the respondentsfurther submits that the respondents have not relied upon thestatement of either the buyer, namely, V.Palanikumar or any of thehttps://hcservices.ecourts.gov.in/hcservices/ statements of the petitioner’s siblings. On the other hand, it issubmitted that it is the specific case of the petitioner that thebuyer failed to pay the amount and therefore question of thepetitioner having paid any amount to the sibling also does notarise. Therefore, the request for cross-examine the sibling was alsoa request only to delay the completion of the assessment in respectof assessment year 2007-2008, which had remained inconclusive afterthe orders were set aside by the Tribunal. As far as the cross-examination of the buyer is concerned, it is submitted that thedepartment has not relied on the statement of the buyer. 10. On the other hand, the department has relied upon thestatement contained only in the sale deed, dated 26.02.2007. Thelearned Senior Standing Counsel for the respondents further submitsthat though the provisions of the India Evidences Act, 1872 is notapplicable, nevertheless, there cannot be any evidence on thecontent of documents as the documents speak for themselves. It istherefore submitted that merely because the petitioner now turnsaround and states that the petitioner has not received anyinstructions and therefore, the question of invoking Section 50 C ofthe Income Tax Act, would not apply cannot be countenanced. Thelearned senior standing counsel for the respondents submits that thepetitioner has been given enough latitude and therefore, theimpugned order deserves to be upheld. It is submitted that noprocedural irregularity has been pointed out or committed by therespondents while passing the impugned order. 11. The learned senior standing counsel for the respondentssubmits that the review under Article 226 of the Constitution ofIndia is confined to only decision making process and it issubmitted that there is no procedural infraction as far as thecompletion of assessment order is concerned and therefore, the writpetition is liable to be dismissed. 11. The learned senior standing counsel for the respondentssubmits that the review under Article 226 of the Constitution ofIndia is confined to only decision making process and it issubmitted that there is no procedural infraction as far as thecompletion of assessment order is concerned and therefore, the writpetition is liable to be dismissed. 12. By way of rejoinder, the learned counsel for the petitionersubmits that the impugned order has to go as there is a violation ofprinciples of natural justice and no opportunity of personal hearingwas granted to the petitioner. The learned counsel for thepetitioner submits that the impugned order relied on the statementof the petitioner’s siblings and therefore, the petitioner wasentitled to cross-examine them. It is further submitted that thevalue under Section 50 C (2) in question there has to be properdetermination of the value for the purpose of computation of income. 13. I have considered the arguments advanced by the learnedcounsel for the petitioner and the learned counsel for therespondents. 14. Earlier, the petitioner suffered an assessment order, dated30.12.2010. Aggrieved by the same, the petitioner had preferred anappeal before the Commissioner of Income Tax Appeals inhttps://hcservices.ecourts.gov.in/hcservices/I.T.A.No.160/2010-11, which came to be dismissed by the Appellate Tribunal by an order, dated 27.08.2014. The petitioner failed toparticipate in the proceedings before the Commissioner of Income TaxAppeals despite having filed the appeal. It is in this back ground,the Appellate Tribunal granted a fresh opportunity to the petitionerby setting aside the order and remitted the case back to theAssessing Officer to pass a fresh order by its order, dated08.08.2019 in I.T.A No.288/CHNY/2019. 15. The petitioner in this case had not filed a return underSection 139 of the Income Tax Act in time. Under thesecircumstances, the petitioner was issued with a notice under Section148 of the Income Tax Act, which culminated in an assessment order,dated 30.12.2010. The said assessment order was passed under Section144 of the Income Tax Act, 1961. 16. The dispute in this present case pertains to sale of 110cents of land out of total extent of 8.59 acres. It is the specificcase of the petitioner that though the sale deed, dated 26.02.2007declares a sale consideration as Rs.15,00,000/-, receipt of suchconfirmed in the said sale deed, the petitioner has not received asingle penny from the buyer. That apart, it is submitted that thepetitioner was not the sole owner of the property but a co-owneralong with the sibling and that tax if can be demanded only on theproportionate value. Even as per the petitioner, the petitioner hasnot received any consideration from his buyer, namely,V.Palanikumar. Therefore, the petitioner’s demand for cross-examination of his sibling is an exercise in futility. In the remandreport that they had categorically stated that they had given uptheir rights and it is the petitioner who sold the land toV.Palanikumar after given their power in his favour. Thus, no usefulpurpose will be served by summoning his siblings for cross-examination. 17. Therefore, I do not find any merits in the argumentsadvanced by the learned counsel for the petitioner that there was aviolation of principles of natural justice as no cross-examinationwas not allowed to cross-examine the petitioner’s siblings. As thefar as the cross-examination of the buyer, V.Palanikumar isconcerned, in my view, it was also irrelevant as documents namelysale deed speak for itself. Whatever, the sale considerationdeclared in the sale deed, dated 26.02.2007 is of no relevant. Thevalue that has to be determined under Section 50 C of the Income TaxAct. If the guideline value is more than the value declared in thedocument, then guideline value is relevant for payment of tax.whether the petitioner has received the aforesaid amount is of noconsequence. As long as a sale was effected the petitioner is boundby Section 50 C of the Income Tax Act. 18. Further, argument that value has to be redetermined underSection 50 C (2) was taken up for the first time. It is evident thatthe petitioner is dragging on the proceedings to stall recovery ofthe tax amount. I do not find any merits in this writ petition.https://hcservices.ecourts.gov.in/hcservices/ Therefore, the writ petition stands dismissed. I however giveliberty to the petitioner to file a statutory appeal within a periodof thirty days from the date of receipt of copy of this order. Ifsuch an appeal is filed within such time, the petitioner's appealshall be numbered and disposed on merits. The appellate authorityshall examine the case independently uninfluenced by any operationin this order touching on the merits. Needless to state that beforeorders are passed, the petitioner shall be heard. No costs.Consequently, the connected Miscellaneous Petitions are closed. // True Copy // Sd/- Assistant Registrar (P&A) / /2022Sub Assistant Registrar(CS) snTo1.The Chairperson , The Central Board of Direct Taxes, Department of Revenue – Ministry of Finance, Government of India, New Delhi.2.The Additional/Joint/Deputy/Assistant Commissioner, of Income Tax/Income Tax Officer, National e-Assessment Center, Delhi.3.The Income Tax Officer, Ward-4, Tirunelveli.+1 CC to M/s.A. MOHAMED HANEEF, Advocate ( SR-17626[F] dated08/04/2022 )+1 CC to M/s.N. DILIPKUMAR, Advocate ( SR-17657[F] dated08/04/2022 ) AM(CO)KB(02.05.2022) 6P 6C W.P(MD).No.19814 of 202107.04.2022 https://hcservices.ecourts.gov.in/hcservices/