Shri Raj Kumar Tewatia v. The Commissioner Of Income Tax, N.h. Iv, Faridabad

ITA No. 305 of 2009 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 305 of 2009 Date of Decision: 1.9.2015 Shri Raj Kumar Tewatia ....Appellant. Versus The Commissioner of Income Tax, N.H. IV, Faridabad ...Respondent. CORAM:-HON'BLE MR. JUSTICE AJAY KUMAR MITTAL.HON'BLE MR. JUSTICE RAMENDRA JAIN. 1.Whether the Reporters of the local papers may be allowed to see the judgment? 2.To be referred to the Reporters or not? 3.Whether the judgment should be reported in the Digest? PRESENT: Mr. Sanjay Bansal, Senior Advocate with Mr. B.M. Monga, Advocate for the appellant. Mr. Tajender K. Joshi, Advocate for the respondent. AJAY KUMAR MITTAL, J. 1.This appeal has been preferred by the assessee underSection 260A of the Income Tax Act, 1961 (in short “the Act”) against theorder dated 12.12.2008 (Annexure A-11) passed by the Income TaxAppellate Tribunal, Delhi Bench “G”, New Delhi (hereinafter referred toas “the Tribunal”) in ITA No. 1956/Del/2007 for the assessment year2000-01, claiming the following substantial questions of law:- (i)Whether on the facts and circumstances of thecase the Tribunal was legally correct in takingthe view that the CIT(A) was not justified in (ii) (iii) (iv) entertaining the grounds regarding validity ofnotice under Section 143(2) issued to theappellant herein being time barred and theassessment framed in the status of 'Individual'being null and void as per law as the same hadnot been challenged either before the CIT(A) orbefore the ITAT before the remand order waspassed by the latter? Whether on the facts and circumstances of thecase the Tribunal is legally correct in holdingthat the CIT(A) should have declined to admitadditional grounds, even when the assessmentframed in the status of 'Individual' is null andvoid as per law? Whether the Tribunal was legally correct inignoring the judgment of a coordinate Bench inthe case of the appellant for assessment year2001-02 admitting the ground/plea with regardto assessment having been framed in wrongstatus affecting the jurisdiction of the AssessingOfficer going to the root of the matter,admittedly not requiring any investigation intothe facts and thereby being void? Whether the Tribunal was legally correct inreversing the order of the CIT(A) even when theorder of assessment passed under Section 143(3) was bad in law on account of notice under Section 143(2) issued to the appellant hereinbeing time barred in view of the expressprovisions of Section 143(2) of the Income TaxAct, 1961? (v) Whether the Tribunal misdirected itself in law aswell as on facts in recording its conclusionbased on irrelevant findings while reversing theorder of the CIT(A)? (vi) Whether the impugned order passed by theTribunal is perverse, contrary to judicialdiscipline and institutional integrity and as aresult of non application of correct principles oflaw to factual position emerging from thematerial on record? 2.The facts, in short, necessary for adjudication of the instantappeal as narrated therein are that consequent to the acquisition ofagricultural lands acquired by the Haryana Urban Development Authority(HUDA), the appellant received enhanced compensation and interestduring the financial years 1999-2000, 2000-01 and 2001-02 relevant tothe assessment years 2000-01, 2001-02 and 2002-03 on furnishing ofsecurity as the enhanced compensation was being challenged by theHUDA in this Court. As the income of the assessee in the status of HUFwas not liable to be subjected to income-tax, return of income was notfiled. However, the return of income in the status of individual was filedby the assessee for the assessment year 2000-01 on 14.6.2000 underSection 139(1) of the Act. The Assessing Officer issued a notice dated7.2.2002 under Section 142(1) of the Act to the effect that since the appellant had received the enhanced compensation from HUDA, heshould file return of income for the assessment year 2000-01 which theassessee did on 25.2.2002. In the computation of income, it was statedthat since the Land Acquisition Collector and the assessee are in appealbefore this Court, therefore, the enhanced compensation of` 28,37,047/- received during the year under consideration was nottaxable. The Assessing Officer issued notice dated 26.9.2002 to theassessee under Section 143(2) of the Act in the status of individual.However, on the basis of the return filed by the appellant and incompliance thereto, the assessee submitted a letter dated 15.11.2002stating therein that the award of enhanced compensation is disputed inappeal before this Court. The Assessing Officer vide assessment orderdated 23.12.2002 (Annexure A-1) assessed the enhanced compensationof ` 28,37,047/- for the assessment year 2000-01 in the status ofindividual. Feeling aggrieved, the assessee filed an appeal before theCommissioner of Income Tax (Appeals) [for brevity “the CIT(A)”]. TheCIT(A) dismissed the appeal of the assessee against which theassessee filed an appeal before the Tribunal. The Tribunal vide orderdated 13.7.2004 (Annexure A-2) set aside the assessment order(Annexure A-1) and remanded the matter back to the Assessing Officerfor deciding the question in the light of the decision of the KarnatakaHigh Court in Chief Commissioner of Income-Tax and aother v. Smt.Shantavva (2004) 267 ITR 67 (Kar.).Being dissatisfied, the revenuefiled an appeal bearing ITA No. 108 of 2005 in this Court against theorder dated 13.7.2004 (Annexure A-2) which is still pending adjudication.The assessee had also filed returns of income for the assessment year2001-02 on 25.2.2002 under Section 139(4) of the Act and for assessment year 2002-03 in compliance with the notice under Section148 of the Act in the status of HUF. The Assessing Officer made theassessment for the assessment year 2001-02 on 23.12.2002 (AnnexureA-3) in the status of 'individual' and for the assessment year 2002-03 on27.12.2004 (Annexure A-4) in the status of 'HUF' and assessed theenhanced compensation and interest in the year of receipt. Feelingaggrieved, the assessee filed appeals before the CIT(A) who vide ordersdated 9.11.2004 and 29.3.2005 (Annexures A-5 and A-6, respectively)allowed the appeals by holding that the enhanced compensation andinterest received was not taxable as the HUDA had challenged thecompensation before this Court and, therefore, the right to receive hadnot crystallized and become final. Against the order of the CIT(A) for theassessment year 2001-02, the revenue filed an appeal before theTribunal whereas the assessee filed cross-objections challenging theassessment in the status of 'individual' on the plea that the AssessingOfficer had accepted the status of 'HUF' for the assessment year 2002-03. The Tribunal vide order dated 11.1.2007 (Annexure A-7) restored thematter to the CIT(A) for the assessment year 2001-02 for adjudication inaccordance with law. In pursuance thereto, the CIT(A) vide order dated5.2.2008 (Annexure A-8) allowed the appeal and annulled theassessment against which the revenue filed an appeal before theTribunal which is pending adjudication. The Income Tax Officer madere-assessment for the assessment year 2000-01 vide order dated14.2.2006 (Annexure A-9) on being set aside by the Tribunal andassessed the enhanced compensation of ` 28,37,047/- again in thestatus of 'individual' even when the return was filed in the status of'HUF'. The said order was challenged before the CIT(A) who vide order dated 8.2.2007 (Annexure A-10) annulled the assessment made in thestatus of 'individual'. The revenue took the matter in appeal before theTribunal. The Tribunal vide order dated 12.12.2008 (Annexure A-11)allowed the appeal and sent the matter back to the CIT(A) to decide theissue on merits. Hence, the present appeal. dated 8.2.2007 (Annexure A-10) annulled the assessment made in thestatus of 'individual'. The revenue took the matter in appeal before theTribunal. The Tribunal vide order dated 12.12.2008 (Annexure A-11)allowed the appeal and sent the matter back to the CIT(A) to decide theissue on merits. Hence, the present appeal. 3.We have heard learned counsel for the parties. 4.Learned counsel for the assessee relying upon thejudgment of the Apex Court in Assistant Commissioner of Income-tax v. Hotel Blue Moon, (2010) 188 Taxman 113 (SC), urged that noassessment could be framed in the status of 'individual'. It was furthersubmitted that for the assessment years 2001-02 and 2002-03, theincome from the acquired land was assessed in the status of 'HUF'which had attained finality. It was argued that the order of the Tribunal isunsustainable in view of subsequent decision of the Apex Court in HotelBlue Moon's case (supra) . 5.Learned counsel for the revenue relied upon the provisionsof Section 292BB of the Act inserted w.e.f. 1.4.2008 and also judgmentof this Court in CIT v. Panchvati Motors (P) Ltd. (2011) 243 CTR 189.It was contended that in such circumstances, the reliance on Hotel BlueMoon's case (supra) was of no assistance to the assessee. 6.After hearing learned counsel for the parties, we find thatthe issue arising in this appeal raises mixed question of law and factand, therefore, it is required to be remanded to the Tribunal to decideafresh in view of the submissions made hereinbefore. Accordingly, theimpugned order dated 12.12.2008 (Annexure A-11) passed by theTribunal is set aside and the matter is remitted to the Tribunal toadjudicate the same afresh after hearing learned counsel for the parties ITA No. 305 of 2009-7-and by passing a speaking order in accordance with law. The appealstands disposed of. (AJAY KUMAR MITTAL)JUDGESeptember 1, 2015(RAMENDRA JAIN)gbsJUDGE