Shri.abhijit Bhandari v. The Principal Commissioner Of Income Tax

IN THE HIGH COURT OF JUDICATURE AT MADRAS RESERVED ON : 18.01.2017 DELIVERED ON : 02.06.2017 CORAM THE HONOURABLE MR.JUSTICE RAJIV SHAKDHER Writ Petition No.11596 of 2016andW.M.P.No.9995 of 2016 Shri.Abhijit Bhandari... Petitioner Vs The Principal Commissioner of Income Tax-5,Aayakar Bhavan,Wanaparthy Block, 5[th] Floor,121, Mahatma Gandhi Road,Chennai-600 034.... Respondent Prayer : Writ Petition filed under Article 226 of theConstitution of India praying for the issuance of Writ ofCertiorari or any other appropriate writ, direction or other inthe nature of writ, calling for the records in C.No.2(24)/263/PCIT-5/CR-5/2015-16, dated 26.02.2016 on the file of therespondent relating to Assessment Year 2008-09, quashing thesame and pass such further or other order or orders that maydeem fit and necessary in the circumstances of the case. For Petitioner : Mr.M.R.Senthil Kumar for M/s.G.Susheela and Anish Unni.K For Respondent :Ms.Hema Muralikrishnan 1. This Writ Petition is directed against the order dated26.02.2016, passed by the respondent. The said order pertainsto Assessment Year (AY) 2008-09. This order has been passed bythe respondent in exercise of his powers under Section 263 ofthe Income Tax Act, 1961 (in short "the Act"). 1.1. The petitioner seeks to assail the order, inter alia,on the ground that it is contrary to the law, and has beenpassed in exercise of "assumption of jurisdiction" and is beyondthe prescribed period of limitation. https://hcservices.ecourts.gov.in/hcservices/ 2. In order to adjudicate upon the issues raised in the writpetition, one would require to notice the following broad facts :2.1. The petitioner was, at the relevant point in time, theprincipal shareholder of a company by the name of Royal ImagesDirect Marketing Private Limited (in short referred to as"RIDM"). The petitioner, along with other shareholders, enteredinto a Share Purchase Agreement, dated 17.07.2006 (in short"SPA"), with another entity by the name Accor Services. 2.2. As per the SPA, the sale of shares held in RIDM wasstaggered. Accordingly, 70% of the shareholding in RIDM was tobe sold, by way of tranche, followed by sale of second and thirdtranches comprising of 30% and 10% of the equity stake in RIDM.The said three tranches of shares were required to be sold inthree consecutive years, i.e., 2007-2008, 2008-2009 and 2009-2010. It appears that the petitioner received an advance in thesum of Rs.15,82,86,273/-, in the previous year 2006-2007,relatable to AY 2007-2008 towards sale of shares. The recordshows that 70% of the shareholding was sold by the petitioner on05.05.2007, for a total consideration of Rs.22,42,72,478/-,which included the aforementioned sum received in the form ofadvance. 2.3. The petitioner, evidently, in order to avail of thebenefit of Section 54F of the Act, took a decision to invest theamount received, in two residential flats located in the Olumpusbuilding situate in Altamount Road, Cumbulla Hill, Mumbai(hereafter collectively referred to as "flats"). These wereflats bearing No.607 and 612. The flats were, admittedly,adjacent to each other, in as much as they were located cheek tojowl. 2.4. In so far as flat No.612 was concerned, since, theoriginal owner of the flat had passed away and the rights in theflat had devolved on the legal heir of the original owner by wayof transmission under Section 29 of the Maharashtra Co-operativeSocieties Act, 1960 (in short "the 1960 Societies Act"), thesale could not be effectuated for a period of one year. 2.5. Having regard to this legal provision, a request wasmade to the housing society, in which, the said flat was locatedfor issuance of a No Objection Certificate (in short "NOC").Consequently, an NOC qua flat No.612, was issued on 11.04.2006. 2.4. In so far as flat No.612 was concerned, since, theoriginal owner of the flat had passed away and the rights in theflat had devolved on the legal heir of the original owner by wayof transmission under Section 29 of the Maharashtra Co-operativeSocieties Act, 1960 (in short "the 1960 Societies Act"), thesale could not be effectuated for a period of one year. 2.5. Having regard to this legal provision, a request wasmade to the housing society, in which, the said flat was locatedfor issuance of a No Objection Certificate (in short "NOC").Consequently, an NOC qua flat No.612, was issued on 11.04.2006. 2.6. The petitioner, thus, got executed two separate saledeeds with respect to the subject flats. In so far as flatNo.607 was concerned, the sale was effectuated vide a deed dated23.05.2006, while in respect of flat No.612, the sale deed wasexecuted on 16.01.2007. 2.7. However, it is the petitioner's case that, since, hisintention was to convert the two adjoining flats into a singleresidential unit, upon receipt of the NOC, he had commenced themodification and renovation works in and about June 2006. 2.8. It appears that upon the petitioner writing to qua the flats to the housing society, he was informed vide a letterdated 08.02.2012, that, since, what he had in his possession wasa single residential unit, he would be entitled to a singlevote. 3. In the interregnum, the petitioner had filed his returnsfor AY 2008-2009, on 31.07.2008, in which, he had claimeddeduction under Section 54F of the Act. Evidently, thepetitioner's return was taken up for scrutiny, whereupon, anassessment order dated 22.12.2010, was passed. 3.1. The record also seems to suggest that after theassessment order had been passed, it was intimated to thepetitioner that the Internal Revenue Audit had raised anobjection to the acceptance of the claim made by the petitionerunder Section 54F of the Act. Consequently, the petitioner'sresponse was sought. The petitioner claims that he furnished allthe details, which, he had filed, at the time of originalassessment proceedings as well, whereupon, the Assessing Officerdropped the proceedings initiated, pursuant to the objection ofthe Internal Revenue Audit. 3.2. The record further shows that thereafter, thepetitioner received a notice dated 20.03.2013, under Section 148of the Act, in respect of the very same AY, i.e., AY 2008-2009,on the ostensible ground that income chargeable to tax for thesaid AY had escaped assessment. 3.3. Consequently, the petitioner asked for reasons forissuance of a notice under Section 148 of the Act; whereupon,the aspect pertaining to the claim made by him under Section 54Fof the Act was, inter alia, brought to fore as the reason forissuance of the said notice. 3.4. The petitioner, filed his objections to the same. TheAssessing Officer, after considering the objections, passed anassessment order, under Section 143(3) read with Section 147 ofthe Act, on 31.03.2014. In the said order, in so far as theclaim under Section 54F of the Act was concerned, the AssessingOfficer made the following observations, and sustained the claimmade by the petitioner: "..... With regard to the merits of the case theassessee vide letter dated 09.07.2013 submitted thatthe assessee had sold the shares of the Royal ImagesDirect Marketing Private Limited shares on 05.05.2007.Annual Return filed by the said company to the ROCreflecting the above fact has already been submitted atthe time of assessment. A copy of the same has beenattached with this letter for your reference. Thisbeing the case for purchase of the flats by theassessee on 23.05.2006 and 16.01.2007 is well withinthe limits of one year, as prescribed by the subsection Section (sic) 54F of the Income Tax Act, 1961.For the above reasons, the deduction allowed under "..... With regard to the merits of the case theassessee vide letter dated 09.07.2013 submitted thatthe assessee had sold the shares of the Royal ImagesDirect Marketing Private Limited shares on 05.05.2007.Annual Return filed by the said company to the ROCreflecting the above fact has already been submitted atthe time of assessment. A copy of the same has beenattached with this letter for your reference. Thisbeing the case for purchase of the flats by theassessee on 23.05.2006 and 16.01.2007 is well withinthe limits of one year, as prescribed by the subsection Section (sic) 54F of the Income Tax Act, 1961.For the above reasons, the deduction allowed under Section 54F cannot be withdrawn. The details providedby the assessee were verified and the assessee's claimis found to be in order. ....." 4. While the aforesaid proceedings were on, the petitionerin the interregnum, filed his return for the AY 2009-2010,whereby, he declared the sale of the second tranche ofshareholding in RIDM, for a total consideration ofRs.11,24,14,809/-. 4.1. To be noted, it is the petitioner's case that he hadpaid, out of the sum received, a sum of Rs.40 lakhs as advancefor purchase of a immovable property situate in Alibaug in theDistrict Rajgad, Maharashtra, to enable him to construct aresidential property. In addition thereto, a sum of Rs.6.10Crores was invested by the petitioner in the Capital GainsAccount, maintained with the Bank of India. 4.2. The return for AY 2009-2010 was also subjected toscrutiny and an assessment order was passed under Section 143(3)of the Act. This assessment order was passed on 12.12.2011.While passing the assessment order, the Assessing Officerdisallowed the claim made by the petitioner for a sum of Rs.6.50Crores, under Section 54 of the Act. The reason given by theAssessing Officer, evidently, was that the flats purchased bythe petitioner were two separate residential units and hence,the petitioner was not entitled to claim the benefit, which mayotherwise have been available to him under Section 54F of theAct. 4.3. As would be evident from the narration of facts above,the view of the Assessing Officer in respect of this aspect ofthe matter, in A.Y. 2009-2010 was different to that, which hadtaken in AY 2008-2009. 4.4. The petitioner, being aggrieved, challenged theassessment order dated 12.12.2011, by preferring an appeal withthe Commissioner of Income Tax (Appeals) [in short "CIT(A)"]. 4.5. The CIT(A) vide order dated 29.07.2013, allowed theappeal, and thus, sustained the deduction claimed by thepetitioner under Section 54F of the Act. It may be pertinent tonote that by the very same order, the CIT(A) also dealt with theappeal preferred by the petitioner in respect of the AY 2008-2009, as some of the issues were common to the two appealspreferred by him. To be noted, though, the issue pertaining todeduction claimed by the petitioner, under Section 54F of theAct arose in the petitioner's appeal, as indicated above, onlyin the appeal preferred qua AY 2009-2010. 5. This time around, the Revenue, was aggrieved and hence,carried the matter in appeal to the Income Tax AppellateTribunal, Chennai (in short "the Tribunal"). 5.1. The Tribunal vide a common order dated 08.04.2015, dealt with the two appeals filed by the Revenue, being AppealNos.ITA 1899/Mds/2013 and ITA 1900/Mds/2013. The Tribunal, byvirtue of the said order, dismissed the appeal, bearing No.ITA1899/Mds/2013, pertaining to AY 2008-2009 and, for statisticalpurposes, partly allowed the appeal, bearing No.ITA1900/Mds/2013, pertaining to AY 2009-2010. 5. This time around, the Revenue, was aggrieved and hence,carried the matter in appeal to the Income Tax AppellateTribunal, Chennai (in short "the Tribunal"). 5.1. The Tribunal vide a common order dated 08.04.2015, dealt with the two appeals filed by the Revenue, being AppealNos.ITA 1899/Mds/2013 and ITA 1900/Mds/2013. The Tribunal, byvirtue of the said order, dismissed the appeal, bearing No.ITA1899/Mds/2013, pertaining to AY 2008-2009 and, for statisticalpurposes, partly allowed the appeal, bearing No.ITA1900/Mds/2013, pertaining to AY 2009-2010. 5.2. Interestingly, in the said order, the Tribunal,broadly, adverted to three aspects, in so far as the claim ofthe petitioner under Section 54F of the Act was concerned. Thefirst aspect related to the investment made by the petitioner inthe flats. The second aspect, which the Tribunal dealt with wasthe investment made by the petitioner in the sum of Rs.6.10Crores in the Capital Gains Account, maintained with the Bank ofIndia. The third aspect, which, the Tribunal referred to in thesaid order, was the sum of Rs.40 lakhs paid by the petitionerfor purchasing an immovably property, in Alibaug, in District,Rajgad, Maharashtra (in short “Alibaug property”). 5.3. A perusal of the observations made in the Tribunal'sorder would show that the Assessee had constructed a residentialhouse on the aforementioned Alibaug property in and about July2011, which was funded from the investment made in the CapitalGains Account. The petitioner appears to have claimed exemptionunder Section 54 of the Act, to the extent he utilized thefunds, in purchasing the land and constructing the residentialhouse thereon, albeit, within the prescribed time frame ofthree years of the moneys being invested in the Capital GainsAccount Scheme. 5.4. The Tribunal's order, notes, that the amount availablein the Capital Gains Account, as on 07.07.2011, had beenutilized and that this fact stood disclosed in the income taxreturns filed qua previous year 2011-2012, relatable to AY 2012-2013. Accordingly, the orders goes on to observe that a sum ofRs.49,24,780/- had been offered for taxation by the petitioner. 5.5. Therefore, having regard to the aforesaid threeaspects, the Tribunal, as it is evident, remanded the matter tothe Assessing Officer, with the following observations made inparagraph 10 : "..... 10. After considering the remand reportsand the order of the first appellate authority, wefind that there is no discussion by the AssessingOfficer about the issue of investment in capital gainsaccounts scheme amounting to Rs.6,10,000/- andRs.40,00,000/- and advance paid for the purchase ofproperty. It means that the Assessing Officer has notgiven any comments regarding this issue. Being so, inour opinion, it is appropriate to remit this issue.being so, in our opinion, it is appropriate to remitthis issue back to the Assessing Officer, as there isviolation of Rule 46A. Accordingly, we remit theissues for fresh consideration with regard to investment in capital gains accounts scheme and theadvance paid for the purchase of property totalling atRs.6,50,00,000/- back to the Assessing Officer, as hehas only considered the investment in flat Nos.607 and612, Altamount Road, Cumballa Hills, for which theassessee has already claimed deduction u/w.54F forassessment year 2008-09 and allowed by the AssessingOfficer in the assessment year 2008-09. Therefore,the same cannot be considered once again in theassessment year 2008-09 (sic 2009-2010). This issueto be decided afresh by the Assessing Officer. ...." (emphasis is mine) 5.6. A careful perusal of the observations of the Tribunalmade in paragraph 9 of its order would show that in so far asthe investment made by the petitioner in Alibaug property wasconcerned, a doubt was, perhaps, raised, as the said immovableproperty, on which, a residential unit had been constructed wasdescribed as pieces and parcels of agricultural land. (emphasis is mine) 5.6. A careful perusal of the observations of the Tribunalmade in paragraph 9 of its order would show that in so far asthe investment made by the petitioner in Alibaug property wasconcerned, a doubt was, perhaps, raised, as the said immovableproperty, on which, a residential unit had been constructed wasdescribed as pieces and parcels of agricultural land. 6. I must indicate herein that there has been much debate onthe aspect as to whether or not the Tribunal had reopened theissue with regard to the flats, in which, the petitioner hadmade investment and claimed deduction under Section 54F of theAct. In other words, the debate centered around the point as towhether the Tribunal had closed the issue by sustaining thestand of the petitioner that two adjoining flats formed a singleresidential unit, and not two separate units, as contended bythe Revenue. 6.1. The Revenue did not rest with the outcome of theTribunal proceedings and accordingly, issued a Show Cause Noticedated 15.12.2015 (in short "SCN") to the petitioner underSection 263 of the Act. This SCN raised a red flag with regardto the petitioner's claim for deduction under Section 54F of theAct to the tune of Rs.4,88,78,900/, which was the amountinvested by the petitioner in the aforementioned flats. 6.2. The petitioner filed a response to the same. Therespondent, after considering the reply of the petitioner,proceeded to pass the impugned order on 26.02.2016, whereby, heset aside the assessment order dated 31.03.2014, pertaining toAY 2008-2009, passed under Section 143(3) read with Section 147of the Act. 6.3. The petitioner, being aggrieved, has preferred theinstant writ petition. 7.Mr.Senthil Kumar, who appears for the petitioner,submitted that the impugned order passed by the respondentamounted to an abuse of process of law, in as much as it waspassed in disregard of the following facts and circumstances: (i) The subject flats had been converted into a single https://hcservices.ecourts.gov.in/hcservices/ residential unit, after obtaining the approval of the concernedhousing society. (ii) The petitioner had one single vote as per theregulations put in place by the concerned housing society, basedon the rationale that the subject flats formed one singleresidential unit. (iii) A report of the Surveyor dated 20.02.2012, which wason record, confirmed that the flats comprised of one singleresidential unit. (iv) The Revenue had undertaken a survey of the premises on31.10.2013, whereupon, the stand taken by the petitioner thatthe flats comprised of one single residential unit had beenaffirmed. (v) This aspect had been confirmed by the CIT(A) vide orderdated 29.07.2013, and therefore, the contrary view taken by theAssessing Officer, in respect of the AY 2009-2010, with regardto the sustainability of the claim made by the petitioner underSection 54F of the Act had been set aside. Thus, the view takenby the CIT (A), in the said order was not only binding on theAssessing Officer, qua AY 2008-2009, but that upon an re-assessment having been carried out vis-a-vis AY 2008-2009, videorder dated 31.03.2014, passed under Section 143(3) read withSection 147 of the Act, the conclusion had been reached that theexemption claimed by the petitioner under Section 54F of theAct, was in order had been validated. (vi) The Tribunal, in its order dated 08.04.2015, had notdisturbed the finding that the subject flats formed of a singleresidential unit. Therefore, the direction of remand issued bythe Tribunal qua other aspects, in respect of AY 2009-2010,would have no impact on the findings reached by the CIT(A), inits order dated 29.07.2013 that the subject flats should betreated as one single residential unit. (vi) The Tribunal, in its order dated 08.04.2015, had notdisturbed the finding that the subject flats formed of a singleresidential unit. Therefore, the direction of remand issued bythe Tribunal qua other aspects, in respect of AY 2009-2010,would have no impact on the findings reached by the CIT(A), inits order dated 29.07.2013 that the subject flats should betreated as one single residential unit. (vii) Lastly, in passing the assessment order dated31.03.2014, under Section 143(3) read with section 147 of theAct, the Assessing Officer had taken a view, which was apossible view, and therefore, the proceedings taken out underSection 263 of the Act would not be sustainable, as it could notbe held that the view taken by him was erroneous. In otherwords, according to the learned counsel, unless, the twinconditions provided in Section 263 of the Act, are fulfilled;which are : that the order passed by the Assessing Officer is,both erroneous and prejudicial to the interest of the Revenue,no order can be passed under the said provision. 7.1. In support of his submissions, learned counsel for thepetitioner relied upon the following judgements :(i).Malabar Industrial Co. Ltd. V. CIT, [2000] 243 ITR 83 (SC);(ii).CIT V. Max India Ltd., [2007] 295 ITR 282 (SC);(iii).CIT V. Mepco Industries Ltd., [2007] 294 ITR121 (Mad); (iv).CIT V. Sak Soft Ltd., [2008] ITR 63 (Mad);(v).CIT V. K.G.Denim Ltd., [2009] 180 Taxman 590(Mad); and(vi).CIT V. PVP Ventures Ltd., [2014] 101 DTR 161(Mad). 8. As against the aforesaid, Ms.Hema Muralikrishnan, madethe following submissions : (i). That an alternative remedy, by way of appeal, wasavailable to the petitioner, and therefore, this writ petitionought not to be entertained. (ii). That the order dated 22.12.2010, which was passed bythe Assessing Officer, in respect of AY 2008-2009, under Section143(3) of the Act, did not deal with the exemption claimed bythe petitioner under Section 54F of the Act, and consequently,the assessment order passed the said AY, was reopened and afresh assessment order under Section 143(3) read with Section147 of the Act was passed on 31.03.2014. It was emphasized thatthough petitioner's claim for exemption under Section 54F of theAct was sustained, since, it was inherently flawed, therespondent chose to exercise his revisional power under Section263 of the Act, by serving SCN dated 15.12.2015, on thepetitioner. (iii) The mistake made by the Assessing Officer in AY 2008-2009, as regards the petitioner's attempt to claim deductionunder Section 54F of the Act was avoided by the AssessingOfficer, while passing the assessment order dated 12.12.2011,vis-a-vis AY 2009-2010. Though, the Assessing Officer's view forAY 2009-2010, was overturned by the CIT(A), vide a common orderdated 29.07.2013, passed qua AYs 2008-2009 and 2009-2010, thesame was reversed by the Tribunal, vide its order dated08.04.2015, by remanding the matter to the Assessing Officer toconsider afresh the investment made in the Capital Gains AccountScheme by the petitioner in AY 2009-2010. Since, the Tribunal inits order dated 08.04.2015, did not deal with the issue as towhether or not the subject flats formed a single residentialunit, even while setting aside the order for AY 2009-2010, therespondent had acted within the four corners of the jurisdictionvested in him, in exercising powers under Section 263 of theAct. (iii)(a) In other words, learned counsel stressed on thefact that in so far as the Tribunal was concerned, in respect ofAY 2008-2009, the issue before it, pertained to disallowance ofexpenditure under Section 14A of the Act, and not deductionclaimed by the petitioner under Section 54F of the Act, while,in so far as AY 2009-2010 was concerned, even though, the issuepertaining to Section 54F arose for consideration, the Tribunaldid not adjudicate upon the same. https://hcservices.ecourts.gov.in/hcservices/ (iii)(a) In other words, learned counsel stressed on thefact that in so far as the Tribunal was concerned, in respect ofAY 2008-2009, the issue before it, pertained to disallowance ofexpenditure under Section 14A of the Act, and not deductionclaimed by the petitioner under Section 54F of the Act, while,in so far as AY 2009-2010 was concerned, even though, the issuepertaining to Section 54F arose for consideration, the Tribunaldid not adjudicate upon the same. https://hcservices.ecourts.gov.in/hcservices/ perused the record.9.1. Quite clearly, the preliminary objection taken withregard to the alternative remedy, by Ms.Hema, on behalf of theRevenue, will not require any discussion, if, I were to come tothe conclusion that the respondent had the necessary leeway, inthe given facts and circumstances, to exercise power underSection 263 of the Act. It is only if I come to a differentconclusion, would I be required to deal with this objection.Accordingly, in order to adjudicate upon the matter, thefollowing admitted facts are required to be noticed : 9.2. The petitioner had sold his shares held in RIDM, inthree tranches over a period spanning between 2007-2008 and2009-2010. 9.3. 70% of the shareholding in RIDM was sold on 05.05.2007,for a total consideration of Rs.22,42,72,478/-. 9.4. The petitioner had purchased the subject flats on twoseparate dates, Flat No.607 was purchased on 23.05.2006, whileflat No.612 was purchased on 16.01.2017. These flats werepurchased, quite clearly, within preceding one year of the saleof the shares, resulting in generation of capital gains. Therecord shows that flat No.607 was sold for a sum of Rs.1.67Crores, while flat No.612 was sold for a sum of Rs.3 Crores. 9.5. The petitioner had claimed a deduction under Section54F of the Act in the sum of Rs.4,88,78,900/-, against admittedlong term gains of Rs.21,39,19,223/-, after adjusting thetransfer expenses and indexed cost, against the aforestatedconsideration in the sum of Rs.22,42,72,478/- received qua saleof shares. 9.6. Though, the return for AY 2008-2009 was taken up forscrutiny and an order dated 22.12.2010, was passed, it wasreopened and a fresh assessment order under Section 143(3) readwith Section 147 of the Act was passed on 31.03.2014. The recordalso shows that in so far as AY 2009-2010 was concerned, theAssessing Officer did not accept the petitioner's claim fordeduction under Section 54F of the Act, with respect to thesubject flats, on the ground that they did not form a singleresidential unit. Therefore, two inconsistent orders were onrecord, i.e., order dated 22.12.2010, pertaining to AY 2008-2009, whereby, the deduction claimed by the petitioner underSection 54F of the Act was accepted, and the order dated12.12.2011, pertaining to AY 2009-2010, where, an oppositeconclusion had been reached, i.e., the deduction claimed underSection 54F of the Act was not available. 9.7. This led to the filing of an appeal with the CIT(A).The CIT(A), vide a common order dated 29.07.2013, dealt with thepetitioner's appeal pertaining to AYs 2008-2009 and 2009-2010. 9.8. As correctly submitted by Ms.Hema, in respect theappeal pertaining to AY 2008-2009, there was no grievancearticulated by the petitioner, with regard to his claim fordeduction under Section 54F of the Act, as the same stood accepted by the Assessing Officer via his order dated22.10.2010. The grievance of the petitioner, thus, with respectto the disallowance of deduction under Section 54F of the Actstood articulated only qua AY 2009-2010. The CIT(A), however,as noticed hereinabove, in his common order dated 29.07.2013,clearly, held that the petitioner should be allowed deductionunder Section 54F of the Act, as the aspects pertaining to theclaim had been considered in AY 2008-2009. This conclusion wasreached by the CIT(A), after adverting to the entire history ofthe transaction and the material placed before him, whichincluded, the Surveyors report, to which, I have made areference above. 9.9. Moreover, in the proceedings carried under Section 143(3) read with Section 147 of the Act, qua AY 2008-2009, afterdue scrutiny, the Assessing Officer vide order dated 31.03.2014,came to the very same conclusion, which is that the deductionallowed under Section 54F of the Act, via the order dated22.12.2010, could not be withdrawn. The relevant observationsmade, in this regard, have already been extracted hereinabove byme. 9.10. While the Revenue preferred appeals to the Tribunalvide CIT (A)'s common order dated 29.07.2013, qua AY 2008-2009and 2009-2010, it initiated proceeding under Section 263 of theAct, against the Assessing Officer's order dated 31.03.2014.Notably, the issue pertaining to the tenability of thepetitioner's claim for deduction under Section 54F of the Actarose in both proceedings. 10. The Tribunal, therefore, while adjudicating upon theappeals preferred by the Revenue for both AYs, i.e., AY 2008-2009 and 2009-2010, was required to deal with the issue, whichis, as to whether the subject flats formed one singleresidential unit. 11. The fact that this issue came before the Tribunal isquite evident, if, one were to peruse the paragraph 9 of theimpugned order dated 08.04.2015. For the sake of convenience,the same is extracted hereafter : "..... 9. In the remand report, it was stated bythe Assessing Officer that the transfer of assetsinvolving financial transactions took place on7.7.2008. The assessee claimed ownership of FlatNo.607 and 612 of Olympus Apartments. The AssessingOfficer emphasized on the two conditions for claimingdeduction u/s.54F. According to the AssessingOfficer, the first condition is that the assesseeshould not own more than one residential property. TheAssessing Officer is of the opinion that whileclaiming deduction u/s.54F of the Act, the assessee as 11. The fact that this issue came before the Tribunal isquite evident, if, one were to peruse the paragraph 9 of theimpugned order dated 08.04.2015. For the sake of convenience,the same is extracted hereafter : "..... 9. In the remand report, it was stated bythe Assessing Officer that the transfer of assetsinvolving financial transactions took place on7.7.2008. The assessee claimed ownership of FlatNo.607 and 612 of Olympus Apartments. The AssessingOfficer emphasized on the two conditions for claimingdeduction u/s.54F. According to the AssessingOfficer, the first condition is that the assesseeshould not own more than one residential property. TheAssessing Officer is of the opinion that whileclaiming deduction u/s.54F of the Act, the assessee as on date of transfer of long term capital gain, theassessee should possess only one residential houseproperty. It is brought out by the Assessing Officerthat the assessee has bought the properties ondifferent dates, viz., flat Nos.607 and 612 on23.5.2006 and on 16.1.2007 respectively and that theassessee produced copies of permission for renovationby Olympus Co-operative Housing Property Ltd., forsale of flat No.612 layout of combined FlatNos.607/612 of Olympus Apartments and certificate fromV.S.Modi Associates. The Assessing Officer's questionis that on the date of capital gain transaction, i.e.,on 7.7.2008, how many residential properties theassessee was holding. The Assessing Officer statesthat the submissions by the assessee did not supportthe assessee's contention of holding singleresidential unit on the date of transfer of capitalgain and also no supporting documents were receivedfrom the assessee regarding completion of renovationand occupation of the assessee in the combinedresidential unit of flat Nos.607 & 612. Further,according to the Assessing Officer, the secondcondition for disallowance is that the assessee shouldhave invested in a residential house. The AssessingOfficer states that as per deduction of claim u/s.54F,the assessee could invest either in purchase ofresidential property one year prior to the date oftransfer or 2 years after the date of transfer orconstruct house within 3 years after the date oftransfer. In the assessee's case the Assessing Officerstates that the assessee has utilized the amount inagricultural land located at Dhokawade Village,Alibag, Taluka of Rajgad District, which is evidentfrom the document describing the property as 'piecesand parcels' of agricultural land. The AssessingOfficer also pointed out that the assessee had notproduced any proof like approval obtained from theMunicipal Corporation of competent Authority forconstruction of residential property for treating theassessee's agricultural land as residential area." (emphasis is mine)11.1. A perusal of the aforesaid extract would show that theTribunal was considering, not only the issue as to whether ornot the subject flats formed one residential unit, but also, waslooking at the investment made by the petitioner in the Alibaugproperty, on which, a residential structure had been built byhim. Tribunal's order would also establish that it was also examiningthe petitioner's claim that he had invested Rs.6.10 crores in aCapital Gains Account scheme via the Bank of India. This aspectis evident from the perusal of the following extract of theTribunal's order dated 08.04.2015 : Tribunal's order would also establish that it was also examiningthe petitioner's claim that he had invested Rs.6.10 crores in aCapital Gains Account scheme via the Bank of India. This aspectis evident from the perusal of the following extract of theTribunal's order dated 08.04.2015 : ".... 8. We have heard both the parties andperused the orders of the authorities below. In ouropinion, the Assessing Officer mixed up with theinvestment on two flats at Mumbai. the Commissioner ofIncome-tax (Appeals) observed that the assessee hasearned capital gains on sale of shares during the yearunder consideration and deposited the same in capitalgain account scheme in July 2007 with Bank of IndiavideA/cNo.006610110001298amountingtoRs.6,10,00,000/-. The amount paid as advance for thepurchase of land at Alibagh Taluka, Dhokawde Village,MaharashtraforRs.40,00,000/-totallingtoRs.6,50,00,000/-. The assessee has claimed exemptionu/s.54F for the coast (sic cost) of land atRs.4,46,26,000/- including registration charges forthe land of 16940 sq.meters. The assessee hascompleted the construction on this land by July 2011,i.e., within 3 years from the date of investment madein capital gains accounts scheme. The total amount ofcost of construction incurred by the assessee is atRs.1,54,49,220/-. the amount utilized as on 7.7.2011out of the investment made in capital gains accountshas been disclosed in the income tax return for thefinancial year 2011-12 relevant to the assessment year2012-13 and offered for taxation at Rs.49,24,780/-.Since the assessee has constructed residential housewithin 3 years from the date of investment in capitalagainst accounts scheme, he claimed exemption u/s.54Fof the Act to the extent of capital gains utilized inpurchasing of land and construction completed thereon.Regarding these facts, the Commissioner of Income Tax(Appeals) called for remand report and the same wassubmitted by the Assessing Officer vide remand reportdated 31.07.2012. Later, a second remand report dated13.8.2012 was also submitted by the Assessing Officer,which was considered by the Commissioner of Income-tax(Appeals)." (emphasis is mine) 12. The Tribunal, thus, as indicated in my narration above,was dealing with three aspects via its order dated 08.04.2015.First, as to whether the subject flats formed a singleresidential unit. Second, the petitioner's claim that he hadinvested Rs.6.10 Crores in the Capital Gains Accounts Scheme wasborne out. Third, the petitioner's claim that he had invested money in the Alibaug property, on which, he had, purportedly,constructed a residential structure. 12.1. The Tribunal, after discussing these three aspects ofthe matter, confined the remand only to the last two aspects,that is, the claim of the petitioner with regard to investmentof Rs.6.10 Crores in the Capital Gains Scheme; and the purportedinvestment of Rs.40 lakhs made by him by way of advance towardspurchase of Alibaug property. 12.2. The issue with regard to the claim of deduction underSection 54F of the Act, (which arose, as correctly argued onbehalf of the Revenue, in its appeal filed qua A.Y. 2009-2010),was not remanded for reconsideration, as the same had alreadybeen considered in AY 2008-2009. This is quite evident uponperusing paragraph 10 of the Tribunal's order. The relevantobservations made, in this regard, have already been extractedhereinabove by me. 12.3. Having regard to the aforesaid, in my view, theTribunal in its wisdom, thought it fit not to entertain theappeal of the Revenue, with regard to its challenge laid to thededuction claimed by the petitioner vis-a-vis the subject flatsunder Section 54F of the Act. 12.2. The issue with regard to the claim of deduction underSection 54F of the Act, (which arose, as correctly argued onbehalf of the Revenue, in its appeal filed qua A.Y. 2009-2010),was not remanded for reconsideration, as the same had alreadybeen considered in AY 2008-2009. This is quite evident uponperusing paragraph 10 of the Tribunal's order. The relevantobservations made, in this regard, have already been extractedhereinabove by me. 12.3. Having regard to the aforesaid, in my view, theTribunal in its wisdom, thought it fit not to entertain theappeal of the Revenue, with regard to its challenge laid to thededuction claimed by the petitioner vis-a-vis the subject flatsunder Section 54F of the Act. 12.3. Therefore, in my opinion, since, the Revenue did notassail the order of the Tribunal dated 08.04.2015, therespondent could not have exercised powers under Section 263 ofthe Act to revisit the issue once again, by setting aside theorder dated 31.03.2014, passed by the Assessing Officer underSection 143(3) read with Section 147 of the Act. 13. Furthermore, according to me, as correctly argued byMr.Senthil, on behalf of the appellant, the view taken by theAssessing Officer in its order dated 31.03.2014, was a possibleview, and therefore, would not, necessarily, as it sought to beprojected on behalf of the Revenue, be categorised as anerroneous view. 13.1. A perusal of the impugned order would show that therespondent has set aside the order and directed the AssessingOfficer to revisit the issue, as he, according to him, hadfaulted to take into account the fact that the subject flats hadbeen purchased via two separate sale deeds, and had separateelectricity meter connections. According to me, it appears thatthe respondent was unnecessarily burdened by the fact that thesubject flats were purchased by two separate sale deeds and hadseparate electricity meter connections. The issue at hand,before the Assessing Officer, in my opinion, was whether or notthe subject flats form a single residential unit. 13.2. The size of the flat, or, that they had separateelectricity meter connections would not, necessarily, lead to aconclusion that they were two separate residential units. TheAssessing Officer was required to look at other attendantcircumstances, which included the survey report, in reaching a conclusion in the matter. Notably, what was available onrecord, was not only the survey report, but also the materialprovided by the concerned housing society. The survey report,as it appears, did advert to the fact that the subject flatsformed a single residential unit. 13.3. The learned counsel for the Revenue has not assailedthe survey report before me. Therefore, quite clearly, therewas material available to the Assessing Officer to come to apossible view, if not, definite view that the subject flatsformed a single residential unit. 13.4. If,that be the conclusion,then,clearly,the respondenthad no jurisdiction to initiate proceedings under Section 263 ofthe Act and thereupon, proceed to pass the impugned order. 14. In view of the conclusion reached by me, the preliminaryobjection taken by Ms.Hema Muralikrishnan, that the writpetition ought not to be entertained, would have to be rejected.It would be trite to say that an order passed withoutjurisdiction can be interfered with in Writ proceedings. 13.3. The learned counsel for the Revenue has not assailedthe survey report before me. Therefore, quite clearly, therewas material available to the Assessing Officer to come to apossible view, if not, definite view that the subject flatsformed a single residential unit. 13.4. If,that be the conclusion,then,clearly,the respondenthad no jurisdiction to initiate proceedings under Section 263 ofthe Act and thereupon, proceed to pass the impugned order. 14. In view of the conclusion reached by me, the preliminaryobjection taken by Ms.Hema Muralikrishnan, that the writpetition ought not to be entertained, would have to be rejected.It would be trite to say that an order passed withoutjurisdiction can be interfered with in Writ proceedings. 14.1. Furthermore, relegating the petitioner, at this stage,to an alternative remedy in respect of an issue pertaining to AY2008-2009, which has travelled by way of statutory remedies tothe Tribunal, once before, would be unfair to parties. Theexistence of an alternative remedy, as is articulated time andagain by Court is not an absolute bar. Superior courts oftenrelegate parties to alternative remedy by way of self-limitation. As a matter of fact the law, as declared by theSupreme Court, now, clearly, sets out that in appropriate cases,the writ court has jurisdiction to entertain a petition, eveninvolving disputed questions of fact, notwithstanding the factthat they arise out of contractual obligations. Seeobservations of the Supreme Court in ABL International Limitedand another V. Export Credit Guarantee Corporation of IndiaLimited, (2004) 3 SCC 553 in Paragraphs 27 and 28 at page 572and in Union of India V. Aravali Minerals and Chemicals (India)(P) Limited, (2000) 9 SCC 558. 15. For the foregoing reasons, the impugned order is setaside.The captioned writ petition is allowed.Resultantly,pendingapplication shall stand closed.Given the facts and circumstancesof the case, there shall, however, be no order as to costs. //True Copy// gg Sub Assistant Registrar https://hcservices.ecourts.gov.in/hcservices/ To The Principal Commissioner of Income Tax-5,Aayakar Bhavan,Wanaparthy Block, 5[th] Floor,121, Mahatma Gandhi Road,Chennai-600 034. +1cc to M/s.G.Susheela, Advocate, S.R.No.39480+1cc to Mr.T.Ravi Kumar, Senior Standing Counsel for Income Tax Department, S.R.No.39460 Writ Petition No.11596 of 2016 KGK(CO)CA(28/06/2017)