The Commissioner Of Income Tax, Kota v. Late H.h. Maharao Bhim Singh Through L/H Shri Brijraj Singh, Ummed Bhawan, Kota

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH ATJAIPUR D.B. Civil Review No. 98 / 2017 The Commissioner of Income Tax, Kota ----Petitioner Versus Late H.H. Maharao Bhim Singh Through L/H Shri Brijraj Singh, Ummed Bhawan, Kota ----Respondent D.B. Civil Review No. 99 / 2017 Commissioner of Income Tax, Kota. ----Petitioner Versus H.H. Maharao Bhim Singh Huf, TH. Karta Brijraj Singh, Brij Raj Bhawan, Kota. ----Respondent D.B. Civil Review No. 100 / 2017 The Commissioner of Income Tax, Kota ----Petitioner Versus Late H.H. Maharao Bhim Singh Through L/H Shri Brijraj Singh, Ummed Bhawan, Kota ----Respondent D.B. Civil Review No. 101 / 2017 The Commissioner of Income Tax, Kota ----Petitioner Versus H.H. Maharao Bhim Singh (HUF) Through Karta Shri Brijraj Singh, Ummed Bhawan, Kota ----Respondent D.B. Civil Review No. 102 / 2017 The Commissioner of Income Tax, Kota. ----Petitioner Versus H.H. Maharao Bhim Singh (HUF) Through Karta Shri Brijraj Singh,Ummed Bhawan, Kota. ----Respondent D.B. Civil Review No. 103 / 2017 The Commissioner of Income Tax, Kota. ----Petitioner Versus H.H. Maharao Bhim Singh (HUF), Through Karta Shri Brijraj Singh,Ummed Bhawan, Kota. ----Respondent D.B. Civil Review No. 104 / 2017 The Commissioner of Income Tax, Kota ----PetitionerVersus H.H. Maharao Bhim Singh (HUF) Through Karta Shri Brijraj Singh, Ummed Bhawan, Kota ----Respondent Commissioner of Income Tax, Kota. ----Petitioner Versus H.H. Maharao Bhim Singh HUF, Th. Karta, Shri Brijraj Singh, Brij Raj Bhawan, Kota. ----Respondent D.B. Civil Review No. 106 / 2017 The Commissioner of Income Tax, Kota ----PetitionerVersus H.H. Maharao Bhim Singh (HUF) Through Karta Shri Brijraj Singh, Ummed Bhawan, Kota ----Respondent The Commissioner of Income Tax, Kota ----Petitioner Versus H.H. Maharao Bhim Singh (HUF) Through Karta Shri Brijraj Singh, Ummed Bhawan, Kota ----Respondent D.B. Civil Review No. 108 / 2017 The Commissioner of Income Tax, Kota ----Petitioner Versus H.H. Maharao Bhim Singh (HUF) Through Karta Shri Brijraj Singh, Ummed Bhawan, Kota ----Respondent D.B. Civil Review No. 109 / 2017 The Commissioner of Income Tax, Kota ----PetitionerVersus H.H. Maharao Bhim Singh (HUF) Through Karta Shri Brijraj Singh, Ummed Bhawan, Kota ----Respondent The Commissioner of Income Tax, Kota ----Petitioner Versus H.H. Maharao Bhim Singh (HUF) Through Karta Shri Brijraj Singh, Ummed Bhawan, Kota ----Respondent The Commissioner of Income Tax, Kota. ----PetitionerVersus H.H. Maharao Bhim Singh (HUF) Through Karta Shri Brijraj Singh, Ummed Bhawan, Kota. ----Respondent The Commissioner of Income Tax, Kota ----Petitioner Versus H.H. Maharao Bhim Singh (HUF) Through Karta Shri Brijraj Singh, Ummed Bhawan, Kota ----Respondent D.B. Civil Review No. 113 / 2017 Commissioner of Income Tax, Kota. ----Petitioner Versus H.H. Maharao Bhim Singh HUF, Th. Karta, Shri Brijraj Singh, Brij Raj Bhawan, Kota. ----Respondent The Commissioner of Income Tax, Kota. ----Petitioner Versus H.H. Maharao Bhim Singh (HUF) Through Karta Shri Brijraj Singh, Ummed Bhawan, Kota. ----Respondent Commissioner of Income Tax, Kota. ----Petitioner Versus H.H. Maharao Bhim Singh HUF, Th. Karta, Shri Brijraj Singh, Brij Raj Bhawan, Kota. ----Respondent Commissioner of Income Tax, Kota. ----Petitioner Versus H.H. Maharao Bhim Singh HUF, Th. Karta, Shri Brijraj Singh, Brij Raj Bhawan, Kota. ----Respondent The Commissioner of Income Tax, Kota. ----Petitioner H.H. Maharao Bhim Singh (HUF) Through Karta Shri Brijraj Singh, Ummed Bhawan, Kota. ----Respondent D.B. Civil Review No. 118 / 2017 The Commissioner of Income Tax, Kota. ----Petitioner Versus H.H. Maharao Bhim Singh (HUF) Through Karta Shri Brijraj Singh, Ummed Bhawan, Kota. ----Respondent The Commissioner of Income Tax, Kota. ----Petitioner Versus H.H. Maharao Bhim Singh (HUF) Through Karta Shri Brijraj Singh, Ummed Bhawan, Kota. ----Respondent The Commissioner of Income Tax, Kota. H.H. Maharao Bhim Singh HUF, Th. Karta, Shri Brijraj Singh, Brij Raj Bhawan, Kota. ----Respondent Commissioner of Income Tax, Kota. ----Petitioner Versus H.H. Maharao Bhim Singh HUF, Th. Karta, Shri Brijraj Singh, Brij Raj Bhawan, Kota. ----Respondent The Commissioner of Income Tax, Kota. ----Petitioner H.H. Maharao Bhim Singh (HUF) Through Karta Shri Brijraj Singh, Ummed Bhawan, Kota. ----Respondent D.B. Civil Review No. 118 / 2017 The Commissioner of Income Tax, Kota. ----Petitioner Versus H.H. Maharao Bhim Singh (HUF) Through Karta Shri Brijraj Singh, Ummed Bhawan, Kota. ----Respondent The Commissioner of Income Tax, Kota. ----Petitioner Versus H.H. Maharao Bhim Singh (HUF) Through Karta Shri Brijraj Singh, Ummed Bhawan, Kota. ----Respondent The Commissioner of Income Tax, Kota. ----Petitioner Versus H.H. Maharao Bhim Singh (HUF), Through Karta Shri Brijraj Singh,Ummed Bhawan Kota. ----Respondent The Commissioner of Income Tax, Kota. ----Petitioner Versus H.H. Maharao Bhim Singh (HUF) Through Karta Shri Brijraj Singh, Ummed Bhawan Kota. ----Respondent D.B. Civil Review No. 123 / 2017 The Commissioner of Income Tax, Kota. ----Petitioner Late H.H. Maharao Bhim Singh Through L/H Shri Brijraj Singh, Ummed Bhawan, Kota. ----Respondent D.B. Civil Review No. 124 / 2017 The Commissioner of Income Tax, Kota ----Petitioner Versus H.H. Maharao Bhim Singh (HUF) Through Karta Shri Brijraj Singh, Ummed Bhawan, Kota. ----Respondent The Commissioner of Income Tax, Kota. ----Petitioner Versus Late H.H. Maharao Bhim Singh Through L/H Shri Brijraj Singh, Ummed Bhawan, Kota. ----Respondent The Commissioner of Income Tax, Kota. ----Petitioner Versus Late H.H. Maharao Bhim Singh Through L/H Shri Brijraj Singh, Ummed Bhawan, Kota. ----Respondent The Commissioner of Income Tax, Kota ----Petitioner Versus H.H. Maharao Bhim Singh (HUF) Through Karta Shri Brijraj Singh, Ummed Bhawan, Kota. ----Respondent D.B. Civil Review No. 128 / 2017 The Commissioner of Income Tax, Kota ----Petitioner H.H. Maharao Bhim Singh (HUF) Through Karta Shri Brijraj Singh, Ummed Bhawan, Kota. ----Respondent D.B. Civil Review No. 129 / 2017 The Commissioner of Income Tax, Kota ----Petitioner Versus H.H. Maharao Bhim Singh (HUF) Through Karta Shri Brijraj Singh, Ummed Bhawan, Kota. ----Respondent The Commissioner of Income Tax, Kota. ----Petitioner Versus H.H. Maharao Bhim Singh (HUF) Through Karta Shri Brijraj Singh,Ummed Bhawan, Kota. ----Respondent D.B. Civil Review No. 137 / 2017 The Principle Commissioner of Income Tax, Kota. ----Petitioner M/s. Bhim Singh (H.H. Maharao Shri Brij Raj Singh Ji Sahib of Kotah), Ummed Bhawan, Kota. ----Respondent D.B. Civil Review No. 138 / 2017 The Principle Commissioner of Income Tax, Kota. ----Petitioner Versus M/s. Bhim Singh (H.H. Maharao Shri Brij Raj Singh Ji Sahib of Kota), Ummed Bhawan, Kota. ----Respondent D.B. Civil Review No. 139 / 2017 The Principle Commissioner of Income Tax, Kota. ----Petitioner Versus H.H. Maharao Sh. Brij Raj Singh Ji (Sole owner of Estate of H.H. Maharao Sh. Bhim Singh, Ji, Kota), Kota. ----Respondent _____________________________________________________ For Petitioner(s) : Mrs. Parinitoo Jain For Respondent(s) : Mr. P.K.Kasliwal _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERIHON'BLE MR. JUSTICE VIJAY KUMAR VYASJudgment 02/11/2017 1.All these review petitions have been filed beyond limitation.An application u/s 5 of the Limitation Act has been filed seekingcondonation of delay. 2.In view of the averments made in the applications, the sameare allowed. Delay in filing the review petitions is condoned. 3.Since, certified copy of the judgment is placed in mainmatter which is tagged with the review petition, the applicationsseeking exemption for filing the certified copies are also allowed.Other defects are waived. _____________________________________________________ For Petitioner(s) : Mrs. Parinitoo Jain For Respondent(s) : Mr. P.K.Kasliwal _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERIHON'BLE MR. JUSTICE VIJAY KUMAR VYASJudgment 02/11/2017 1.All these review petitions have been filed beyond limitation.An application u/s 5 of the Limitation Act has been filed seekingcondonation of delay. 2.In view of the averments made in the applications, the sameare allowed. Delay in filing the review petitions is condoned. 3.Since, certified copy of the judgment is placed in mainmatter which is tagged with the review petition, the applicationsseeking exemption for filing the certified copies are also allowed.Other defects are waived. 4. The contention of the petitioner-appellant is that the legalheirs of the original Ruler are no longer Ruler, therefore,exemption which was granted u/s 10(19A) is not available to thepresent assessee. 5.She has taken us to the order of the Supreme Court inMaharao Bhim Singh of Kota Thr. Maharao Brij Raj Singh, Kota vs. Commissioner of Income Tax, Rajasthan-II, Jaipur wherein it has been observed as under:- “34. We find that in Section 10(19A) of theI.T. Act, the Legislature has used theexpression "palace" for considering thegrant of exemption to the Ruler whereas onthe same subject, the Legislature has useddifferent expression namely "any onebuilding" in Section 5(iii) of the WealthTax Act. We cannot ignore this distinctionwhile interpreting Section 10(19A) which,in our view, is significant. 35. In our considered opinion, if theLegislature intended to spilt the Palace inpart(s), alike houses for taxing the subject,it would have said so by employingappropriate language in Section 10(19A) ofthe I.T. Act. We, however, do not find suchlanguage employed in Section 10(19A). 36. As rightly pointed out by the learnedSenior Counsel for the Appellant, Section23(2) and (3), uses the expression "houseor part of a house". Such expressiondoes not find place in Section 10(19A) ofthe I.T. Act. Likewise, we do not find anysuch expression in Section 23, specificallydealing with the cases relating to"palace". This significant departure of thewords in Section 10(19A) of the I.T. Actand Section 23 also suggest that theLegislature did not intend to tax portion ofthe "palace" by splitting it in parts.” 6.The provision of Section 10(19A) of the Income Tax, 1961 reads as under:- (19A) the annual value of any one palace inthe occupation of a Ruler, being a palace,the annual value whereof was exempt fromincome- tax before the commencement ofthe Constitution (Twenty- sixth Amendment)Act, 1971 , by virtue of the provisions of theMerged States (Taxation Concessions) Order, 1949 , or the Part B States (TaxationConcessions) Order, 1950 , or, as the casemay be, the Jammu and Kashmir (TaxationConcessions) Order, 1958 : Provided that for the assessment yearcommencing on the 1st day of April, 1972 ,the annual value of every such palace in theoccupation of such Ruler during the relevantprevious year shall be exempt from income-tax;] (20) the income of a local authoritywhich is chargeable under the head" Incomefrom house property"," Capital gains", or"Income from other sources" or from a tradeor business carried on by it which accrues orarises from the supply of a commodity orservice (not being water or electricity) withinits own jurisdictional area or from the supplyof water or electricity within or outside itsown jurisdictional area]; 6.1She also taken us to Article 366 sub clause (22) of theConstitution of India which reads as under:- Provided that for the assessment yearcommencing on the 1st day of April, 1972 ,the annual value of every such palace in theoccupation of such Ruler during the relevantprevious year shall be exempt from income-tax;] (20) the income of a local authoritywhich is chargeable under the head" Incomefrom house property"," Capital gains", or"Income from other sources" or from a tradeor business carried on by it which accrues orarises from the supply of a commodity orservice (not being water or electricity) withinits own jurisdictional area or from the supplyof water or electricity within or outside itsown jurisdictional area]; 6.1She also taken us to Article 366 sub clause (22) of theConstitution of India which reads as under:- “(22) Ruler means the Prince, Chief or otherperson who, at any time before thecommencement of the Constitution (Twentysixth Amendment) Act, 1971, wasrecognised by the President as the Ruler ofan Indian State or any person who, at anytime before such commencement, wasrecognised by the President as thesuccessor of such Ruler;” 7.We have heard counsel for the parties. 7.1The contention emphasised before the Supreme Court was ‘palace’ not ‘Ruler’. Therefore, we have considered only the same.Though one of the ground (C) of the memo of appeal reads asunder:- “C. That the order of Tribunal is erroneousas the property in question is exempt fromIncome Tax and Wealth Tax, only for the Ex-Ruler who happens to be His HighnessLate Sh. Maharao Bhim Singh Ji. But in theinstant case the assessee who is the legalheir of Ex-Ruler Shri Bhim Singhji is notRuler or successor of Ruler as required tobe declared by the Central Government asper Article 366(22) of Constitution of India.According to section 5(1)(iii) of Wealth TaxAct any one building in the occupation of aRuler- (Up to 27.12.1971) declared by the Centralgovernment as his official residence or. (W.e.f. 28.12.1971) being a building whichimmediately before the commencement ofthe Constitution (Twenty-sixth Amendment)Act, 1971, was official residence by virtueof a declaration by the Central Governmentunder paragraph 13 of the Merged States(Taxation Concessions) Order, 1949 orparagraph 15 of the Part B State (TaxationConcessions) Order, 1950 is exempt undersection 5(1)(iii), for assessment years1957-58 to 1992-93 and further as perSection 10(19A) the annual value of anyone palace of occupation of the ruler, beinga palace, the annual value whereof wasexempt from Income Tax before thecommencement of the Constitution (Twentysixth Amendment) Act, 1971 by virtue ofthe provisions of the Merged States(Taxation Concessions) Order, 1949 or thepart B States (Taxation Concession) Order,1950 or, as the case may be, the Jammu &Kashmir (Taxation concession) Order, 1958.Thus, as per aforesaid both the sections i.e.in the Income Tax Act and in the Wealth TaxAct the word “Ruler” and the word“Occupation” has vital importance since toclaim exemption under these section theassessee should come under the fourcorners of the definition/meaning of thewords “Ruler & Occupation”. The expression ‘Ruler’ as per the definition(effective from 28.12.1971) in Article366(22) of the Constitution of India, meansthe Prince, Chief or other person who, atany time before the commencement of theConstitution (Twenty-sixth Amendment)Act, 1971, was recognized by the Presidentas the Ruler of an Indian State or anyperson who, at any time before suchcommencement, was recognized by the The expression ‘Ruler’ as per the definition(effective from 28.12.1971) in Article366(22) of the Constitution of India, meansthe Prince, Chief or other person who, atany time before the commencement of theConstitution (Twenty-sixth Amendment)Act, 1971, was recognized by the Presidentas the Ruler of an Indian State or anyperson who, at any time before suchcommencement, was recognized by the President as the successor of such Ruler. Itis submitted here that Ex-Ruler MaharaoBhim Singhji has expired in the year 1991and the President of India has notaccorded/recognizedthemandatorysuccession certificate as required for theassessee to become the “Successor of suchRuler”. Therefore, in absence of suchrecognition by the President of India, theassessee Shri Brij Raj Singh in the capacityof legal heir cannot suo moto claim to bethe Ruler as mandatory required underArticle 366(22) of the Constitution of India.The definition of ‘Ruler’ prescribed by Article366(22) of the Constitution is inclusivedefinition and its latter part takes insuccessors of a Ruler who satisfied the testof its first part. It was held in maharajKumar Takendra Bir Singh reported in AIR1964 SC 1663 that the minor MaharajKokendrajit Singh of Manipur who has beenrecognized by the President as thesuccessor of his deceased father, must beheld to be a ruler under Article 366(22) andhe is entitled to claim the status of a Rulerof the former State of Manipur. Thusreorganization by the President is the sinequa non to become the successor of the Ex-Ruler, which in the present case isadmittedly missing. Further Article 366(22)is a provision relating to recognition ofRulers, which is the direct, and onlypurpose of the said provision. Thus in theinstant case no such recognition has beenaccorded to the assessee by the Presidenthence on bare perusal of Article 366(22) ofConstitution of India the appeal deserves tobe allowed and the order of the Tribunaldeserves to be quashed on threshold.” 7.2However, no substantial question of law was framed norsame was admitted as it was not raised before the AO, CIT(A) orIncome Tax Appellate Tribunal. 8.In our considered opinion, while matter was pending beforethe Supreme Court, same position was existing. Since legal heirsare on record right from 1992 and the question whether the legal heirs is Ruler or not was never raised before the AO, CIT(A) orIncome Tax Appellate Tribunal, no substantial question of law hasbeen framed. 9. In that view of the matter, it will not be appropriate to allowthese review petitions. If the department desires they may getclarification from the Supreme Court. We cannot sit over thedecision of Supreme Court in appeal, since Supreme Court hasalready decided the issue and we have followed the same. 10.The other contention regarding exemption u/s 10 (19A)given to the palace, in our considered opinion, Ruler, individual orHUF is not required to be considered at this stage. It will be openfor the department to get clarified the same from the SupremeCourt. 11.All the review petitions stand disposed of. (VIJAY KUMAR VYAS),J. (K.S. JHAVERI),J. Brijesh 21 to 55.