The Commissioner Of Income Taxtrichy v. S.kalaivani

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 5.6.2007 CORAM THE HON'BLE MR.JUSTICE P.D.DINAKARANANDTHE HON'BLE MR.JUSTICE P.P.S.JANARTHANA RAJA T.C.(A) No.408 of 2007 The Commissioner of Income TaxTrichy...Appellant / Respondent Vs. S.Kalaivani ..Respondent /Appellant Appeal under Section 260A of the Income Tax Act, 1961 againstthe order of the Income Tax Appellate Tribunal, Madras 'D' Benchdated 24.11.2006 in ITA No.989/Mds/2006 for the assessment year1996-97 against the order of the Commissioner of Income Tax(Appeals) No.4 williams road, Contonment, Tiruchirappalli-620 001dated 27.2.2006 and made in I.T.A.No.104/05-06 against the order ofthe Assistant Commissioner of Income Tax (OSD) Circle III, Tiruchidated 30.3.2005 and made in PAN/GIR No.AAQPK 7684Q. For Appellant: Mr.T.Ravi Kumar, Jr.S.C.J U D G M E N T (Delivered by P.D.DINAKARAN,J.) The above tax case appeal is directed against the order of theIncome-tax Appellate Tribunal in ITA No.989/Mds/2006 dated24.11.2006, raising the following substantial questions of law.(a) Whether on the facts and in the circumstances of thecase, the Income Tax Tribunal is right in holdingthat the reassessment made under Section 147 is badand deleting the addition of Rs.1,46,790/- towardsunexplained investment in the construction of acommercial complex at Simco Meters Road Trichy isproper? https://hcservices.ecourts.gov.in/hcservices/ (b) Whether on the facts and in the circumstances of thecase, the Income Tax Tribunal is right in law inholding that Section 142A is not applicable to thefacts of the present case for the assessment year1996-97 especially when Section 142A was inserted bythe Finance Act 2004 with retrospective effect from15.11.1972? 2.1. The revenue is the appellant. The assessee filed herreturns on 26.2.1999, which was processed under Section 143(3) ofthe Act along with the returns for the assessment year 1997-98,considering the investment in building. As the Commissioner ofIncome Tax (Appeals) directed that unexplained investment in theconstruction of commercial complex at Simco Meter Road, Trichy hadto be assessed in the ratio of 1:3 for the assessment year 1996-97and 1997-98, fixing the amount for the assessment year 1996-97, anotice under Section 148 of the Act was issued for reassessment.Pursuant to the same, the assessee filed returns on 28.10.2003 andthereafter, notice under Section 143(2) of the Act was issued. 2.2. The assessee also filed a letter requesting to considerthe order of the Income Tax Tribunal and that a miscellaneouspetition filed before the Tribunal in respect of the above saidorder is pending. However, the unexplained investment wasconsidered for the assessment year 1996-97 and added to the incomereturned. Hence, the assessee filed an appeal, which was dismissedby the Commissioner. However, further appeal preferred before theIncome Tax Tribunal was allowed on the ground that amendment toSection 142A would not apply, as the order passed on 31.12.2003 inthe assessee's own case had become final. Hence, the above appeal. 3. The relevant portion of the order of the Tribunal dated31.12.2003 made in assessee's own case in ITA No.1499/Mds/2003,reads as follows: 2.2. The assessee also filed a letter requesting to considerthe order of the Income Tax Tribunal and that a miscellaneouspetition filed before the Tribunal in respect of the above saidorder is pending. However, the unexplained investment wasconsidered for the assessment year 1996-97 and added to the incomereturned. Hence, the assessee filed an appeal, which was dismissedby the Commissioner. However, further appeal preferred before theIncome Tax Tribunal was allowed on the ground that amendment toSection 142A would not apply, as the order passed on 31.12.2003 inthe assessee's own case had become final. Hence, the above appeal. 3. The relevant portion of the order of the Tribunal dated31.12.2003 made in assessee's own case in ITA No.1499/Mds/2003,reads as follows: "Consideration of the rival submissions made by both theparties in the light of the facts and circumstances ofthe case and also in the light of the decision of theHon'ble Apex Court, which was relied on by the Id.representative of the assessee, we find that theAssessing Officer has failed to exercise the powersconferred on him under Section 133(6) of the Act and/orunder Section 142(2) of the I.T.Act. Further, theAssessing Officer has not pointed out any other materialwhich would support his action in adopting the valuegiven in Departmental Valuation Officer's report, whichwould have based on some bills, vouchers, bank statementsetc. In the absence of any concrete material evidence inpossession of the Assessing Officer, which could havereflected the value of the property, the value adopted by the Assessing Officer based on the D.V.O's report is badin law and cannot be accepted as held by the Hon'bleSupreme Court in their judgment cited supra. In view ofthe above discussion, the action of the Assessing Officerin this case cannot be sustained and accordingly we setaside the orders of the lower authorities. Thus theissue in the present case is decided in favour of theassessee." 4. In the instant case, the Tribunal, holding that the saidorder dated 31.12.2003 had become final, refused to apply theamendment to Section 142A, as nothing was contained in Section 142Ain respect of amendment made on or before 30.9.2004 and whethersuch amendment had become final and concluded on or before thatdate. 5. However, the learned standing counsel for the revenuecontends that the revenue has already filed a miscellaneouspetition against the order dated 31.12.2003 and the same is pendingand therefore, the said order had not become final and concluded onor before 30.9.2004. Unfortunately, the learned standing counsel isnot in a position to place the correct facts as to the date of thefiling of miscellaneous petition and whether the said miscellaneouspetition is pending or disposed of as on date. 6. That apart, we also notice that the tax effect involved isnegligible and as such, the order of the Tribunal does not meritany interference by this Court. Accordingly, the appeal isdismissed. /true copy/ Sub Asst. Registrar. kpl To 1. The Assistant RegistrarIncome Tax Appellate TribunalRajaji Bhavan, III Floor,Besant Nagar, Chennai-90. 2. The Commissioner of Income tax (Appeals) No.4, Williams road Cantonment, Tiruchirappalli- 620 001. 3. The Assistant Commissioner of Income Tax (OSD) Circle III, Tiruchi.of Income Tax (OSD) Circle III, Tiruchi. 4. The Commissioner of Income TxTrichy.Trichy. 1 cc to Mr.N. Muralikumaran, Advocate, sr. 31979 TC (A) No.408 of 2007. NG (CO)kk 13/6