TaxTMI 
TaxTMI 
2017 (3) TMI 1247
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....n law, the Tribunal was right in approving the denial of exemption under Section 54F? (C) Whether the Tribunal infringed the principles of natural justice in not providing an opportunity to the Appellant to rebut the detrimental conclusions inferred by the Tribunal based on the additional evidences adduced by the appellant and the Circular no.495 dated 22nd September, 1987?" 3. Vide order dated 28th January, 2015 the Court expedited the hearing of the appeal in view of the appellant being 86 years of age. Thereafter by consent of parties the appeal has been taken up for hearing on 18th November, 2016 by consent of parties. After the admission of the appeal the appellant took out Chamber Summons No.335 of 2015 proposing certain amendments. Initially the Chamber Summons was adjourned to the hearing of the appeal. However, since the appellant sought to rely upon the contents of the proposed amendment, we thought it fit to hear Chamber Summons in the first instance. Accordingly vide order dated 12th January, 2017 we held that the amendment sought is impermissible and the Chamber Summons came to be dismissed. The appeal has since been taken up for hearing. 4. Mr. Shah, the learned c....
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....ny order on the application to take on record the additional evidence. The grievance of Mr. Shah is that the AEPB had been taken on record but the Tribunal failed to pass any orders on the application to permit the additional evidence to be considered. Instead the Tribunal used the documents filed and relied upon them to hold against the assessee. Exception has been taken to this approach adopted by the Tribunal. Mr. Shah then submitted that there are different ways in which additional evidence may be considered viz under Rule 18 or 29 of the ITAT Rules and by using inherent provisions of Section 254 of the Income Tax Act, 1961. In the instant case the Tribunal by not indicating whether or not the application had been allowed committed a serious error which has caused grave prejudice to the appellant. Mr. Shah submitted that the Tribunal had erred in not passing an order on the assessee's application for admission of additional evidence. 7. Mr. Shah submitted that the Tribunal ought to have first passed an order on the application allowing or rejecting it and give reasons for the decision. However, without indicating so, the Tribunal in paragraph 9 of the impugned order relied upo....
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....ouble space or printed. If xerox copy of a document is filed, then the same should be legible. Each paper should be certified as a true copy by the party filing the same, or his authorised representative and indexed in such a manner as to give the brief description of the relevance of the document, with page numbers and the Authority before whom it was filed. (4) The additional evidence, if any, shall not form part of the same paper book. If any party desires to file additional evidence, then the same shall be filed by way of a separate book containing such particulars as are referred to in sub-rule (3) accompanied by an application stating the reasons for filing such additional evidence. (5) The parties shall not be entitled to submit any supplementary paper book, except with the leave of the Bench. (6) Documents that are referred to and relied upon by the parties during the course of arguments shall alone be treated as part of the record of the Tribunal. (7) Paper/paper books not conforming to the above rules are liable to be ignored. 29. Production of additional evidence before the Tribunal. The parties to the appeal shall not be entitled to produce additional evidence eith....
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....arkkot Maritima Agencies Pvt. Ltd. v/s. Commissioner of Income Tax in Tax Appeal No.37 of 2016 decided on 15th November, 2016; (vii) Assam Hindu Mission Upper Nawprem v/s. Smt. Elaboris Tron AIR 1999 Gauhati 39; (viii) Smt. Suhasinibai Goenka v/s. Commissioner of Income Tax 216 ITR 518; (ix) Commissioner of Income Tax v/s. Kum. Satya Setia 143 ITR 486; (x) Hukumchand Mills Ltd. Vs. Commissioner of Income Tax, Central, Bombay 63 ITR 232 (SC); (xi) Arjan Singh Vs. Kartar Singh and Others AIR (38) 1951 SC 193 (xii) M.M. Quasim vs. Manohar Lal Sharma and Others AIR 1981 SC 1113 (xiii) Gopal Chandra Chaudhury v/s. LIC of India AIR 1985 Orissa 120; 11. We do not see how the facts before the Kerala High Court in Asian Techs (supra) help the appellant. In the above case, the Tribunal in exercise of its powers under Rule 29 of the Income Tax (Appellate Tribunal) Rules directed the parties to file details showing description of the articles manufactured and the amounts received by the assessee. The same was filed on behalf of the assessee. on the directions of the Tribunal. In that case the judicial member of the Tribunal had based the entire reasoning relating to the factual ....
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....fresh documents filed for the first time before the Tribunal. It was in this context that the High Court held that the process followed by the Tribunal to consider the documents was not in accordance with law and observed as follows:- "No reason has been stated for receiving those documents at that stage." 13. The Court observed that it was competent for the Tribunal to admit additional evidence in accordance with law but for reasons to be stated since the parties would have fair and proper notice of the same thus causing the Court to observe that ad-hocism cannot be countenanced in law. In our view, Asian Techs (supra) and Travancore Titanium Products Ltd. (supra) offer no assistance to the appellant's cause. 14. The Madras High Court in R.S.S. Shanmugam Pillai & Sons (supra) the Tribunal observed that a letter sought to be relied upon cannot be received at the appellate stage since its genuineness has not been tested at the stage of the assessment. However, despite this the Tribunal had taken the very document into consideration to decide the appeal against the party. This led the Court to observe "In this case the Tribunal adopted a somewhat curious procedure. Having hel....
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....this Court observed an order passed by the Tribunal declining to add additional grounds is procedural in nature and cannot be said to affect the rights of the parties since such an order can always be challenged in the appeal that may be preferred against the final order. We have therefore considered the final order which effectively deals with the merits of the Appellants' case and also takes into consideration the additional document which admittedly the Appellants relied upon at the hearing. In a recent judgment of this Court in Parkkot Maritima Agencies Pvt. Ltd. (supra) a Division Bench of this Court had allowed the assessee to place additional material before the Assessing Officer instead of Tribunal. However, we notice that this order came to be passed on request made on behalf of the Revenue by its counsel who did not oppose the request seeking the leading of additional evidence. 18. In the case of Hukumchand Mills Ltd. (supra) the Supreme Court considered the power of the Tribunal under Section 33(4) of the Indian Income Tax Act, 1922 and the Appellate Tribunal Rules, 1946 wherein it was observed that provisions of Section 33(4) were in pari materia with Section 254 o....
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.... produce additional evidence contained in the AEPB before making his submissions on merits and therefore proceeded upon the understanding that the application has been allowed. The Tribunal has taken into consideration the submissions of counsel for the appellants based on the documents forming part of AEPB. There is no doubt in our mind that the Tribunal had permitted the appellants to make submissions on the basis of these documents. If that were not to be case, there may have been something to be said in favour of the appellants, however, in the present case the appellants were aware that the attention of the Tribunal had been invited to the documents in question and the Tribunal had in fact considered contents of the documents on merits and as to how it would affect the appellants' case. Having done so, in our view no injustice has been caused to the appellants. Had the Tribunal declined to consider the documents in our view it would have been appropriate that some reasons will have to be given by them for depriving the parties the benefit of the submissions to be made on the basis of such additional documents. This, in our view is necessary since the rules itself provide ....
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....sent form would be read as extension to Section 139(1). 23. Mr. Shah relied upon the following decisions in support of his submissions on the second question. i) Commissioner of Income Tax vs. Rajesh Kumar Jalan (2006) 286 ITR 274; ii) Commissioner of Income Tax vs. Punjab Financial Corporation 254 ITR 492; iii) Commissioner of Income Tax vs. Kullu Valley Transport Co. P. Ltd. 77 ITR 518; iv) Humayun Suleman Merchant vs. The Chief Commissioner of Income Tax, Mumbai in Income Tax Appeal No.545 of 2002 decided on 18th August, 2016; v) K. P. Varghese vs. Income Tax Officer, Ernakulam and Anr. 131 ITR 596 (SC); vi) CBDT and Others vs. Aditya V. Birla 170 ITR 137; vii) Commissioner of Income Tax vs. J.H. Gotla 156 ITR 323; viii) Commissioner of Income Tax vs. Mrs.Hilla J.B. Wadia (1995) 261 ITR 376; ix) Commissioner of Income Tax vs. R. L. Sood 2000 245 ITR 727; x) Munibyrappa vs. Commissioner of Income Tax 265 ITR 560; 24. Mr. Shah submitted that important dates such as the date of approval of the amended plan 8th March, 2002 was not taken into account by the Tribunal. Although this date would have made a difference to the case. Mr. Shah then made reference to the ob....
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....n of flat before due date of filing return under Section 139(4) cannot be accepted because sub-section (4) of Section 54F clearly mentions that the amount of net consideration which is not appropriated by the assessee towards construction of new premises before the date of furnishing return under Section 139 'shall' be deposited by him before furnishing the return (such deposit being made in any case not later than the due date applicable in the case of the assessee for furnishing the return of income under sub-section (1) of Section 139). 27. Mr. Shah submitted that this interpretation was incorrect and based on improper appreciation of provisions. Merely because the Tribunal had queried the assessee as to stage of construction and to which the assessee responded that the construction was in progress, the Tribunal had proceeded to hold that construction had not been completed even after a lapse of seven years and declined to accept assessee's contention that three residential flats which were adjacent to each other were contiguous and therefore to be treated as one unit. 28. Mr. Shah further submitted that the provisions similar to Section 54F to be found in Section ....
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....rn. Relying upon the said observation Mr. Shah submitted that in the present case also the date of filing the return is of no relevance and Section 139(4) should be read as extension of Section 139(1) and to that effect he submitted that the date of filing return is of no relevance provided other conditions had been satisfied, namely, that of investing amount received from the sale of old property. He, therefore, submitted that second question is liable to be answered in the affirmative. 30. When his attention was drawn to the fact that this Court had in case of Humayun Merchant (supra) had delivered a judgment dated 18th August, 2016 which would cover the issue, Mr. Shah submitted that the said decision could be differentiated. He further submitted that the decision in Humayun Merchant (supra) was per incuriam inasmuch as it had not appreciated the judgment of the Guwahati High Court in Commissioner of Income Tax vs. Rajesh Kumar Jalan (2006) 286 ITR 271 which has been referred to on behalf of the assessee. He then proceeded to attempt differentiation, referring to the facts of the case of Humayun Merchant (supra). He submitted that relevant dates in that case were 29th April, 19....
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....pra) the assessee had satisfied the material test of having domain over the flat and having made an investment therein. In that behalf we hasten to add that the scheme of Delhi Development Authority clearly provided for an allotment letter to be issued on the first installment being paid and that the allotment letter is final unless it is cancelled or the allottee withdraws from the scheme. It further observed that under the scheme, the allottee would get title to the property on the issuance of the allotment letter and that the payment of installment is only a follow up action and taking delivery of possession is only a formality. 34. In the fact situation at hand we are afraid the assessee can derive no benefit from the provisions of circular No.672 dated 16th December, 1993 inasmuch as the scheme contemplated in paragraph 2 of circular No.471 is not available to the appellant. The appellant has to obtain the allotment letter from the developer under the provision of Maharashtra Ownership of Flats Act, 1963 (MOFA) and not from the co-operative society. The allotment letter issued by the developer does not confer title until the agreement for sale under the provisions of the MOFA....
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....e decisions cited. Every decision cited may not be relevant. We find that the decisions cited were relating to contiguous units being treated as one residential unit. We have already observed that we are not required to go into this aspect in order to answer the question, since on first principles, we find that the assessee had not complied with Section 54F. In our view it is not necessary to consider this aspect of challenge and hence reference to said decision is of no avail to the assessee. The other cases enlisted by us in this judgment have no bearing on the facts of the case of the Appellant herein. 37. In the course of the submissions in support of the Appellants' case over exemption under section 54F Mr. Shah has strenuously argued and tried to draw a parallel between the provisions of Section 24(2) of the 1922 Act and Section 72 contending they are in pari materia. Likewise Sections 22 and 22(2A) were in pari materia with Sections 139 and 80 respectively of the 1961 Act. However, in our view this does not come to assistance of Mr. Shah inasmuch as the language of Section 54 will not admit of such an interpretation. We have already taken a view that the consequences of....
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....ed to be deposited before due date of return under Section 139(1). Since it is the case of the Appellants that the deposit has not been so made, the question of the assessee being affected, by the said circular does not arise. 41. We enquired of Mr. Shah as to whether the appellant's application for leading additional evidence was heard separately before the main appeal was taken up for hearing to which he replied that the application for additional evidence was heard along with the main appeal and that all arguments on the main appeal on behalf of the parties had been concluded on 8th October, 2012. To a specific query as to whether he canvassed the appellant's case based in the AEPB, he fairly stated reference was made to the additional documents but submitted that if a reasoned order is passed allowing or disallowing the AEPB the appellant could have been better placed while making the submissions before the Tribunal. Mr. Shah fairly conceded that all arguments on the appeal has been advanced before the Tribunal on the same date and that there was no occasion for separately considering the application for leading additional evidence. 42. Thus, it becomes evident th....