2019 (4) TMI 347

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....ther deed on 20.07.1999 fraudulently transferring the very same land to Shri I.A.J. Balan, Shri I.P. Andrew Raj, Shri I.S.J. Rozario, Shri I. Francis Jeyaraj and Shri I. Jerome Michael Pushpanathan. According to the Ld. counsel, the execution of fraudulent document by the very same vendor in respect of those persons were not known to the assessee at the earlier point of time. Subsequently, the assessee came to know about the fraudulent execution of the second sale deed in favour of the third parties. The assessee thereafter executed general power of attorney in favour of her father Col. V.N. Lingappan. According to the Ld. counsel, the assessee's father Col. V.N. Lingappan approached the Revenue authorities for grant of patta. To the surprise and shock of Col. V.N. Lingappan, the Revenue authorities informed that the patta was already transferred in the name of Shri I.A.J. Balan, Shri I.P. Andrew Raj, Shri I.S.J. Rozario, Shri I. Francis Jeyaraj and Shri I. Jerome Michael Pushpanathan. According to the Ld. counsel, the assessee's father approached the Revenue authorities by means of various petitions right from Tahsildar and upto District Collector for cancellation of patta granted....

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....of document said to be made on 20.07.1999 in favour of the above said third party was also rejected on the ground there is no provision in the Registration Act to cancel the document already registered. A similar reply was also received from the Inspector General of Registration, a copy of which is available at page 94A of the paper-book. Having left with no other remedy and out of compulsion and pressure from the above said third parties/persons, according to the Ld. counsel, the assessee executed a sale deed in favour of the above persons for a total consideration of Rs. 6,00,000/-. Referring to the assessment order, the Ld.counsel submitted that the Assessing Officer admitted that the property was sold under pressure. However, he chose to invoke the provisions of Section 50C of the Income-tax Act, 1961 (in short 'the Act') for computing the capital gain. According to the Ld. counsel, it is only a distress sale under the circumstance which is explained above, therefore, the Assessing Officer ought to have referred the matter to the valuation officer to find out the actual market value. Without referring to the valuation officer, according to the Ld. counsel, adopting the ....

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....than. When this fact was brought to the notice of the Tahsildar and other higher officers of State Revenue Department, it appears the Tahsildar prepared a note / report addressed to the Revenue Divisional Officer recommending for cancellation of patta which was already granted in favour of Shri I.A.J. Balan, Shri I.P. Andrew Raj, Shri I.S.J. Rozario, Shri I. Francis Jeyaraj and Shri I. Jerome Michael Pushpanathan and to grant patta in favour of the assessee, being the title holder of the land. This report even though was said to be prepared, it was not signed by the Tahsildar and also not forwarded to the higher authorities for further action. This Tribunal is of the considered opinion that the Tahsildar is the competent authority for grant of patta. When it was brought to his notice about the fraudulent issue of patta in favour of the third party, the Tahsildar ought to have cancelled the patta immediately and a patta should have been granted in favour of the assessee. Unfortunately, the Tahsildar has not acted on the petition received even from an army officer. Even though a report was said to be prepared, the Tahsildar failed to forward the same to the higher authorities. 7. Mo....

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....t in the assessment / appellate proceedings. In the absence of the District Collector, Tahsildar and State Registration authorities before this Tribunal, this Tribunal cannot issue any direction with regard to fraudulent activities which is now exposed by the assessee before this Tribunal. Since the State Revenue authorities and Registration authorities cannot be impleaded as party before this Tribunal, this Tribunal has to confine itself only to the computation of capital gain. Therefore, only for adjudication of the appeal which arises out of assessment order, this Tribunal made observation in the preceeding paragraph. 9. Admittedly, the circumstances under which the sale deed executed by the assessee through her father Col. V.N. Lingappan is a distress sale. The Assessing Officer himself recorded the same in the impugned order at para 5 which reads as follows:- "5. The above submission of the assessee has been carefully perused. Though it seems that the assessee had sold the property under pressure, the provision of Section 50C is clear that if the sale value is less than the valuation adopted, assessed or assessable by the stamp duty authorities, the valuation as adopted, as....