TaxTMI 
TaxTMI 
TaxTMI 
2020 (1) TMI 20
X X X X Extracts X X X X
X X X X Extracts X X X X
....t in holding on a perverse view that the change of position by mere clarification by the Assessing Officer regarding status of the assessee, which is contrary to the reasons recorded under Section 148(2) and rule of law laid down by the jurisdictional High Court could give jurisdiction to issue the impugned notice under Section 148, which is otherwise barred by limitation? ii. Whether on the facts and in the circumstances of the case, the Appellate Tribunal is right in dismissing the appeal based on incorrect appreciation of facts and law and taking a perverse view that the family arrangement approved by the Civil Court was not bonafide and consequently there was a transfer of assets attracting tax on capital gains ? 4. The Appellant is a Power of Attorney holder to Lorna Margaret Pinto, who is a Non-Resident Indian (NRI), about which there is no serious dispute. The present Appellant and the Appellants in connected Appeals, are sisters, who were involved in a dispute relating to an immovable property in the State of Goa. It was the case of these Appellants that the said immovable property was sought to be usurped by Cristovam and Alvaro, relatives of the Appellants. This led t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t moved in appeal before the appellate authority. Therefore, we direct the petitioner herein/ N.R.I. Assessee to move in appeal within four weeks. Delay, if any, stands condoned. The objection as to limitation will also be decided by the appellate authority." 10. The Hon'ble Apex Court by the aforesaid order dated 17.07.2006, granted liberty to the Appellants to institute Appeals, because in the meanwhile, the Assessing Officer, vide Order dated 30/03/2006, had already made an assessment order, bringing to tax the aforesaid amount of Rs. 5.50 crores as 'capital gains'. 11. The Appellant then preferred an appeal before the Commissioner of Income -tax (Appeals), which was dismissed vide order dated 14.12.2007. 12. The Appellant then instituted further appeal before the Income Tax Appellate Tribunal (ITAT), which was also dismissed vide order dated 10.06.2011. 13. As against the order dated 10.06.2011 made by the ITAT, the Appellant has instituted the present appeal, which came to be admitted on the aforesaid substantial questions of law. 14. Mr. Mihir Naniwadekar, learned Counsel for the Appellant submits that the notices dated 14.03.2005, issued under Section 148 of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....under Section 148 of the IT Act. In support of this contention, he relies on Hindustan Lever Ltd. vs. R.B. Wadkar 268 ITR 332. 17. Mr. Naniwadekar, without prejudice to the aforesaid, submits that even, otherwise, this is a clear case where the parties have entered into a 'family settlement' or 'family arrangement' , which is perfectly bonafide. He submits that the consideration received under the family settlement, even upon transfer of right and interest in the family property, is not taxable as capital gain under Section 145 of the IT Act. He submits that in fact, in such a situation there is really no transfer or relinquishment of any right to the immovable property as such. In any case, the proceeds received on the basis of such family settlement or family arrangement cannot be brought to tax as capital gains. He submits that from the material on record, it is more than apparent that there was a bona fide family settlement arrived at between the members of the Assessees's family who have received the amount of Rs. 5.50 crores, as a consequence of such family settlement alone. He submits that the Revenue has exceeded its jurisdiction in treating such amount....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ntial question of law be decided against the Appellant and in favour of the Revenue. 21. Ms. Razaq submits that this is not at all a case of any bonafide family settlement, because the material on record overwhelmingly establishes that the parties with whom the Assessees have chosen to settle the dispute had no preexisting right in the immovable property which was the subject matter of the dispute. She points out that the decisions relied upon by the Appellant are in the context of family settlements, in which preexisting rights of the parties were realigned or adjudicated upon. She submits that this is an essential distinguishing feature which has been noted by not less than three authorities, who have recorded the concurrent findings of fact. She submits that the concurrent findings of fact so recorded, suffer from no perversities and, therefore, warrant no interference in exercise of limited jurisdiction under Section 260A of the IT Act. She relies on the following decisions in support of her contentions : a) Union of India vs. Playworld Electronics (P.) Ltd. 1989 taxmann.com 651 (SC); b) Banarsi Lal Aggarwal vs. Commissioner of Gift-tax 230 ITR 114 (Punjab & Haryana)....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the notice dated 14.03.2005. Thus, we are not too sure whether the Appellant was justified once again in raising the aforesaid ground before the authorities or for that matter, before this Court. 26. In any case, even, upon evaluation of such ground, we are satisfied that the view taken by the authorities, warrants no interference. This is because the communication dated 21.06.2005 nowhere supplements or adds to the reasons accompanying the notice dated 14.03.2005. All that communication dated 21.6.2005 clarifies is that the notice was issued to Mr. P.P. Mahatme in his capacity as the power of attorney holder of the Assessee. There is really no dispute that Mr. P.P. Mahatme was indeed the power of attorney holder of the Assessee. In these circumstances, the principle in Hindustan Lever Ltd (supra) is certainly not attracted. In the said decision, reasons which found no place in the notice proposing to reopen the assessment, were sought to be introduced by means of an affidavit or making oral submissions in response to the challenge to such notice. It is, in these circumstances that the Hon'ble Apex Court, held that the reasons cannot be supplemented by filing an affidavit or o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he purpose of removal of doubts or to clarify the position with regard to the applicability of the amended provisions. 31. Mr. Naniwadekar had placed reliance upon paragraph 10.1 in Uttam Steel Limited (supra) which, in turn, refers to the decision in S.S. Gadgil vs. Lal and Co. reported in AIR 1965 SC 171. In the said decision, it is true that the Hon'ble Apex Court held that the subsequent amendment will not assist the Revenue to commence a proceeding even though at the date on which the notice for commencement was issued, when such notice was barred by limitation. However, Hon'ble Apex Court added that such provision must be read subject to the rule that in the absence of an express provision or clear implication, the legislature does not intend to attribute to the amending provision a greater retrospectivity than is expressly mentioned, nor to authorise the Income Tax Officer to commence proceedings which before the new Act came into force had by the expiry of the period provided, become barred. 32. In the present case, the explanation to Section 149 of the IT Act makes all the difference. The explanation, is an express provision that the legislature intended the amen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....interfere with the view taken by the ITAT by observing that the decision of the ITAT 'is based on facts. Hence no question of law arises'. 37. The findings of fact, in the present case, concurrently recorded by all the three authorities indicate that there was no issue of any 'preexisting right' as between the Appellants, Cristovam and Alvaro, who are alleged to have usurped the immovable property belonging to the Appellants. In fact, the record which has been assessed in detail by the the Commissioner of Income-tax (Appeals), establishes that the properties of Xavier Pinto were allocated to his three sons Jose, Rosario and Antonio who, in turn, had one son each by name of Alvaro, Cristovam and Anthony. Anthony migrated to England along with his father Antonio. Margaret (present assessee) is the wife of Anthony. They had three daughters Lorna, Julia and Siobhan who are the Appellants in the connected Appeals. Since there was already a partition of the properties owned by Xavier Pinto between his three sons Jose, Rosario and Antonio sometime in 1950s, obviously Alvaro and Cristovam had no right whatsoever in the immovable properties exclusively belonging to Antonio ....