TaxTMI 
TaxTMI 
2021 (1) TMI 1239
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....tion under Section 54 F of the Act and levied the tax thereupon and also recommended for initiation of penalty proceeding under Section 271(1)(c) of the Act. Petitioner is also aggrieved by the order of penalty dated 26.09.2019 (Annexure-9) passed by the respondent no.3 under Section 271(1)(c) of the Act. 3. Petitioner has raised the following questions of law for determination in the instant writ petition. a) Whether the benefit of exemption under Section 54F of the Act can be denied merely because petitioner did not claim the same while furnishing the returns? b) Whether the claim made at the stage of assessment or before the revisional authority would be denied on the misinterpretation of decision of the Apex Court in the case of Goetze (India) Ltd Vs. CIT reported in (2006) 284 ITR 323 (SC)? c) Whether the petitioner can be made to suffer on account of bonafide mistake, which in no manner is prejudicial to the interest of the Revenue? d) Whether the Revenue Officers have discharged their responsibility within four corners of law? e) Whether the CBDT Circular no. 014(XL-35) dated 11.04.1955 has to be strictly adhered too? 4. Facts necessary for appreciating the issue....
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....B) of the Act. Respondents have contended that petitioner did not disclose the income out of sale consideration amount of Rs. 59,49,000/- in his return or otherwise before the Department prior to the case being selected for scrutiny. It was during the assessment proceedings initiated after the scrutiny, the concealed income was discovered. Petitioner had not even disclosed that he had landed asset/ property in any of the previous return filed with the respondent department in at least last three assessment year prior to A.Y. 2014-15 in which he concealed the sale transaction. Therefore, he had concealed the sale transaction while furnishing his return. In that case, he is not entitled to get any exemption from payment of income tax on the said concealed income. Petitioner has not bonafidely disclosed all his income or much less the sale consideration. He had not even made a whisper of his income or the sale consideration, amounting to Rs. 59,49,000/- from the sale of his land at Bokaro while filing his returns. He had not filed any revised return for the A.Y. 2014- 15 for claiming exemption. Only during the assessment proceedings just by way of filing a calculation sheet, he had cl....
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....fference to his entitlement. Petitioner being an ordinary citizen, ignorant of the law, has admitted his mistake when his case was taken up for assessment upon scrutiny. The assessing officer is under an obligation to guide the assesse as to the correct provision of law in the light of the circular dated 11.04.1955. If at the stage of assessment, even after scrutiny, the income under capital gains is eligible for exemption under Section 54 or Section 54 F, the assessing officer ought to have allowed it instead of adding it to his income for the purposes of imposing tax, interest and initiating penalty proceedings. The facts of the case of the petitioner does not show a deliberate concealment of income rather a bonafide mistake. 7. The decision rendered in Goetze (India) Ltd (supra) has been explained in subsequent decisions by the Bombay High Court in the case of Commissioner of Income Tax, Central -I Vrs. Pruthvi Brokers and Shareholders Pvt. Ltd. reported Manu /MH/0878/2012. It has been explained that such a claim can be considered by the higher authority like the revisional authority even if the assessing authority is precluded from entertaining such a claim on the basis of fil....
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....ovision of Section 54 or 54 F of the Act. 9. Learned counsel for the Revenue in reply refers to the registered sale deed at page 62 of the writ petition. He submits that the recital of the deed itself makes it clear that there are no residential building subjected to transfer. It is only the vacant land described in the deed which have been sold. As such, provisions of section 54 would not apply. Petitioner is himself not sure as to under which provision section 54 or 54F such an exemption can be claimed. Learned counsel for the revenue further submits that if the petitioner did not show the income in its return, he cannot claim exemption at the stage of assessment proceedings by filing a calculation sheet only, without filing any revised return in terms of section 54F or 54 of the Act following the ratio of Goetze (India) Ltd(supra). He has distinguished the decisions relied upon by learned counsel for the petitioner in the case of Pruthvi Brokers and Shareholders Pvt. Ltd.(supra) and Smt. Beena K. Jain (supra). According to him, in the case of Smt. Beena K. Jain (supra), the facts disclose that the assesse had claimed the benefit of exemption under the section 54F of the income ....
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.... filed in the A.Y. 2014-15 despite the sale of his landed property at Bokaro through registered sale on 24.06.2013 i.e., in the F.Y. 2013-14. Petitioner had not disclosed his assets before the income tax department in any of the preceding three assessment years. It was only upon perusal of CIB information extracted from ITD application that it was found that he had sold immovable property of Rs. 59,49000/-but neither the sale consideration nor capital gains was shown by him in the return filed in the A.Y. 2014-15. In those circumstances his case was selected for scrutiny under CASS for assessment. During the course of assessment, petitioner filed a calculation sheet claiming exemption instead of filing a revised return disclosing income arisen from transfer of long terms capital asset due to transfer of his landed property at Bokaro through registered sale deed dated 24.06.2013. It is well settled that such additional claim cannot be made before the assessing officer under the Act to make an amendment in the return without filing a revised return. 11. The ratio rendered by the Apex court in the case of Goetze (India) Ltd (supra) relied upon by learned counsel for the revenue appli....
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....s claim for exemption is admissible under Section 54 or 54F of the Act. Considering those circumstances, the revisional authority did not find any substance in the claim of exemption put forward by the assesse. 12. The case of pruthvi Broker and Shareholders Pvt. Ltd (Supra), relied upon by the petitioner, is distinguishable on facts. The Assessee / Respondent in that case had filed his return for A.Y. 2004-05 on 18.10.2004. The same was processed under section 143(1) of Income Tax Act on 31.03.2005. A notice under section 143(2) of the I.T. Act was issued on 10.08.2005. The Respondent was also served with a letter dated 24.06.2006 calling for certain information. During the proceedings, it was noticed that the Respondent-Assessee had claimed deduction under section 43B of the I.T. Act in respect of payment of SEBI fees of Rs. 10.00 lakhs each paid on 16.07.2004 and 29.04.2004 i.e. during F.Y 2004-05, relevant to A.Y. 2005-06. Thus, admittedly, for the relevant A.Y. 2004-05, the Respondent was not entitled to a deduction in respect of such payments. The Respondent, in course of such proceedings before the Assessing Officer, stated that the claim was made through inadvertence. Howe....
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....han filing a revised return? b. Whether on the facts and circumstances of the case, the I.T.A.T, in law, was right in holding that the claim of deduction not made in the original return and not supported by a revised return, is admissible? c. Whether on the facts and in the circumstances of the case, the Hon'ble Tribunal, in law, was right in not appreciating the fact that the A.O has no power to entertain a claim made by an assessee after filing a original return otherwise than filing a revised return? 14. The Bombay High Court relying upon the decision of the Hon'ble Supreme Court in the case of Jute Corporation of India Limited versus Commissioner of Income Tax [1991 Supp (2) SCC 744] and also in the case of Goetze (India) Limited Versus Commissioner of Income Tax [(2006) 157 Taxman 1], held that the scope of power and jurisdiction of the Appellate Authority under section 251(1)(a) of the Income Tax Act was co-terminus with that of the Income Tax Officer in disposing of the appeal against an order of assessment. The Appellate Authority can confirm, reduce, enhance or annul the assessment. The Appellate Authority while hearing the appeal against the order of subordinate auth....
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.... section 254 of the Income-tax Act, 1961, is to entertain for the first time a point of law provided the fact on the basis of which the issue of law can be raised before the Tribunal. The decision does not in any way relate to the power of the Assessing Officer to entertain a claim for deduction otherwise than by filing a revised return. In the circumstances of the case, we dismiss the civil appeal. However, we make it clear that the issue in this case is limited to the power of the assessing authority and does not impinge on the power of the Income-tax Appellate Tribunal under section 254 of the Income-tax Act, 1961. There shall be no order as to costs." [Emphasis supplied] 15. In these circumstances, Bombay High Court held that the Hon'ble Supreme Court did not held anything contrary to what was held in the previous judgments to the effect that even if a claim is not made before the Assessing Officer, it can be made before the Appellate Authority. It was held that the jurisdiction of the Appellate Authority to entertain such a claim has not been negated by the Hon'ble Supreme Court in this judgment. 16. As noticed herein-above, case of the present writ petitioner herein is clea....
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....Act. The scope of judicial review under Article 226 of the Constitution of India has been well settled in the case of Syed Yakoob versus K.S. Radhakrishnan and others [AIR 1964 SC 477]. Illuminating opinion of the Hon'ble Supreme Court at para-7 and 8 thereof are extracted hereunder: "7. The question about the limits of the jurisdiction of High Courts in issuing a writ of certiorari under Article 226 has been frequently considered by this Court and the true legal position in that behalf is no longer in doubt. A writ of certiorari can be issued for correcting errors of jurisdiction committed by inferior courts or tribunals: these are cases where orders are passed by inferior courts or tribunals without jurisdiction, or is in excess of it, or as a result of failure to exercise jurisdiction. A writ can similarly be issued where in exercise of jurisdiction conferred on it, the Court or Tribunal acts illegally or improperly, as for instance, it decides a question without giving an opportunity, be heard to the party affected by the order, or where the procedure adopted in dealing with the dispute is opposed to principles of natural justice. There is, however, no doubt that the jurisdic....
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.... in disregard of it, or is expressly founded on reasons which are wrong in law, the said conclusion can be corrected by a writ of certiorari. In all these cases, the impugned conclusion should be so plainly inconsistent with the relevant statutory provision that no difficulty is experienced by the High Court in holding that the said error of law is apparent on the face of the record. It may also be that in some cases, the impugned error of law may not be obvious or patent on the face of the record as such and the Court may need an argument to discover the said error; but there can be no doubt that what can be corrected by a writ of certiorari is an, error of law and the said error must, on the whole, be of such a character as would satisfy the test that it is an error of law apparent on the face of the record. If a statutory provision is reasonably capable of two constructions and one construction has been adopted by the inferior Court or Tribunal, its conclusion may not necessarily or always be open to correction by a writ of certiorari. In our opinion, it is neither possible nor desirable to attempt either to define or to describe adequately all cases of errors which can be appro....