Income Tax Appellate Tribunal

Rajlaxmi Satishkumar Sharma vs. The Income Tax Officer

MANU/IB/0151/2024

12.04.2024

Direct Taxation

Appeal before the CIT(A) should be admitted only when the assessee paid the advance tax where return of income has not been filed

In present case, the assessee has not filed original return of income for assessment year 2013-14 and the case was reopened for the reason that, the assessee purchased immovable property of Rs. 38,52,870 and also incurred stamp duty expenses at Rs. 1,89,000 thus, the total investment of assessee was Rs. 40,41,870. Notice under Section 147 of the Income Tax Act, 1961 was issued.

The assessee did not file return in response to the notice. The assessee filed reply thereby stating that the assessee is having less income which is below the taxable limit and therefore she was not required to file ITR for assessment year 2013-14. The assessee also filed copy of document deed on immoveable property transaction carried out in the financial year 2012-13. The Assessing Officer assessed total income of the assessee at Rs. 40,41,870.Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee for statistical purposes.

The provisions of Section 249(4)(b) of the IT Act is clear that, the appeal before the CIT(A) should be admitted only when the assessee paid the advance tax where return of income has not been filed. The proviso to said section also describes that, the assessee will get exemption from this clause, if the application is made before the CIT(A) for not filing return of income or paying advance tax. But in the present case in peculiar circumstances, the assessee has explained that the assessee herself has not obtained the said property but her son has paid the said amount for purchase of property from his own fund. In fact, the assessee's son is a joint owner of the said property and for the sake of conveyance specially the conveyance deed, the stamp deed is lesser therefore, the assessee's name has been utilised in the conveyance deed. The relation is direct relation between the mother and son and therefore this should have been considered by the Assessing Officer as well as by the CIT(A).

In the peculiar circumstances of the present case, the proviso to Section 249(4)(b) of the IT Act should have been pointed out by the CIT(A) during the hearing which the CIT(A) failed to do so. Merely on the technical ground, the appeal before the CIT(A) cannot be dismissed and in fact after seeing the merit of the case, it appears that the transaction was not doubted and the investment made by the son of the assessee was also not questioned by the Assessing Officer. Therefore, the appeal of the assessee is allowed. This decision is based on the peculiar facts of the present assessee's case and cannot be treated as precedent.The appeal of the assessee is allowed.

Tags : Assessment Addition Legality

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Supreme Court

Bhupatbhai Bachubhai Chavda and Ors. Vs. State of Gujarat (Neutral Citation: 2024 INSC 295)

MANU/SC/0303/2024

10.04.2024

Criminal

Appellate Court cannot overturn order of acquittal only on basis that another view is possible

In present case, the Appellants, who are father and son, were prosecuted for the offence punishable under Section 302, read with Section 34 of the Indian Penal Code, 1860 (IPC). By judgment, the Sessions Court acquitted the Appellants. Being aggrieved by the judgment of the Sessions Court, the Respondent - State preferred an appeal against acquittal before the High Court. By the impugned judgment, the High Court interfered and converted the acquittal of the Appellants into a conviction for the offence punishable under Section 302, read with Section 34 and Section 323 of the IPC.

Appellate Court can interfere with the order of acquittal only if it is satisfied after reappreciating the evidence that the only possible conclusion was that the guilt of the Accused had been established beyond a reasonable doubt. The Appellate Court cannot overturn order of acquittal only on the ground that another view is possible. The judgment of acquittal must be found to be perverse. Unless the Appellate Court records such a finding, no interference can be made with the order of acquittal. The High Court has ignored the well-settled principle that, an order of acquittal further strengthens the presumption of innocence of the Accused. High Court has not addressed itself on the main question.

The High Court has gone to the extent of recording a finding that the Appellants have failed to adduce evidence in their support, failed to examine the defence witness and failed to establish falsity of the prosecution's version. This concept of the burden of proof is entirely wrong. Unless, under the relevant penal statute, there is a negative burden put on the Accused or there is a reverse onus clause, the Accused is not required to discharge any burden. In a case where there is a statutory presumption, after the prosecution discharges initial burden, the burden of rebuttal may shift on the Accused. In the absence of the statutory provisions as above, in this case, the burden was on the prosecution to prove the guilt of the Accused beyond a reasonable doubt. Therefore, the High Court's finding on the burden of proof is completely erroneous. It is contrary to the law of the land.

As is apparent from Section 162 of the Code of Criminal Procedure, 1973 (CrPC), statements recorded by police under Section 161 of the CrPC cannot be used for any purpose except to contradict the witness. The Trial Court gives several reasons for discarding the testimony of PW-4. His prior enmity with the Appellants and his failure to report the incident to the police, notwithstanding available opportunities, are also the factors considered by the Trial Court.

Therefore, the finding of the Trial Court that, the evidence of PW-4 did not inspire confidence is a possible finding which could have been recorded on the basis of the evidence on record. There was no reason for the High Court to overturn the order of acquittal when the findings of the Trial Court were possible findings that could be arrived at after reappreciating evidence. The judgment and order of the High Court is set aside. The judgment and order dated of the Trial Court is restored. Appeal allowed.

Tags : Conviction Evidence Credibility

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High Court of Delhi

Jitender Kumar Kushwaha vs. Albert Joseph & Anr. (Neutral Citation: 2024:DHC:2900)

MANU/DE/2710/2024

10.04.2024

Civil

Time limit for filing the written statement is only directory and not mandatoryin non- commercial suits

The present petition assails the impugned orders passed by Trial Courtwhereby the learned trial court did not take on record the written statement of the Petitioner in absence of any application for condonation of delay and subsequently, after filing the application for condonation of delay under Section 5 of limitation Act along with an application under Order VIII Rule 1 read with Section 151 of Code of Civil Procedure, 1908 (CPC), the same were dismissed thereafter.

Trial Court vide order had issued summons to the petitioner. The Petitioner entered appearance and requested for time to file the written statement, acceding to the request, the learned Trial Court granted 30 days time to the petitioner to file the written statement in the suit.

Notably, the time limit granted by the learned Trial Court to the Petitioner to file written statement expired on 4th August, 2022, being the 30th day, however, the Petitioner filed his written statement on 12th August, 2022 with a delay of eight days. Moreso, without an application seeking condonation of delay explaining the reasons caused for such delay. Thereafter, the learned Trial Court vide order took the written statement off the record.

The position of law is well settled and is no longer res-integra as held by the Supreme Court in catena of judgments that, in non- commercial suits, the time limit for filing the written statement is only directory and not mandatory. Furthermore, it is trite in law that the rules of procedure are handmaid of justice and the Court should aim to do substantial justice in a given matter, provided that the other party can be well compensated in terms of order of cost.

In view of the discussion and in the peculiar facts of this case, the written statement is allowed to be taken on record, subject to cost of Rs. 5,000 to be paid to the Respondent no. 1 before the learned Trial Court on the next date of hearing. Petition disposed of.

Tags : Written Statement Time limit Extension

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Supreme Court

K.B. Lal Vs. Gyanendra Pratap and Ors. (Neutral Citation: 2024 INSC 281)

MANU/SC/0288/2024

08.04.2024

Limitation

Discretionary power of a court to condone delay must be exercised judiciously and it is not to be exercised in cases where there is gross negligence by litigant

The Appellant before present Court has challenged the order passed by the High Court, by which the petition filed by the Appellant under Article 227 of the Constitution of India, 1950 was dismissed. Question raised before present Court is whether an application filed by the Appellant under Order IX, Rule 7 of the Code of Civil Procedure, 1908 (CPC) can be allowed, after a delay of almost 14 years.

Although the term 'sufficient cause' has not been defined in the Limitation Act, it is now well-settled through a catena of decisions that, the term has to be construed liberally and in order to meet the ends of justice. The reason for giving the term a wide and comprehensive meaning is quite simple. It is to ensure that deserving and meritorious cases are not dismissed solely on the ground of delay.

There is no gainsaying the fact that the discretionary power of a court to condone delay must be exercised judiciously and it is not to be exercised in cases where there is gross negligence and/or want of due diligence on part of the litigant. The discretion is also not supposed to be exercised in the absence of any reasonable, satisfactory or appropriate explanation for the delay. Thus, it is apparent that the words 'sufficient cause' in Section 5 of the Limitation Act can only be given a liberal construction, when no negligence, nor inaction, nor want of bona fide is imputable to the litigant

There was no satisfactory or reasonable ground given by the Appellant explaining the delay. We say this for two reasons. It is an admitted position by the Appellant himself that upon an inspection of the case file in the year 2011, he came to know about the order dated 06.09.2006, by which the Trial Court had decided to proceed ex-parte against him. What prevented the Appellant from filing the application under Order IX, Rule 7 that year itself has not been satisfactorily explained at all, as the first application was only filed in the year 2017. The explanation offered by the Appellant, which is that the advocate appointed by him did not pursue the matter diligently, and then another advocate was appointed by him who inadvertently forgot to file the application does not find support from the records. The Appellant has been grossly negligent in pursuing the matter before the trial court. Thus, the trial court, the revisional court as well as the High Court, were correct in dismissing the belated claim of the Appellant. Appeal dismissed.

Tags : Delay Condonation Discretionary power

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High Court of Delhi

Principal Commissioner of Income Tax Vs. Inderjit Singh Sodhi (Neutral Citation: 2024:DHC:2820-DB)

MANU/DE/2633/2024

08.04.2024

Direct Taxation

Income received by way of interest on compensation or on enhanced compensation shall be chargeable to tax

The present appeal involves an examination of the taxability of the interest component, earned on compensation or enhanced compensation, ordered under Land Acquisition Act, 1894 ["Act of 1894"].

The instant appeal has been preferred by the Revenue against the order passed by the Income Tax Appellate Tribunal ["ITAT"], whereby, the ITAT deleted the addition made by the Assessing Officer ["AO"] under Section 56(2)(viii) of the Income Tax Act, 1961 for the Assessment Year ["AY"] 2016-17.

The solitary question which arises for consideration in the present appeal is whether the interest on enhanced compensation received by the respondent-assessee partakes the character of income from other sources under Section 56(2)(viii) of the Act, to be considered as separable from the enhanced compensation.

A reading of Section 28 of the Act of 1894 indicates that the said provision comes into play in cases where the Court finds that some higher compensation ought to have been provided by the Collector. In such situations, the Court may direct for payment of an interest on the excess awarded amount. Whereas, Section 34 of the Act of 1894 stipulates that, the Collector shall award interest on the compensation at the rate of 9% per annum from the date of taking possession. It further lays down the condition that, in case of non-payment despite expiry of a period of one year, the said interest on the amount of compensation which remains unpaid, shall be awarded at the rate of 15% per annum, calculable from the date of such expiry.

A conjoint reading of the Sections 56(2)(viii) and 145-B of the Act vividly stipulate that, the income received by way of interest on compensation or on enhanced compensation shall be chargeable to tax under the head 'income from other sources'. Therefore, since the position with respect to the imposition of tax on interest on compensation or enhanced compensation, as it exists today, came into being only in the year 2010.

Present Court affirm the concurrent findings of the AO and CIT(A) and find that the view taken by the ITAT is unsustainable, as the same is based on an incorrect appreciation of law. The 2010 amendment was a conscious departure by the Legislature from the earlier position and the said departure holds good law, as on date. There is no question with respect to the vires of the amendment before us or regarding any ambiguity in the language of the amendment. The only concern is regarding the enunciation of the applicable law and present Court hold the same to unequivocally mean that interest, whether on compensation or on enhanced compensation, shall be considered as income from other sources and shall be exigible to income tax.

The ITAT has erred in relying upon the decision of Commissioner of Income Tax vs. Ghanshyam, ignoring the changes brought about by Finance (No. 2) Act, 2009, which came into effect in the year 2010. Present Court set aside the order of the ITAT. Appeal allowed.

Tags : Tax Levy Interest

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Customs, Excise and Service Tax Appellate Tribunal

Farida Shoes Pvt Ltd vs. Commissioner of Customs

MANU/CC/0113/2024

08.04.2024

Customs

Assessee cannot be denied the benefit of alternate notification, when it is eligible at the time of import of the goods

In the facts of present case, the Appellant exported leather shoes under claim of drawback. These goods were returned by the foreign buyer for the purpose of repair of the shoes. The Appellant cleared these items under 4 Bills of Entry availing the benefit of Notification No.158/95 dated 14th November, 1995 on executing Bond and Bank Guarantee. They requested vide letter to consider their eligibility of Customs Notification No.94/96 as amended as they could not re-export the goods although availed the benefit of Notification No.158/95 dated 14th November, 1995 at the time of import.

The adjudicating authority rejected the request holding that the Appellant, by not complying with the condition of re-exporting the goods within the stipulated period, had failed to comply with the condition of notification and therefore not eligible for the benefit of Notification No.158/95. The request for benefit of Notification No.94/96 was not considered at all. Against this, the Appellant filed appeal before the Commissioner (Appeals) who upheld the order passed by the adjudicating authority. The issue that arises for consideration is whether the Appellant is eligible for the benefit of Notification No.94/96 although they have not claimed the said benefit at the time of import of goods.

The appellant had intended to re-export the goods after repair of the shoes. However, they could not fulfil this requirement and thereafter sold the goods locally. They then requested the department to extend to them the benefit of Notification No.94/96. The department has not considered the same observing that the appellant has availed drawback and Customs Appeal No. 42615 of 2014 claimed benefit of Notification No.158/95 at the time of import of the goods. On similar set of facts, the Tribunal in the case of Olam Agro India Ltd. Vs. CC had considered the very same issue and held tha,t the appellant would be eligible for alternate beneficial notification. The decision of the Hon'ble Supreme Court in the case of Share Medical Care vs. UOI held that,assessee cannot be denied the benefit of alternate notification, when it is eligible at the time of import of the goods.

In view of cited decisions, the appellant is eligible for the benefit of Notification No.94/96. However, it is made clear that the appellant has to pay back the drawback claimed by them along with interest. The impugned order is set aside. Appeal allowed.

Tags : Benefit Notification Eligibility

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