Madras High Court
Samuel vs The Central Board Of Direct Taxes on 7 April, 2022
W.P(MD).No.19814 of 2021
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 07.04.2022
CORAM
THE HONOURABLE MR.JUSTICE C.SARAVANAN
W.P(MD).No.19814 of 2021
and
W.M.P(MD).Nos.16502 and 16503 of 2021
Samuel ... Petitioner
Vs.
1.The Central Board of Direct Taxes,
Represented by its Chairperson,
Department of Revenue – Ministry of Finance,
Government of India,
New Delhi.
2.The Additional/Joint/Deputy/Assistant Commissioner,
of Income Tax/Income Tax Officer,
National e-Assessment Center,
Delhi.
3.The Income Tax Officer,
Ward-4,
Tirunelveli. ...Respondents
Prayer : Writ Petition filed under Article 226 of the Constitution of India,
praying this Court to issue a Writ of Certiorarified Mandamus, calling for the
records on the file of the second respondent and quash the impugned order in
ITBA/AST/S/144/2021-22/1035945220(1) dated 27.09.2021 passed under
Section 144 read with Section 254 read with section 144B if the Income Tax
1/13
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W.P(MD).No.19814 of 2021
Act, 1961 by the 2nd Respondent as illegal and consequently direct the third
respondent to conduct the proceedings in accordance with the principles of
natural justice.
For Petitioner : Mr.M.Veerabathran Prasanth
For Respondents : Mr.N.Dilipkumar
Senior Standing Counsel
ORDER
The petitioner has challenged the impugned assessment order dated
27.09.2021. The challenge to the impugned order is primarily on the ground
that it is in violation of the principles of natural justice, as the petitioner was
not heard before the impugned order was passed. The second ground on
which the impugned order is challenged is on account of the fact that despite
the petitioner requesting for cross-examination of the persons from whom a
statement was obtained by the Income Tax Department, they were not allowed
to be cross-examined. The petitioner had specifically requested for cross-
examination of buyer also namely, V.Palanikumar, which was denied.
2. It is submitted that on an earlier occasion on 23.09.2021, the
petitioner was called to furnish the PAN numbers of the respective parties and
therefore, the petitioner should provide the PAN numbers of the persons to
whom the petitioner wishes to cross-examine. It is submitted that the
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W.P(MD).No.19814 of 2021
statements of the petitioner's brothers, sister and the buyer were obtained.
However, none of the persons were allowed to be cross-examined and the
impugned order has to go in the light of the decision of the Hon'ble Supreme
Court in Kishanchand Chellaram vs. CIT [1980 (125) ITR 713 (SC)] and
the decision of the Hon'ble Supreme Court followed in Dy. CIT vs. Roger
Enterprises (P.) Ltd., [2012 SCC Online ITAT 11821] and in the case of
Briji Bhushan Singhal vs. ACIT [2018 SCC Online ITAT 2891].
3. The learned counsel for the petitioner submits that the property in
question was under litigation and that a total extent of 8.59 Acres of lands
were transferred and the dispute pertains to 1.01 Acres of land and that no
sale consideration was received by the petitioner from the buyer namely,
V.Palanikumar. It is submitted that even though the petitioner's brothers and
sister have stated that they have not received any consideration, the fact
remains that the petitioner has also not received any consideration from the
buyer V.Palanikumar, who offered to buy the property under litigation
between the petitioner and Matheesa Pandian and Duraipandian, the two
brothers and that the documents were presented for registration, but could not
be completed for want of income tax clearance.
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W.P(MD).No.19814 of 2021
4.In this connection, a reference was made to the decision of this Court
in Crl.O.P.(MD)Nos.1682 of 2012 and 11750 of 2013, dated 06.06.2018, in
the cases filed under Section 482 of Cr.P.C. by one of the petitioner's buyer
namely, V.Palanikumar and one Karuppasamy Pandian. That apart, the
learned counsel for the petitioner has also placed reliance on the Circular,
dated 06.09.2021, which was modified later on 22.09.2021, prior to the
impugned order. It is submitted that as per the above Circular, the Range
Head may compulsorily be involved in the finalization of assessment of such
cases transferred to JAO, for which the provisions of Section 144-A of the
Income Tax Act may suitably be invoked.
5.The learned counsel for the petitioner further submits that having
invoked Section 144 of the Income Tax Act, it was mandatory on the part of
the respondents to have given personal hearing to the petitioner, as under the
scheme of the Act, any order passed in violation of principles of natural
justice will be non est in law. In this connection, a reference was made to
sub-clause (9) to Section 144-B of the Income Tax Act.
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W.P(MD).No.19814 of 2021
6. In support of his submissions, the learned counsel for the petitioner
relied on the following judgments:-
(i) Trendsutra Client Services (P.) Ltd. vs. Assistant Commissioner of
Income Tax [2021 (132) taxmann.com 104 (Bombay)]
(ii) A decision of the Delhi High Court in Bharat Aluminium Company
Ltd. vs. Union of India and others [W.P.(C)No.14528 of 2021 and CM
APPL.No.45702 of 2021, dated 14.01.2022]
(iii) M/s.Arun Excello Foundations, Rep. by its Partner, Mr.P.Suresh vs.
The Additional/Joint/Deputy Assistant Commissioner of Income Tax, Delhi
[W.P.No.19552 of 2021, dated 01.02.2022]
(iv) Fifth Field Relators (P.) Ltd., vs. Assistant Commissioner of
Income Tax, National e-Assessment Centre, Delhi [2022 (135) taxmann.com
76 (Madras)]
(v) C.V.Ravi vs. Income Tax Officer Business Ward-11(4), Chennai
[2021 (124) taxmann.com 438 (Madras)]
(vi) Ponmani Suresh vs. Deputy Commissioner of Income Tax Non-Corporate
Ward 2, Chennai [2020 (120) taxmann.com 207 (Madras)]
(vii) Vetrivel Minerals vs. Assistant Commissioner of Income Tax,
Central Circle -2, Madurai [2021 (12) taxmann.com 126 (Madras)]
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W.P(MD).No.19814 of 2021
(viii) Karti P.Chidambaram vs. Additional Commissioner of Income
Tax, Central Range – 2, Chennai [2021 (129) taxmann.com 36 (Madras)]
7. Opposing the prayer, the learned Senior Standing Counsel for the
respondents submits that this is a second round of litigation by the petitioner.
8. The learned Senior Standing Counsel for the respondents submits
that challenge to the impugned order is based on Central Board of Direct
Taxes Circular/Instructions, dated 06.09.2021 in circular F.No. 187/3/2020-
ITA-I as modified by an order in F.No.225/97/2021-ITA-II, dated 22.09.2021.
It is not applicable to the facts of the case inasmuch as Paragraph iv (b) of
circular, which is one of the exemption for faceless assessment under Section
144 B of the Act. It applies to a situation, where time limit for completion of
assessment expires on 30.09.2021 pending with the jurisdictional Assessing
Officer as on 11.09.2021 or thereafter, were cannot complete as per the
procedure laid down under Section 144 B of the Act due to technical
procedure constrains in the given period of limitation. It is therefore
submitted that there is no error committed by the respondents while
completing the assessment pursuant to the remand order, dated 08.08.2019 of
the ITA in ITA No.288/CHNY/2019.
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9. The learned Senior Standing Counsel for the respondents further
submits that the respondents have not relied upon the statement of either the
buyer, namely, V.Palanikumar or any of the statements of the petitioner’s
siblings. On the other hand, it is submitted that it is the specific case of the
petitioner that the buyer failed to pay the amount and therefore question of the
petitioner having paid any amount to the sibling also does not arise.
Therefore, the request for cross-examine the sibling was also a request only to
delay the completion of the assessment in respect of assessment year
2007-2008, which had remained inconclusive after the orders were set aside
by the Tribunal. As far as the cross-examination of the buyer is concerned, it
is submitted that the department has not relied on the statement of the buyer.
10. On the other hand, the department has relied upon the statement
contained only in the sale deed, dated 26.02.2007. The learned Senior
Standing Counsel for the respondents further submits that though the
provisions of the India Evidences Act, 1872 is not applicable, nevertheless,
there cannot be any evidence on the content of documents as the documents
speak for themselves. It is therefore submitted that merely because the
petitioner now turns around and states that the petitioner has not received any
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W.P(MD).No.19814 of 2021
instructions and therefore, the question of invoking Section 50 C of the
Income Tax Act, would not apply cannot be countenanced. The learned senior
standing counsel for the respondents submits that the petitioner has been
given enough latitude and therefore, the impugned order deserves to be
upheld. It is submitted that no procedural irregularity has been pointed out or
committed by the respondents while passing the impugned order.
11. The learned senior standing counsel for the respondents submits
that the review under Article 226 of the Constitution of India is confined to
only decision making process and it is submitted that there is no procedural
infraction as far as the completion of assessment order is concerned and
therefore, the writ petition is liable to be dismissed.
12. By way of rejoinder, the learned counsel for the petitioner submits
that the impugned order has to go as there is a violation of principles of
natural justice and no opportunity of personal hearing was granted to the
petitioner. The learned counsel for the petitioner submits that the impugned
order relied on the statement of the petitioner’s siblings and therefore, the
petitioner was entitled to cross-examine them. It is further submitted that the
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W.P(MD).No.19814 of 2021
value under Section 50 C (2) in question there has to be proper determination
of the value for the purpose of computation of income.
13. I have considered the arguments advanced by the learned counsel
for the petitioner and the learned counsel for the respondents.
14. Earlier, the petitioner suffered an assessment order, dated
30.12.2010. Aggrieved by the same, the petitioner had preferred an appeal
before the Commissioner of Income Tax Appeals in I.T.A.No.160/2010-11,
which came to be dismissed by the Appellate Tribunal by an order, dated
27.08.2014. The petitioner failed to participate in the proceedings before the
Commissioner of Income Tax Appeals despite having filed the appeal. It is in
this back ground, the Appellate Tribunal granted a fresh opportunity to the
petitioner by setting aside the order and remitted the case back to the
Assessing Officer to pass a fresh order by its order, dated 08.08.2019 in I.T.A
No.288/CHNY/2019.
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15. The petitioner in this case had not filed a return under Section 139
of the Income Tax Act in time. Under these circumstances, the petitioner was
issued with a notice under Section 148 of the Income Tax Act, which
culminated in an assessment order, dated 30.12.2010. The said assessment
order was passed under Section 144 of the Income Tax Act, 1961.
16. The dispute in this present case pertains to sale of 110 cents of land
out of total extent of 8.59 acres. It is the specific case of the petitioner that
though the sale deed, dated 26.02.2007 declares a sale consideration as Rs.
15,00,000/-, receipt of such confirmed in the said sale deed, the petitioner has
not received a single penny from the buyer. That apart, it is submitted that the
petitioner was not the sole owner of the property but a co-owner along with
the sibling and that tax if can be demanded only on the proportionate value.
Even as per the petitioner, the petitioner has not received any consideration
from his buyer, namely, V.Palanikumar. Therefore, the petitioner’s demand for
cross-examination of his sibling is an exercise in futility. In the remand report
that they had categorically stated that they had given up their rights and it is
the petitioner who sold the land to V.Palanikumar after given their power in
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W.P(MD).No.19814 of 2021
his favour. Thus, no useful purpose will be served by summoning his siblings
for cross-examination.
17. Therefore, I do not find any merits in the arguments advanced by
the learned counsel for the petitioner that there was a violation of principles
of natural justice as no cross-examination was not allowed to cross-examine
the petitioner’s siblings. As the far as the cross-examination of the buyer,
V.Palanikumar is concerned, in my view, it was also irrelevant as documents
namely sale deed speak for itself. Whatever, the sale consideration declared in
the sale deed, dated 26.02.2007 is of no relevant. The value that has to be
determined under Section 50 C of the Income Tax Act. If the guideline value
is more than the value declared in the document, then guideline value is
relevant for payment of tax. whether the petitioner has received the aforesaid
amount is of no consequence. As long as a sale was effected the petitioner is
bound by Section 50 C of the Income Tax Act.
18. Further, argument that value has to be redetermined under Section
50 C (2) was taken up for the first time. It is evident that the petitioner is
dragging on the proceedings to stall recovery of the tax amount. I do not find
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any merits in this writ petition. Therefore, the writ petition stands dismissed. I
however give liberty to the petitioner to file a statutory appeal within a period
of thirty days from the date of receipt of copy of this order. If such an appeal
is filed within such time, the petitioner's appeal shall be numbered and
disposed on merits. The appellate authority shall examine the case
independently uninfluenced by any operation in this order touching on the
merits. Needless to state that before orders are passed, the petitioner shall be
heard. No costs. Consequently, the connected Miscellaneous Petitions are
closed.
07.04.2022
Index : Yes / No
Internet : Yes/ No
sn
To
1.The Chairperson ,
The Central Board of Direct Taxes,
Department of Revenue – Ministry of Finance,
Government of India,
New Delhi.
2.The Additional/Joint/Deputy/Assistant Commissioner,
of Income Tax/Income Tax Officer,
National e-Assessment Center,
Delhi.
3.The Income Tax Officer,
Ward-4, Tirunelveli.
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W.P(MD).No.19814 of 2021
C.SARAVANAN, J.
sn
W.P(MD).No.19814 of 2021
07.04.2022
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