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income-tax Officer Vs. D. Lakshminarayanapathy. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtChennai High Court
Decided On
Case NumberI. T. APPEAL NO. 1516 (MAD.) OF 1982 [ASSESSMENT YEAR 1974-75]
Reported in[1986]17ITD336(Mad)
Appellantincome-tax Officer
RespondentD. Lakshminarayanapathy.
Excerpt:
.....: in case of rejection of revision application under section 264, appeal before the appellate assistant commissioner against the assessment order is maintainable. held : there is nothing in the act to prohibit the appellate assistant commissioner from entertaining the appeal only because the assessee has approached the commissioner in vain under section 264. in a case where there are sufficient cause for condoning the delay and entertaining the appeal because normally such a situation can arise only after the limitation for filing the appeal has expired. the second reason is that an order under section 264 refusing to interfere is not deemed to be an order prejudicial to the assessee. this shows that where the commissioner refused to interfere, the entire proceedings become..........act. on 29-8-1981, the ito rejected the application stating that it was barred by limitation. the assessee approached the commissioner under section 264 of the act which was also rejected by order dated 14-12-1981. thereafter on 22-2-1982, the assessee filed an appeal to the aac with an application to condone the delay. the aac condoned the delay, entertained the appeal and directed the ito to grant relief under sections 54b and 80t.3. the revenue is in appeal to contend that the appeal to the aac was not maintainable after the assessee had approached the commissioner under section 264. but, the revenue has not taken any specific ground of appeal against the eligibility of the assessee for relief under section 54b or 80t. though with reference to section 80t it is stated that the.....
Judgment:
ORDER

Per Shri T. N. C. Rangarajan, Judicial Member - This appeal relates to the claim to the assessee for relief under section 54B of the Income-tax Act, 1961 (the Act).

2. The assesse is an individual. The assessee sold certain lands and reinvested the proceeds in the purchase of agricultural lands. In the original assessment dated 25-9-1976, the claim of the assessee for relief under section 54 of the Act was not granted. Later, a reassessment was made by which the capital gains which had been accepted as returned at Rs. 69,656 were redetermined at Rs. 1,12,830. This reassessment was canceled by the AAC on appeal on 22-2-1980. The ITO passed an order giving effect to the order of the AAC on appeal on 29-4-1980 on receipt of that order, the assessee sought rectification on 27-10-1980 and claimed relief under section 54B and 80T of the Act. On 29-8-1981, the ITO rejected the application stating that it was barred by limitation. The assessee approached the Commissioner under section 264 of the Act which was also rejected by order dated 14-12-1981. Thereafter on 22-2-1982, the assessee filed an appeal to the AAC with an application to condone the delay. The AAC condoned the delay, entertained the appeal and directed the ITO to grant relief under sections 54B and 80T.

3. The revenue is in appeal to contend that the appeal to the AAC was not maintainable after the assessee had approached the Commissioner under section 264. But, the revenue has not taken any specific ground of appeal against the eligibility of the assessee for relief under section 54B or 80T. Though with reference to section 80T it is stated that the question whether the capital gains were short term or long term may have to be investigated, it is clear from the order of reassessment itself, that the deduction under section 80T was computed and granted. Though the reassessment was canceled for other reasons, it cannot now be disputed by the revenue that the assessee was entitled on the facts on record for deduction under section 80T. Therefore, the appeal is confined to the technical question whether the AAC was right in entertaining the appeal. The revenue cannot also dispute the decision of the AAC to condone the delay as it is a matter of judicial discretion and he was satisfied that there was sufficient cause for not filing the appeal in time. Such a decision is not appealable unless it was perverse and it is not the case of the revenue that the AAC erred in entertaining the appeal. Again, the decision of the AAC that once the assessee had dialed an application for rectification within the period of limitation, the ITO was bound to rectify it even after the lapse of five years in accordance with the instructions given to him by the Board is also not in question. Thus, we are left only with the single technical point that because the assessee approached the commissioner under section 264 in vain, he should not be allowed relief, which he is lawfully entitled to by the AAC exercising his appellate jurisdiction. We are unable to accept this contention because there is nothing in the Act to prohibit the AAC from entertaining the appeal only because the assessee has approached the Commissioner in vain under section 264. No doubt, there is a provision in section 264 prohibiting the Commissioner from entertaining a revision if an appeal has expired. But, there is no provision in the Act to refer to a reverse situation and prohibiting the AAC from entertaining the appeal after the Commissioner has refused to exercise his power under section 264. In a case where there are sufficient casuse for condoning the delay and entertaining the appeal because normally such a situation can arise only after the limitation for filing the appeal has expired. The second reason is that an order under section 264 refusing to interfere is deemed not to be an order prejudicial to the assessee. This shows that where the Commissioner refused to interfere, the entire proceedings become non est as far as the assessee is concerned and he is, therefore, left to seek his remedies elsewhere. Last, but not least, the Appellate Court should be slow to interfere with an order of a lower Court when the error complained of has not resulted ina miscarriage of justice. Technical errors of precedure should be disregarded particularly when the decision is right on law and facts and it does not affect the substantial rights of the parties. In the present case, when it is not in dispute that the assessee was entiled to the relief under sections 54B and 80T by setting aside the order of the AAC. We would only be restoring an assessment which is patently unjust and brings to tax an amount which is not taxable under the provisions of the Act. We should, therefore, refrain from entertaining this technical ground as otherwise it would only lead to injustice. We, therefore, confirm the order of the AAC. The appeal is dismissed.


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