2020 (12) TMI 722 - AT - Income Tax

Revision u/s 254 - purchase transactions of the immovable property were carried out and completed prior to effective date of amendment in section 56(2)(vii)(b) - HELD THAT - Tribunal committed error in rejecting the ground raised towards inapplicability of amended provisions of section 56(2)(vii)(b). CIT(A) has given appropriate relief in this regard. We thus see no wrong in action of the CIT(A). The plea of the assessee that the agricultural land is rural land was raised for the first time before us. In the absence of any findings of the lower authorities on factual aspects, we decline to entertain the aforesaid new plea. We also find no merit in the plea of the assessee for its inapplicability of Section 56(2)(vii)(b)(ii) of the Act to the FY 2013-14 concerning AY 2014-15. The aforesaid provision is applicable from AY 2014-15 and would thus apply to transactions concerning FY 2013-14 as intended by the legislature. Tribunal has dealt with the ground raised in the light of facts placed before it. Thus, the error in conclusion drawn by the Tribunal, if any, as alleged, cannot fall within the sweep of expression apparent mistake governing section 254(2) of the Act. The prayer of rectification is thus not sustainable. Admissibility of additional evidences - Tribunal has applied its mind and taken a conscious view on the admissibility of additional evidences. Hence, the grievances of the assessee on this score do not fall within the purview of section 254(2) of the Act.

Summary

Issues:
Rectification of mistake in the substantive order under s.254(2) of the Income Tax Act, 1961 for AY 2014-15.

Analysis:
The Assessee filed a Miscellaneous Application seeking rectification of a mistake in the Tribunal's substantive order. The issue revolved around the applicability of the amended provisions of section 56(2)(vii)(b) of the Income Tax Act to a land purchase transaction. The Assessee argued that the purchase was completed before the effective date of the amendment, making it exempt. Additionally, the Assessee submitted additional evidence regarding the land being rural, citing a Supreme Court decision. The Department defended the Tribunal's order, stating that the alleged errors were not apparent mistakes and that the Tribunal cannot review its decision under the guise of rectification. The Tribunal examined the grievances raised by the Assessee in detail.

The first grievance was the Tribunal's rejection of the ground on the inapplicability of the amended provisions of section 56(2)(vii)(b). The Tribunal upheld the actions of the Assessing Officer and the CIT(A), stating that the provision would apply to transactions concerning the relevant financial year. The Tribunal declined to entertain the new plea regarding the land being rural, as it was raised for the first time without findings from lower authorities. The Tribunal found no error in its conclusion and deemed the rectification prayer unsustainable.

The second grievance concerned the admissibility of additional evidence. The Tribunal rejected the Assessee's plea for admission of additional evidence, citing stringent stipulations under Rule 29 of IT(AT) Rules. The Tribunal noted that the Assessee failed to provide compelling reasons for not presenting the evidence before lower authorities and declined to entertain the additional evidence requiring factual verifications at a belated stage. The Tribunal concluded that it had applied its mind and taken a conscious view on the matter, dismissing the Miscellaneous Application as devoid of merits.

In conclusion, the Tribunal carefully considered all aspects raised by the Assessee and found no grounds for rectification or admission of additional evidence. The Miscellaneous Application was ultimately dismissed.