2014 (9) TMI 363 - HC - Income Tax

Maintainability of appeal before CIT(A) - aggrieved person - Imposition of penalty u/s 271(1)(c) - Estimation of fair market value as on 01.04.1981 Held that - Following the decision in Sterling Machine Tools vs. Commissioner of Income Tax 1979 (10) TMI 53 - ALLAHABAD High Court The figure obtained from the registering authority was communicated - the assessee has given his consent to the cost of the land being ₹ 8,000/- per bigha, as on the relevant date, for the purpose of calculation of capital gains - assessee did not choose to make available any evidence in support of their contentions, which they seem to do now - when an assessment is made on the basis of the consent of the parties, in view of the provision creating the right of appeal, Section 246A in this case, unless there is any grievance for the party as such that the concession was wrongly recorded or that he was coerced into making such concession, which case also the appellants do not have in these cases; the order of the appellate authority, as affirmed by the Tribunal, that the appellants cannot be treated as aggrieved persons is not liable to be interfered with - the appellants have not made out a case for interference with the order of the CIT, as affirmed by the Tribunal. It may be true that penalty was levied in breach of the understanding between the parties - appellants seek to maintain an appeal against an assessment order, which was based on a concession relating to the fact as to the value of the property and, though with the condition that there would be no penalty proceedings, having regard to the penalty proceedings being cancelled, there is no ground for the appellants to maintain these appeals - Decided against assessee.

Summary

Issues Involved:
1. Acceptance of fair market value and imposition of penalty under Section 271(1)(c).
2. Timeliness and maintainability of the appeal against the assessment order.
3. Condonation of delay in filing the appeal before the Commissioner of Income Tax (Appeals).

Detailed Analysis:

1. Acceptance of Fair Market Value and Imposition of Penalty under Section 271(1)(c):

The appellants, co-owners of an ancestral property, accepted the fair market value of Rs. 8,000 per bigha for the land sold, instead of Rs. 2,70,000 per bigha as initially claimed in their return. This acceptance was made under the condition that no penalty proceedings would be initiated under Section 271(1)(c). Despite this, penalty proceedings were initiated. The court noted that the appellants had communicated their acceptance in writing. The appellants argued that this was done to avoid penalty proceedings and for the sake of buying peace. However, the penalty proceedings were eventually cancelled, leading the court to conclude that the appellants were not aggrieved by the assessment order based on the accepted value of Rs. 8,000 per bigha.

2. Timeliness and Maintainability of the Appeal Against the Assessment Order:

The appellants filed an appeal against the assessment order simultaneously with the appeal against the penalty order, which was delayed. The Commissioner of Income Tax dismissed the appeal as time-barred and held that the appellants were not aggrieved persons. The Tribunal upheld this decision. The court emphasized that Section 246A of the Income Tax Act provides a right to appeal only to an aggrieved person. The court referred to various precedents, including the cases of Sterling Machine Tools vs. Commissioner of Income Tax and Rameshchandra and Company vs. Commissioner of Income Tax, to support the view that an appeal is not maintainable if the assessment is based on the concession of the assessee, unless the concession was wrongly recorded or made under a mistaken belief.

3. Condonation of Delay in Filing the Appeal Before the Commissioner of Income Tax (Appeals):

The appellants argued that the delay in filing the appeal was due to the imposition of penalty, which was against the agreed condition. However, the court noted that the penalty proceedings were eventually cancelled, and therefore, the appellants had no valid grievance to maintain the appeal. The court distinguished the present case from others where appeals were allowed despite concessions, noting that the appellants did not provide any evidence to support their claim that the value determined by the Assessing Officer was incorrect. The court concluded that the appellants were not aggrieved persons as the assessment was based on their own concession and there was no coercion or incorrect recording of the concession.

Conclusion:

The court dismissed the appeals, holding that the appellants were not aggrieved persons and therefore had no right to appeal under Section 246A of the Income Tax Act. The court found no merit in the questions of law raised by the appellants and ruled that the appeals were not maintainable. The court emphasized that an appeal is not competent if it is based on a concession made by the assessee, unless there is evidence of coercion or incorrect recording of the concession. The appeals were dismissed with no order as to costs.