2022 (6) TMI 958 - HC - Income Tax

Revision u/s 263 - As per CIT AO failed to enquire on the applicability of provisions of section 56(2)(vii)(b) (ii) - Whether Tribunal was justified in holding that there was no lack of enquiry by the Assessing Officer but the PCIT had considered the order erroneous and prejudicial to the interest of revenue without assigning any reasons? - HELD THAT - The view taken by the learned ITAT is based on logical findings. While rendering the judgment, the learned ITAT has relied upon various judgments of different High Courts and considered the provisions of 56(2)(vii) pre-amendment and post-amendment. Learned ITAT has held that law contained in Section 56(2)(vii)(b) as stood on the date of allotment letter (on 11.11.2009), falling in assessment year 2010-11, did not contemplate the situation of a receipt of property by the buyer with inadequate construction. The learned ITAT has held categorically that the amended provisions of Section 56(2)(vii)(b)(ii) could not be applied and they have relied upon the judgment of Bajranghlal Naredi Vs. ITO 2020 (1) TMI 1359 - ITAT, RANCHI . It is held time and again by the Apex Court qua the admission of appeal on substantial questions of law, more specifically in the case of Commissioner of Customs-I Vs. Aasu Exim Pvt. Ltd. 2017 (12) TMI 107 - SUPREME COURT and Steel Authority of India Ltd. 2017 (4) TMI 881 - SUPREME COURT if the learned ITAT, on consideration of material and relevant facts, had arrived at the conclusion which is a possible conclusion, the same must be allowed to rest even, if this court is inclined to take another view of the matter. In the case at hand, logical reasonings was given by the learned ITAT and there is no gross violation of the procedure or principles of natural justice occasioning a failure of justice. - Decided against revenue.

Summary

Issues:
Appeal under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal (ITAT) regarding substantial questions of law.

Analysis:
The Revenue challenged the ITAT's findings under Section 263 of the Act, arguing that the assessment order was erroneous and prejudicial to Revenue's interest. The ITAT considered an allotment letter for a flat, finding it constituted a lawful agreement between the parties. The ITAT referred to relevant case laws and the Indian Contract Act, 1872, supporting their decision. They also analyzed the provisions of Section 56(2)(vii) pre-amendment and post-amendment to determine the applicability of the law. The ITAT concluded that the amended provisions could not be applied retroactively, and the assessment order was not erroneous or prejudicial to Revenue's interest.

The ITAT's decision was based on logical findings, considering various judgments and legal provisions. They held that the law at the time of the allotment letter did not cover the situation of inadequate consideration for property received by the buyer. The ITAT cited a specific case to support their conclusion, emphasizing the inapplicability of the amended provisions. The Apex Court's criteria for admission of appeals on substantial questions of law were also discussed, highlighting the importance of a direct nexus to duty assessment or value determination.

The judgment emphasized that if the ITAT's conclusion was based on relevant facts and a possible interpretation, it should be upheld even if a different view could be taken. In this case, the ITAT's reasoning was considered logical, and there was no violation of natural justice principles. Therefore, the court dismissed the appeal, stating that no substantial question of law arose from the matter. The decision affirmed the ITAT's findings and upheld the conclusion that the assessment order was not erroneous or prejudicial to Revenue's interest.