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TMI Blog2004 (4) TMI 579X X X X Extracts X X X X X X X X Extracts X X X X ..... pital gain on the sale of land was utilized for the purchase of a residential house within time and the consideration for the purchase of the house was much more than the amount of capital gain. The assessee had no liability to pay tax and was entitled to benefit u/s 54F of the Income Tax Act. It is also admitted position that the petitioner had failed to claim the benefit in her return but an effort was made to over-come the mistake before the revisional authority. Respondent No. 1 has not disputed the sale and purchase of the House as the same is evidenced by documentary evidence duly registered before the Competent authority. It is also admitted position that the petitioner had no remedy before the assessing authority after the assessment order was passed. The revisional jurisdiction was invoked within the prescribed time. The revisional authority having widest possible powers under section 264 was required to hold an inquiry or cause any inquiry to be held and consider the question of purchase of the property and proceeded to comply the provisions of section 54F. The reasoning given by the revisional authority is only technical. Though the assessing authority was not aware of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as ₹ 7,03,000. The capital gain at sale price was declared as ₹ 2,80,858. The total amount of Tax payable was shown as ₹ 84,529 out of which advance tax paid was ₹ 6000 and the Tax deducted at source on various incomes ₹ 21,845. It was stated that she is unable to pay the balance amount of tax " for want of funds" The assessing authority assessed the income and tax liability as under: (i) Total income as per return: Rs. 1,56,680 (ii) Adjustment Under section 143(1)(a) ₹ 2,80,858 Grand Total (I + II) ₹ 4,37,538 (iii) Tax on assessed income: ₹ 77,165 (iv) Surcharge ₹ 7,716 (v) Total ₹ 84,861 Interest Payable: 234A Rs. 7,610 Under-Section 234B ₹ 27,660 Under-section 234C ₹ 3,880 Total 1,18,981 Less Pre-paid tax 8,635 Total Tax payable 1,10,346 2. On receipt of demand, the petitioner approached respondent No. 1, who is revisional authority and raised plea of non-disclosure of certain facts in the Income tax return and claimed benefits under section 54F of the Income Tax Act. It was pleaded before respondent No. 1 that the petitioner's liability of Tax as assessed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of the property within the specified time could not be disclosed. It is further contended that since the filing of the revised return had become barred by time, the petitioner had no remedy except to invoke the revisional jurisdiction. Since the facts were not disputed the revisional authority was required to exercise the revisional power and grant relief to the petitioner. 6. In responses to the petition, the respondents have filed reply. Mr. D.S. Thakur, refuting the contention of the petitioner has contended that the Income Tax is a self-contained and complete Code in itself which provides and prescribes the procedure and the method of making the assessment. The petitioner's Income Tax return has been accepted by the assessing authority and thus there was no occasion for the revisional authority to interfere in the same. It is further stated that the writ Court is not to exercise the appellate jurisdiction over the decision of the authority under the Act. It is only if the authorities under the Act fail to follow the procedure prescribed and the orders are other-wise perverse, the High Court can exercise its extra-ordinary jurisdiction. In regard to the claim of the pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or in contravention to the provisions of law. The petitioner had the remedy of filing a revised return provided the steps were taken within the time prescribed under section 139. That having not been done she allowed the assessment order to be passed and there-after realized the mistake which was incurable after the lapse of time. She invoked the revisional jurisdiction of respondent No. 1 under section 264 of the Income Tax Act which reads as under: "264 (1) In the case of any order other than an order to which section 263 may, either of his own motion or on an application by the assessee for revision, call for the record of any proceeding under this Act in which any such order has been passed and may make such inquiry or cause such inquiry to be made and subject to the provisions of this Act, may pass such order thereon, not being an order prejudicial to the assessee, as he thinks fit. (2) The Commissioner shall not of his own motion revise any order under this section if the order has been made more than one year previously; (3) In the case of an application for revision under this section by the assessee, the application must be made within one year from the date on w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sale and purchase of the House as the same is evidenced by documentary evidence duly registered before the Competent authority. It is also admitted position that the petitioner had no remedy before the assessing authority after the assessment order was passed. The revisional jurisdiction was invoked within the prescribed time. The revisional authority having widest possible powers under section 264 was required to hold an inquiry or cause any inquiry to be held and consider the question of purchase of the property and proceeded to comply the provisions of section 54F. The reasoning given by the revisional authority is only technical. This question was decided in similar circumstances by Gujrat High Court in Digvijay Cement Co. Ltd v. CIT and Anr., TC 57R. 467, wherein it has been held as under: "This section empowers the CIT, either on his own motion or on an application made by the assessee to call for the record of any proceeding under the Act and pass such order thereon not being an order prejudicial to the assessee. This power has been conferred upon the CCIT in order to enable him to give relief to the assessee in cases of over-assessment. The power is conferred to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration of the facts, which are no different from the case in hand, the Court observed- "Seems to me, however, that the order of the CIT rejecting the previous applications, on the mere ground that the petitioner had shown the income in his return is erroneous. The CIT was bound to apply his mind to the question whether the petitioner was taxable on that income. The ITO is entitled under Section 23(1) to make an assessment on the basis of the return if he is satisfied, without requiring the presence of the assessee or the production of evidence in support of the return, that the return is correct and complete. But it may be that the assessee may have committed a mistake in treating a certain receipt as taxable. The mere circumstance that he has shown that receipt as income in his return does not make him liable to tax thereon. An assessee is liable to tax only upon such receipt as can be included in his total income and is assessable under the IT tax. The law empowers the ITO to assess the income on an assessee and determine the tax payable thereon. In doing so, he may proceed on the basis that where an assessee discloses that a certain sum of money has been received by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... correct it under Section 264(1). The CIT would be wrong in not giving relief to the petitioner in respect of over-assessment as a result of under[totaling of the purchases." 12. Though the assessing authority was not aware of the purchase of the property by the petitioner and proceeded on the basis of the admitted facts disclosed in the return. However, the revisional authority could not be oblivious of its duty to accept the contention of the assessee when the facts were brought to its notice about the capital gain being not chargeable to Tax under law. What to say of its duty to advice the assessee the revisional authority rejected the contention of the petitioner only on technical grounds. When the substantive law confers a benefit on the assessee under a statute, it cannot be taken away by the ad judicatory authority on mere technicalities. It is settled proposition of law that no Tax can be levied or recovered without authority of law. Article 265 of the Constitution of India and Section 114 of the State Constitution imposes an embargo on imposition and collection of tax if the same is without authority of law. Admittedly, on the basis of facts disclosed before the revi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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