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TMI Blog2017 (6) TMI 602X X X X Extracts X X X X X X X X Extracts X X X X ..... arketing Private Limited (in short referred to as "RIDM"). The petitioner, along with other shareholders, entered into a Share Purchase Agreement, dated 17.07.2006 (in short "SPA"), with another entity by the name Accor Services. 2.2. As per the SPA, the sale of shares held in RIDM was staggered. Accordingly, 70% of the shareholding in RIDM was to be sold, by way of tranche, followed by sale of second and third tranches comprising of 30% and 10% of the equity stake in RIDM. The said three tranches of shares were required to be sold in three consecutive years, i.e., 2007-2008, 2008-2009 and 2009-2010. It appears that the petitioner received an advance in the sum of Rs. 15,82,86,273/-, in the previous year 2006-2007, relatable to AY 2007-2008 towards sale of shares. The record shows that 70% of the shareholding was sold by the petitioner on 05.05.2007, for a total consideration of Rs. 22,42,72,478/-, which included the aforementioned sum received in the form of advance. 2.3. The petitioner, evidently, in order to avail of the benefit of Section 54F of the Act, took a decision to invest the amount received, in two residential flats located in the Olumpus building situate in Altamoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs initiated, pursuant to the objection of the Internal Revenue Audit. 3.2. The record further shows that thereafter, the petitioner received a notice dated 20.03.2013, under Section 148 of the Act, in respect of the very same AY, i.e., AY 2008-2009, on the ostensible ground that income chargeable to tax for the said AY had escaped assessment. 3.3. Consequently, the petitioner asked for reasons for issuance of a notice under Section 148 of the Act; whereupon, the aspect pertaining to the claim made by him under Section 54F of the Act was, inter alia, brought to fore as the reason for issuance of the said notice. 3.4. The petitioner, filed his objections to the same. The Assessing Officer, after considering the objections, passed an assessment order, under Section 143(3) read with Section 147 of the Act, on 31.03.2014. In the said order, in so far as the claim under Section 54F of the Act was concerned, the Assessing Officer made the following observations, and sustained the claim made by the petitioner: "..... With regard to the merits of the case the assessee vide letter dated 09.07.2013 submitted that the assessee had sold the shares of the Royal Images Direct Marketing Pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the deduction claimed by the petitioner under Section 54F of the Act. It may be pertinent to note that by the very same order, the CIT(A) also dealt with the appeal preferred by the petitioner in respect of the AY 2008-2009, as some of the issues were common to the two appeals preferred by him. To be noted, though, the issue pertaining to deduction claimed by the petitioner, under Section 54F of the Act arose in the petitioner's appeal, as indicated above, only in the appeal preferred qua AY 2009-2010. 5. This time around, the Revenue, was aggrieved and hence, carried the matter in appeal to the Income Tax Appellate Tribunal, Chennai (in short "the Tribunal"). 5.1. The Tribunal vide a common order dated 08.04.2015, dealt with the two appeals filed by the Revenue, being Appeal Nos.ITA 1899/Mds/2013 and ITA 1900/Mds/2013. The Tribunal, by virtue of the said order, dismissed the appeal, bearing No.ITA 1899/Mds/2013, pertaining to AY 2008-2009 and, for statistical purposes, partly allowed the appeal, bearing No.ITA 1900/Mds/2013, pertaining to AY 2009-2010. 5.2. Interestingly, in the said order, the Tribunal, broadly, adverted to three aspects, in so far as the claim of the pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unts scheme and the advance paid for the purchase of property totalling at Rs. 6,50,00,000/- back to the Assessing Officer, as he has only considered the investment in flat Nos.607 and 612, Altamount Road, Cumballa Hills, for which the assessee has already claimed deduction u/w.54F for assessment year 2008-09 and allowed by the Assessing Officer in the assessment year 2008-09. Therefore, the same cannot be considered once again in the assessment year 2008-09 (sic 2009-2010). This issue to be decided afresh by the Assessing Officer. ...." (emphasis is mine) 5.6. A careful perusal of the observations of the Tribunal made in paragraph 9 of its order would show that in so far as the investment made by the petitioner in Alibaug property was concerned, a doubt was, perhaps, raised, as the said immovable property, on which, a residential unit had been constructed was described as pieces and parcels of agricultural land. 6. I must indicate herein that there has been much debate on the aspect as to whether or not the Tribunal had reopened the issue with regard to the flats, in which, the petitioner had made investment and claimed deduction under Section 54F of the Act. In other words, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment having been carried out vis-a-vis AY 2008-2009, vide order dated 31.03.2014, passed under Section 143(3) read with Section 147 of the Act, the conclusion had been reached that the exemption claimed by the petitioner under Section 54F of the Act, was in order had been validated. (vi) The Tribunal, in its order dated 08.04.2015, had not disturbed the finding that the subject flats formed of a single residential unit. Therefore, the direction of remand issued by the Tribunal qua other aspects, in respect of AY 2009-2010, would have no impact on the findings reached by the CIT(A), in its order dated 29.07.2013 that the subject flats should be treated as one single residential unit. (vii) Lastly, in passing the assessment order dated 31.03.2014, under Section 143(3) read with section 147 of the Act, the Assessing Officer had taken a view, which was a possible view, and therefore, the proceedings taken out under Section 263 of the Act would not be sustainable, as it could not be held that the view taken by him was erroneous. In other words, according to the learned counsel, unless, the twin conditions provided in Section 263 of the Act, are fulfilled; which are : that the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder for AY 2009-2010, the respondent had acted within the four corners of the jurisdiction vested in him, in exercising powers under Section 263 of the Act. (iii)(a) In other words, learned counsel stressed on the fact that in so far as the Tribunal was concerned, in respect of AY 2008-2009, the issue before it, pertained to disallowance of expenditure under Section 14A of the Act, and not deduction claimed by the petitioner under Section 54F of the Act, while, in so far as AY 2009-2010 was concerned, even though, the issue pertaining to Section 54F arose for consideration, the Tribunal did not adjudicate upon the same. 9. I have heard the learned counsels for the parties and perused the record. 9.1. Quite clearly, the preliminary objection taken with regard to the alternative remedy, by Ms.Hema, on behalf of the Revenue, will not require any discussion, if, I were to come to the conclusion that the respondent had the necessary leeway, in the given facts and circumstances, to exercise power under Section 263 of the Act. It is only if I come to a different conclusion, would I be required to deal with this objection. Accordingly, in order to adjudicate upon the matter, the follo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der dated 22.10.2010. The grievance of the petitioner, thus, with respect to the disallowance of deduction under Section 54F of the Act stood articulated only qua AY 2009-2010. The CIT(A), however, as noticed hereinabove, in his common order dated 29.07.2013, clearly, held that the petitioner should be allowed deduction under Section 54F of the Act, as the aspects pertaining to the claim had been considered in AY 2008-2009. This conclusion was reached by the CIT(A), after adverting to the entire history of the transaction and the material placed before him, which included, the Surveyors report, to which, I have made a reference above. 9.9. Moreover, in the proceedings carried under Section 143(3) read with Section 147 of the Act, qua AY 2008-2009, after due scrutiny, the Assessing Officer vide order dated 31.03.2014, came to the very same conclusion, which is that the deduction allowed under Section 54F of the Act, via the order dated 22.12.2010, could not be withdrawn. The relevant observations made, in this regard, have already been extracted hereinabove by me. 9.10. While the Revenue preferred appeals to the Tribunal vide CIT (A)'s common order dated 29.07.2013, qua AY 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer, the second condition for disallowance is that the assessee should have invested in a residential house. The Assessing Officer states that as per deduction of claim u/s.54F, the assessee could invest either in purchase of residential property one year prior to the date of transfer or 2 years after the date of transfer or construct house within 3 years after the date of transfer. In the assessee's case the Assessing Officer states that the assessee has utilized the amount in agricultural land located at Dhokawade Village, Alibag, Taluka of Rajgad District, which is evident from the document describing the property as 'pieces and parcels' of agricultural land. The Assessing Officer also pointed out that the assessee had not produced any proof like approval obtained from the Municipal Corporation of competent Authority for construction of residential property for treating the assessee's agricultural land as residential area." (emphasis is mine) 11.1. A perusal of the aforesaid extract would show that the Tribunal was considering, not only the issue as to whether or not the subject flats formed one residential unit, but also, was looking at the inve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thus, as indicated in my narration above, was dealing with three aspects via its order dated 08.04.2015. First, as to whether the subject flats formed a single residential unit. Second, the petitioner's claim that he had invested Rs. 6.10 Crores in the Capital Gains Accounts Scheme was borne out. Third, the petitioner's claim that he had invested money in the Alibaug property, on which, he had, purportedly, constructed a residential structure. 12.1. The Tribunal, after discussing these three aspects of the matter, confined the remand only to the last two aspects, that is, the claim of the petitioner with regard to investment of Rs. 6.10 Crores in the Capital Gains Scheme; and the purported investment of Rs. 40 lakhs made by him by way of advance towards purchase of Alibaug property. 12.2. The issue with regard to the claim of deduction under Section 54F of the Act, (which arose, as correctly argued on behalf of the Revenue, in its appeal filed qua A.Y. 2009-2010), was not remanded for reconsideration, as the same had already been considered in AY 2008-2009. This is quite evident upon perusing paragraph 10 of the Tribunal's order. The relevant observations made, in thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer to come to a possible view, if not, definite view that the subject flats formed a single residential unit. 13.4. If, that be the conclusion, then, clearly, the respondent had no jurisdiction to initiate proceedings under Section 263 of the Act and thereupon, proceed to pass the impugned order. 14. In view of the conclusion reached by me, the preliminary objection taken by Ms.Hema Muralikrishnan, that the writ petition ought not to be entertained, would have to be rejected. It would be trite to say that an order passed without jurisdiction can be interfered with in Writ proceedings. 14.1. Furthermore, relegating the petitioner, at this stage, to an alternative remedy in respect of an issue pertaining to AY 2008-2009, which has travelled by way of statutory remedies to the Tribunal, once before, would be unfair to parties. The existence of an alternative remedy, as is articulated time and again by Court is not an absolute bar. Superior courts often relegate parties to alternative remedy by way of self-limitation. As a matter of fact the law, as declared by the Supreme Court, now, clearly, sets out that in appropriate cases, the writ court has jurisdiction to e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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