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TMI Blog2009 (9) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... eased out the said portion of land to the Indian Oil Corporation for more than 40 years in which the Corporation was operating a petrol bunk. The petitioner, having decided to sell the property to the Indian Oil Corporation, after negotiation, fixed the sale consideration at Rs.99 Lakhs. Pursuant to the agreement, a sale deed was executed in favour of the Indian Oil Corporation. Since there was a capital gain on the sale, the petitioner offered the capital gains for assessment based on the actual consideration received by her, namely Rs.99 Lakhs and paid capital gains tax. However, the Registering Authority adopted the guideline value of the property which comes to Rs.3,92,68,800/- and levied stamp duty and the Indian Oil Corporation which is the purchaser has also paid stamp duty on the said amount. 3. According to the petitioner, in these circumstances, the Assessing Authority proposed to assess the capital gains on the basis of the value adopted by the Stamp Authorities which was in excess of actual consideration received by the petitioner and the petitioner filed a writ petition challenging the vires of Section 50C of the Act, which was dismissed. The matter was also ultimatel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the present case, the petitioner being the vendor can raise his objection under Section 50C(2) of the Act. 9. He would also refer to Section 153(1) and 153(3) of the Act, especially with reference to the term "any time" and contend that any time which may be given by the Court will come within the meaning of the same saving the period of limitation, as it was held in the order dated 22.4.2009 made in W.P.No.2092 of 2009. 10. On the other hand, it is the contention of Mr. Patti B. Jaganathan, learned counsel appearing for the respondent that when the assessment was made as per the value determined under Section 47A of the Indian Stamp Act, the petitioner has not raised any objection and therefore, there is no bar on the part of the Department from passing the impugned assessment order. 11. It is his submission that the Assessing Authority has to pass orders within one year and that time cannot be extended by any one and therefore, the order passed without waiting for the report from the Valuation Officer is perfectly valid. 12. He would distinguish between Section 50C and Section 55A of the Act by referring to the judgment of the Bombay High Court in Rallis India Ltd. v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns 143 or 144 of the Act, no doubt contemplates that the assessment order should be passed within a period of two years from the end of the assessment year in which the income was first assessable; or one year from the end of the financial year in which a return or a revised return relating to the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year, is filed under sub-section (4) or sub-section (5) of Section 139, whichever is later and the periods of limitation are varied by insertion through Finance Act, 2006 with effect from 1.6.2006 and Finance Act, 2007 with effect from 1.6.2007. However, Section 153(3) of the Act exempts the said period of limitation in certain cases where the assessment, reassessment or recomputation is made as per the direction "in an order of any court in a proceeding otherwise than by way of appeal or reference under this Act." That apart, there are many other instances like the period of stay or injunction granted by this Court which are exempted. Further, where, after the exclusion of the said period prescribed under Section 153(3)(ii) of the Act, the period of limitation available to the Assessing Officer to make an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd ending with the date on which the order under sub-section (3) of that section is made by him, or (v) in a case where an application made before the Income-tax Settlement Commission under section 245C is rejected by it or is not allowed to be proceeded with by it, the period commencing from the date on which such application is made and ending with the date on which the order under sub-section (1) of section 245D is received by the Commissioner under sub-section (2) of that section, or (vi)the period commencing from the date on which an application is made before the Authority for Advance Rulings under sub-section (1) of section 245Q and ending with the date on which the order rejecting the application is received by the Commissioner under sub-section (3) of section 245R, or (vii) the period commencing from the date on which an application is made before the Authority for Advance Rulings under sub-section (1) of section 245Q and ending with the date on which the advance ruling pronounced by it is received by the Commissioner under sub-section (7) of section 245R, shall be excluded : Provided that where immediately after the exclusion of the aforesaid time or period, the perio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer finds that the amount expended on making such investments or in acquiring such bullion, jewellery or other valuable article exceeds the amount recorded in this behalf in the books of account maintained by the assessee for any source of income, and the assessee offers no explanation about such excess amount or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the excess amount may be deemed to be the income of the assessee for such financial year. Section : 69C.Unexplained expenditure, etc.- Where in any financial year an assessee has incurred any expenditure and he offers no explanation about the source of such expenditure or part thereof, or the explanation, if any, offered by him is not, in the opinion of the Assessing Officer, satisfactory, the amount covered by such expenditure or part thereof, as the case may be, may be deemed to be the income of the assessee for such financial year : Provided that, notwithstanding anything contained in any other provision of this Act, such unexplained expenditure which is deemed to be the income of the assessee shall not be allowed as a deduction under any head of income.", the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the asset exceeds the value of the asset as claimed by the assessee by more than such percentage of the value of the asset as so claimed or by more than such amount as may be prescribed in this behalf ; or (ii) that having regard to the nature of the asset and other relevant circumstances, it is necessary so to do, and where any such reference is made, the provisions of sub-sections (2), (3), (4), (5) and (6) of section 16A, clauses (ha) and (i) of sub-section (1) and sub-sections (3A) and (4) of section 23, sub-section (5) of section 24, section 34AA, section 35 and section 37 of the Wealth-tax Act, 1957 (27 of 1957), shall with the necessary modifications, apply in relation to such reference as they apply in relation to a reference made by the Assessing Officer under sub-section (1) of section 16A of that Act. Explanation. In this section, Valuation Officer has the same meaning, as in clause (r) of section 2 of the Wealth-tax Act, 1957 (27 of 1957)." 20. Either Section 50C or Section 55A of the Act, they all relate to capital gains. Section 55A of the Act deals with the ascertainment of the fair market value, conferring such power to the Assessing Officer. While construi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2003. Section 50C of the Act is as follows: "Section:50C. Special provision for full value of consideration in certain cases. (1) Where the consideration received or accruing as a result of the transfer by an assessee of a capital asset, being land or building or both, is less than the value adopted or assessed by any authority of a State Government (hereafter in this section referred to as the "stamp valuation authority") for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed shall, for the purposes of section 48, be deemed to be the full value of the consideration received or accruing as a result of such transfer. (2) Without prejudice to the provisions of sub-section (1), where- (a) the assessee claims before any Assessing Officer that the value adopted or assessed by the stamp valuation authority under sub-section (1) exceeds the fair market value of the property as on the date of transfer; (b) the value so adopted or assessed by the stamp valuation authority under sub-section (1) has not been disputed in any appeal or revision or no reference has been made before any other authority, court or the High Court, the Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as determined by the Stamp duty authority. Thus, a complete foolproof safeguard has been given to the assessee to establish before the authorities concerned the real value. Thus, what is stated in Section 50C as a real value cannot be regarded as a notional or artificial value and such real value is determinable only after hearing the assessee as per the statutory provisions stated supra. There is no indication either in the provisions of Section 50C of Income-tax Act or Section 47A of the Stamp Act or rules made thereunder about the adoption of the guideline value. Hence, the contention that the Section 50C is arbitrary and violative of Article 14 cannot be accepted." 24. Therefore, the right of an assessee conferred under Section 50C of the Act is a valuable statutory right available to protect his interest against any arbitrariness which may creep in while fixing the value of the capital gain and that is the safeguard given to the assessee. The said right is more effective in cases where the parties to the document have not taken any steps to defend or to initiate proceedings under Section 47A of the Indian Stamp Act. 25. A combined reading of the entire provisions show that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lternative remedy also deserves to be considered. 28. In M/s. Nivaram Pharma Private Limited v. The Customs, Excise and Gold (Control) Appellate Tribunal, South Regional Bench, Madras and others, [2005] 2 MLJ 246, it was held by the Division Bench of this Court that in tax matters there should not be a short circuiting of statutory remedies as follows: "15. There are well settled principles of writ jurisdiction and Judges also must exercise self-discipline. It has been repeatedly held by the Supreme Court that in tax matters there should be no short circuiting the statutory remedies of appeal, revision, etc. We are therefore surprised that in this case the learned single Judge did not observe this well settled principle of self-discipline and entertained the writ petition despite existence of statutory remedies." 29. It is true and also not in dispute that as against the impugned order of assessment, an appeal lies under Section 246A of the Act. But, on the undisputed facts and circumstances of the case on hand that while the matter is pending before the Valuation Officer, which has been referred by the respondent at the instance o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notwithstanding existence of an alternative remedy this Court while dealing with the matter in an appeal should not permit the question to be raised unless the High Court's reasoning for entertaining the writ petition is found to be palpably unsound and irrational. Similar view was expressed by this Court in [1966] 3 SCR 84 and State of U.P. and Ors. v. M/s. Indian Hume Pipe Co. Ltd., [1977] 2 SCC 724. That being the position, we do not consider the High Court's judgment to be vulnerable on the ground that alternative remedy was not availed. There are two well recognized exceptions to the doctrine of exhaustion of statutory remedies. First is when the proceedings are taken before the forum under a provision of law which is ultra vires, it is open to a party aggrieved thereby to move the High Court for quashing the proceedings on the ground that they are incompetent without a party being obliged to wait until those proceedings run their full course. Secondly, the doctrine has no application when the impugned order has been made in violation of the principles of natural justice. We may add that where the proceedings itself are an abuse of process of law the High Court in an appropri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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