IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 19TH DAY OF AUGUST, 2019 BEFORE THE HON’BLE MR.JUSTICE P.B. BAJANTHRI WRIT PETITION NO.23502 OF 2018 (T-IT) BETWEEN:
R.RAMAKRISHNAN AGED ABOUT 68 YEARS SON OF SRI.RAMASWAMI R/AT NO.14, ARUNDEL WAY CHERRYBROOK, NSW 2126 AUSTRALIA … PETITIONER (BY SRI.V.K.GURUNATHA FOR SRI.S.PARTHASARATHI, ADV.) AND:
1. THE CENTRAL BOARD OF DIRECT TAXES MINISTRY OF FINANCE DEPARTMENT OF REVENUE D-1/35, NORTH BLOCK NEW DELHI-110 001 2. THE INCOME-TAX OFFICER WARD-1 (2) HMT BHAVAN, BELLARY ROAD BANGALORE-560 032 ... RESPONDENTS (BY SRI.K.V.ARAVIND, ADV.) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER OF THE FIRST RESPONDENT DT: 13.12.2017 IN ANNEXURE-F AND QUASH THE ORDER OF THE COMMISSIONER OF INCOME-TAX PASSED U/S 264 OF THE ACT DT: 21.07.2006 IN ANNEXURE-B1 AND ETC.
THIS PETITION COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, THE COURT MADE THE FOLLOWING:-
ORDER In the instant petition, petitioner has sought for the following reliefs:
(a) Issue a Writ of Certiorari or a direction in the nature of Writ of Certiorari quashing the order of the First Respondent Dt: 13.12.2017 in F.No.225/116/2011/ITA.II (Annexure- ‘F’).
(b) Issue a Writ of Certiorari or a direction in the nature of Writ of Certiorari quashing the Order of the Commissioner of Income-tax passed under section 264 of the Act Dt: 21.07.2006 in LRP No. 12/264/CIT-I/05-06 (Annexure-‘B1’):
(c) Issue a Writ of Mandamus or a direction in the nature of Writ of Mandamus to enter the application under section 119 (2) (b) of the Act and condone the delay of two days in making the investment in a specified bond under the provisions of Section 54 EC of the Act.
(d) Issue a Writ of Mandamus or a direction in the nature of Writ of Mandamus for Central Board of Direct Taxes- First Respondent for giving instructions to the Assessing Authority- Second Respondent to rectify the assessment made by applying the provisions of Section 154 of the Act and to issue appropriate refund of demand in pursuance of the assessment order dtd: 24.08.2005 (Annexure-‘A’) paid along with interest eligible under Section 244 A of the Act;
(e) Pass such other order, direction or writ as this Hon’ble Court deems fit, and (f) Direct the Respondents to award the costs of this Writ Petition.
2. Petitioner who is an income tax assessee had filed assessment returns for the year 2002-03. He has sold the property on 03.08.2002 which has attracted capital gain. For the purpose of exemption of tax on the capital gain, petitioner should have reinvested the money on or before 03.02.2003 in terms of provisions of the Income Tax Act. Petitioner had reinvested on 05.02.2003. Thus, there is delay of 2 days. In this backdrop, on 24.08.2003 assessment order was passed while determining income from capital gains as computed by the assessee i.e., Rs.24,99,119/- or Rs.24,99,120/-. Tax would be Rs.4,99,824/-, further surcharge at 5% and interest as per Section 234(A) & (B) amounting to Rs.6,98,003/-.
3. Dissatisfied with the assessment tax on capital gains, petitioner chose to file a revision under Section 264 of the Income Tax Act, 1961 before the Commissioner of Income Tax, Bengaluru. On 21.07.2006, the Commissioner of Income Tax, Bengaluru dismissed the petitioner’s petition on the ground that Assessment order cannot be revised as there is no provision in the Income Tax Act to condone the delay in making any investment in specified bonds as per the provisions of Section 54(EC).
4. When things stood thus, petitioner accepted the decision of the Commissioner dated 21.07.2006. After more than 5 years from the date of Commissioner’s order dated 21.07.2006, petitioner submitted an application to the CBDT on 24.05.2011 while invoking Sub-clause (b) of Sub-section (2) of Section 119 of Income Tax Act seeking for condonation of delay and for appropriate direction to the authorities who are under CBDT. During pendency of the petitioner’s application before CBDT, authority by its order dated 24.05.2011 invoking Section 119 of the Income Tax Act issued a circular dated 09.06.2015 (Ann.’D’). Pursuant to the factual aspect of the matter read with the circular, CBDT proceeded to reject the petitioner’s application dated 24.05.2011 on the score that para.3 of the circular dated 09.06.2015 which mandates concerned authority could examine delay application for claim of refund/loss and shall not be entertained beyond 6 years from the date of assessment year for which such application/claim is made. Further, it is highlighted that petitioner had the cause of action on or before 31.03.2010 for assessment year 2003-04 (within 6 years). Thus, it has proceeded to dismiss the petitioner’s application on the ground of delay. Further, an observation has been made for waiver of interest levied under Sections 234B and 234C of the Act, petitioner was permitted to file an application before the jurisdictional CCIT/Pr.CIT.
5. Feeling aggrieved and dissatisfied of the decision of the CBDT dated 13.12.2017, petitioner has presented this petition.
6. Learned counsel for the petitioner vehemently contended that there is delay of 2 days in reinvestment. It is an interpretation of counting number of days of 6 months from 03.08.2002 to 02.03.2003. If the interpretation of delay is taken into consideration as on 05.02.2003, there would not be any delay in respect of investment. Further, contended that Section 119(2)(b) for entertaining any application by CBDT, question of delay would not arise. CBDT has rejected petitioner’s application on the score that there is delay with reference to circular dated 09.06.2015. Petitioner’s claim - application is dated 24.05.2011. Therefore, whatever existed as on 24.05.2011 is required to be taken into consideration. Therefore, circular dated 09.06.2015 which has been referred by the CBDT has no application.
7. In support of the petitioner’s claim, learned counsel relied on 3 decisions:
(1) C.A.6850/2018 disposed of on 20.07.2018 – PRINCIPAL COMMISSIONER OF INCOME TAX 5 & ORS vs M/S LG ELECTRONICS INDIA PVT.
LTD. on the issue of circular. That the administrative circular will not operate as a fetter on the Commissioner since it is a quasi judicial authority.
(2) DR. (SMT.) SUJATHA RAMESH vs CENTRAL BOARD OF DIRECT TAXES AND ANOTHER in W.P.No.54672/15 (IT) dated 24.10.2017 wherein, delay has been condoned.
(3) Similarly, in the case of DR.SUDHA KRISHNASWAMY vs CHIEF COMMISIONER OF INCOME TAX reported in (2018) 101 CCH 0269 Kar.HC (Para.7).
8. In view of the judicial pronouncements, petitioner is entitled to relief of condoning the delay of 2 days for the purpose of exemption of payment of capital gains.
9. Per contra, learned counsel for the respondent vehemently contended that circular dated 09.06.2015 has been taken into consideration by the CBDT while rejecting the petitioner’s application on 13.12.2017 (Ann.F). No-doubt circular relates to 09.06.2015 whereas in para.8 of the circular, it is made clear that applications/claims for condonation of delay under Section 119(2)(b) which are pending as on the date of issue of the circular would cover. Petitioner’s application dated 24.05.2011 was pending consideration as on 13.12.2017. Thus, circular is applicable to the petitioner. Petitioner has not questioned the validity of Para.8 of the circular. It was also contended that petitioner’s application can be entertained only in terms of para.3 of the circular. Therefore, petitioner cannot approbate and reprobate in contending that circular has no application.
10. It was further contended that the cited decision has no application to the petitioner’s case. In the case of Dr.Sujatha supra is concerned, assessment is of the year 2013-14 and as on 31.03.2013, petitioner therein approached the CBDT on 26.11.2014. Thus, there was no delay in approaching CBDT by the petitioner therein. In the case of Dr.Sudha K M supra, matter relates to refund of TDS amount. Thus, the cited decisions has no application to the petitioner’s case.
11. Heard the learned counsel for the parties.
12. Crux of the matter in the present petition is, “Whether communication dated 13.12.2017 (Annexure ‘F’) is in terms of Section 119(2)(b) read with Circular dated 09.06.2015 or not?”
13. The petitioner’s application before CBDT could be entertained only in terms of Circular dated 09.06.2015. Paras 3 and 8 reads as under:
“3. No condonation application for claim of refund/loss shall be entertained beyond six years from the end of the assessment year for which such application/claim is made. This limit of six years shall be applicable to all authorities having powers to condone the delay as per the above prescribed monetary limits, including the Board. A condonation application should be disposed of within six months from the end of the month in which the application is received by the competent authority, as far as possible.
8. This circular will cover all such applications/claims for condonation of delay under section 119(2xb) which are pending as on the date of issue of the Circular”.
14. Undisputedly, petitioner has not questioned the validity of para.8 of the Circular which relates to pending application as on 09.06.2015. Petitioner had submitted application on 24.05.2011 before the CBDT and it was pending consideration as on 09.06.2015, the date on which the circular was issued. As long as petitioner has not questioned the validity of para.8 of the circular, petitioner is not entitled for relief sought in the present petition. That apart, conduct of the petitioner is required to be taken into consideration for the purpose of deciding whether petitioner is entitled for the relief in the present petition or not?”
15. On 24.08.2005, assessment order was passed. Feeling aggrieved and dis-satisfied in respect of portion of the order, petitioner had filed an application under Section 264 and it was rejected on 21.07.2006. Thus, petitioner had a cause of action with reference to Assessment year 2003-04 on or before 31.03.2010 which is the outer limit in terms of the circular dated 09.06.2015. Petitioner has slept over the matter from 21.07.2006 to 24.05.2011 for which petitioner has not appraised this Court by adducing any documentary evidence so as to examine whether delay could be condoned or not. Even for condoning the delay, para.8 of the circular would be a hurdle which is not questioned by the petitioner. The cited decisions has no assistance to the petitioner having regard to the factual aspect of the present matter. Petitioner has not explained the inordinate delay and laches from 21.07.2006 to 24.05.2011. The cited decision in the case of Dr.Sujatha supra was within the time limit in terms of circular dated 09.06.2015. As regards Dr.Sudha’s case is concerned, matter relates to refund of TDS. In view of these facts and circumstances and preceding analysis, writ petition stands dismissed.
Sd/-
JUDGE Brn