Citadel Research & Solutions Ltd.,, ... vs Assessee

This miscellaneous application is preferred by the assessee requesting to recall/rectification of the order in ITA No.2068/ Hyd/2011 dated 14th March, 2013.

2. The petitioner has stated as follows:

"The Applicant had filed an appeal against order dated 17.10.2011 passed by the learned Commissioner of Income Tax (Appeals)-II, Hyderabad. The above appeal came to be disposed off vide consolidated order dated 13.03.2013 in I.T.A.No.2068/Hyd/2011. The issue involved in the appeal was. denial of exemption under the provisions of Sec.54EC of the Income Tax Act, 1,961 on the ground that investment in specified bonds was not made within a period of six (6) months from the date of sale of shares in the proceedings u/s. 143(3) r.w.s. 263 of the Income Tax Act, 1961. The Hon'ble Tribunal was pleased to dismiss the above appeal as

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infructuous vide para 21 of the order, which is extracted below:

"21. We have decided the appeal being ITA No.1171/Hyd/2008 (supra) wherein we have confirmed the direction of CIT for setting aside the file to the AO for reconsideration de novo and to determine the correct cost of acquisition, in view of our finding therein (supra), this appeal has become infructuous and accordingly dismissed as infructuous".

02. The Applicant respectfully submits that the above findings of the Hon'ble Tribunal go against the very well settled principle of law that dismissal of appeal against order u/s. 263 of the Income Tax Act, 1961 cannot be a bar to entertain an appeal against the order passed consequential to 263 order, when the Commissioner in exercise of revisional power had restored the matter to the Assessing Officer for de novo examination of the issue on merits. The order of the Commissioner u/s, 263 of the Income-tax Act, 1961 was not final on the issues, in as much as, the Commissioner himself had remanded the matter to the file of the Assessing Officer to decide the issue whether the resultant capital gains arising out of sale of shares of G.E. Medical Systems Ltd., to M/s. WIPRO Ltd., were long-term or short-term capital gains on merits afresh. The Hon'ble Tribunal in I.T.A.No.1171/Hyd/2008 had only upheld restoring of the matter to the file of the Assessing Officer by the Commissioner. Therefore, the dismissal of the appeal against the order under Sec. 263 i.e. LT.A.No.1171/Hyd/2008 can never be a ground at all for dismissal of the appeal against the consequential order. This is clearly against the plain provisions of the Income Tax Act, 1961 as well as the well settled principle of law. Further, the department had neither filed cross appeal nor cross objections, challenging the maintainability of the appeal. Therefore, it is capable of being rectified u/s. 254(2) of the Income Tax Act, 1961.

03. The Applicant further respectfully submits that the issue involved in the proceedings u/s. 263 of the Income Tax Act, 1961 was whether the resultant Capital gains arising out of sale of shares of G.E. Medical Systems Ltd to M/s. WIPRO Ltd were long term

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or short term capital gains. The issue whether the investment in specified bonds u/s. 54EC of the Income Tax Act, 1961 was made within six (6) months from the date of sale or not, was not the subject-matter of the proceedings under Section 263 of the Income Tax Act, 1961. Therefore, the learned Assessing Officer, while passing the consequential order under Sec. 143(3) r.w.s. Sec. 263 of the Income Tax Act, 1961, had travelled beyond the scope and ambit of the order under Sec. 263 of the Income Tax Act, 1961. This issue goes to the very root of jurisdiction of the matter. In other words, the Assessing Officer had no jurisdiction to delve on this issue and, therefore, the whole proceedings are null and void. It is trite law that if there is want of jurisdiction the whole proceeding is coram non judice. Please refer to the Supreme Court judgment in the case of Dasa Muni Reddy v. Appa Rao, AIR 1974 SC 2089.

04. The Applicant further avers that no appeal under the provisions of Sec. 260A of the Income Tax Act, 1961 to the Hon'ble High Court was filed against the order of the Tribunal dismissing the appeal In the light of what has been submitted above, this Hon'ble Tribunal may be pleased to pass such other order or orders for recall or rectification of the order in I.T.A.No.2068/HYD/2011, as deemed fit and proper, in the interests of all canons of fair play, equity and justice".

3. We have perused the miscellaneous petition and heard the arguments of both the parties. We find that the CIT's order u/s 263 holding that it is a case of short term capital gain has been upheld by the Tribunal and the Tribunal has further held that the issue relating to assessee's claim for exemption u/s 54EC has become infructuous. By this M.A, the ld AR wants the Tribunal to review its earlier order. We are of the opinion that the Tribunal has rightly held at Para 21 of the order as follows:

"21. We have decided the appeal being ITA No.1171/Hyd/2008 (supra) wherein we have confirmed the direction of CIT for setting aside the file to the AO for reconsideration de novo and to determine the correct cost of acquisition, in view of our finding therein (supra), this

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appeal has become infructuous and accordingly dismissed as infructuous".

Hence no mistake appears to be in the order of the Tribunal and the M.A. filed by the assessee is dismissed.

4. In the result miscellaneous application filed by the assessee is dismissed.

Order pronounced in the Open Court on 17th April, 2015.

Sd/- Sd/- (P.M. Jagtap) (Asha Vijayaraghavan) Accountant Member Judicial Member

Hyderabad, dated 17th April, 2015.

Vnodan/sps Copy to:

1. Citadel Research & Solutions Ltd, 35 Sai Enclave, Avenue 1, Road No.12, Banjara Hills, Hyderabad 500034

2. ACIT, Circle 1(2) Hyderabad

3. The CIT-I Hyderabad

4. Add. CIT - I Hyderabad

5. The DR, ITAT, Hyderabad

6. Guard File

By Order

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