Section 148 & 149 of the Income tax Act, 1961 — Reassessment — Amendment to Section 149(3), which came into force with effect from 01.04.2012, was not applicable retrospectively and that the amendment made subsequent to the expiry of time limit cannot be made applicable to the assessment, which was already closed.[2020] 53 ITCD 38 (AP)
Facts: The assessee, a non-resident, sold immovable property along with another for certain consideration under a registered sale deed, dated 11.02.2008. During the scrutiny proceedings for the assessment year 2008-09, it was found that the proportionate fair market value (as per SR’s Office) of the subject property was Rs. 58,03,000/- and that the assessee did not file his return of income disclosing capital gains arising from the sale of the subject property. It was further noticed that during the remittance of sale consideration to the assessee, deduction under Section 195 was not made by the purchaser of the property. An order under Section 163(1) dated 20.03.2015, was passed treating the purchaser of the property as the representative assessee of the non-resident assesse.
Pursuant to the order under Section 163(1) , a notice, dated 25.03.2015, under Section 148 was issued to the representative assesse. The assessment was completed under Section 144 read with Section 147 and the tax payable was determined at Rs. 10,50,367/-. The representative of the assesse preferred an appeal before the Commissioner of Income Tax (Appeals). The said appeal was dismissed. Aggrieved thereof, the representative of the assesse preferred an appeal before the Income Tax Appellate Tribunal. Vide common order, the Income Tax Appellate Tribunal, allowed the appeal and set aside notice under Section 148 and consequently, held that the assessment proceedings are void ab initio. Aggrieved thereof, the present appeal is preferred.
Held, that it is not in dispute that as per Circular No.3 of 2018, dated 11.07.2018, of the Central Board of Direct Taxes, an appeal shall not be filed in cases, where the tax effect does not exceed the monetary limit of Rs. 50,00,000/- in the event, the appeal is to be instituted before a High Court. In that view of the matter, this appeal is liable for dismissal. Be that as it may, Clause 10 of the said Circular carves out exceptions and states that certain appeals can be contested on merits notwithstanding that the tax effect entailed is either less than the monetary limit specified in the Circular or there is no tax effect. In this appeal, though the constitutional validity of the provision viz., Section 149(3) is not under challenge, the contention of the assessee is that the instant appeal is entertainable, as the effect of the amendment of limitation period prescribed under Section 149(3) is involved and as the assessee is of the opinion that this appeal be considered to be falling within the exceptions carved out under clause 10 of the above circular. Therefore, we have examined the said aspect of the matter. As already noted, the Income Tax Appellate Tribunal, while allowing the appeal of the representative of the assesse, recorded a finding that the amendment to Section 149(3), which came into force with effect from 01.04.2012, was not applicable retrospectively and that the amendment made subsequent to the expiry of time limit cannot be made applicable to the assessment, which was already closed. The Tribunal also enunciated the legal position obtaining in support of its findings by making a reference to a decided case wherein the case facts are identical to the instant case and also to the precedential guidance in the decision of the Supreme Court and further held that the assessment related to 2008-09 and that the time limit for issuance of notice under Section 148 which is two years, had expired in the year 2010-11, before the amendment came into force. Having thus given earnest consideration, we hold that, in the facts and circumstances of the case, the contention that the appeal can be instituted on the above ground urged by the appellant is untenable, and that there is no substantial question of law involved and that therefore, the present appeal, in view of the contents of the afore-stated Circular and the well reasoned sustainable findings of the Income Tax Appellate Tribunal, is liable for dismissal at the stage of admission. In the result, the appeal is dismissed. No order as to costs.