Srirama Pankajam Vs Union of India (Andhra Pradesh High Court)
The Andhra Pradesh High Court considered a writ petition filed by a taxpayer who had inherited a 1/3rd share in an undivided property along with a building in Visakhapatnam after the death of her husband. The petitioner, along with her son and daughter, entered into a Development Agreement-cum-General Power of Attorney dated 24.02.2011 with a developer for construction of flats. Treating the transaction as giving rise to capital gains in the financial year 2012-2013 corresponding to Assessment Year (AY) 2013-2014, the petitioner offered the capital gains to tax and paid ₹11,08,486 towards capital gains tax for AY 2013-2014.
Subsequently, the Income Tax Department initiated assessment proceedings for the financial year 2010-2011 corresponding to AY 2011-2012, contending that the capital gains had arisen in that year. The assessment proceedings culminated in an assessment order dated 13.12.2018. The petitioner challenged the assessment by filing an appeal before the Commissioner of Income Tax (Appeals)-1, Visakhapatnam.
While the appeal was pending, the petitioner opted for the Vivad Se Vishwas Scheme and, on 22.02.2021, paid ₹9,55,706 towards full and final settlement of the dues arising from the assessment proceedings.
After making the payment under the scheme, the petitioner applied to the Chief Commissioner of Income Tax under Section 119(2)(b) of the Income Tax Act, 1961, seeking refund of the ₹11,08,486 paid for AY 2013-2014. The petitioner relied upon Section 119(2)(b), which empowers the Board to authorise admission of applications or claims for exemption, deduction, refund or other relief after expiry of the prescribed period where genuine hardship exists.
