ANKITA SINGH,NALSAROVAR, ADODARA, AHMEDABAD V. INCOME TAX OFFICER, WARD 42(2)(1), BANDRA EAST, MUMBAI, MAHARASHTRA

ITA 5146/MUM/2024

AI Insights

The case involves Ankita Singh, the appellant, who contested the disallowance of a deduction claimed under Section 54F of the Income Tax Act, 1961, amounting to Rs. 55,15,951. The Income Tax Officer (ITO) initially disallowed the deduction during the best judgment assessment under Section 144 of the Act, due to the absence of supporting documents. The Commissioner of Income-tax (Appeals) upheld this decision. The appellant argued that she was not given reasonable opportunities to present her case or supporting documents during the assessment proceedings. The Tribunal, acknowledging the procedural oversight, decided to remand the case for a fresh assessment, allowing the appellant to substantiate her claim.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 31953 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAM KRISHN KEDIA
• Assessee Lawyers: PALAK PAVAGADHI VIRTUALLY
• Section: 144; 271(1)(c); 54F

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “A” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND MS. KAVITHA RAJAGOPAL (JUDICIAL MEMBER) ITA No. 5146/MUM/2024 Assessment Year: 2013-14 Ankita Singh, 9, Bellevue Vierra, Adroda Gaon, Bavla, Nalsarovar Road, Adroda B.O., Adroda, Ahmedabad-382220. Vs. ITO, Ward 42(2)(1), Kautilya Bhawan, Avenue 3, Near Videsh Bhavan, G Block, BKC Bandra Kurla Complex, Bandra East, Mumbai-450001. PAN NO. BIAPS 8725 F Appellant Respondent Assessee by : Mr. Palak Pavagadhi (Virtually appear) Revenue by : Mr. Ram Krishn Kedia, Sr. DR Date of Hearing : 04/03/2025 Date of pronouncement : 04/03/2025 ORDER PER OM PRAKASH KANT, AM This appeal by the assessee is directed against order dated 04.09.2023 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2013-14, raising following grounds: 1. Disallowance of deduction of Rs.55,15,951/ 54F of the Income Tax Act, 1961: On facts and in the circumstances of the case and in law, Ld. CIT(A) by confirming the order passed by the Ld. AO has grossly erred in disallowing the deduction cl 55,15,951/-. 2. The Ld. AO passed order without giving reasonable opportunities: On facts and in the circumstances of the case and in law, the Ld. AO has grossly erred in passed Order without giving reasonable of opportunities and pa show cause notice to the appellant. 3. Initiating penalty proceeding u/s 271(1)(c) of the Act: On facts and in the circumstances of the case and in law, the Ld. AO has grossly erred in initiating the proceedings f penalty u/s. 271(1)(c) of the Act when no such penalty is leviable. The proceedings initiated by the Ld. AO should be dropped as it is wrongly initiated. 2. Briefly stated, facts of the case are that the assessee filed return of income on 06.08. Rs.7,93,460/-. The return of income filed by the assessee was selected for scrutiny assessment and statutory notices under the Income-tax Act, 1961 (in short ‘the Act’) were issued and duly served upon the assessee. Subsequen partly responded. In the return of income, the assessee claimed deduction u/s 54F of the Act amounting to Rs.55,15,951/ supporting documents were filed before the AO proceedings. Therefore the Act i.e. best judgment dated 29.03.2016, the Assessing Officer disallowed the claim of deduction u/s 54F of the Act. On further ITA No. 1. Disallowance of deduction of Rs.55,15,951/- claimed u/s 54F of the Income Tax Act, 1961: On facts and in the circumstances of the case and in law, Ld. CIT(A) by confirming the order passed by the Ld. AO has grossly erred in disallowing the deduction claimed u/s 54F of Rs. 2. The Ld. AO passed order without giving reasonable opportunities: On facts and in the circumstances of the case and in law, the Ld. AO has grossly erred in passed Order without giving reasonable of opportunities and passed the Assessment order without giving show cause notice to the appellant. 3. Initiating penalty proceeding u/s 271(1)(c) of the Act: On facts and in the circumstances of the case and in law, the Ld. AO has grossly erred in initiating the proceedings f penalty u/s. 271(1)(c) of the Act when no such penalty is leviable. The proceedings initiated by the Ld. AO should be dropped as it is wrongly initiated. Briefly stated, facts of the case are that the assessee filed return of income on 06.08.2013 declaring total income at . The return of income filed by the assessee was selected for scrutiny assessment and statutory notices under the tax Act, 1961 (in short ‘the Act’) were issued and duly served upon the assessee. Subsequent notices issued . In the return of income, the assessee claimed u/s 54F of the Act amounting to Rs.55,15,951/ supporting documents were filed before the AO during assessment Therefore, in the assessment order passed u/s 144 of the Act i.e. best judgment dated 29.03.2016, the Assessing Officer disallowed the claim of deduction u/s 54F of the Act. On further Ankita Singh 2 ITA No. 5146/MUM/2024 claimed u/s On facts and in the circumstances of the case and in law, Ld. CIT(A) by confirming the order passed by the Ld. AO has grossly aimed u/s 54F of Rs. 2. The Ld. AO passed order without giving reasonable On facts and in the circumstances of the case and in law, the Ld. AO has grossly erred in passed Order without giving reasonable of ssed the Assessment order without giving 3. Initiating penalty proceeding u/s 271(1)(c) of the Act: On facts and in the circumstances of the case and in law, the Ld. AO has grossly erred in initiating the proceedings for levy of penalty u/s. 271(1)(c) of the Act when no such penalty is leviable. The proceedings initiated by the Ld. AO should be dropped as it is Briefly stated, facts of the case are that the assessee filed 2013 declaring total income at . The return of income filed by the assessee was selected for scrutiny assessment and statutory notices under the tax Act, 1961 (in short ‘the Act’) were issued and duly t notices issued were only . In the return of income, the assessee claimed u/s 54F of the Act amounting to Rs.55,15,951/- ,but no during assessment sment order passed u/s 144 of the Act i.e. best judgment dated 29.03.2016, the Assessing Officer disallowed the claim of deduction u/s 54F of the Act. On further appeal, the Ld. CIT(A) also upheld the disallowance observing as under: “5.2. Ground 2 Vide this ground, the Appellant has challenged the action of the AO in denying exemption of Rs.55,15,951/ u/s 54F of the Act. In this regard, the Appellant has submitted that relevant details in support of exemption claimed u/s 54F wa not submitted before the AO since the Appellant was not in receipt of any notice u/s 143(2)/142(1) and thus, was not aware of ongoing assessment proceedings. The Appellant further promised to submit relevant details in support of claim of exemption u/s 5 within two weeks from the date of submission of reply before CIT(A). I have considered the submissions of the Appellant. The undisputed fact is that the AO denied the claim of exemption of the Appellant made u/s 54F since the Appellant had not furnishe any supporting documents. In this regard, it is further observed that the Appellant has failed to furnish such details in the course of present proceedings as well, although, the same was promised to be furnished. Therefore, in view of the same, it is co the Appellant has not been able to substantiate its claim of exemption of Rs.55,15,951/ the action of AO in denying the exemption of Rs.55,15,951/ claimed u/s 54F of the Act. Ground is, thus, dismissed. 3. We have considered the rival submissions of both parties and perused the relevant materials on record, including the paper book submitted by the learned counsel for the assessee. The learned counsel referred to the application for condonation of a 334 delay in filing the appeal. In support of this application, the assessee filed an affidavit stating that he was continuously traveling outside Mumbai for business purposes and had relied entirely on his authorized representative, which resulted in the considering the assessee’s submission, we find that there is ITA No. appeal, the Ld. CIT(A) also upheld the disallowance observing as 5.2. Ground 2 Vide this ground, the Appellant has challenged the action of the AO in denying exemption of Rs.55,15,951/ u/s 54F of the Act. In this regard, the Appellant has submitted that relevant details in support of exemption claimed u/s 54F wa not submitted before the AO since the Appellant was not in receipt of any notice u/s 143(2)/142(1) and thus, was not aware of ongoing assessment proceedings. The Appellant further promised to submit relevant details in support of claim of exemption u/s 5 within two weeks from the date of submission of reply before I have considered the submissions of the Appellant. The undisputed fact is that the AO denied the claim of exemption of the Appellant made u/s 54F since the Appellant had not furnishe any supporting documents. In this regard, it is further observed that the Appellant has failed to furnish such details in the course of present proceedings as well, although, the same was promised to be furnished. Therefore, in view of the same, it is co the Appellant has not been able to substantiate its claim of exemption of Rs.55,15,951/- made u/s 54F. Accordingly, I confirm the action of AO in denying the exemption of Rs.55,15,951/ claimed u/s 54F of the Act. Ground is, thus, dismissed. We have considered the rival submissions of both parties and the relevant materials on record, including the paper book submitted by the learned counsel for the assessee. The learned counsel referred to the application for condonation of a 334 delay in filing the appeal. In support of this application, the assessee filed an affidavit stating that he was continuously traveling outside Mumbai for business purposes and had relied entirely on his authorized representative, which resulted in the considering the assessee’s submission, we find that there is Ankita Singh 3 ITA No. 5146/MUM/2024 appeal, the Ld. CIT(A) also upheld the disallowance observing as 5.2. Ground 2 Vide this ground, the Appellant has challenged the action of the AO in denying exemption of Rs.55,15,951/-claimed u/s 54F of the Act. In this regard, the Appellant has submitted that relevant details in support of exemption claimed u/s 54F was not submitted before the AO since the Appellant was not in receipt of any notice u/s 143(2)/142(1) and thus, was not aware of ongoing assessment proceedings. The Appellant further promised to submit relevant details in support of claim of exemption u/s 54F within two weeks from the date of submission of reply before I have considered the submissions of the Appellant. The undisputed fact is that the AO denied the claim of exemption of the Appellant made u/s 54F since the Appellant had not furnished any supporting documents. In this regard, it is further observed that the Appellant has failed to furnish such details in the course of present proceedings as well, although, the same was promised to be furnished. Therefore, in view of the same, it is concluded that the Appellant has not been able to substantiate its claim of made u/s 54F. Accordingly, I confirm the action of AO in denying the exemption of Rs.55,15,951/- claimed u/s 54F of the Act. Ground is, thus, dismissed.” We have considered the rival submissions of both parties and the relevant materials on record, including the paper book submitted by the learned counsel for the assessee. The learned counsel referred to the application for condonation of a 334-days delay in filing the appeal. In support of this application, the assessee filed an affidavit stating that he was continuously traveling outside Mumbai for business purposes and had relied entirely on his authorized representative, which resulted in the delay. Upon considering the assessee’s submission, we find that there is sufficient cause for the delay in filing the appeal. Accordingly, the delay is condoned, and the appeal is admitted for adjudication. 3.1 Having considered the submissions advanced by counsel for the assessee we find that the assessee was not afforded adequate opportunity before the Learned CIT(A) support of the deduction claimed under Section 54 Tax Act. The learned counsel has drawn our attention to the Paper Book, specifically page 72, which contains a copy of the allotment letter evidencing investment in the flat. Additionally, reference has been made to pages 69 to 70, which in substantiating the investment made towards the purchase of the property. The learned counsel has further submitted that the assessee is willing to appear before the CIT(A) and submit all relevant documents in support of the deduct Section 54F. In view of the facts and circumstances of the case, and in the interest of substantial justice, we deem it appropriate to set aside the order passed by the CIT(A) on the issue under dispute. Accordingly, the matter is remande Officer for fresh adjudication after affording the assessee due opportunity to present the requisite evidence. Consequently, Ground No. 2 of the appeal preferred by the assessee stands allowed. ITA No. sufficient cause for the delay in filing the appeal. Accordingly, the delay is condoned, and the appeal is admitted for adjudication. Having considered the submissions advanced by counsel for the assessee and the ld Departmental representative that the assessee was not afforded adequate opportunity CIT(A) to furnish the necessary documents in support of the deduction claimed under Section 54F of the Income Tax Act. The learned counsel has drawn our attention to the Paper Book, specifically page 72, which contains a copy of the allotment letter evidencing investment in the flat. Additionally, reference has been made to pages 69 to 70, which include the bank statements substantiating the investment made towards the purchase of the property. The learned counsel has further submitted that the assessee is willing to appear before the CIT(A) and submit all relevant documents in support of the deduction claimed under Section 54F. In view of the facts and circumstances of the case, and in the interest of substantial justice, we deem it appropriate to set aside the order passed by the CIT(A) on the issue under dispute. Accordingly, the matter is remanded to the file of the Assessing Officer for fresh adjudication after affording the assessee due opportunity to present the requisite evidence. Consequently, Ground No. 2 of the appeal preferred by the assessee stands Ankita Singh 4 ITA No. 5146/MUM/2024 sufficient cause for the delay in filing the appeal. Accordingly, the delay is condoned, and the appeal is admitted for adjudication. Having considered the submissions advanced by the learned and the ld Departmental representative , that the assessee was not afforded adequate opportunity to furnish the necessary documents in F of the Income Tax Act. The learned counsel has drawn our attention to the Paper Book, specifically page 72, which contains a copy of the allotment letter evidencing investment in the flat. Additionally, reference has clude the bank statements substantiating the investment made towards the purchase of the property. The learned counsel has further submitted that the assessee is willing to appear before the CIT(A) and submit all ion claimed under Section 54F. In view of the facts and circumstances of the case, and in the interest of substantial justice, we deem it appropriate to set aside the order passed by the CIT(A) on the issue under dispute. d to the file of the Assessing Officer for fresh adjudication after affording the assessee due opportunity to present the requisite evidence. Consequently, Ground No. 2 of the appeal preferred by the assessee stands 3.2 Since we have already res the AO, the ground No. 1 required to be adjudicated upon at this stage. The ground No. 3 challenging the initiation of the penalty proceedings is premature at this stage, hence Accordingly the Ground Nos. 1 and 3 are dismissed as infructuous. 4. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on Sd/- (KAVITHA RAJAGOPAL JUDICIAL MEMBER Mumbai; Dated: 04/03/2025 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// ITA No. Since we have already restored the matter back to the file of the AO, the ground No. 1 challenging merit of addition required to be adjudicated upon at this stage. The ground No. 3 challenging the initiation of the penalty proceedings is premature at we are not required to adjudicate upon. Accordingly the Ground Nos. 1 and 3 are dismissed as infructuous. In the result, the appeal of the assessee is allowed for nced in the open Court on 04/03 Sd/ RAJAGOPAL) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Ankita Singh 5 ITA No. 5146/MUM/2024 tored the matter back to the file of challenging merit of addition is not required to be adjudicated upon at this stage. The ground No. 3 challenging the initiation of the penalty proceedings is premature at e not required to adjudicate upon. Accordingly the Ground Nos. 1 and 3 are dismissed as infructuous. In the result, the appeal of the assessee is allowed for /03/2025. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai "