CHUDAJI THAKOR,GANDHINAGAR, GUJARAT V. INCOME TAX OFFICER, WARD 1, GANDHINAGAR, GANDHINAGAR, GUJARAT

ITA 301/AHD/2025

AI Insights

This case involves an appeal by Chudaji Thakor against the order of the National Faceless Appeal Centre (CIT(A)), which had dismissed his earlier appeal due to a delay of 177 days in filing, without examining the merits of the case. The original assessment by the Income Tax Officer (ITO) treated the entire sale consideration of Rs. 75,00,000 from an immovable property as Long Term Capital Gain and added Rs. 49,00,000 concerning cash deposits under Section 69A of the Income Tax Act, 1961. The Tribunal found the dismissal of the appeal by CIT(A) without a hearing to be against the principles of natural justice and set aside the matter for a detailed examination by the Assessing Officer.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 361343 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMIT PRATAP SINGH
• Assessee Lawyers: DIVYA S. AGARWAL
• Keywords: Set aside; Capital asset; Opportunity of being heard; Additional evidence; Cost of acquisition; Principle of natural justice
• Section: 147; 144; 2(14)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “B” BENCH, AHMEDABAD BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER ITA No.301/Ahd/2025 Assessment Year: 2018-19 Chudaji Thakor, Vansajada, Dhedia, Gandhinagar – 382 721, (Gujarat). [PAN – AOVPT 3573 N] Vs. Income Tax Officer, Ward-1, Gandhinagar, Income Tax Office, Udyog Bhawan, Sector-11, Gandhinagar – 382 010 (Gujarat) (Appellant) (Respondent) Assessee by Shri Divya S. Agarwal, AR Revenue by Shri Amit Pratap Singh, Sr. DR Date of Hearing 14.05.2025 Date of Pronouncement 22.05.2025 O R D E R PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER: This appeal is filed by the Assessee against the order of National Faceless Appeal Centre, Delhi (in short ‘the CIT(A)’) dated 26.09.2024 for the Assessment Year (A.Y.) 2018-19. 2. There was a delay of 70 days in filing of this appeal. The assessee has filed an affidavit explaining the reason for the delay. It has been explained that the assessee is residing in a remote village and he does not have internet facility to access e-mail account or Income-tax portal. According to the assessee, the Ld. CIT(A) had passed the order without issuing any notice to the assessee and without allowing any opportunity of being heard. It was only when the A.R. of the assessee brought to his ITA No.301/Ahd/2025 Assessment Year: 2018-19 Chudaji Thakor vs. ITO Page 2 of 6 notice about the order of the Ld. CIT(A) that the present appeal was filed. Considering the explanation of the assessee, the delay in filing the appeal is condoned. 3. The brief facts of the case are that the assessee did not file his return of income for the A.Y. 2018-19. The Assessing Officer had received an information that the assessee had sold an immovable property during the year for a consideration of Rs.75,00,000/- and also made cash deposit of Rs.49,00,000/- in his bank account with Bank of India. Therefore, the Assessing Officer had reopened the case under Section 147 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) after recording proper reasons. In the course of assessment, no compliance was made by the assessee. Therefore, the Assessing Officer treated the entire sale consideration of Rs.75,00,000/- as Long Term Capital Gain and also made addition of Rs.49,00,000/- in respect of his fixed deposit under Section 69A of the Act. The assessment was completed ex-parte under Section 147 read with Section 144 of the Act on 13.03.2023 at a total income of Rs.1,24,00,000/-. 4. Aggrieved with the order of the Assessing Officer, the assessee had filed an appeal before the First Appellate Authority which was dismissed by the Ld. CIT(A) vide the impugned order for the reason that there was a delay of 177 days in filing the appeal, which was not explained. Now, the assessee is in second appeal before us. The following grounds have been taken by the assessee in this appeal: 1. Hon. CIT(A), NFAC has passed Ex-Parte Order u/s. 250 of I.T. Act without issuing any Notice/letter of hearing u/s. 250(1) of the Act. 2 Hon. CIT(A), NFAC has erred in non-granting the opportunity of hearing to the assessee, which is against natural justice. ITA No.301/Ahd/2025 Assessment Year: 2018-19 Chudaji Thakor vs. ITO Page 3 of 6 3 Hon. CIT(A), NFAC has erred in not deciding the appeal on merits of the case and dismissed the same without giving opportunity to explain delay in filling the appeal and other evidences in support of grounds of appeal. 4 Hon. CIT(A), NFAC has erred in confirming the addition of sale consideration as LTCG of Rs.75,00,000 made by A.O. In A.Y. 2018-19. In as much as, the sale deed is signed and possession on land is given and sale deed is registered in A.Y. 2019-20 and not in A.Y. 2018-19. 5. Hon. CIT(A), NFAC has erred in confirming the addition of sale consideration as LTCG of Rs.75,00,000 made by A.O. In A.Y.-2018-19. In as much as, the land sold is Rural Agricultural Land and it is not capital asset u/s. 2(14) (iii) of the Act. 6. Hon. CIT(A), NFAC has erred in confirming the addition made by A.O. of Rs.49,00,000 cash deposited on 24/10/2017 in bank account with Bank of India. In as much as, on the same day cash of Rs.49,00,000 was withdrawn from bank a/c. of cousin of assessee i.e. Shanaji Somaji Thakor and deposited cash in bank account of assessee. 5. Shri Divya S. Agarwal, Ld. AR of the assessee submitted that the Ld. CIT(A) was not correct in dismissing the appeal on the ground of delay without examining the merit of the additions. He explained that in Form No.35, the assessee had mentioned that the reason for delay will be explained at the time of hearing of the appeal. However, the Ld. CIT(A) did not allow any opportunity to the assessee to explain the delay in filing the appeal and dismissed the appeal of the assessee on the ground of delay. The Ld. AR contended that the action of the Ld. CIT(A) in dismissing of the appeal was against the principles of natural justice. The Ld. AR also sought permission to file additional evidences in respect of additions as made by the Assessing Officer. He further requested that the matter may be set aside to the Assessing Officer with a direction to allow another opportunity to the assessee to explain the source of cash deposits as well as the transaction in the immovable property. ITA No.301/Ahd/2025 Assessment Year: 2018-19 Chudaji Thakor vs. ITO Page 4 of 6 6. Per contra, Shri Amit Pratap Singh, Ld. Sr DR had no objection if the matter was set aside to the file of the Assessing Officer. 7. We have considered the rival submissions. It is found that no compliance was made by the assessee before the Assessing Officer, the reason for which has not been explained. Further, the assessee had also not explained the reason for delay in filing the appeal before the ld. CIT(A) in Form No.-35. We, therefore, deem it proper to impose a cost of Rs.5,000/- on the assessee which will be paid to the Prime Minister National Relief Fund within a period of 15 days of receipt of this order. At the same time, the action of the ld. CIT(A) in dismissing the appeal of the assessee in limine without allowing any opportunity to the assessee cannot be held as correct. Further, the action of the Assessing Officer in treating the entire sale consideration as Long Term Capital Gain, without allowing any deduction in respect of cost of acquisition of the asset, was also not correct. We, therefore, deem it proper to set aside the matter to the file of the Jurisdictional Assessing Officer with a direction to allow another opportunity to the assessee to explain the Long Term Capital Gain arising on sale of immovable property as well as the source of cash deposits in the bank account. The contention of the assessee that the land sold by the assessee was rural agricultural land and not a capital asset under Section 2(14)(iii) of the Act, should be duly examined by the Assessing Officer. The assessee will be free to produce the additional evidences brought on record before us or any other evidence, before the Assessing Officer, to explain the nature of LTCG as well as the source of cash deposits in the bank account. The assessee is also directed to make compliance before the Assessing Officer and not to seek adjournment without any pressing reason. ITA No.301/Ahd/2025 Assessment Year: 2018-19 Chudaji Thakor vs. ITO Page 5 of 6 8. In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced in the open Court on this 22nd May, 2025. Sd/- Sd/- (SANJAY GARG) (NARENDRA PRASAD SINHA) Judicial Member Accountant Member Ahmedabad, the 22nd May, 2025 PBN/* Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order TRUE COPYE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad "