DHIRAJLAL GOVINDBHAI PATEL ,RAJKOT V. ITO WD 1(2)(1), RAJKOT, RAJKOT

ITA 299/RJT/2024

AI Insights

The case involves Dhirajlal Govindbhai Patel, who appealed against the order of the National Faceless Appeal Centre (NFAC) which confirmed the addition of Rs. 68,02,077 to his income. This addition was initially made by the Centralized Processing Center (CPC) due to the disallowance of a deduction claimed under section 54G of the Income Tax Act, 1961, following the sale of his industrial unit in Rajkot and subsequent purchase in a rural area. The CIT(A) upheld the CPC's decision, leading Patel to appeal to the Income Tax Appellate Tribunal. The Tribunal found that the principles of natural justice were not adequately followed in the previous hearings and thus remitted the case back to the CIT(A) for a fresh evaluation.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 473449 (ITAT-RAJKOT)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2020-2021
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIMANYU SINGH YADAV; LD.
• Assessee Lawyers: D.M. RINDANI; LD
• Keywords: Set aside; Opportunity of being heard; Principle of natural justice; Rectification of order
• Section: 154; 143(1); 22

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT BEFORE DR. ARJUN LAL SAINI, AM. & DIESH MOHAN SINHA, JM आयकरअपीलसं./ITA No.299/RJT/2024 (Ǔनधा[रणवष[ / Assessment Year: (2020-21) (Hybrid Hearing) Dhirajlal Govindbhai Patel Mayurpankh Industries, K-1/49, Road-D, Phase-I, AJI GIDC, 80ft Road, Rajkot – 360003 Gujarat Vs. The ITO, Ward – 1(2)(1), Aayakar Bhawan, Race Course Ring Road, Rajkot – 360001 èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AGEPP0489N (Respondent) Appellant by : Shri D. M. Rindani, Ld. AR Respondent by : Shri Abhimanyu Singh Yadav, Ld. Sr. DR Date of Hearing : 22 /10 /2024 Date of Pronouncement : 22 /01 /2025 आदेश / O R D E R PER DINESH MOHAN SINHA, JM: Captioned appeal filed by the assessee is directed against the order passed by the National Faceless Appeal Centre [(in short “NFAC/Ld.CIT(A)”] vide order dated 08.05.2024, which in turn assessment order passed by Assessment Unit, Income Tax Department / Assessing Officer under section 154 of the Income Tax Act, 1961 (in short “the Act”). 2. Grounds of appeal raised by the assessee are as followed: 2 ITA No.299/RJT/2024 A.Y. 2020-21 Dhirajbhai Govindlal Patel v. ITO 1) The Learned Commissioner of Income – tax (Appeals), NFAC, Delhi erred in confirming action of CPC in making addition of Rs. 68,02,077/- by disallowing the claim of deduction made by the appellant u/s. 54G of the Act. 2) The Learned Commissioner of Income Tac (Appeals), Income Tax Department NFAC, Delhi further erred in upholding action of CPC in making addition of Rs. 68,02,077/- to returned income of the appellant without stating any reasons. 3) The appellant craves leave to add, amend, alter and withdraw any ground of appeal anytime up to the hearing of this appeal. 3. Brief facts of the case is that the appellant is an individual. During the year under consideration, the appellant decided to shift his industrial unit to the rural area and sold the industrial factory situated in Rajkot for a sale price of Rs. 75,00,000/-. Thereafter, the appellant purchased a factory unit in the village Soyal, Dict. Jamnagar (Rural area) for Rs. 1,50,00,000/- and claimed deduction u/s. 54G of Rs. 68,02,077/- in the return of income filed by assessee. However, the assessee submitted in submission filed on 29.11.2023 that assessee had worked out the deduction u/s. 54G of the Act in computation of income was processed u/s. 143(1) of the Act on 28.10.2021 whereby exemption claimed was disallowed. Thereafter, the appellant filed rectification request u/s. 154 of the Act before CPC. However, the CPC confirmed the demand, the rectification request of the appellant was rejected, vide rectification order u/s. 154 of the Act. 3 ITA No.299/RJT/2024 A.Y. 2020-21 Dhirajbhai Govindlal Patel v. ITO 4. Feeling aggrieved by the order dated 15.07.2022. The assessee filed an appeal before the Ld. CIT(A) and NFAC. The details of opportunities provided to the assessee for hearing, and the outcome are detailed below: Sr. No. Date of Notice Date of hearing Remarks 1. 24.11.2023 30.11.2023 Response submitted on 30.11.2023 2. 10.01.2024 16.01.2024 Response submitted on 15.01.2024 3. 12.02.2024 16.02.2024 Response submitted on 15.02.2024 5. The Ld. CIT(A) has disposed the appeal with a view of the legal and factual position. It was held that the mistake committed by the appellant cannot be rectified by under section 154 of the Act. Hence, the ground raised by the appellant is accordingly rejected. 6. The assessee filed an appeal against the impugned order of the Ld. CIT(A) vide order dated 15.03.2024, the assessee is appeal before us. 7. The Ld. AR of the assessee requested for one more opportunity to explain the case before the lower authority. On the other hand Ld. Sr. DR on 4 ITA No.299/RJT/2024 A.Y. 2020-21 Dhirajbhai Govindlal Patel v. ITO behalf of the revenue has not objected to the prayer of the assessee and relied on the order of the Ld. CIT(A). 8. We have heard both the parties and perus the material available on record we note that assessee could not plead his case successfully before the ld. CIT(A). We note that it is settled law that principles of natural justice and fair play require that the affected party is granted sufficient opportunity of being heard to contest his case. Therefore, without delving much deeper into the merits of the case, in the interest of justice, we restore the matter back to the file of Ld. CIT(A) for de novo adjudication and pass a speaking order after affording sufficient opportunity of being heard to the assessee, who in turn, is also directed to contest his stand forthwith. Therefore, we deem it fit and proper to set aside the order of the ld. CIT(A) and remit the matter back to the file of the ld. CIT(A) to adjudicate the issue afresh on merits. 9. For statistical purposes, the appeal of the assessee is treated as allowed. Order pronounced in the open court on 22/01/2025 Sd/- Sd/- (A. L. SAINI) (DINESH MOHAN SINHA) ACCOUNTANT MEMBER JUDICIAL MEMBER Rajkot Ǒदनांक/ Date: 22 /01/2025 Copy of the Order forwarded to 1. The Assessee 5 ITA No.299/RJT/2024 A.Y. 2020-21 Dhirajbhai Govindlal Patel v. ITO 2. The Respondent 3. The CIT(A) 4. Pr. CIT 5. DR/AR, ITAT, Rajkot 6. Guard File By Order Assistant Registrar/Sr. PS/PS ITAT, Rajkot "