GOPAL JI MISHRA,LUCKNOW V. ITO-6(5), LUCKNOW

ITA 349/LKW/2024

AI Insights

The case involves Gopal Ji Mishra, the appellant, who contested the orders of the Assessing Officer (AO) and the National Faceless Appeal Centre (NFAC) regarding the assessment for the year 2013-14. The AO had reopened the assessment under section 147 of the Income Tax Act, 1961, due to undisclosed property sales and made various additions to the assessee's income. The NFAC dismissed the appeal ex-parte, leading to the current appeal before the Income Tax Appellate Tribunal, Lucknow. The Tribunal found procedural lapses in the handling of the assessee's case, particularly in not providing adequate opportunity for representation and not properly considering the assessee's health issues and the impact of the COVID-19 pandemic on communication.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 32641 (ITAT-LUCKNOW)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANJEEV KRISHNA SHARMA
• Assessee Lawyers: P.K. KAPOOR
• Keywords: Opportunity of being heard; Sale consideration of property below Jantri Value; Salary income; Principle of natural justice; Initiation of penalty proceedings
• Section: 147; 148; 142(1); 271(1)(c); 133(6); 69A; 50C; 80C

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, LUCKNOW BEFORE SHRI. SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA No.349/LKW/2024 Assessment Year: 2013-14 Gopal Ji Mishra K-1218, Ashiana Kanpur Road, Lucknow v. The Income Tax Officer 6(5) Lucknow - New TAN/PAN:AKJPM8317M (Appellant) (Respondent) Appellant by: Shri P. K. Kapoor, C.A. Respondent by: Shri Sanjeev Krishna Sharma, D.R. Date of hearing: 18 03 2025 Date of pronouncement: 20 03 2025 O R D E R This appeal has been preferred by the assessee against order dated 18.03.2024, passed by the National Faceless Appeal Centre, Delhi (NFAC) for Assessment Year 2013-14. 2. The brief facts of the case are that the Income Tax Department was in possession of information that the assessee had sold property of Rs.20,00,000/- against the market value of Rs.33,52,500/- in the year under consideration. The assessee had not filed the return of income for the year under consideration. The Assessing Officer (AO) reopened the assessment under section 147 of the Income Tax Act, 1961 (hereinafter called “the Act’) and issued notice under section 148 of the Act to the assessee. The AO also issued notice under ITA No.349/LKW/2024 Page 2 of 9 section 142(1) of the Act to the assessee. However, the assessee, in response to notice under section 148 of the Act, did not file any return of income for the year under consideration, but filed reply and furnished certain documents relating to the sale of property. The AO after considering the reply of the assessee and the documents obtained under section 133(6) of the Act, made various additions and completed the assessment under section 147 read with 144 of the Act, computing the income of the assessee as under: Addition of Income from Salary : Rs.6,00,000/- Addition of interest income : Rs.29,848/- Addition u/s. 69A of the Act : Rs.15,85,904/- Addition u/s. 50C of the Act : Rs.25,92,873/- Net taxable income (rounded off) : Rs.48,08,630/- 2.1 The AO also initiated penalty proceedings under section 271(1)(c) and 271F of the Act, separately. 3. Aggrieved, the assessee preferred an appeal before the Ld. First Appellate Authority. The case of the assessee was migrated to NFAC, which dismissed the appeal of the assessee by passing an order ex-parte qua the assessee. ITA No.349/LKW/2024 Page 3 of 9 4. Now, the assessee has approached this Tribunal challenging the orders of the AO as well as the NFAC by raising the following grounds of appeal: 1.1 BECAUSE the ld. \"CIT(A)\" was not justified in dismissing the appeal in limini by passing the order ex-parte by erroneously holding that the appeal was not maintainable on the ground that it was defective owing to non-attachment of legible documents. 1.2 BECAUSE all the requisite documents were duly attached to Form 35 and the same were clearly legible, consequently the ld. \"CIT(A)\" was factually in-correct in observing that the attached documents were not legible and on that basis in holding the appeal as defective so as to dismiss the same as not maintainable. 2.1 BECAUSE, on the facts and in the circumstances, the Id. \"CIT(A)\" was not justified in dismissing the appeal in limine by passing the impugned order ex-parte without affording due and adequate opportunity of being heard to the assessee. 2.2 BECAUSE various notices issued by the authorities below could not be responded to by the assessee due to illness/non-accessibility of registered e-mail account owing to which proper compliance could not be made by the assessee and as such the impugned order deserves to be set-aside and matter restored to the file of Assessing Officer for passing the assessment order afresh after affording reasonable opportunity of being heard to the assessee. ITA No.349/LKW/2024 Page 4 of 9 WITHOUT PREJUDICE TO AFORESAID 3. BECAUSE the Assessing Officer was not correct in making an addition of Rs.15,85,904/-; comprising of - (i) cash deposit in Bank of India, Aminabad branch - Rs.6,50,000/-, (ii) cash deposit in Sate Bank of India, Jail Road branch - Rs.2,30,000/- ;and (iii) credit entries by way of cheques/transfer - Rs.7,05,904/- as unexplained money u/s 69A of the Act by holding that the said amounts remained unexplained. 4.1 BECAUSE as per the information on record, aggregate cash deposits during the year in the said bank accounts were to the tune of Rs.6,30,000/- only (which included cash withdrawal of Rs.4,00,000/- from assessee's own bank account in State Bank of India, Jail Road branch), therefore the addition to the tune of Rs.8,80,000/- (out of overall addition of Rs.15,85,904/-) was wholly erroneous and factually incorrect, consequently the Id. \"CIT(A)\" should have deleted the addition of Rs.8,80,000/-. 4.2 BECAUSE the balance amount of Rs.2,30,000/- (Rs.6,30,000/- minus Rs.4,00,000/-) deposited in SBI Jail Road branch was out of salary of Rs.6,00,000/-received in cash from New Public Inter College, LDA, Lucknow for which a separate addition had been made as per para 2 of the assessment order, as such, no further addition of cash deposits in the bank accounts was called for. 5. BECAUSE the Assessing Officer was also not correct in making an addition of Rs.7,05,904/- (out of overall addition ITA No.349/LKW/2024 Page 5 of 9 of Rs.15,85,904/-) because out of the said amount a sum of Rs.6,99,800/- represented the car loan taken by assessee from Bank of India and the rest amount of Rs.6,104/- was also not of the nature of income. 6.1 BECAUSE the Assessing Officer was not correct in making the addition of Rs.25,92,873/- as long-term capital gain on sale of an immovable property. 6.2 BECAUSE while computing the long-term capital gain at Rs.25,92,873/- the Id. Assessing Officer firstly did not consider the cost of improvement incurred by the assessee and secondly the Id. Assessing Officer wrongly adopted the stamp value of Rs.33,52,500/- as the sale consideration as against the actual sale consideration of Rs.20,00,000/- declared in the sale deed and consequently the addition of Rs.25,92,873/- made under the head 'Long-Terin Capital Gain' was liable to be deleted. 6.3 BECAUSE on the facts and in the circumstances, the Id. Assessing Officer erred in not referring the matter of valuation to the DVO, as per provisions of sub-section (2) of section 50C and in straight away adopting stamp value of Rs.33,52,500/- as the sale consideration, consequently the ld. \"CIT(A)\" ought to have deleted the addition of Rs.25,92,873/- and should have directed the Id. AO to refer the valuation to the DVO. 7. BECAUSE the Assessing Officer, while computing the total income of the appellant, should have granted deduction u/s 80TTA of the Act to the tune of Rs.10,000/-. ITA No.349/LKW/2024 Page 6 of 9 8. BECAUSE the Assessing Officer, while computing the total income of the appellant, should have granted due deduction u/s 80C of the Act. 9. BECAUSE initiation of penalty proceedings u/s 271(1)(c) of the Act in the assessment order was contrary to the provisions of law and facts of the case owing to lack of requisite satisfaction and consequently the Id. \"CIT(A)\" should have directed the Assessing Officer to drop the penalty proceedings. 10. BECAUSE the order appealed against is contrary to facts, law and principles of natural justice. 11. BECAUSE each ground taken in appeal is mutually exclusive and without prejudice to each other. 12. The appellant craves leave, to add, delete or modify any of the grounds before or at the time of hearing of appeal. 5. During the course of hearing before me, the Ld. Authorized Representative for the assessee (Ld. A.R.) submitted that when the appellate proceedings were initiated by the ld. CIT(A), Covid-19 pandemic was at peak and there was complete lock-down in the Country. He further submitted that the notice issued by the Office of the ld. CIT(A) on 29.09.2023 and Defect Memo dated 21.11.2023 and 08.03.2024 were sent to the email id of the earlier Counsel of the assessee, who did not inform the same to the assessee. The Ld. A.R. also submitted that the assessee was a heart patient and had undergone bypass surgery, ITA No.349/LKW/2024 Page 7 of 9 and subsequently pacemaker was inserted twice and, therefore, the assessee could not be represented before the ld. CIT(A). He submitted that these averments are duly supported by Affidavit of the assessee, Shri Gopal Ji Mishra and Medical Reports of Max Super Specialty Hospital, New Delhi. The Ld. A.R. also submitted that the AO has passed the order without giving adequate opportunity to the assessee. The Ld. A.R. submitted that the notice under section 142(1) of the Act issued by the AO was dated 23.06.2016 and that in response to the same, the assessee had filed reply on 29.06.2016 and that the order was passed by the AO on 30.06.2016, i.e., on the very next day of filing of the reply by the assessee, vide dated 29.06.2016. The Ld. A.R. further submitted that some deficiencies were also there in the order of the AO, as the order had been passed in haste without proper appreciation of facts. The Ld. A.R. prayed that the matter may be restored to the file of the AO for passing the assessment order de novo after providing a reasonable opportunity of hearing to the assessee. 6. The Ld. Senior D.R. had no objection to the restoration of appeal to the file of the Assessing Officer. 7. I have heard both the parties and have also perused the material on record. Looking into the facts of this case, I am of the ITA No.349/LKW/2024 Page 8 of 9 considered view that the Assessee deserves one more opportunity to present his case and, therefore, in the interest of substantial justice, I restore this file to the Office of the Assessing Officer with the direction to provide one more opportunity to the Assessee to present his case and produce the necessary evidences, if any, in support of the transactions entered into by the Assessee. I also caution the Assessee to fully comply with the directions of the Assessing Officer in the set-aside proceedings when called upon to do so, failing which, the Assessing Officer would be at complete liberty to pass the order in accordance with law, based on the material available on record even if it is ex-parte qua the assessee. 8. In the result, the appeal of the assessee stands allowed for statistical purposes. Order pronounced in the open Court on 20/03/2025. Sd/- [SUDHANSHU SRIVASTAVA] JUDICIAL MEMBER DATED:20/03/2025 JJ: Copy forwarded to: 1. Appellant 2. Respondent 3. CIT(A) 4. CIT 5. DR ITA No.349/LKW/2024 Page 9 of 9 By order Assistant Registrar "