ISHVARBHAI LALLUBHAI PATEL,SURAT V. ASSESSMENT UNIT NFAC, DELHI

ITA 1046/SRT/2024

AI Insights

The case involves Ishvarbhai Lallubhai Patel, an uneducated 77-year-old farmer, who faced difficulties in the assessment of long-term capital gains from the sale of immovable property. The property was sold for Rs.1,71,72,500, but the Stamp Duty Valuation authority assessed its value at Rs.4,45,04,100, leading to a significant tax implication under section 50C of the Income-tax Act. The Assessing Officer passed an order under section 144 due to non-compliance with notices, and the CIT(A) dismissed the appeal due to a delay of 162 days in filing, which was not condoned. The Tribunal found that the assessee was not adequately represented and had not been properly advised, leading to the decision to remit the case back for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 26743 (ITAT-SURAT)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2015-2016
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH JAIN
• Assessee Lawyers: DINESH RAMANI
• Keywords: Condonation of delay; Set aside; Sale consideration of property below Jantri Value; Fair market value; Principle of natural justice; Deduction for capital gain
• Section: 147; 144; 142(1); 250; 28; 50C

Judgement Text

" IN THE INCOME-TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.1046/SRT/2024 Assessment Year: (2015-16) (Physical Hearing) Ishvarbhai Lallubhai Patel, House No.3, Navapara Village Kosad, Surat - 394107 Vs. The Assessment Unit, NFAC, Delhi èथायीलेखासं./जीआइआरसं./PAN/GIR No: CAEPP6924J (Appellant) (Respondent) Appellant by Shri Dinesh Ramani, CA Respondent by Shri Mukesh Jain, Sr. DR Date of Hearing 08/01/2025 Date of Pronouncement 10/01/2025 आदेश / O R D E R PER BIJAYANANDA PRUSETH, AM: This appeal by the assessee emanates from the order passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’) dated 14.08.2024 by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short, ‘CIT(A)’] for the assessment year (AY) 2015-16. 2. The grounds of appeal raised by the assessee are as under: “(1) The C.I.T(A) erred in law and on the facts and circumstances of the case in rejecting condonation of delay by not allowing opportunity of personal hearing. (2) The C.I.T(A) has violated principal of natural justice in rejection of appeal for condonation of delay. 2 ITA No.1046/SRT/2024/AY.2015-16 Ishvarbhai Lallubhai Patel (3) The C.I.T(A) has erred in law and on the facts and circumstances of the case not verifying and considering that (1) in computing capital gain deduction of original cost/indexed cost should have been calculated and allowed as deduction, (2) assessment order is time barred.” 3. Facts of the case in brief are that the assessee filed the return of income for the AY.2015-16 on 30.03.2016, declaring total income of Rs.2,69,960/-. Subsequently, the assessee had filed revised ITR on 27.02.2017, declaring the total income as returned earlier. The assessee with other five co-owners had jointly sold immovable property, situated at Block No.32, S. No.27, 28 & 29, Paiki – 1, Moje – Barthana, Kosad, Surat for sale consideration of Rs.1,71,72,500/- with Sub-Registrar Office, Choryasi. The Stamp Duty Valuation authority (SVA) calculated Fair Market Value (FMV) of the property at Rs.4,45,04,100/-. There is a difference of Rs.2,73,31,600/- between the sale consideration and value determined by SVA as per provisions of section 50C of the Act. Various notices u/s 142(1) and show cause notices u/s 144 of the Act were issued but there were non- compliance to the said notices. Hence, the Assessing Officer (in short, ‘AO’) passed order u/s 144 of the Act because assessee failed to discharge the onus cast on him though he was given sufficient opportunities. The assessee had not furnished the computation of capital gain/loss. The cost / indexed cost of the land and details are not available. The assessee’s share was 1/6 of the sale value and accordingly, AO made addition of Rs.74,17,350/- as 3 ITA No.1046/SRT/2024/AY.2015-16 Ishvarbhai Lallubhai Patel long-term capital gain taxed the same for AY.2015-16. Total income was determined at Rs.76,87,310/- u/s 144 r.w.s. 147 r.w.s. 144B of the Act. 4. Aggrieved by the order of AO, the assessee filed this appeal before CIT(A). The CIT(A) observed that assessment order was passed on 08.04.2023, but the appellant had filed appeal on 23.10.2023, which was delayed by 162 days. The appellant had acknowledged this delay in Form No.35. The reason for condonation of delay was that the AR did not inform about assessment proceedings about the subsequent demand notices. Then assessee approached another tax consultant after which the whole facts came to knowledge. The CIT(A) relied upon various decisions and observed that the appellant had failed to come forth with any substantial clarification to support the applications for condonation elaborating in the backdrop of sufficient reason that would justify condonation of delay involved in preferring of such appeal. The CIT(A) held that the appellant had not shown any sufficient cause for delay in filing appeal. He, therefore, did not admit the appeal and dismissed the same in limine. 5. Aggrieved by the order of CIT(A), the assessee filed appeal before the Tribunal. The learned Authorized Representative (ld. AR) of the assessee submitted a paper book containing pages 1 to 32. He submitted that assessee is an old man of 77 year. The assessee is uneducated and was carrying on agricultural activities. The assessee was not aware of procedure under Income-tax matter. After three to four months, when tax consultant 4 ITA No.1046/SRT/2024/AY.2015-16 Ishvarbhai Lallubhai Patel was asked about the progress in this matter, no proper and satisfactory response was given and therefore assessee got his file back from his and had given it to another tax consultant. The new Consultant after making study of the file, advised him to file belated appeal against assessment order and make request to condone the delay before CIT(A). The CIT(A) denied condonation of the delay and dismissed the appeal of assessee. The ld. AR submitted that that AO has passed an order u/s 144 of the Act. He further submitted that the CIT(A) has passed the order u/s 250 of the Act on 14.08.2024 wherein the delay was not condoned by him. The ld. AR contended that assessee could not represent his case before CIT(A) due to circumstances beyond his control. He requested to set aside the order of CIT(A) and remit the issue back to file of AO for fresh assessment on merit in the interests of justice. He has relied upon various decisions of Hon’ble Supreme Court, High Court and Tribunals. 6. On the other hand, learned Senior Departmental Representative (ld. Sr. DR) for the revenue submitted that assessee was negligent and careless during the appellate proceedings; hence, the order of CIT(A) should be upheld. 7. We have heard both the parties and perused the materials available on record. It is an undisputed fact that the assessee has been non-compliant to the statutory notices and the show cause notice issued to him by the AO. The CIT(A) did not condone the delay and passed the order u/s 250 of the 5 ITA No.1046/SRT/2024/AY.2015-16 Ishvarbhai Lallubhai Patel Act without discussing anything on merit by observing that the delay of 162 days was not properly explained. We find that assessee is an uneducated senior citizen, aged 77 years. He was engaged in sale of vegetables grown in his own agricultural land. He was not properly advised by his old Consultant during the assessment proceedings and after passing of assessment order. Considering the facts of the case, we are of the view that the principles of natural justice would call for giving another opportunity of hearing to the assessee. The expression \"sufficient cause\" used in section 253(5) of the Act is sufficiently elastic to enable the Tribunal to apply the law which subserves the ends of justice. It has been held in a number of cases that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. Accordingly, we hold that the interests of justice would be met in case the AO re-examines the entire issue afresh subject to payment of cost of Rs.15,000/- (Rupees fifteen thousand only) by the assessee to the credit of the “Income Tax Appellate Tribunal Bar Association, Surat Bench, Surat” within two weeks from receipt of this order. Subject to payment of above cost, we set aside the order of CIT(A) and remit the matter back to the file of AO with a direction to pass fresh assessment order in accordance with law after granting adequate opportunity of hearing to the assessee. The assessee is directed to be more 6 ITA No.1046/SRT/2024/AY.2015-16 Ishvarbhai Lallubhai Patel vigilant and diligent and to furnish all details and explanations as needed by the AO by not seeking adjournment without valid reasons. With these directions, the grounds of appeal raised by the assessee are allowed for statistical purposes. 8. In the result, appeal of the assessee is allowed for statistical purposes. Order is pronounced in the open court on 10/01/2025. Sd/- Sd/- (PAWAN SINGH) (BIJAYANANDA PRUSETH) JUDICIAL MEMBER ACCOUNTANT MEMBER Surat Ǒदनांक/ Date: 10/01/2025 SAMANTA Copy of the Order forwarded to: 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // TRUE COPY // Assistant Registrar/Sr. PS/PS ITAT, Surat "