Ravi Agrawal, Indore V. The PCIT-2, Indore

ITA 144/Ind/2021

AI Insights

The case involves Ravi Agrawal, the appellant, who appealed against the revision order of the Principal Commissioner of Income Tax, Indore, concerning the assessment year 2015-16. The Principal Commissioner had invoked Section 263 of the Income Tax Act, finding the original assessment order erroneous and prejudicial to the interest of the revenue due to the Assessing Officer's lack of inquiry into the claim of deduction under Section 54 for two flats purchased by the assessee. The Tribunal dismissed the appeal, noting the absence of the assessee's representation and the failure to conduct necessary inquiries by the Assessing Officer.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 130853 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 9 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-05-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 18-04-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 21-07-2021
• Other Referred Cases: Ravi Shankar, Mumbai vs AsstCit 16(3), CIT Vs. Syed Ali Adil, CIT v. Gita Duggal, CIT v. K.G. Rukminiamma, ITO v. Smt. Jyothi K. Mehta, Prem Prakash Bhutani v. ACIT, ITO v. Ms. Shushila M. Jhaveri, CIT v. Raman Kumar Suri, V.R. Karpaam (Smt.) v. ITO, ACIT v. Deepak S. Bheda, ACIT v. Leela P. Nanda, CIT vs. Late Khoobchand M. Makhija, Navin Jolly Vs. ITO, Mohammadanif Sultanali Pradhan DCIT (Ahd) (Trib)
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Revision of order; Period of limitation; Assessment record; Time period of passing order; Condonation of delay; Set aside
• Section: 54; 263; 143(3); 12A; 113

Judgement Text

Page 1 of 6 आयकर अपील य अ धकरण, इंदौर यायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI B.M. BIYANI, ACCOUNTANT MEMBER ITA No.144/Ind/2021 (Assessment Year:2015-16) Ravi Agrawal 101-102, Kanchan Vihar, Niranjanpur, Indore Vs. Pr. CIT Indore (Appellant / Assessee) (Respondent/ Revenue) PAN: AORPA 2161 B Assessee by None Revenue by Shri P.K. Mishra, CIT- DR Date of Hearing 19.04.2023 Date of Pronouncement 02.05.2023 O R D E R Per Vijay Pal Rao, JM: This appeal by the assessee is directed against the revision order dated 17.03.2021 of Pr. Commissioner of Income Tax, Indore for Assessment Year 2015-16. 2. None has appeared on behalf of the assesse when this appeal was called for hearing. It is manifest from the record that various notices issued to the assessee through RPAD have been received back with postal remarks that the house is found lock on the various visits made by the Postman. The assessee has been seeking adjournment since beginning, and the Division Bench of the Tribunal vide order dated 14 th July 2022 imposed a cost of Rs.2000/- on the assessee and directed the assessee to deposit the same to the Prime Minister Relief Fund. It was also asked to submit receipt of the payments of the said cost on or before the next date ITA No. 144/Ind/2021 Ravi Agrawal Page 2 of 6 Page 2 of 6 of hearing i.e. 30 th August 2022. Neither the assessee has produced any record for payment of the said cost imposed by the Tribunal nor the assessee has responded to the various notices issued by the Tribunal. Therefore, we find that the assessee is not interested in prosecution of the present appeal. Accordingly, the bench proposes to hear and disposed of the present appeal ex-parte. 3. There is a delay of 67 days in filing the present appeal. The assessee has filed an application for condonation of delay and also filed the affidavit in support of the application to explain the cause of delay. 4. We have perused the contents of the affidavit filed by the assessee and heard the Ld. DR on the condonation of the delay. At the outset, we find that the impugned order was passed by the Ld. Pr. CIT on 17.03.2021 which as a period of Covid-19 pandemic and Hon’ble Supreme Court in suo-moto cognizance for extension of limitation 441 ITR 722 (SC) has finally issued the following direction in Para 5 as under: “5. Taking into consideration the arguments advanced by learned counsel and the impact of the surge of the virus on public health and adversities faced by litigants in the prevailing conditions, we deem it appropriate to dispose of the M.A. No. 21 of 2022 with the following directions: (i) The order dated 23-3-2020 is restored and in continuation of the subsequent orders dated 8-3-2021, 27-4-2021 and 23-9- 2021, it is directed that the period from 15-3-2020 till 28-2- 2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings. (ii) Consequently, the balance period of limitation remaining as on 3-10-2021, if any, shall become available with effect from 1- 3-2022. iii. In cases where the limitation would have expired during the period between 15-3-2020 till 28-2- 2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 1-3-2022. In the event the actual balance period of limitation remaining, with effect from 1-3-2022 is greater than 90 days, that longer period shall apply. ITA No. 144/Ind/2021 Ravi Agrawal Page 3 of 6 Page 3 of 6 IV. It is further clarified that the period from 15-3-2020 till 28- 2-2022 shall also stand excluded in computing the periods prescribed under sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings.” 5. Thus the Hon’ble Supreme court extended the limitation from 15.03.2020 to 28.02.2022 and also allowed 90 days from 01.03.2022 where the limitation is already expired on or before 28.02.2022 or the remaining limitation period is less than 90 days. Accordingly, in view of the judgment of Hon’ble Supreme Court extending the period of limitation due to Covid-19 pandemic, the appeal filed by the assessee is treated as within the period of limitation. The assesse has raised following grounds: 1.Section 54 Inappropriate interpretation of section- On facts and circumstances of the case and in law, the order passed by the Ld. CIT is on the basis of inappropriate interpretation of law. 2.Section 263 Liability Denial of That the appellant denies to the addition made by the Ld. CIT on the basis of interpretation of law. 3. Section 263 - Appellant right to amend ground or grounds- That the appellant craves leave to, add to, amend, alter, modify, substitute, withdrawal, delete or rescind all or any of the above grounds of appeal on or before the final hearing, if necessity so arises. 4. Section 263 - All grounds are without prejudice to others All the grounds herein are without prejudice to each other. 6. The assessee is an individual deriving income from business and other sources. The assessee filed return of income for the year under consideration on 02.10.2015 declaring total income of Rs.2,38,080/-. Scrutiny assessment u/s 143(3) of the Act was completed on 31 st May 2017 whereby the Ld. AO accepted the return income at Rs.2,38,080/-. Thereafter, the Pr. CIT on going through the assessment record found that certain points were not taken up by AO while completing assessment order and the assessment order was passed without examining facts ITA No. 144/Ind/2021 Ravi Agrawal Page 4 of 6 Page 4 of 6 relating to the issue of allowing claim of deduction u/s 54 of the Income Tax Act in respect of two flats. Accordingly, Pr. CIT invoked the provisions of section 263 and issued a show cause notice dated 19.09.2019. Only after number of notices issued by the Pr. CIT the assessee finally filed the part reply and further sought the time to submit the reply. Pr. CIT has finally held that order passed by the AO dated 31 st May 2017 is erroneous in so far as the prejudicial to the interest of the revenue on account of lack of inquiry on the part of the AO. Accordingly, assessment order was set aside and AO was asked to re-examine the issue of allowability of deduction u/s 54 and passed the order as per the law. 7. Aggrieved by the impugned order the assessee has filed the present appeal and stated in the statement of facts that the assessee sold residential house and purchased two residential flats adjacent to each other from M/s. Ormonde Private Developers Ltd. The flats were purchased vide two separate registered sale deeds and claimed that these two flats constitute a residential house for the purpose of the provisions of section 54 of the Act. Assessee has relied upon a series of the decisions of this point which are as under: 1. Ravi Shankar, Mumbai vs AsstCit 16(3), (2018), Mumbai 2. CIT Vs. Syed Ali Adil (2013) 352 ITR 418 (AP), Andhra Pradesh High Court ] 3. CIT v. Gita Duggal [2013] 30 taxmann.com 230/214 Taxman 51 (Delhi) 4. CIT v. K.G. Rukminiamma (331 ITR 211) 5. ITO v. Smt. Jyothi K. Mehta (2011) 12 Taxman 440 6. Prem Prakash Bhutani v. ACIT (2009) 31 SOT 38 7. ITO v. Ms. Shushila M. Jhaveri (2007) 107 ITD 327 8. CIT v. Raman Kumar Suri (2013) 81 DTR 33 9. V.R. Karpaam (Smt.) v. ITO (2013) 143 ITD 126 10. ACIT v. Deepak S. Bheda (2012) 52 SOT 327 (Mum.) (Trib.) 11. ACIT v. Leela P. Nanda (2006) 286 ITR (AT) 113 (Mum.) ITA No. 144/Ind/2021 Ravi Agrawal Page 5 of 6 Page 5 of 6 12. CIT vs. Late Khoobchand M. Makhija [TS-706-HC2013(KAR)] 13. Navin Jolly Vs. ITO (ITA No. 320 of 2011 dtd 18.06.2020) 14. Mohammadanif Sultanali Pradhan DCIT (Ahd) (Trib) (UR 8. On the other hand, Ld. DR has submitted that the Ld. AO has not conducted the necessary inquiry while passing assessment order and therefore, the order passed by the Ld. AO is erroneous due to lack of inquiry on the part of the AO. He has further submitted that since there is an amendment in provision of section 54 by Finance Act 2014 w.e.f. 01.04.2015 to restrict the deduction u/s 54 only in respect of the investment made in purchase of one residential house in India. He has relied upon the impugned order of the Ld. Pr. CIT passed u/s 263 of the Act. 9. Having considered the rival submissions as well as relevant material on record at the outset, we note that the assessee has not disputed the fact that the AO has accepted the return income of the assessee while passing assessment order dated 31.05.2017. The Ld. AO has not conducted any inquiry in respect of the allowability of claim of deduction u/s 54 as to whether the assessee satisfied all the conditions as contemplates in section 54 of the Act. Therefore, without going into the issue whether the assessee is entitled for deduction u/s 54 of the Act in respect of investment made in two flats we find that when the AO has not conducted any inquiry on this issue then it is a case of complete lack of inquiry on the part of the AO which renders the assessment order as erroneous so far as prejudicial to the interest of the revenue. Accordingly, we do not find any reason to interfere with the impugned revision order passed by the Pr. CIT u/s 263 whereby the matter was set aside to the record of the AO for examination of the issue of allowability of deduction u/s 54 of the Act. We make it clear that the ld. AO has to pass consequential order independently by considering the facts and law on the issue without ITA No. 144/Ind/2021 Ravi Agrawal Page 6 of 6 Page 6 of 6 having any influenced of the opinion expressed by Pr. CIT in the impugned order. Accordingly, appeal of the assesse is dismissed. 10. In the result, appeal of assessee is dismissed. Order pronounced in the open court on 02.05.2023. Sd/- Sd/- (B.M. BIYANI) (VIJAY PAL RAO) Accountant Member Judicial Member Indore, 02 .05.2023 Patel/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Sr. Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore