Charandass Juneja, New Delhi V. ITO WARD - 31(1), New Delhi

ITA 1901/DEL/2020

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 7834 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Assessment Year: 2011-2012
• Appeal Filed On: 25-11-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: INDIRA BANSAL
• Keywords: Reasonable cause; Valuation report; Set aside
• Section: 148; 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “SMC-2” BENCH: NEW DELHI (THROUGH VIDEO CONFERENCING ) BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER ITA No.1901/Del/2020 [Assessment Year : 2011-12] Charandas Juneja, J-2/12A, 2 nd Floor, Right Side Khirki Extension, Malviya Nagar, New Delhi-110017. PAN-AGTPJ3483H vs ITO, Ward-31(1), New Delhi. APPELLANT RESPONDENT Appellant by Smt. Indira Bansal, CA Respondent by Shri Om Prakash, Sr.DR Date of Hearing 10.11.2021 Date of Pronouncement 24.11.2021 ORDER PER KUL BHARAT, JM : This appeal filed by the assessee for the assessment year 2011-12 is directed against the order of Ld. CIT(A)-11, New Delhi dated 18.09.2019. The assessee has raised following grounds of appeal:- “The assessee has been denied an opportunity for his explaining the facts of his case before the Assessing Officer. No notice u/s 148 or 142(1) was received by the assessee due to change of his residential address. Also, no assessment order was received physically by the assessee and he came to know about the assessment order only via email only. Hence the assessment made is liable to be cancelled. All the notices were received at G-15/7, Ground Floor, Malviya Nagar, New Delhi 110017, his old residential address as he was informed of the same by his relatives residing at the said property which was sold by him on 10 November 2010. The reasons for non- communication of change of residential address to the Assessing Officer were beyond the control of the assessee hence the notice ITA No.1901/Del/2020 [Assessment Year : 2011-12] Page | 2 of re-assessment and subsequent proceedings are not valid and assessment deserves to be cancelled against the appellant. The assessee had no taxable income in said assessment year as the sale of above house property was fully exempt. The assessee had invested the sale proceeds out of the above property in equity shares and the proceeds were received in two saving bank accounts of the assessee i.e. Punjab National Bank and South Indian Bank. The investment in shares amounted to Rs 5,50,000 only as against an arbitrary sum of Rs 12,74,426 made out by the Assessing Officer. The said amount of Rs 5,50,000 was transferred to M/s Mansukh Stock Brokers Ltd account from the saving bank account of the assessee maintained with South Indian Bank. On the aforesaid investment Rs 5,50,000, the assessee suffered a loss of Rs 83,427 and the source of investment is fully explained by the appellant out of the sale of the above house property. The CIT(A) failed to examine the facts of the case even when all details were furnished by the assessee. There is no capital gain on the alleged transactions reported to have been made by the appellant. Proper opportunity of presenting the full facts of the case before CIT(A) was also denied. The order is illegal against the facts of the case and bad at law. The assessee craves leave to add, alter or modify the above grounds of appeal any time before the hearing of the appeal. The evidence before CIT(A) went into the root of the matter and CITCA) erroneously rejected the evidence thereby denying the principle of justice to the assessee. All these documents were not filed before the AO but were duly filed before the CIT(A).” 2. The present appeal filed by the assessee is barred by 367 days. The assessee has filed an application seeking condonation of delay. Ld. Counsel for the assessee reiterated the submissions as made in the application dated 25.11.2020. It is stated that the assessee had no major source of income and ITA No.1901/Del/2020 [Assessment Year : 2011-12] Page | 3 was earning meagre income by running a small thread shop. It was contended that there was no taxable income hence, no return of income was filed in any of the Assessment Years. The assessee had inherited only a house bearing number G-15/7, Ground Floor, Malviya Nagar, New Delhi-110017 after the demise of his father Late Sh. R. P. Juneja in 2005. The said house property was sold in Assessment Year 2011-12 and a portion of the sales proceeds of which was invested in equity shares. The assessee suffers from diabetes and back pain and had not been keeping well since past few years. His health further deteriorated in Covid-19 Pandemic. Due to ill health, he could not file the appeal in time. 3. Per contra, Ld. Sr. DR opposed these submissions and submitted that there is no reasonable cause for condoanation of delay. Therefore, the appeal filed by the assessee deserves to be dismissed on account of barred of 367 days. 4. I have heard the submissions of both the parties and perused the material placed on record. The assessee filed the present appeal on 26.11.2020 and the impugned order was passed on 18.09.2019. Considering the fact that there has been wide spread of pandemic like situation during that period, therefore, taking a liberal view the delay in filing the appeal is hereby condoned and the appeal is admitted for hearing. 5. At the outset, Ld. Counsel for the assessee submitted that the assessee is an aged person suffering from various health issues. The assessee was denied the opportunity for explaining the facts before Assessing Officer [“AO”]. It was ITA No.1901/Del/2020 [Assessment Year : 2011-12] Page | 4 further contended that notice u/s 147/148 of the Income Tax Act, 1961 [“the Act”] was not received by the assessee due to change of his residential address. It was also stated that no assessment order was received physically by the assessee and he came to know about the assessment order only via email. Ld. Counsel for the assessee submitted that all the notices were received on G- 15/7, Ground Floor, Malviya Nagar, New Delhi as old residential address and same was informed by the relatives of the assessee. The said property was sold by him on 10.11.2010. It was further contended that the assessee had no taxable income in the said Assessment Year as the sale of house property was fully exempt. The assessee had invested the sale proceeds from the sale of the residential house property as the proceeds were received in two saving bank accounts of the assessee i.e. Punjab national bank and South Indian Bank. It was further contended that investment in shares was amounting to Rs.5,50,000/-in equity shares as against an arbitrary sum of Rs.12,74,426/- made by the AO. It was further contended that the said amount of Rs.5,50,000/- was transferred to M/s. Mansukh Stock Brokers Ltd. from the saving bank account of the assessee maintained with South Indian Bank. Ld. Counsel for the assessee submitted that the assessee being ill and suffering different health issues, was not properly advised by his Ld. Counsel at the relevant time representing him before Ld.CIT(A). 6. On the contrary, Ld.Sr.DR vehemently opposed these submissions and submitted that the assessee has not thoroughly negligent and did not explain the source of investment. Further, it was incumbent upon the assessee to furnish the relevant evidences before the assessing authority. He submitted ITA No.1901/Del/2020 [Assessment Year : 2011-12] Page | 5 that the assessee cannot be allowed to take advantage of his illness. he ought to have been vigilant and properly explained his case. At such a belated stage, he should not be granted opportunity for filing evidences, that he negligently did not furnish before the AO. 7. In re-joinder, Ld. Counsel for the assessee prayed that matter may be sent back to the AO and Ld. Counsel for the assessee undertook that the requisite details would be filed before the assessing authority. It was further submitted that the assessee would not seek any adjournment. 8. I have heard the rival contentions and perused the material available on record. The facts of the case are that the AO had made addition of Rs.12,74,426/- on account of investment made in buying of shares. The addition was sustained by Ld.CIT(A) on the basis that the assessee failed to support its claim and did not file income tax return. Ld.CIT(A) decided the issue in para 5.4 by observing as under:- 5.4. “Ground No.2 to 5 pertains to disallowance of Rs.12,74,426/- on account of investment in shares. Form the perusal of the copy of demat account filed by appellant it is seen that appellant has incurred a loss of Rs.83,427/-. Appellant has also submitted copy of account from which it is seen that he has made investment of Rs.5,50,000/- in shares which has been given to his broker M/s. Mansukh Stock Brokers Ltd. M/s. Mansukh Stock Brokers Ltd. is managing the demat account of appellant. Regarding the source of Rs.5,50,000/- appellant has claimed that it has been given out of the sale proceeds of house property sold during the year. However, it is seen that appellant had not filed his ITR for Assessment Year 2011- 12, therefore, now appellant’s claim that the amount of Rs.5,50,000/- is from sale of house property does not explain the source as the same was ITA No.1901/Del/2020 [Assessment Year : 2011-12] Page | 6 not disclosed before the Department. Further, from perusal of the documents submitted by appellant, it is seen that Appellant has filed a General Power of Attorney in favour of Sh. Ashok Kumar Jain and a valuation report dated 23.07.2019. The valuation report filed by appellant is dated 23.07.2019 which is an afterthought. It is apparent that appellant has not submitted any document to support his claim. Moreover, appellant has not made any application for admission of additional evidence. Further, it is seen that appellant has purchased share worth Rs.12,74,426/- out of which shares of Rs.3,55,000/- were purchased on 05.11.2010 and the balance share of Rs.9,19,426/- has been purchased from Bombay Stock Exchange Ltd. on 01.12.2010. Therefore, it is apparent that appellant has invested Rs.12,77,426/- fro purchase of shares and he has not disputed claim of Assessing Officer that he has purchased share worth Rs.12,74,426/-. Moreover, appellant has not stated that the source of shares purchased were out of sale of shares purchased earlier. Therefore, in view of the facts of the case, I find no basis to interfere in the order of AO. Accordingly, disallowance of Rs.12,74,426/- is sustained.” 8.1. Considering the fact that the authorities below failed to advert to the contention of the assessee that investment in share was made out of sale consideration of house property. I therefore, set aside the impugned order and restore the issue to the file of Assessing Officer to frame the assessment afresh after giving reasonable opportunity to the assessee. Needless to say that the assessee would not seek adjournment without any reasonable cause. Thus, grounds raised by the assessee are allowed for statistical purposes. ITA No.1901/Del/2020 [Assessment Year : 2011-12] Page | 7 9. In the result, the appeal of the assessee is allowed for statistical purposes. Above decision was pronounced on conclusion of Virtual Hearing in the presence of both the parties on 24 th November, 2021. Sd/- (KUL BHARAT) JUDICIAL MEMBER *Amit Kumar* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI