Ram Singh, Barabanki V. Income Tax Officer, Range-VI(1), Lucknow

ITA 203/LKW/2022

AI Insights

The case involves Shri Ram Singh, the appellant, contesting the addition made to his income under section 50C of the Income Tax Act, 1961, by the Income Tax Officer, Range-VI(1), Lucknow, for the assessment year 2019-20. The primary contention was regarding the deemed value of sale consideration for calculating Long-Term Capital Gain (LTCG) on land sold, which was assessed at Rs.1,55,58,543 as per section 50C, compared to the actual sale consideration of Rs.42,00,000 declared by the appellant. The appellant argued that the addition was made without proper opportunity and was based on a mistaken belief that he had uploaded an audit report in Form 3CD, which he had not, as he was not required to get his accounts audited. The ITAT found merit in the appellant's arguments and restored the matter to the Assessing Officer for a fresh assessment.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 113243 (ITAT-LUCKNOW)
• Duration Of Justice: 6 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 06-06-2023
• Assessment Year: 2019-2020
• Appeal Filed On: 22-11-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: REVENUE DID NOT DISPUTE
• Assessee Lawyers: RAJESH KUMAR SINGH
• Keywords: Sale consideration of property below Jantri Value; Condonation of delay; Set aside
• Section: 50C; 143(1)

Judgement Text

I.T.A. No.203/Lkw/2022 Assessment year:2019-20 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH ‘A’, LUCKNOW BEFORE SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER I.T.A. No.203/Lkw/2022 Assessment Year: 2019-20 Shri Ram Singh, Village – Tikra Murtaza, Barabanki. PAN:EZJPS7737D Vs. Income Tax Officer, Range-VI(1), Lucknow. (Appellant) (Respondent) O R D E R PER ANADEE NATH MISSHRA:A.M. (A) The present appeal vide I.T.A. No.203/Lkw/2022 has been filed by the assessee for assessment year 2019-20 against impugned appellate order dated 08/06/2022 (DIN & Order No.ITBA/NFAC/S/250/2022- 23/1043377265(1) of Commissioner of Income Tax (Appeals) [“CIT(A)” for short]. The grounds of appeal are as under: “1. That the learned CIT(A) has erred in law and on facts and circumstances of the case in confirming the addition made by the CPC (Assessing Officer) Bangalore by passing an ex-parte order under section 143(1). 2. That no proper opportunity as required by law has been provided to the Appellant failing which the order passed is void abinitio, bad in law. Appellant by Shri Rajesh Kumar Singh, Advocate Respondent by Shri Amit Nigam, Sr. D.R. Date of hearing 07/06/2023 Date of pronouncement 09/06/2023 I.T.A. No.203/Lkw/2022 Assessment year:2019-20 2 3. The learned CIT(A) erred in law and on facts and circumstances of the case by adopting & taking Deemed value as per 50C of Rs.1,55,58,543/- for computing the LTCG against the actual sale consideration of Rs.42,00,000/- for calculation of Long- Term Capital Gain & rejecting the Appellant claim of taking the actual sale consideration. 4. That the learned CIT(A) has erred in law by confirming the addition under section 143(1)(a)(iv) made by the CPC Bangalore by passing order under section 143(1). 5. That the Learned CIT(A) has erred in law and on facts and circumstances of the case by confirming the addition made under section 50C for the order passed under section 143(1) which is the intimation order and not appropriate for making addition by invoking section 50C of the Income Tax act,1961. 6. That the learned CIT(A) is incorrect in confirming the addition made by CPC by invoking section 143(1)(a)(iv) by stating in the impugned order that "So, the CPC has taken the figure of 'value adopted or assessed or assessable' ofRs.1,49,67,075/- as reported by the Tax auditor in Form 3CD uploaded by the appellant himself whereas Appellant has not filed or uploaded any such audit Report.” (B) This appeal has been filed by the assessee, beyond time prescribed under s. 253(2) of IT Act. The assessee has submitted application for condonation of delay in filing of the appeal stating that assessee is a village resident and not much educated, is also not computer literate at all and does not even possess smartphone due to which impugned appellate order of learned CIT(A) could not be taken on time. It is further stated that professional advice was not available on time. The learned Sr. Departmental Representative for Revenue did not express any objection to assessee’s application for condonation of delay in filing of the appeal. In view of the foregoing, and in specific facts and circumstances of the present appeal before us, the delay in filing of this appeal is condoned; and we proceed to decide the appeal on merits. I.T.A. No.203/Lkw/2022 Assessment year:2019-20 3 (C) Vide intimation issued u/s 143(1) of the Income Tax Act, 1961 (“IT Act” for short) dated 02/12/2020 (DIN & Order No.ITBA/NFAC/S/250/2022- 23/1043377265(1) deemed value of sale consideration as per section 50C of the IT Act was taken as Rs.1,55,58,543/- as against sale consideration of Rs.42,00,000/- stated by the assessee for calculating Long Term Capital Gain in respect of land sold by the assessee. The assessee filed appeal in the office of the learned CIT(A) on this issue. Vide impugned appellate order dated 08/06/2022, the learned CIT(A) dismissed the assessee’s appeal. The relevant portion of the impugned appellate order 08/06/2022 is reproduced as under: “So, the CPC has taken the figure of 'value adopted or assessed or assessable' of Rs.1,49,67,075/- as reported by the Tax auditor in Form 3CD uploaded by the appellant himself along with its return. Sec 143(1)(a)(iv) allows adjustment of 'increase in income indicated in the audit report but not taken into account in computing the total income in the return'. It is evident that the adjustment made u/s 50C is allowed u/s 143(1)(a)(iv), as long as it is certified in the Form 3CD. It is therefore, evident on facts, that the adjustment covered u/s 143(1)(a) and against the claim by the Appellant that is it not covered. Plain and simple, Form 3CD specifically mentions the details as per sr.no.17 of Form 3CD and the CPC has picked up the details from Form 3CD uploaded by the appellant himself. The mandate to make such a disallowance is as per sec 143(1)(a)(iv). The argument of the appellant that the issue is not covered u/s 143(1)(a) is therefore not tenable. The ingredients of an adjustment u/s 143(1)(a)(iv) are satisfied in this case.” (C.1) In the course of appellate proceedings in ITAT, the learned Counsel for the assessee submitted copy of acknowledgement of return filed by the assessee. The assessee had filed return in Form ITR-2 which is applicable for individuals and HUFs not having income from profits & gains of business or profession. The learned Counsel for the assessee submitted that the assessee was under no statutory requirement to get its accounts audited, because the assessee has no income under the head profit & gains of I.T.A. No.203/Lkw/2022 Assessment year:2019-20 4 business or profession. The learned Counsel for the assessee further submitted that the assessee had not got its accounts audited and therefore, there was no question of audit report in Form 3CB being uploaded by the assessee on the website of the Income Tax Department. He further submitted that the learned CIT(A) erroneously invoked section143(1)(a)(iv) under a mistaken belief that the assessee has uploaded audit report in Form 3CB. He also submitted that the assessee has not even got accounts audited and therefore, there was no question of the assessee having uploaded the audit report in Form 3CB. Moreover, he submitted that the addition made u/s 143(1) of the IT Act, by applying Section 50C of the IT Act was a debatable and disputable matter and he further submitted that addition on a debatable and disputable matter was beyond the scope of s. 143(1) of IT Act. (C.2) Learned Sr. Departmental Representative for Revenue did not dispute the aforesaid submissions made by learned Counsel for the assessee; and left matter to the discretion of the Bench. (C.2.1) In view of the submissions made by learned Counsel for the assessee and the materials placed on record, we are of the view that learned CIT(A) passed the impugned appellate order under a mistaken belief that the assessee had filed / uploaded audit report in Form-3CD. The fact is that the assessee is not liable to get the accounts audited, the assessee did indeed not get the accounts audited and therefore, there was no question of assessee filing/uploading audit report in Form-3CD, does not arise. Therefore, we hold that learned CIT(A) erred in invoking s.143(1)(a)(iv) of the IT Act. The submissions made by learned Counsel for the assessee, that the addition made under s. 143(1) of the IT Act by applying section 50C was a debatable and disputable matter. On perusal of records, I.T.A. No.203/Lkw/2022 Assessment year:2019-20 5 we find that the assessee, in the appeal filed in the office of learned CIT(A), filed several grounds of appeal. In the grounds of appeal, it was contended by the appellant assessee that actual sale consideration was fair market value of the property; that market value of the land was much below the value as assessable by the stamp valuation authority; and that the Assessing Officer was not justified in taking stamp duty value of Rs.1,49,67,076/- as sale consideration against the actual sale consideration received by assessee. It was explained by the assessee to the learned CIT(A) that the assessee belonged to SC-ST community; that as per land law of Uttar Pradesh State Government, the assessee could not sell agricultural land to person of any other community; and that he was not getting any buyer from his own SC-ST community. It was also explained by the assessee to learned CIT(A) that there was dispute in the land. Despite the foregoing, the learned CIT(A) took adverse view against the assessee. The learned CIT(A) did not ask the assessee to provide any further materials in support of the aforesaid contentions/explanations. The impugned order of learned CIT(A) was passed without any representation from the assessee’s side. Thus, the assessee as well as learned CIT(A) did not have any benefit of representation from the assessee’s side. Further, even intimation u/s 143(1) was issued without any representation from assessee’s side. Thus, the assessee as well as Revenue did not have any benefit of representation from the assessee’s side when intimation u/s 143(1) of IT Act was issued. In view of the foregoing; and in the specific facts and circumstances of the present appeal before us; we are of the opinion that this is a fit case for restoration of the dispute to the file of the Assessing Officer for taking a decision afresh after providing reasonable opportunity to the assessee. Accordingly, we set aside the impugned appellate order dated 08/06/2022 of learned CIT(A) and we restore the issue in dispute in the present appeal before us to the file of the Assessing Officer with the I.T.A. No.203/Lkw/2022 Assessment year:2019-20 6 direction to decide the matter afresh, after providing reasonable opportunity to the assessee. All grounds of appeal are treated as disposed of in accordance with our aforesaid direction. (D) In the result, the appeal is partly allowed for statistical purposes. (Order pronounced in the open court on 09/06/2023) Sd/- Sd/- (SUDHANSHU SRIVASTAVA) (ANADEE NATH MISSHRA) Judicial Member Accountant Member Dated: 09/06/2023 *Singh Copy of the order forwarded to : 1. The Appellant 2. The Respondent. 3. Concerned CIT 4. D.R., I.T.A.T., 5. CIT(A) Assistant Registrar