Shauket hussain M Patel, Surat V. Income Tax Officer, Ward 1(3)(9), Surat

ITA 250/SRT/2018

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 2069 (ITAT-SURAT)
• Duration Of Justice: 4 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 16-05-2022
• Assessment Year: 2012-2013
• Appeal Filed On: 03-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PROCEEDING EX PARTE BY PASSING A
• Keywords: Sale consideration of property below Jantri Value; Cost of acquisition; Set aside
• Section: 271(1)(c); 144; 50C; 54F

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER ITA No. 250/Srt/2018 (AY: 2012-13) (hearing in virtual court) Shaukethussain M Patel, A-504, Sanjay Residency, Causeway Road, Rander, Surat-395009. PAN No. ARTPP 2101 R Vs. I.T.O., Ward-1(3)(9), Room No. 509, 5 th Floor, Aayakar Bhavan, Majura Gate, Surat-395001. Appellant/ assessee Respondent/ revenue Appellant represented by Shri Parin Shah, AR Respondent represented by Shri H.P. Meena, CIT-DR Date of hearing 17/05/2022 Date of pronouncement 17/05/2022 Order under Section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the assessee is directed against the order of learned Commissioner of Income Tax (Appeals)-2, Surat (in short, the ld. CIT(A) dated 04/10/2017 for the Assessment year 2012-13. The assessee has raised following grounds of appeal: “1. The order passed by AO is invalid and bad in law and required to be quashed as same was passed without observing principle of natural justice. 2. Ld. CIT(A) ought to have considered the facts and circumstances that appellant was not in receipt of any notice of hearing before him and due to non-receipt could not attend the hearing. Hence, appeal may be set aside. ITA No. 250/Srt/2018 Shaukethussain M PatelVs ITO 2 3. Ld. CIT(A) ought to have adjudicated the appeal on merits and not merely dismissed the same ex parte. 4. Ld. CIT(A) erred inlaw and on facts in confirming addition of Rs. 4,17,95,918/- by invoking provision of Section 50C of Act solely on relying valuation by stamp duty authority without bringing evidences on record. Ld. CIT(A) ought not to have confirmed the addition merely on conjectures and surmises. It be so held now. 5. Ld. CIT(A) erred in law and on facts in confirming action of AO without appreciating fact that addition was made without referring the matter to valuation officer u/s 50C(2) of the Act. Ld. CIT(A) ought to have referred the matter to the valuation officer to determine the correct value of the property. It be so held now. 6. Ld. CIT(A) erred in law and on facts in not granting exemption u/s 54F of the Act for investment made in purchase of residential house on sale of long term capital gain. 7. Levy of interest u/s 234A/234B & 234C of the Act is unjustified. 8. Initiation of penalty u/s 271(1)(c) of the Act is unjustified. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal.” 2. At the outset of hearing, the learned Authorised Representative (AR) of the assessee submits that the Assessing Officer passed assessment order under Section 144 of the Income Tax Act, 1961 (in short, the Act) and made addition of Rs. 4.19 crores by invoking provisions of Section 50C of the Act. As per the Assessing Officer, the assessee had sold the property at Rs. 1.30 crores, however, the stamp duty valuation determining the value of property was Rs. 4.17 crores. The Assessing officer disallowed ITA No. 250/Srt/2018 Shaukethussain M PatelVs ITO 3 the long term capital gain by considering the cost of improvement and acquisition at Zero and thereby made huge addition. The ld. CIT(A) also dismissed the appeal of assessee by proceeding ex parte by passing a non-speaking order. The ld. AR for the assessee submits that the assessee is a Non-Resident Indian (NRI) and has not received notice during the assessment. Notice of ld. CIT(A) was also not communicated to him as the assessee was out of India and the person appointed by the assessee to pursue his appeal has not taken proper step to enquire about the status of appeal. The ld. AR of the assessee invited our attention on para 6 of the impugned order and would submit that the ld. CIT(A) issues notice for hearing fixing the date of hearing on three occasions. The ld. CIT(A) himself recorded that the notices were returned back. The ld. AR for assessee submits that the assessee has a very good case on merit and is likely to succeed if one more opportunity is given to the assessee to contest the case on merit. The ld. CIT(A) has not adjudicated the case of merit. In the statement of fact, the assessee has explained necessary fact and claimed exemption under Section 54F of the Act for making investment in purchase of residential flat. The investment was made within the eligible period and the assessee is entitled for exemption under Section 54F of the Act. The ld. AR submits that we undertake on behalf of assessee to be more vigilant in attending the hearing before the lower ITA No. 250/Srt/2018 Shaukethussain M PatelVs ITO 4 authorities and will not make any default in future. The ld. AR submits that the matter may be restored to the file of Assessing officer and the Assessing Officer also passed the assessment order in absence of proper compliance for want of evidence. 3. On the other hand, the ld. CIT-DR for the Revenue supported the orders of the lower authorities. The ld. CIT-DR for the Revenue submits that the assessee was given ample opportunity by the lower authorities and the assessee failed to respond to various notices, therefore, the lower authorities have no option except to pass the order on the basis of material available on record. Even otherwise, the assessee has not provided any evidence to substantiate his various claims including the claim of exemption under Section 54F of the Act. 4. We have considered the rival submissions of parties and have gone through the orders of the authorities below. We find that the Assessing Officer passed the assessment order under Section 144 and made addition of Rs. 4.17 crores. The assessing officer recorded that no documents were furnished by the assessee, thus, in absence of information the cost of acquisition and improvement was not possible and treated the same are zero. The ld. CIT(A) dismissed the appeal of assessee in limine without discussing the merit of the case. Before dismissing the appeal, the ld. CIT(A) recorded that the notice of hearing ITA No. 250/Srt/2018 Shaukethussain M PatelVs ITO 5 of appeal was sent on three occasions. However, the notices were received back with the remark of postal authorities “not served”. Before us, the ld. AR of the assessee submits that the assessee is an NRI and the notice was not served him. We find that the ld. CIT(A) instead of considering the case on merit, dismissed the appeal of assessee in limine. In our view, the order passed by the ld. CIT(A) is not as per mandate of Section 250(6) of the Act. Section 250(6) of the Act provides that the order of the Commissioner (Appeals) must contain point of determination, decision thereon and reasons for such decision. We instead of going into controversy whether the assessee was informed by his representative to whom the assessee assigned his case or not, in our view, the assessee deserved opportunity of hearing on merit. Therefore, considering all the aspects of the matter, the order of ld. CIT(A) is set aside and all the issues are restored to the file of Assessing Officer for redetermination of issues afresh. Needless to order, before passing the assessment order afresh, the Assessing Officer shall grant fair and proper opportunity of hearing to the assessee. The assessee is also directed to vigilant and to attend the hearing and furnished all requisite details and not to prolong the proceedings. With this observation, the appeal of assessee is allowed for statistical purposes. In the result, the grounds of the appeal is allowed for statistical purpose. ITA No. 250/Srt/2018 Shaukethussain M PatelVs ITO 6 5. In the result, this appeal of the assessee is allowed for statistical purposes only. Order pronounced in the open court on 17 May 2022 at the time of hearing of appeal. Sd/- Sd/- (Dr. ARJUN LAL SAINI) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat, Dated:17/05/2022 *Ranjan Copy to: 1. Assessee – 2. Revenue - 3. CIT(A) 4. CIT 5. DR 6. Guard File By order Sr.Private Secretary, ITAT, Surat