Shri Nathalal D. Dadhania, Navsari V. Income Tax Officer, Ward-4, Navsari

ITA 29/SRT/2022

AI Insights

This case involves an appeal by Shri Nathalal D. Dadhania against the order of the Commissioner of Income Tax (Appeals), Valsad, which confirmed the assessing officer's actions regarding the reopening of assessment, addition of short-term capital gains, disallowance of exemption under section 54, disallowance of development expenses, and initiation of penalty proceedings under section 271(1)(c) of the Income Tax Act, 1961. The Tribunal noted a significant delay in filing the appeal, attributed to the assessee's lack of awareness of the CIT(A)'s order until a recovery notice was received. The Tribunal found sufficient cause to condone the delay, considering the assessee's educational background and the circumstances of the COVID-19 pandemic. The Tribunal also observed that the CIT(A) had dismissed the appeal in limine without discussing the merits, leading to the decision to restore the case for fresh consideration.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 301563 (ITAT-SURAT)
• Duration Of Justice: 1 year(s) 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 30-05-2023
• Assessment Year: 2009-2010
• Appeal Filed On: 10-02-2022
• Other Referred Cases: Majji Sannemma @ Sanyasirao Vs Reddy Sridevi & Ors
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Recovery proceedings; Period of limitation; Time period of passing order; Set aside
• Section: 147; 148; 54; 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH (SMC), SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER ITA No. 29/Srt/2022 (Assessment Year 2009-10) (Physical hearing) Shri Nathalal D. Dadhania, At and Post Donja, Tal: Chikhli, Navsari-396521. PAN No. ANPPD 2418 M Vs. I.T.O., Ward-4, Navsari. Appellant/ assessee Respondent/ revenue Assessee represented by Shri P. M. Jagasheth, CA Department represented by Shri Vinod Kumar, Sr. DR Date of hearing 31/05/2023 Date of pronouncement 30/06/2023 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), Valsad (in short, the ld. CIT(A)) dated 25/07/2018 for the Assessment Year (AY) 2009-10. The assessee has raised following grounds of appeal: “1. On the facts and in the circumstances of the case as well as law on the subject, the ld. CIT(A) has erred in confirming the action of assessing Officer in reopening the assessment u/s 147 of the Income Tax Act, 1961 and notice issued u/s 148 of the Income Tax Act, 1961. 2. On the facts and in the circumstances of the case as well as law on the subject, the ld. CIT(A) has erred in confirming the action of assessing Officer in making addition of Rs. 19,08,930/- on account of short term capital gain on sale of agriculture land bearing block No. 1112 located at Village-Khundh, Tal. Chikhli, Dist.-Navsari. 3. On the facts and in the circumstances of the case as well as law on the subject, the ld. AO has erred in disallowing claimed of exemption u/s 54 of the Income Tax Act, 1961. ITA No. 29/Srt/2022 Shri Nathalal D. Dadhania Vs ITO 2 4. On the facts and in the circumstances of the case as well as law on the subject, the ld. AO has erred in disallowing of expenses of Rs. 6,66,430/- claimed by the assessee for development expenses. 5. On the facts and in the circumstances of the case as well as law on the subject, the ld. AO has erred in initiating penalty proceedings u/s 271(1)(c) of the Income Tax Act, 1961. 6. On the facts and in the circumstances of the case as well as law on the subject, the ld. CIT(A) has not provided the ample opportunities to hear the case, hence the case may please be allowed and set aside to the CIT(A), Surat. 7. It is therefore prayed that the above addition may please be deleted as learned Members of the Tribunal may deem it proper. 8. Appellant craves leave to add, alter or delete any ground(s) either before of the Act in the course of the hearing of the appeal.” 2. Perusal of record shows that the impugned order was passed by the ld. CIT(A) on 25/07/2018, however, the present appeal is filed only on 11/02/2022. Thus, there is a delay of 1237 days in filing appeal. The assessee has filed application for condonation of delay which is supported by affidavit of assessee. In the application, the assessee has stated that the assessee is educated only up to 4 th standard and not well-versed with the computer knowledge and resides in small village in the district of Navsari where there is no facility of internet. The assessee came to know about passing of order by ld. CIT(A) dated 25/07/2018 only when recovery notice was served upon the assessee by the ITO, Ward-4, Navsari. The assessee contacted with his consultant and obtained copy of order of ld. CIT(A) through e-filing portal and immediately filed present appeal before the Tribunal. The assessee also stated that time limit for the period from 15/03/2020 to 28/12/2022 was ITA No. 29/Srt/2022 Shri Nathalal D. Dadhania Vs ITO 3 excluded by the Hon'ble Apex Court in M.A. No. 21/2022 in suo moto writ petition. 3. The learned Authorised Representative (ld. AR) of the assessee submits that after excluding the time period of Covid-19 period, the delay is only 733 days. Non-filing of appeal before the Tribunal was neither intentional nor deliberate but for the reasons that the assessee was not having any knowledge about passing of the order. Moreover, no notice about hearing of appeal was served upon the assessee and the ld. CIT(A) passed the ex parte order and dismissed the appeal of assessee in limine without discussing the merit of the case. The ld. AR of the assessee submits that the assessee has good case on merit and is likely to succeed if one more opportunity is given to the assessee to contest the case on merit. On merits, the ld AR for the assessee submits that the assessee has sold rural agricultural land and the surplus earned on sale of such agricultural land is exempt under the provisions of Income Tax Act and that no tax is leviable against the assessee. The ld. AR of the assessee submits that there is no intentional or deliberate act on the part of assessee in not filing appeal in time. The ld. AR of the assessee submits that the assessee is not going to be benefitted in filing appeal belatedly rather there is a chance that appeal may be dismissed in limine and not condoning the delay in filing appeal. ITA No. 29/Srt/2022 Shri Nathalal D. Dadhania Vs ITO 4 4. On the other hand, the learned Senior Departmental Representative (ld. Sr. DR) for the revenue submits that even after excluding the delay of Covid-19 period, the delay is of 733 days and that the assessee has not explained the delay in proper manner. The assessee has just raised the excuse that the order of ld. CIT(A) was not served upon the assessee or that he came to know only on initiating recovery proceedings by the department. The ld. Sr. DR submits that the application for condonation of delay may be rejected an appeal may not be admitted. To support his submission, the ld. Sr. DR for revenue has relied upon the decision of Hon'ble Apex Court in Civil Appeal No.7696 of 2021 in the case of Majji Sannemma @ Sanyasirao Vs Reddy Sridevi & Ors. 5. I have considered the submissions of both the parties and perused the orders of the lower authorities carefully. I find that the ld. CIT(A) passed the order on 25/07/2018. The ld. CIT(A) passed ex parte order without discussing the merit of the case. The ld. CIT(A) in para 3.3 of his order recorded that hearing of appeal was fixed on 04/04/2018 but no one attended the hearing nor filed written submission. Vide notice dated 11/04/2018 fixing the date of hearing on 24/04/2018, the assessee was informed that in case no submission is filed, case will be finalized on the basis of available record. No one attended nor adjournment application was filed. The ld. CIT(A) dismissed the appeal of assessee in limine without discussing the merit of the case. The present appeal is filed on ITA No. 29/Srt/2022 Shri Nathalal D. Dadhania Vs ITO 5 11/02/2022. The assessee was required to file appeal on or before 25/09/2018, if the impugned order was served upon the assessee. The ld. AR of the assessee vehemently argued that order of ld. CIT(A) was not served upon the assessee. The ld. Sr. DR for the revenue vehemently disputed such contention of assessee. The assessee has filed his affidavit contending therein that the impugned order was not served upon the assessee. The revenue has not controverted such fact by showing their official record that the impugned order was served upon the assessee or not. It is a matter of record that at the relevant period in July, 2018, the hearing was taken in physical mode and order used to be served by way of registered post. I instead of going into deep controversy that order was really dispatched or nor or served or not at the given address, find that assessee has shown sufficient cause for condoning the delay. I further find that after excluding the Covid-19 period, the delay is of 733 days and that the assessee has filed application within extended period of limitation as per decision of Hon'ble Supreme Court in M.A. No. 21/2022 in Suo Motu Writ Petition No (C) No. 3 of 2020, wherein limitation period was for taking recourse of law was extended up to 28/02/2022. The assessee has filed appeal on 11/02/2022. Considering the overall facts and circumstances of the case, I am inclined to condone the delay by keeping in view the principle ITA No. 29/Srt/2022 Shri Nathalal D. Dadhania Vs ITO 6 that when technical consideration and cause of justice are placed against each other, the cause of justice may be prevailed. 6. So far as reliance of revenue in decision of Hon'ble Apex Court in Civil Appeal No.7696 of 2021 in the case of Majji Sannemma @ Sanyasirao Vs Reddy Sridevi & Ors. with utmost regard to the said decision, I find that facts of the present appeal are at variance. With utmost regard the ratio of the said decision, I find that in that case, the High Court has not observed that there was any sufficient cause explaining the huge delay of 1011 days was made out, however in the present case the assessee has properly explained the facts about non service of impugned order. In view of the aforesaid discussion, the delay in filing appeal is condoned. Now adverting to the merit of the case. 7. The ld. CIT(A) dismissed the appeal of assessee in ex parte proceeding without discussing the merit of the case. The contention of ld. AR of the assessee before me is that the assessee sold agricultural land and the surplus so earned is not taxable as the land was rural agricultural land. Considering the fact that the ld. CIT(A) passed the order without adjudicating various grounds of appeal on merit, therefore, all the grounds of appeal are restored back to the file of ld. CIT(A) with the direction to adjudicate the issue afresh. Needless to direct that before passing the order, the ld. CIT(A) shall grant fair and reasonable opportunity of hearing to the assessee. The assessee is also directed to ITA No. 29/Srt/2022 Shri Nathalal D. Dadhania Vs ITO 7 be more vigilant in future and to make timely compliance and file necessary evidence and not to seek adjournment without any valid reason. Hence, grounds of appeal raised by the assessee are allowed for statistical purposes only. 8. In the result, this appeal of assessee is allowed for statistical purposes only. Order announced in open court on 30 th June, 2023. Sd/- (PAWAN SINGH) JUDICIAL MEMBER Surat, Dated: 30/06/2023 *Ranjan Copy to: 1. Assessee – 2. Revenue – 3. CIT 4. DR By order 5. Guard File Sr. Private Secretary, ITAT, Surat