Sh. Dalgir Singh Alias Daljit Singh, Yamunanagar V. ITO, Yamunanagar

ITA 33/CHANDI/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6824 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2007-2008
• Appeal Filed On: 04-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Reasonable cause; Bonafide mistake
• Section: 54B; 54F; 2(14); 142(1); 147; 148; 54; 144

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, A CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER & MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 33/CHD/2017 ASSESSMENT YEAR: 2008-09 SH. DILGIR SINGH ALIA DALJIT SINGH, VS. THE ITO, WARD-3, S/O SH. TARA SINGH, YAMUNANAGAR YAMUNANAGAR PAN NO. CGVPS3639G (APPELLANT) (RESPONDENT) APPELLANT BY : SH. SUDHIR SEHGAL RESPONDENT BY : SMT. CHANDERKANTA DATE OF HEARING : 25.09.2017 DATE OF PRONOUNCEMENT : 29.09.2017 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTE R REFERRED TO AS CIT(A)], PANCHKULA DATED 17.11.2016. 2. THE ASSESSEE IS AGGRIEVED BY THE ADDITIONS MADE / CONFIRMED OF RS. 79,65,297/- U/S 143 (3) READ WITH SECTION 147 OF T HE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') ON ACCOUNT OF LONG TERM CAPITA L GAIN. 2 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING O FFICER HAD INFORMATION THAT THE ASSESSEE ALONG WITH SH. TEJA SINGH AND SH. DAYA SINGH HAD SOLD LAND MEASURING 58 KANAL 6 MALA FOR RS. 2,46,56,663 /- TO M/S JYOTIMA BUILDWELL PVT LTD., NEW DELHI THROUGH REGISTERED SA LE DEED DATED 11.6.2006. THE ASSESSEE HAD 1/3 RD SHARE IN THE SALE CONSIDERATION. ON THE SALE OF TH IS LAND, THE ASSESSEE HAD EARNED LONG TERM CAPITAL GAI N BECAUSE THE LAND SOLD WAS WITHIN THE AMBIT OF CAPITAL ASSETS AS PER THE P ROVISIONS OF SECTION 2(14) AS DISTANCE OF LAND SOLD BY THE ASSESSEE WAS WITHIN 8 KM FROM THE MUNICIPAL LIMIT OF JAGADHRI. INFORMATION REGARDING FAIR MARKE T VALUE OF LAND DURING THE YEAR 1981-82 WAS CALLED BY ASSESSING OFFICER FROM T HE SUB REGISTRAR, JAGDHRI. THE RATE OF LAND, BENEFICIAL TO THE ASSESS EE, SUPPLIED BY THE SUB REGISTRAR, WAS APPLIED FOR COMPUTING THE LONG TERM CAPITAL GAIN. SINCE, THE ASSESSEE HAD NOT DISCHARGED TAX LIABILITY ON TH E LONG TERM CAPITAL GAIN, THE ASSESSING OFFICER RECORDED REASONS TO BELIEVE T HAT LONG TERM CAPITAL GAIN OF RS. 79,65,297/- (1/3RD SHARE OF ASSESSEE) R ELEVANT TO ASSESSMENT YEAR 2007-08 HAD ESCAPED ASSESSMENT. THE ASSESSEES CASE WAS REOPENED BY INITIATING PROCEEDINGS U/S 147 OF THE ACT AFTER APP ROVAL FROM THE JCIT. A NOTICE U/S 148 DATED 26.3.2014 WAS ISSUED AND SERVE D ON THE ASSESSEE REQUIRING HIM TO FILE RETURN OF INCOME FOR THE ASSE SSMENT YEAR 2007-08. HOWEVER, DUE COMPLIANCE OF THE NOTICE WAS NOT MADE WITHIN THE STIPULATED TIME OF 30 DAYS. FURTHER, THE ASSESSING OFFICER IS SUED NOTICES U/S 142(1) ALOGNWITH QUESTIONNAIRE DATED 10.10.2014 INCLUDING REASONS TO REOPEN THE CASE. IN VIEW OF NON-COMPLIANCE, A FINAL SHOW CAUSE NOTICE DATED 2.2.2015 WAS ISSUED FOR COMPLIANCE. THE ASSESSING OFFICER HA D ALSO ISSUED A SHOW CAUSE AS TO WHY EX-PARTE ASSESSMENT U/S 144 OF THE ACT MAY NOT BE COMPLETED BY MAKING AN ADDITION OF LONG TERM CAPITAL GAIN ON THE SALE OF PROPERTY. 3 THE ASSESSEE DID NOT MAKE ANY COMPLIANCE OF THE SHO W CAUSE NOTICE ON THE GIVEN DATE. THE ASSESSING OFFICER NOTED THAT AS P ER THE SALE DEEDS DATED 17.4.2006, THE ASSESSEE HAD RECEIVED RS. 82,18,888/ - (13 SHARE OF ASSESSEE). ON THE SALE OF THIS LAND THE ASSESSEE EARNED LONG T ERM CAPITAL GAIN ON WHICH THE DUE TAX LIABILITY WAS NOT PAID. THE ASSES SING OFFICER ASKED THE ASSESSEE TO SHOW CAUSE AS TO WHY LONG TERM CAPITAL GAIN OF RS. 79,65,297/- SHOULD NOT BE ASSESSED TO TAX, AFTER GIVING CREDIT OF INDEX COST OF RS. 7,60,771/- FOR THE FOR THE SAID LAND AS ON 1.4.1982 . IN VIEW OF NON- COMPLIANCE TO THE NOTICES, THE ASSESSING OFFICER PR OCEEDED TO COMPLETE THE ASSESSMENT U/S 144 OF THE ACT ON THE BASIS OF INFOR MATION AND DOCUMENTS AVAILABLE ON RECORD. THUS, THE INCOME OF THE ASSESS EE WAS ASSESSED AT RS. 79,65,297/- UNDER THE HEAD LONG TERM CAPITAL GAIN . 4. IN APPEAL BEFORE THE CIT(A), THE ASSESSEE SUBMIT TED THAT THE ASSESSEE HAD FILED THE RETURN OF INCOME FOR ASSESSMENT YEAR 2007-08 AFTER RECEIPT OF NOTICE U/S 148 OF THE ACT AND A REPLY DATED 13.3.20 15 WAS ALSO FILED IN THE REGISTRY / DAK AFTER REFUSAL OF THE ASSESSING OFFIC ER TO ENTERTAIN THE SAME. THE LD. CIT(A) AFTER CONSIDERING THE ABOVE SUBMISSI ONS OBSERVED THAT THE ASSESSEE DID NOT RESPOND TO ANY OF THE NOTICES ISSU ED BY THE ASSESSING OFFICER AND ULTIMATELY THE IMPUGNED ASSESSMENT ORDER WAS PA SSED BY THE ASSESSING OFFICER ON 12.3.2015. HOWEVER, THE ALLEGED RETURN A ND REPLY WAS FILED POST COMPLETION OF ASSESSMENT PROCEEDINGS. HE ALSO REJE CTED THE CLAIM OF THE ASSESSEE FOR EXEMPTION U/S 54 / 54B / 54D/ 54E / 54 F OF THE ACT ON ACCOUNT OF PURCHASE OF AGRICULTURAL LAND ON THE ASSESSEES NAME AS WELL AS IN THE NAME OF THE ASSESSEES SON AND FURTHER CLAIM OF INV ESTMENT FOR CONSTRUCTION 4 OF THE RESIDENTIAL HOUSE FOR WANT OF PROPER AND REL IABLE EVIDENCE. HE THEREFORE, UPHELD THE ORDER OF THE ASSESSING OFFICE R. 5. BEFORE US LD. COUNSEL FOR THE ASSESSEE HAS TAKEN AN ADDITION GROUND AS UNDER:- THAT THE ASSESSEE WAS PREVENTED BY SUFFICIENT AND REASONABLE CAUSE IN NOT APPEARING BEFORE THE LD. COMMISSIONER OF INCOME TAX (A). FURTHER ASSESSEE HAS FILED AN AFFIDAVIT OF C.A., SH RI AMRAJIT SINGH S/O SHRI PREM SINGH RESIDENT OF H.NO. 513-R, MODEL TOWN, YAM UNANAGAR. THE CONTENTS OF THE SAME ARE REPRODUCED HERE-IN-UNDER:- AFFIDAVIT I, CA AMARJEET SINGH, S/O SHRI PREM SINGH, R/O H.NO . 513- R, MODEL TOWN, YAMUNANAGAR, HARYANA, DO HEREBY SOLE MNLY AFFIRM AS UNDER:- 1. THAT I AM PRACTICING AS CHARTERED ACCOUNTANT IN YAMUNANAGAR FOR LAST FEW YEARS. 2. THAT I HAD A BRIEF OF SHRI DALGIR SIGH, SH. GURDEV SINGH AND SHRI DHARAM SINGH OF YAMUNA NAGAR. 3. THAT I HAD TAKEN FEW ADJOURNMENTS FROM CIT(A), PANCHKULA AND THE CASE WAS FINALLY ADJOURNED TO 8.11.2016. 4. THAT DUE TO ACCIDENT OF MY FATHER ON 26.10.2016 AT YAMUNA NAGAR FOR THAT HE HAD TO BE ADMITTED IN HOSPITAL, AND THEREAFTER HE WAS OPERATED UPON AND T HEN HE HAD TO BE LOOKED AFTER AT HOME. HE HAD TO BE TAK EN FOR REGULAR CHECKUPS AND AS SUCH DUE TO WHICH I COU LD NOT ATTEND THE HEARING WITH CIT(A), PANCHKULA ON 8.11.2016. THE NON-APPEARANCE BEFORE THE CIT(A), PANCHKULA IS HIGHLY REGRETTED. 5 DEPONENT VERIFICATION: VERIFIED THAT THE CONTENTS OF THE ABOVE AFFIDAVIT A RE TRUE AND CORRECT TO THE BEST OF MY KNOWLEDGE AND NOTHING HAS BEEN CONCEALED THEREIN. DEPONENT 6. THE LD. COUNSEL, THEREFORE, HAS SUBMITTED THAT A SSESSEE WAS AN ILLITERATE PERSON AND DID NOT KNOW THE PROCEDURAL A SPECT AND TECHNICALITIES OF THE INCOME TAX PROCEEDINGS. FURTHER, THAT IN THE APPELLATE PROCEEDING, THE C.A. APPOINTED BY THE ASSESSEE COULD NOT APPEAR BEF ORE THE CIT(A) DUE TO AFORESAID REASONS AS MENTIONED IN THE AFFIDAVIT AS REPRODUCED ABOVE. THE LD. COUNSEL HAS, THEREFORE, REQUESTED THAT IN THE INTER EST OF JUSTICE THE MATTER BE RESTORED TO THE FILE OF THE ASSESSING OFFICER SO T HAT THE ASSESSEE MAY FURNISH THE EVIDENCE IN RESPECT OF CLAIM OF DEDUCTION U/S 5 4 / 54B / 54D/ 54E / 54F OF THE ACT. 7. THE LD. DR, ON THE OTHER HAND, RELIED ON THE FI NDINGS OF THE LOWER AUTHORITIES. 8. WE HAVE CONSIDERED THE RIVAL CONTENTIOUS. NO DOU BT THE ASSESSEE HAD FAILED TO PRESENT ITS CASE PROPERLY BEFORE THE LOWE R AUTHORITIES. SUBMISSIONS BEFORE THE ASSESSING OFFICER ADMITTEDLY WERE MADE A DAY AFTER THE COMPLETION OF THE ASSESSMENT PROCEEDINGS. EVEN IN THE APPELLA TE PROCEEDINGS, THE AR FOR THE ASSESSEE FAILED TO APPEAR. THOUGH IN HIS AF FIDAVIT, THE AR OF THE ASSESSEE, C.A. SHRI AMARJIT SINGH HAS TRIED TO JUST IFY HIS ABSENCE BEFORE THE CIT(A) ON THE GROUND THAT HIS FATHER WAS NOT WELL A ND HE HAD TO ATTEND TO HIS 6 FATHER. THE PLEA RAISED IN THE ABOVE AFFIDAVIT IS GENERAL AND VAGUE AND IT PROVES NEGLIGENCE ON THE PART OF THE C.A. IN OUR V IEW, IF HE BECAUSE OF SOME REASONS WAS UNABLE TO ATTEND THE PROCEEDINGS BEFORE THE CIT(A), HE WAS SUPPOSED TO SEND AN ADJOURNMENT APPLICATION ATLEAST AND SEND SOME PROXY COUNSEL OR OTHER PERSON FOR SEEKING ANOTHER DATE. H OWEVER, DUE TO NEGLIGENCE OF THE C.A. THE ASSESSEE, IN OUR VIEW, SHOULD NOT B E PENALISED. IT IS AN ADMITTED FACT BY THE C.A. THAT HE HAD NOT APPEARED ON THE DATE FIXED BEFORE THE CIT(A). IN VIEW OF THIS, IN OUR VIEW, THE INTE REST OF JUSTICE WILL BE WELL SERVED, IF AN OPPORTUNITY IS GIVEN TO THE ASSESSEE TO FURNISH THE REQUISITE DOCUMENTS IN SUPPORT OF HIS CLAIM BEFORE THE ASSESS ING OFFICER. IT HAS BEEN HELD TIME AND AGAIN THAT ONLY THE ACTUAL AND REAL I NCOME OF THE ASSESSEE SHOULD BE TAXED AND THAT THE LITIGANTS SHOULD NOT B E PENALIZED FOR THEIR BONAFIDE MISTAKES. IN VIEW OF THIS, THE IMPUGNED OR DERS OF THE LOWER AUTHORITIES IS HEREBY SET ASIDE AND THE MATTER IS R ESTORED TO THE FILE OF THE ASSESSING OFFICER FOR DECISION AFRESH. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TRE ATED AS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29.09.2017 SD/- SD/- ( ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 29 TH SEPT. 2017 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR