Mr. Chandrakant R. Naik, England V. Income Tax Officer, Wd.3(1)(1), Surat

ITA 35/SRT/2021

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 2000 (ITAT-SURAT)
• Duration Of Justice: 1 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 27-04-2022
• Assessment Year: 2012-2013
• Appeal Filed On: 08-04-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Principle of natural justice; Fair market value; Condonation of delay; Reason to believe; Capital Gains
• Section: 148; 54B; 50C; 142(1); 13

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. 35/Srt/2021 (Assessment Year: 2012-13) Mr. Chandrakant R. Naik, Flat No. 4, St. Joseph’s Court, 24 Forest View, Chingford, London, England-E4 7UA, Ph. No. 9537543431 [e-mail] PAN No. AKJPN 5088 N Vs. I.T.O., Ward-3(1)(1), Surat. Appellant/ assessee Respondent/ revenue Appellant represented by Shri Sapnesh Seth-CA Respondent represented by Shri Deependra Kumar, Sr.DR Date of hearing 28/04/2022 Date of pronouncement 13/06/2022 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)-3, Surat (in short, ld. CIT(A)] dated 30/01/2019 for the Assessment year 2012-13 wherein the assessee has raised following grounds of appeal: “1. On the facts and circumstances of the case as well as law on the subject, the learned Commissioner of Income-tax (Appeals) has erred in passing ex-parte order without providing reasonable opportunity of hearing to assessee. 2. On the facts and circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Appeals) has erred in ITA No. 35/Srt/2021 Mr. Chandrakant R. Naik Vs ITO 2 confirming the action of assessing officer in reopening assessment by issuing notice u/s 148 of the I.T. Act, 1961. 3. On the facts and circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Appeals) has erred in confirming the action of assessing officer assessing officer in making addition to the income of assessee under the head of capital gains as the land sold by assessee is not a capital asset. 4. On the facts and circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Appeals) has erred in confirming the action of assessing officer in making addition of Rs. 53,67,063/- on account of long term capital gain. 5. On the facts and circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Appeals) has erred in confirming the action of assessing officer assessing officer in not allowing deduction of agricultural land purchased by assessee u/s 54B of the I. T. Act. 6. On the facts and circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Appeals) has erred in confirming the action of assessing officer assessing officer in making addition u/s 50C of the Act without making reference to Departments Valuation Officer for determining the fair market value of property sold. 7. It is therefore prayed that above addition made by assessing officer and confirmed by Commissioner of Income-tax (Appeals) may please be deleted. 8. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.” 2. At the outset of hearing, we find that the impugned order was passed by the ld. CIT(A) on 30/01/2019 and the present appeal was filed on 09/04/2021, thus there is apparent delay of more than two years in filing the present appeal before the Tribunal. The ld. AR of the assessee submits ITA No. 35/Srt/2021 Mr. Chandrakant R. Naik Vs ITO 3 that he has already filed an application for condonation of delay in filing the appeal. The ld. AR submits that the impugned order was passed by the ld. CIT(A) on 30/01/2019 and as such the assessee was required to file appeal before the Tribunal within 60 days of receipt of the order. The ld. AR for the assessee submits that the assessee is a Non-Resident Indian (NRI) and presently residing in United Kingdom (UK). The assessee was not aware about the status of first appeal. The order passed by ld CIT(A) was not received to the assessee. He came to know about the order of dismissal when his co-owner, while filing application for Vivad Se Vishwas Scheme, 2020 (VSVS) in the month of January, 2021 through new counsel Shri Sapnesh Sheth and who intimated about the outcome/dismissal of appeal. Thereafter, the assessee immediately filed the present appeal with the application to condone the delay. The ld. AR of the assessee submits that delay in filing the appeal was not intentional and due to bonafide reason that the appeal is still pending before ld CIT(A) and that the assessee was not aware about dismissal of appeal, as the order was not communicated to the assessee. The assessee would not be benefitted in filing appeal belatedly, rather there is chance of dismissal of appeal for technical reasons. The ld. AR further submits that in fact the delay after 15 th March, 2020 till 14/03/2021 has been extended by the Hon’ble Supreme Court in Suo moto Writ Petition (WP) No. 3/2020 in order dated ITA No. 35/Srt/2021 Mr. Chandrakant R. Naik Vs ITO 4 10/1/2020, from 15.03.2021 till 28.02.2022. Thus, effectively, there is delay of about 360 days only. The ld. AR further submits that the assessee has a good case on merit and is likely to succeed if the matter is considered on merit. The ld. AR submits that he undertakes on behalf of assessee to be vigilant in future and to make proper compliance and not to make in default in attending the hearing of appeal and to provide all necessary information and evidence to the income tax authorities including this Tribunal. To support his submissions on the issue of condonation of delay, the ld. AR of the assessee furnished copy of passport of assessee showing departure of assessee from the India on 13/10/2017, and the copy of decision of Hon’ble Supreme Court in the WP No. 3/2020 dated 10.01.2022. The ld. AR submits that the delay may be condoned and appeal may be restored to the file of ld. CIT(A) for adjudication of issues on merit 3. The ld. AR further submits that the assessee is a salaried employee, the Assessing Officer passed the assessment by making addition of long term capital gain by invoking provisions of Section 50C of the Income Tax Act, 1961 (in short, the Act). The ld. CIT(A) passed ex parte order as no notices were served/complied. The order of ld. CIT(A) is not in accordance with mandate of Section 250(6) of the Act. ITA No. 35/Srt/2021 Mr. Chandrakant R. Naik Vs ITO 5 4. On the other hand, the ld. Senior departmental representative (Sr. DR) for the revenue submits that the assessee was negligent in pursuing the appeal before the first appellate authority and has not fulfilled his duty and obligation cast upon him. In absence of proper compliance, the ld. CIT(A) has no option except to decide the case on the basis of material available on record. There was no material on record to substantiate various grounds of appeal, thus the ld. CIT(A) dismissed the appeal of assessee. 5. On the plea of condonation of delay raised by the assessee, the ld. Sr. DR submits that the Bench may consider the plea in accordance with law, though the assessee has not explained the delay of about one year properly. 6. We have considered the rival submissions of both the parties and have gone through the orders of authorities below carefully. We find that on the basis of AIR information the Assessing Officer noted that the assessee has sold piece of land with his co-owner and shown sale consideration of Rs. 1.00 Crore, though the stamp valuation authority determined the value of said lane at Rs. 2.19 Crore for the purpose of payment of stamp duty. The assessee was having ¼ share in the land. No return of income was filed for offering capital gain, thus the assessing officer has reason to believe that income of assessee escape assessment. Notice under section 148 dated 28.032017 was served on the assessee. No return of income was ITA No. 35/Srt/2021 Mr. Chandrakant R. Naik Vs ITO 6 filed by assessee in response to the notice under section 148. When notice under section 129 read with 142(1) dated 26/07/2017 was served the assessee filed his return of income on 11/09/2017 declaring income of Rs. 1,28,536/-. No capital gain was offered by the assessee in his return of income. In response to the show cause notice the assessee claimed that the land which was transferred was agriculture land situated beyond 8 kilometre form the Municipal limits of Taluka Palsana District Surat. The assessing officer held that on going through Google Map search, he find that the land situated in Sayani Village is only 7.9 Kilometre from Bardoli Municipality and hence capital asset. The assessing officer made addition on long term capital gain on sale of land by invoking provisions of Section 50C of the Act. The Assessing Officer worked out the fair market value of land sold by assessee of Rs. 2.19 crore. The assessee was having 1/4 th share in the land, accordingly, the addition of long term capital gain of Rs. 53,67,063/- was made. On appeal before ld the action of assessing officer was upheld in ex parte proceedings. 7. Before us, the ld. AR of the assessee vehemently submitted that the assessee is an NRI and staying in United Kingdom. The ld. AR of the assessee has furnished copy of passport of assessee showing last arrival in India on 16/09/2017 and last departure on 13/10/2017. The assessment was completed on 20/12/2017 and the first appellate authority passed the ITA No. 35/Srt/2021 Mr. Chandrakant R. Naik Vs ITO 7 impugned order on 30/01/2019. Before us, the ld. AR of the assessee urged that the assessee being an NRI was not aware about the decision of first appellate authority as the copy of impugned order was not received by him personally. He came to know only when other co-owners were applying for settlement of dispute with the Income Tax Department under VSVS and immediately the present appeal was filed. The ld. AR also undertake on behalf of assessee to be vigilant in future. Considering the fact that the assessee has categorically pleaded that the order of ld CIT(A) was not received to him personally being NRI, we find that this fact was pleaded by the assessee in his application for condonation of delay and this fact is not controverted by the revenue by showing the evidence that order sent at the last known address of the assessee or was communication to assessee by other means in electronic communication as his e-mail address was furnished in Form-35 (appeal form before ld CIT(A). Thus, we find convincing force in the contention of ld AR for the assessee to condone the delay. Moreover, the assessee has express his willingness and undertook to be vigilant in attending the hearing before the lower authorities. Further considering the fact that when technical consideration are petted against the cause of natural justice, the cause of justice must prevail. Considering the pleas of ld. AR of the assessee, the delay in filing the appeal from 30/03/2019 to 15/03/2020 is condoned. ITA No. 35/Srt/2021 Mr. Chandrakant R. Naik Vs ITO 8 Further delay from 15/03/2020 onward till 09.04.2021 is condoned as per mandate of decision of Hon’ble Supreme Court in the suo moto WP No. 3/2020 dated 10.012022, wherein the delay expiring in between 15 th March 2020 till 28.02.2022 was further extended for 90 days. Therefore, the delay in filing present appeal is condoned. 8. Now adverting to the merit of the case. We find that the ld. CIT(A) passed the impugned order in ex-party proceedings and without discussing the merit or facts of the present case. The order of ld. CIT(A) is not as per mandate of Section 250(6) of the Act. Considering the fact that we have condoned and already held that the order of ld. CIT(A) is not in accordance with provisions of Section 250(6) of the Act, therefore, all the grounds of appeal raised by the assessee are resorted to the file of ld. CIT(A) to be decided the same on merit. Needless to say that before passing the order, the ld. CIT(A) shall grant reasonable and fair opportunity of hearing to the assessee. The assessee is also directed to be vigilant in making compliance of notice of first appellate authority and not to seek adjournment without any valid reasons. In the result, all the grounds raised by the assessee are allowed for statistical purposes. 9. In the result, this appeal of assessee is allowed for statistical purposes only. ITA No. 35/Srt/2021 Mr. Chandrakant R. Naik Vs ITO 9 Order pronounced in the open court on 13 June, 2022 and result was placed on the notice board. Sd/- Sd/- (Dr. ARJUN LAL SAINI) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat, Dated: 13/06/2022 *Ranjan Copy to: 1. Assessee – 2. Revenue - 3. CIT(A) 4. CIT 5. DR 6. Guard File By order // True Copy // Sr.Private Secretary, ITAT, Surat