Nazir Nisarahmed Waghbakriwala(L/H of Late Nisarahmed Gulammohmed Waghbakriwala), Surat V. ITO, Ward2(2)(5), Surat

ITA 459/SRT/2024

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 0914 (ITAT-SURAT)
• Duration Of Justice: 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 15-07-2024
• Assessment Year: 2014-2015
• Appeal Filed On: 18-04-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Set aside
• Section: 271(1)(c); 143(3); 54F; 250; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JIDICIAL MEMBER & SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.459/SRT/2024 Assessment Year: (2014-15) (Virtual Court Hearing) Nazir Nisarahmed Waghbakriwala (L/h. of Late Nisarahmed Gulammohmed Waghbakriwala), 4/2477, Nani Begumwadi Salabatpura, Surat-395002 Vs. Income Tax Officer, Ward- 2(2)(5), Surat, Aaykar Bhawan, Majura Gate, Surat-395001 èथायीलेखासं./जीआइआरसं./PAN/GIR No.: ABCPV 1755 C (अपीलाथŎ/Appellant) (ŮȑथŎ /Respondent) िनधाŊįरती की ओर से /Appellant by Shri Sapnesh R Sheth, CA िनधाŊįरती की ओर से /Respondent by Shri Vinod Kumar, Sr. DR अपील पंजीकरण/Appeal instituted on 19.04.2024 सुनवाई की तारीख /Date of Hearing 16.07.2024 घोषणा की तारीख /Date of Pronouncement 16.07.2024 आदेश / O R D E R PER BIJAYANANDA PRUSETH, AM: This appeal by the assessee emanates from the order of the Learned Commissioner of Income-tax(Appeals) /National Faceless Appeal Centre, Delhi [in short, “CIT(A)]” u/s 250 of the Income-tax Act, 1961 (in short, “the Act”) dated 23.02.2024 for assessment year 2014- 15. Grounds of appeal raised by the assessee are as under:- “1. On the facts and in circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Appeals), NFAC has erred 2 ITA No.459/SRT/2024 AY.14-15 Nazir N Waghbakriwals (L/h Lt.Nisarahmed G Waghbakriwala) in passing ex-parte order although assessee filed adjournment application on 11.02.2021. 2. On the facts and in circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax(Appeals), NFAC has erred in confirming the action of Assessing Officer in disallowing the deduction u/s 54F amounting to Rs.72,79,111. 3. It is therefore prayed that above addition made by Assessing Officer and confirmed by Commissioner of Income-tax (Appeals) may please be deleted. 4. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.” 2. Facts in brief are that assessee filed his return of income (in short ‘ROI’) on 22.07.2014 declaring total income of Rs.2,12,520/-. The case was taken up for scrutiny and after issuing statutory notice(s) and questionnaire, assessment order passed u/s 143(3) of the Act was passed on 26.12.2016 determining total income at Rs.74,19,630/-. The AO has disallowed deduction of Rs.72,79,111/- out of Rs.1,06,78,991/- claimed u/s 54F of the Act. The sale consideration was Rs.1,09,26,100/- and assessee had purchased residential property amounting to Rs.44,00,000/-. The AO observed that in absence of relevant documents claimed for deduction of the remaining amount of Rs.62,78,991/- (Rs.1,06,78,991 – Rs.44,00,000) the same cannot be allowed. He issued a show cause notice to the assessee in response to which assessee claimed that he has demolished the newly purchased house and constructed a new house on the land and he had invested Rs.74,02,000/- till the date of filing of ROI. Hence, he is eligible to claim 3 ITA No.459/SRT/2024 AY.14-15 Nazir N Waghbakriwals (L/h Lt.Nisarahmed G Waghbakriwala) deduction of Rs.1,09,34,700/-. The submission of the assessee was not accepted by the AO because no supporting evidence relating to construction of new bungalow after demolition of old bungalow was furnished. There was also no evidence regarding the demolition of old building. There is also no proof of plan approval from Surat Municipal Corporation. The assessee claimed to have made payment of Rs.74,02,000/- in cash but the source of such expenses are not given. The AO also made spot verification of the impugned new building and found that construction was not completed till date. Hence, he restricted the deduction u/s 54F of the Act to Rs.33,99,880/- being 77.27% of Rs.44,00,000/- which was the share of the assessee in the new property. The AO also initiated penalty proceeding u/s 271(1)(c) of the Act. 3. Aggrieved by the order of AO assessee filed appeal before CIT(A) who has passed an ex parte order dated 23.02.2024. The CIT(A) issued various notice(s) on 31.12.2020, 13.10.2022 and 29.01.2024. In response to the first notice, the assessee requested for adjournment till April, 2021. In response to other two notices, there was non- compliance by the assessee. The CIT(A) has observed that assessee did not effectively pursued the appeal and has not given any explanation or furnished any documents relating to demolition of the old building 4 ITA No.459/SRT/2024 AY.14-15 Nazir N Waghbakriwals (L/h Lt.Nisarahmed G Waghbakriwala) and construction of new bungalow. He also observed that assessee was provided reasonable opportunity of being heard but he has chosen not to avail the opportunity granted to him. Thereafter, relying on the decision in case of CIT vs. BN Bhattacharya (1997) 118 ITR 461 (SC), he has dismissed the appeal of the assessee. Aggrieved, assessee has filed present appeal before the Tribunal. 4. The Ld. AR submitted that assessee expired on 26.04.2021. The legal heir of the assessee Mr.Nazir Nisarahmed Waghbakriwala has filed the present appeal before the Tribunal. He stated that it is not a case of complete non-compliance on the part of appellant. He has requested for adjournment to April, 2021 in response to the notice issued on 30.12.2020 by CIT(A). However, no further notice was issued fixing the case in April, 2021 or immediately thereafter. The next notice was issued nearly 22 months after the first notice and the final notice was issued after 15 months from the second notice. Due to death of the assessee and there being seven children of the assessee, there was uncertainty as to who would pursue the appeal. However, there was no deliberate or intentional non-compliance to the notices issued by the CIT(A). The Ld.AR stated that all the evidences are available with the legal heir of the assessee and requested to grant one more opportunity in the interest of justice. 5 ITA No.459/SRT/2024 AY.14-15 Nazir N Waghbakriwals (L/h Lt.Nisarahmed G Waghbakriwala) 5. On the other hand, Ld.Sr.DR for the Revenue supported the orders of lower authorities and stated that though assessee purchased the property at Rs.44,00,000/-, he has claimed deduction of Rs.1,09,34,700/-. The other expenses of Rs.74,02,000/- was claimed to have been incurred in cash for which no proper evidences are available. The assessee has also not satisfactorily explained the source of the cash expenses. Hence, he requested to confirm the order of CIT(A). 6. We have considered the submission of both the parties and perused the materials available on record. We find that CIT(A) passed an ex parte order without giving reasonable and sufficient opportunities of being heard to the assessee. The assessee had requested for adjournment in response to the notice issued by CIT(A) on 30.12.2020. He has requested to grant a date in April, 2021. However, we find that subsequent notices were issued very late on 13.10.2022 and 29.01.2024. We also find that assessee had expired on 26.04.2021. In view of these facts, we are of the considered view that assessee was not granted reasonable and sufficient opportunities of hearing by CIT(A). The AO has made addition of Rs.72,79,111/- u/s 54F of the Act. The CIT(A) has dismissed the appeal by passing a cryptic order without discussing the merits of the case. The Ld.AR has stated 6 ITA No.459/SRT/2024 AY.14-15 Nazir N Waghbakriwals (L/h Lt.Nisarahmed G Waghbakriwala) that the appellant has all evidences and explanation in support of the claim of deduction u/s 54F of the Act. We find that impugned order passed by the Ld.CIT(A) is clearly violative of the express provisions of Section 250(6) of the Act, which provides that the appellate orders of the Ld.CIT(A) are to state the points arising in the appeal, the decision of the authority thereon and the reasons for such decisions. The underlying rationale of the provision is that such orders are subject to further appeal to the appellate Tribunal. Speaking order would obviously enable a party to know precise points decided in his favour or against him. Considering the facts and circumstances of the case and the submission of Ld.AR for the assessee that the Assessing Office made addition for the want of evidence, which was confirmed by Ld.CIT(A) in ex parte order, we are of the considered view that the assessee deserves one more opportunity to contest his case on merit. Considering all the facts, in the interest of justice, we set aside the order of Ld. CIT(A) and remit the matter back to the file of AO with a direction to pass fresh assessment order in accordance with law after granting adequate opportunity of hearing to assessee. The assessee is directed to be vigilant and to furnish all details and explanation as needed by AO by not seeking adjournment without valid reason. With 7 ITA No.459/SRT/2024 AY.14-15 Nazir N Waghbakriwals (L/h Lt.Nisarahmed G Waghbakriwala) this direction, the grounds of appeal raised by the assessee is treated as allowed for statistical purposes. 7. In the result, appeal filed by the assessee is allowed for statistical purposes. Order is pronounced on 16/07/2024 in the open court. Sd/- Sd/- (PAWAN SINGH) (BIJAYANANDA PRUSETH) JUDICIAL MEMBER ACCOUNTANT MEMBER स ू रत/Surat Ǒदनांक/ Date: 16/07/2024 DKP Outsourcing Sr.P.S Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // True Copy // Assistant Registrar/Sr. PS ITAT, Surat