Jagrutiben Bhavikkumar Sheth, Ahmedabad V. The Income Tax Officer, Ward-1(3)(2), Ahmedabad

ITA 534/AHD/2022

AI Insights

The case involves Jagrutiben Bhavikkumar Sheth, who appealed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi. The appeal was initially filed late due to the assessee's lack of awareness of the order, as she was not familiar with tax laws and was informed by her brother. The primary contention in the appeal was the ex parte decision by the CIT(A), which the assessee argued should be reconsidered on merits. The reassessment by the AO included a property sale for Rs. 7,50,000, treating the entire amount as income due to non-submission of any explanation or evidence by the assessee. The Tribunal found procedural fairness was not followed, as notices were sent to an incorrect email, preventing the assessee from participating in the appellate process.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 133661 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 07-02-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 29-11-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Cost of acquisition; Reassessment proceedings; Capital Gains
• Section: 147; 22

Judgement Text

आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरणआयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण, अहमदाबाद 瀈यायपीठ अहमदाबाद 瀈यायपीठअहमदाबाद 瀈यायपीठ अहमदाबाद 瀈यायपीठ ‘SMC’ अहमदाबाद। अहमदाबाद।अहमदाबाद। अहमदाबाद। IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD ] ] BEFORE SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA No.534/Ahd/2022 Asstt.Year : 2011-12 JagrutibenBhavikkumarSheth B-106, Mallinath Park P.T. College Road Paldi, Ahmedabad. PAN : BPXPS 8796 E Vs ITO, Ward-1(3)(2) Ahmedabad. (Applicant) (Responent) Assesseeby : Shri Divya Agrawal, AR Revenue by : Ms.M.M. Garg, Sr.DR स ु नवाई क तार ख/D a t e o f H e a r i n g : 0 8 / 0 2 / 2 0 2 3 घोषणा क तार ख /D a t e o f P r o n o u n c e m e n t : 1 0 / 0 2 / 2 0 2 3 आदेश/O R D E R The present appeal has been filed by the assessee against order passed by the Commissioner of Income Tax(Appeals), National Faceless Appeal Centre (NFAC), Delhi (in short referred to as ld.CIT(A)) under section 250(6) of the Income Tax Act, 1961 ("the Act" for short), dated 9.9.2022pertaining to Asst.Year2011-12. 2. It has been brought to my notice that the appeal of the assessee has been filed before the Tribunal late by 22 days. The ld.counsel for the assessee submitted that the assessee is a home- lady having no source of income except interest income from bank deposits and is not acquainted with the provisions of taxation law. It was stated that she was not aware of any order being passed against her by the ld.CIT(A); that it was brought to the notice by her brother, who is handling her tax matters, and therefore, the ITA No.534/Ahd/2022 2 impugned delay in filing of the appeal . He accordingly pleaded the delay to be condoned. The ld.DR had no objection to the condonation of the delay. 3. In view of the above, considering smallness of the delay and the reasons adduced by the ld.counsel for the assessee, we condone the same. The order to this effect is accordingly pronounced in the open court. 4. Thereafter, the hearing of the appeal of the assessee was proceeded with. The ground no.1 raised by the assessee reads as under: “1. The ld.CIT(A)-NFAC, Delhi has erred in dismissing appeal ex parte instead of deciding the appeal on merits.” 5. The ld.counsel for the assessee has pointed out that order passed by the ld.CIT(A)is an ex parte order, and pleaded that the appeal be restored back to the AO for deciding the case on merits. He pointed out from the assessment order that the addition made in the present case; in reassessment proceedings under section 147 of theAct, was on account of information with the AO that the assessee had sold a property during the year for a consideration of Rs.7,50,000/-; that in the absence of any explanation offered by the assessee, he had treated the entire amount as income of the assessee. The ld.counsel for the assessee contended that it is highly improbable that any asset sold will have no cost of acquisition, therefore, taxing the entire consideration received by the assessee of Rs.7.50 lakhs, more particularly, in the circumstances, where the assessee had no source of income at all, has resulted in gross- injustice to her, assessing her income multiple times to that returned. He pleaded that all evidences were available with the ITA No.534/Ahd/2022 3 assessee proving the acquisition cost of assets sold, and if given an opportunity, the assessee would cooperate with the Revenue authorities in determining the correct amount of capital gain to be subjected to tax. He further stated that the reasons for not appearing before the ld.CIT(A) and not responding to any of the notices sent by the ld.CIT(A) was that in Form No.35 the email address mentioned for serving notices was incorrectly mentioned as “[e-mail], while the correct email id is [e-mail] all notices as a resultwere sent at the incorrect address, and thus not received by the assessee, precluding the assessee therefore from participating in the appellate proceedings before the ld.CIT(A). He therefore stated that in all fairness, the assessee be granted an opportunity to bring out the correct income liable to tax on account of the property sold by the assessee during the year, and requested that the issue be restored back to the AO so that income can be assessed duly after making all necessary inquiries. 6. The ld.DR, on the other contrary, stated that the assessee having not availed several opportunitiesgranted to it by the ld.CIT(A) and not even participated inthe assessment proceedings beforethe AO, therewas no reason at all to take lenient view in the matter. The ld.DR vehemently objected to the submissions of the ld.counsel for the restoring the matter back to the file of the AO. 7. I have heard the rival contentions and gone through the orders of the authorities below. Though, I have noted that the assessee has been non-compliant consistently, both before the AO and even before the ld.CIT(A), but I find that non-appearance before theld.CIT(A) has been reasonably justified by the ld.counsel for the assessee, pointing out that due to mistake on the part of the ITA No.534/Ahd/2022 4 assessee mentioning incorrect email address to which notices were tobe sent, the notices remained unserved to the assessee, and therefore, hearing beforetheld.CIT(A) remained uncompiled with. However, considering the fact that the assessee is a lady, non-filer of the income-tax return, having no taxable income at all, and in the impugned year has been assessed at the income of Rs.7,50,000/-, which is considerably high, and further noting the fact that the addition is on account of property sold by the assessee during the year, which in the absence of any information furnished by the assessee, entire sale consideration has been brought to tax, gross injustice has resulted to the assessee. In the interest of justice, I consider it fit to restore the matter back to the AO. The AO shall provide the assessee due opportunity of hearing to adduce all evidencesand thereafter determine the correct capital gains exigible to tax ,after making all verification and inquires required in the matter. 8. In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced in the Court on 10 th February, 2023 at Ahmedabad. Sd/- (ANNAPURNA GUPTA) ACCOUNTANT MEMBER Ahmedabad, dated 10/2/2023 vk*