Ravijeet Rattansingh Sachdeva, Pune V. Income-tax Officer, Ward - (2) (1), Pune

ITA 596/PUN/2018

• Counselvise Citation: [2019] 111 COUNSELVISE.COM (IT) 9516 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 8 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 05-09-2019
• Assessment Year: 2013-2014
• Appeal Filed On: 04-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SACHIN Y JAWADE
• Assessee Lawyers: DR PRAYAG JHA
• Keywords: Opportunity of being heard; Principle of natural justice; Additional evidence; Condonation of delay; Capital Gains
• Section: 54

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE . , BEFORE SHRI D. KARUNAKARA RAO, AM . / ITA NO.596/PUN/2018 / ASSESSMENT YEAR : 2013-14 RAVIJEET RATTANSINGH SACHDEVA, 213, SIND HOUSING SOCIETY, BANER ROAD, AUNDH, PUNE-413110. PAN : AENPS5072B . /APPELLANT VS. ITO, WARD-(2)(1), PUNE. . / RESPONDENT / APPELLANT BY : SHRI DR. PRAYAG JHA / RESPONDENT BY : SHRI SACHIN Y. JAWADE / DATE OF HEARING : 16.12.2019 / DATE OF PRONOUNCEMENT: 31.12.2019 / ORDER PER D. KARUNAKARA RAO, AM : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)-3, PUNE DATED 15.12.2017 FOR THE ASSESSMENT YEAR 2013-14. PRELIMINARY ISSUE - CONDONATION OF DELAY 2. BEFORE ME, AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE APPEAL COULD NOT BE FILED IN TIME AND THE SAID APPEAL IS NOW FILED WITH THE DELAY OF 06 DAYS . IN THIS REGARD, LD. COUNSEL FOR THE ASSESSEE FILED AN AFFIDAVIT STATING THE REASONS FOR NON-FILING THE APPEAL OF THE ASSESSEE IN ITA NO.596/PUN/2018 - 2 - TIME. FOR THE SAKE OF COMPLETENESS, THE RELEVANT PARA OF THE SAID AFFIDAVIT IS EXTRACTED HEREUNDER :- I SAY THAT, I RECEIVED A COPY OF THE ORDER DATED 15.12.2017 OF THE COMMISSIONER OF INCOME TAX (APPEALS)-3, PUNE, FOR THE ASSESSMENT YEAR 2013-14 ON 28.01.2018 BY POST. I SAY THAT, I SENT THIS ORDER TO SHRI. NIKHIL AMRAVATIKAR, CHARTERED ACCOUNTANT AND CONSULTANT FOR FURTHER ACTION IN ACCORDANCE WITH THE PROVISIONS OF THE INCOME TAX ACT. SHRI AMRAVATIKAR HAS BEEN HANDLING MY INCOME TAX AFFAIRS FOR SEVERAL YEARS. I SAY THAT, I DID NOT HEAR ANYTHING FROM SHRI AMRAVATIKAR ABOUT FURTHER ACTION TO BE TAKEN IN THIS MATTER. MEANWHILE, I BECAME BUSY WITH PREPARATION FOR THE MARRIAGE CEREMONY SHRI SOHAIL KANGG, MY WIFES YOUNGER BROTHER. THIS MARRIAGE WAS TO TAKE PLACE IN PUNE ON 04.04.2018. I SAY THAT, I SPOKE TO SHRI NIKHIL AMRAVATIKAR SOME TIME IN THE LAST WEEK OF MARCH, 2018 AND INQUIRED FROM HIM ABOUT THE ACTION WHICH HE HAD TO TAKE IN RESPECT OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-3, PUNE. I SAY THAT, SHRI AMRAVATIKAR INFORMED ME THAT AN APPEAL WAS TO BE FILED BEFORE THE INCOME TAX APPELLATE TRIBUNAL, PUNE BENCH, AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-3, PUNE, AND THAT HE REMAINED EXTREMELY BUSY IN OTHER MATTERS AND FORGOT TO ADVISE ME ABOUT THE FURTHER ACTION TO BE TAKEN IN THIS MATTER. SHRI AMRAVATIKAR FURTHER INFORMED ME THAT TIME FOR FILING THIS APPEAL WAS ALMOST OVER. I SAY THAT, SHRI NIKHIL AMRAVATIKAR ALSO INFORMED ME THAT HE DID NOT APPEAR BEFORE THE INCOME TAX APPELLATE TRIBUNAL AND THAT I HAD TO APPROACH SOME OTHER CHARTERED ACCOUNTANT OR ADVOCATE FOR THIS PURPOSE. SHRI AMRAVATIKAR ALSO SUGGESTED ME THAT I COULD TAKE ADVICE OF DR. PRAYAG JHA, ADVOCATE, IN THIS MATTER. I SAY THAT, I COLLECTED THE COPY OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-3, PUNE, FROM SHRI AMRAVATIKAR AND IMMEDIATELY CONTACTED DR. PRAYAG JHA, ADVOCATE, IN HIS OFFICE AND INQUIRED FROM HIM ABOUT THE ACTION TO BE TAKEN. DR. JHA ASKED FOR THE RELEVANT PAPERS FOR PREPARING THE MEMORANDUM OF APPEAL. I SAY THAT, AFTER LOOKING INTO THE PAPERS DR. PRAYAG JHA INFORMED THAT THE PERIOD OF SIXTY DAYS FROM THE DATE OF RECEIPT OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-3, PUNE, WHICH WAS AVAILABLE FOR FILING APPEAL BEFORE THE INCOME TAX APPELLATE TRIBUNAL WAS GETTING OVER ON 29.03.2018 AND THAT PREPARATION OF MEMORANDUM OF APPEAL, PAYMENT OF APPEAL FEES ONLINE, ETC. WILL TAKE SOME TIME. I SAY THAT, IN CASE OF DELAY IN FILING APPEAL AN APPLICATION FOR CONDONATION OF DELAY SUPPORTED BY MY AFFIDAVIT WAS NEEDED. I OBTAINED STAMP PAPER FOR RS.500/- FOR PREPARATION OF AFFIDAVIT ON 28.03.2018. HOWEVER, I COULD NOT GET THE AFFIDAVIT AFFIRMED AS I REMAINED BUSY IN THE PREPARATION FOR THE MARRIAGE OF MY BROTHER-IN-LAW. I SAY THAT, I MANAGED TO FILE MY APPEAL BEFORE THE INCOME TAX APPELLATE TRIBUNAL ON 4 TH APRIL, 2018, IN SPITE OF THE FACT THAT MY BROTHER-IN-LAWS MARRIAGE WAS GOING TO TAKE PLACE ON THE SAME DATE AND I WAS BUSY WITH THIS CEREMONY ALSO. MY APPEAL GOT DELAYED BY 6 DAYS. I SAY THAT, THE DELAY OF 6 DAYS IN FILING THIS APPEAL WAS NOT CAUSED KNOWINGLY OR DELIBERATELY. IT WAS BECAUSE OF INACTION ON THE PART OF SHRI NIKHIL ITA NO.596/PUN/2018 - 3 - AMRAVATIKAR, THE CHARTERED ACCOUNTANT, WHO DID NOT ADVISE ME PROMPTLY ABOUT FILING OF THIS APPEAL. 3. CONSIDERING THE ABOVE REASONS GIVEN BY THE ASSESSEE IN THE AFFIDAVIT, I FIND IT IS A FIT CASE FOR CONDONING THE DELAY OF 06 DAYS. AFTER CONDONING THE DELAY, I PROCEED TO ADJUDICATE THE APPEAL OF THE ASSESSEE IN THE FOLLOWING PARAGRAPHS. 4. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER :- 1. THE LEARNED CIT(A) ERRED IN DISMISSING THE ASSESSEES APPEAL WITHOUT APPRECIATING THAT THE ASSESSEE WAS ELIGIBLE FOR DEDUCTION UNDER SECTION 54 OF THE I T ACT FOR THE AMOUNT OF LONG TERM CAPITAL GAINS INVESTED IN CONSTRUCTION OF A RESIDENTIAL HOUSE WITHIN THE SPECIFIED PERIOD. 2. THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THAT THE LEARNED A.O. WAS NOT RIGHT IN DISALLOWING THE DEDUCTION UNDER SECTION 54 ON THE GROUND THAT CONSTRUCTION OF RESIDENTIAL HOUSE WAS NOT COMPLETED WITHIN THE PERIOD OF THREE YEARS. 3. WITHOUT PREJUDICE TO GROUND NOS. 1 & 2 THE LEARNED C1T(A) ERRED IN NOT APPRECIATING THAT THE LONG TERM CAPITAL GAINS COULD HAVE BEEN BROUGHT TO TAX IN THE YEAR IN WHICH THE THREE YEARS PERIOD FOR CONSTRUCTION OF A RESIDENTIAL HOUSE EXPIRED AND THAT SUCH ASSESSMENT YEAR WAS 2016-17. 4. THE ABOVE GROUNDS OF APPEAL ARE WITHOUT PREJUDICE TO ONE ANOTHER. 5. THE APPELLANT CRAVES LEAVE TO FURNISH ADDITIONAL EVIDENCES, WHICH MAY BE RELEVANT TO THE ABOVE GROUNDS OF APPEAL, IN COURSE OF THE APPEAL PROCEEDINGS. 6. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY OF THE ABOVE GROUNDS OF APPEAL OR TO ADD NEW GROUNDS OF APPEAL DURING THE COURSE OF APPEAL PROCEEDINGS. 5. EXPLAINING THE ABOVE GROUNDS, LD. COUNSEL FOR THE ASSESSEE MENTIONED THE BRIEF FACTS STATING THAT THE ASSESSEE, ALONG WITH TWO OTHER PERSONS OWNS A PROPERTY. THE PROPERTY WAS SOLD FOR A SUM OF RS.3,38,00,000/-. THE ASSESSEES SHARE ON THE SAID LONG TERM TRANSACTIONS ITA NO.596/PUN/2018 - 4 - WORKS OUT TO RS.64,08,518/-. OUT OF THE SAID CAPITAL GAINS, THE ASSESSEE DEPOSITED RS.25,00,000/- IN CAPITAL GAIN ACCOUNT AS PER THE PROCEDURE LAID DOWN IN THE I.T. ACT. FURTHER, RS.37,55,520/- WAS INVESTED AS HER PART OF THE INVESTMENTS IN THE PLOT OF LAND FOR RAISING THE RESIDENTIAL HOUSE. AS PER THE ASSESSEES CLAIM, THE CONSTRUCTION OF HOUSE IS IN PROGRESS AND A REQUISITE PERMISSION WERE TAKEN SUBSEQUENTLY FOR RAISING THE HOUSE/BUILDING ON THE SAID LAND. THE ASSESSEE OFFERED THE BALANCE SUM OF RS.1,52,998/- TO THE CAPITAL GAINS IN THE RETURN OF INCOME. IN THIS BACKGROUND OF THE FACTS, IT IS A CLAIM OF THE ASSESSING OFFICER/CIT(A) THAT THE COMPLETION OF THE CONSTRUCTION OF THE HOUSE IS RELEVANT FACTOR FOR MAKING A CLAIM OF DEDUCTION. 6. IN THIS REGARD, LD. COUNSEL RELIED ON NUMBER OF DECISIONS BEFORE THE LOWER AUTHORITIES AND HOWEVER, THEY WERE NOT APPRECIATED AT ALL BY THEM. BRINGING MY ATTENTION TO PARA 5.3.8 OF THE CIT(A)S ORDER, BEFORE ME, LD. COUNSEL SUBMITTED THAT THIS IS THE ONLY LINE WHICH CONTAINS ANY REASON BEFORE GIVING AN ADVERSE DECISION AGAINST THE ASSESSEE. ACCORDING TO LD. AR, THE ORDER PASSED BY THE CIT(A) IS NOT AT ALL A SPEAKING ORDER. MENTIONING THAT THE CIT(A) MERELY EXTRACTED THE RELEVANT PARAS OF THE ASSESSMENT ORDER AND THE ASSESSEES REPLY ETC, LD. COUNSEL SUBMITTED THAT THIS IS FIT CASE FOR REMANDING THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR ONE MORE ROUND OF ADJUDICATION. ITA NO.596/PUN/2018 - 5 - 7. ON THE OTHER HAND, LD. DR FOR THE REVENUE HEAVILY RELIED ON THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A). 8. HEARD BOTH SIDE ON THIS ISSUE OF REQUIREMENT OF REMANDING THE MATTER ONCE AGAIN TO THE FILE OF THE ASSESSING OFFICER/CIT(A). FOR THE SAKE OF COMPLETENESS, I EXTRACT THE RELEVANT PARA 5.3.8 OF THE ORDER OF THE CIT(A) AND THE SAME IS EXTRACTED AS UNDER :- 5.3.8 IN VIEW OF THE ABOVE DISCUSSION, THE ACTION OF THE A.O. IS UPHELD AND THE GROUND OF APPEAL OF THE APPELLANT IS DISMISSED. 9. FROM THE ABOVE, IT IS EVIDENT THAT THE CIT(A) HAS NOT ATTENDED TO THE ARGUMENTS OF THE ASSESSEE AND NOT PASSED THE APPROPRIATE ORDER IN ACCORDANCE WITH THE PROVISIONS OF SECTION 250(6) OF THE ACT. FURTHER, IT IS EVIDENT THAT THE ORDER PASSED BY THE CIT(A) CANNOT BE CONSIDERED AS A SPEAKING ORDER. 10. THEREFORE, I AM OF THE CONSIDERED OPINION THAT THE ORDER OF THE CIT(A) NEEDS TO BE SET-ASIDE AND ISSUES NEEDS TO BE REMANDED TO THE FILE OF THE CIT(A) FOR FRESH ADJUDICATION IN THE MATTER. THE CIT(A) IS REQUIRED TO ATTEND OTHER ARGUMENTS, BOTH ON LEGAL AS WELL AS ON MERITS, AND BRING ALL THE FACTS ON RECORD INSTEAD OF MERELY EXTRACTING THE ORDER OF THE ASSESSING OFFICER. CIT(A) SHALL NOTE THE LANGUAGE OF THE RELEVANT PROVISIONS BEFORE REJECTING THE CLAIMS OF THE ASSESSEE. CIT(A) SHALL ALSO NOTE THAT THE ACT PROVIDES TIME MORE THAN 12 MONTHS WHERE THE REINVESTMENT INVOLVES CONSTRUCTION OF THE RESIDENTIAL HOUSE. REASONS FOR DELAY IN THE REINVESTMENTS BECOME RELEVANT ITA NO.596/PUN/2018 - 6 - TOO. NEEDLESS TO SAY, THE CIT(A) SHALL GRANT REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN ACCORDANCE WITH SET PRINCIPLES OF NATURAL JUSTICE. THUS, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 31 ST DAY OF DECEMBER, 2019. SD/- (D. KARUNAKARA RAO) / ACCOUNTANT MEMBER / PUNE; DATED : 31 ST DECEMBER, 2019. SUJEET / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. THE CIT(A)-3, PUNE; 4. THE PR. CCIT, PUNE; 5. , , - / DR SMC, ITAT, PUNE; 6. / GUARD FILE. / BY ORDER, //TRUE COPY// SENIOR PRIVATE SECRETARY , / ITAT, PUNE