PALANISAMY RANI , ERODE V. PCIT , COIMBATORE

ITA 667/CHNY/2022

AI Insights

The case involves an appeal by the assessee, Palanisamy Rani, against the order of the Principal Commissioner of Income Tax, Coimbatore-1, which was passed under section 263 of the Income Tax Act, 1961. The PCIT had set aside the original assessment order and directed a fresh assessment due to issues related to the computation of long-term and short-term capital gains on property transactions. The assessee contended that the PCIT had not provided sufficient time for preparation of a reply to the show-cause notice, which led to the appeal before the Tribunal. The Tribunal found that the assessee was not given adequate time to respond and thus set aside the PCIT's order, directing a re-assessment after providing a fair opportunity to the assessee.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 135131 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: C
• Next Hearing Date: 03-05-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 09-08-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Opportunity of being heard; Principle of natural justice; Reasonable cause; Assessment record; Condonation of delay; Set aside
• Section: 263; 143(3)

Judgement Text

आयकर अपीलीय अिधकरण, ‘सी’ Ɋायपीठ, चेɄई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI ŵी वी. दुगाŊ राव, Ɋाियक सद˟ एवं ŵी मनोज कु मार अŤवाल, लेखा सद˟ के समƗ । Before Shri V. Durga Rao, Judicial Member & Shri Manoj Kumar Aggarwal, Accountant Member आयकर अपील सं./I.T.A. No.667/Chny/2022 िनधाŊरण वषŊ/Assessment Year: 2017-18 Palanisamy Rani, 38, EMM Road – 2, Chennimalai Road, Erode 638 001. [PAN:BIQPR2991L] Vs. The Principal Commissioner of Income Tax – Coimbatore 1, Coimbatore. (अपीलाथŎ/Appellant) (ŮȑथŎ/Respondent) अपीलाथŎ की ओर से / Appellant by : Shri T. Vasudevan, Advocate ŮȑथŎ की ओर से/Respondent by : Shri M. Rajan, CIT सुनवाई की तारीख/ Date of hearing : 04.05.2023 घोषणा की तारीख /Date of Pronouncement : 10.05.2023 आदेश /O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: This appeal filed by the assessee is directed against the order of the ld. Principal Commissioner of Income Tax, Coimbatore-1, Coimbatore dated 23.03.2022 passed under section 263 of the Income Tax Act, 1961 [“Act” in short]. 2. The appeal filed by the assessee is delayed by 79 days in filing the appeal before the Tribunal. The assessee has filed a petition for I.T.A. No. 667/Chny/22 2 condonation of delay in support of an affidavit as well as medical certificate for the treatment underwent by the assessee. The ld. Counsel for the assessee has submitted that the assessee suffering from spinal cord injury and was under treatment, thereby, the assessee could not file the appeal before the Tribunal in time. It was further submission that the delay was neither wilful nor wanton but due to circumstances beyond the control of the assessee and prayed for condonation of delay in filing the appeal and to admit the appeal for adjudication. Against the above submissions, the ld. DR has not raised any serious objection. Since the assessee was prevented by reasonable cause, we hereby condone the delay in filing the appeal and admit the appeal for adjudication. 3. Brief facts of the case are that the assessee filed the return of income for the assessment year 2017-18 on 04.02.2019 admitting total income of ₹.40,40,240/-. The case was selected for scrutiny through CASS for limited scrutiny and the assessment was completed under section 143(3) of the Act dated 28.12.2019 arriving a total income of ₹.2,06,39,519/-. 4. Subsequently, by invoking the provisions of section 263 of the I.T.A. No. 667/Chny/22 3 Act, the ld. PCIT, after examining the assessment records, noticed that the assessee had transferred a property (Land & building) by means of six registered sale deeds dated 07.03.2017 for a sale consideration of ₹.5,13,55,000/- and the assessee had admitted ₹.1,84,77,500/- @ 35.98% as assessee’s share. The stamp duty value adopted by the stamp valuing authority had been paid by the purchaser for the value of ₹.7,30,98,200/- without any dispute. The assessee had admitted LTCG of ₹.36,17,794/- after deducting indexed cost of acquisition of ₹.12,96,709/-, which was disallowed by the Assessing Officer. While computing the tax, the Assessing Officer assessed building value [₹.41,27,211/- - 35.98% of ₹.1,14,70,848/-) as LTCG and taxed @ 20% applicable for LTCG. Since the Assessing Officer assessed the building as a depreciable asset, then the gain from sale of the building value has to be considered as short term capital gain and to be taxed under normal rate of 30% applicable to the assessee and the long term capital gain of ₹.1,63,89,626/- has to be charged @ of 20%. Since the above issue was not considered in the assessment order passed under section 143(3) of the Act and the same erroneous in so far as it is prejudicial to the interest of the Revenue, the ld. PCIT show-caused the assessee to file the reply. Since the assessee has not filed any I.T.A. No. 667/Chny/22 4 explanation/written submission or sought for adjournment, the ld. PCIT set aside the assessment order passed under section 143(3) of the Act dated 28.12.2019 and directed the Assessing Officer to redo the assessment afresh after verification of the facts by affording an opportunity of being heard to the assessee. 5. On being aggrieved, the assessee carried the matter in appeal before the Tribunal. The ld. Counsel for the assessee has submitted that the ld. PCIT has issued the show-cause notice dated 10.03.2022 and posted for hearing 15.03.2022 without giving sufficient time for preparation of reply, which is against the Income Tax Act. No further opportunity was accorded by the ld. PCIT and prayed for quashing the revision order passed under section 263 of the Act. 6. On the other hand, the ld. DR submitted that the ld. PCIT may be directed to afford one more opportunity of being heard to the assessee. 7. We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. In this case, the ld. PCIT issued show-cause notice under section 263 of the Act dated 10.03.2022 and posted for hearing 15.03.2022. It is clear that the assessee was not given sufficient time to file the written I.T.A. No. 667/Chny/22 5 submission. The ld. PCIT issued notice dated 10.03.2022 and hurriedly fixed for hearing 15.03.2022 and passed the revision order under section 263 of the Act dated 23.03.2022. In view of the above facts and to meet the ends of natural justice, the exparte order of the ld. PCIT is set aside and we direct the ld. PCIT to afford reasonable opportunity of being heard to the assessee for filing the explanation/reply and after considering the submissions of the assessee, the revision order may be passed afresh in accordance with law. 8. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 10 th May, 2023 at Chennai. Sd/- Sd/- (MANOJ KUMAR AGGARWAL) ACCOUNTANT MEMBER (V. DURGA RAO) JUDICIAL MEMBER Chennai, Dated, 10.05.2023 Vm/- आदेश की Ůितिलिप अŤेिषत/Copy to: 1. अपीलाथŎ/Appellant, 2.ŮȑथŎ/ Respondent, 3.आयकर आयुƅ/CIT, 4. िवभागीय Ůितिनिध/DR & 5. गाडŊ फाईल/GF.