MAHENDRA H GANDHI ( LEGAL HEIR OF H.C. GANDHI), MUMBAI V. ITO 18(1)(2), MUMBAI

ITA 6922/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8898 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 12-10-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: ASHOK J PATIL
• Keywords: Capital asset; Cost of acquisition; Initiation of penalty proceedings; Valuation report
• Section: 143(3)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B MUMBAI . , BEFORE SHRI D. MANMOHAN, VICE PRESIDENT / AND !'# , !$ %& SHRI RAJENDRA, ACCOUNTANT MEMBER I.TA. NO. 6922/MUM/2011 ASSESSMENT YEAR 2006-07 MAHENDRA H GANDHI (LEGAL HEIR OF H.C. GANDHI), 14A, CRYSTAL BUILDING, 14 TH FLOOR, 36, ALTAMOUNT ROAD, MUMBAI - 26. PAN: AERPG 6044 H VS. ITO 18(1)(2), PIRAMAL CHAMBERS, LOWER PAREL, MUMBAI ( '( / APPELLANT ) ( )*'( / RESPONDENT ) '( + ! / APPELLANT BY : SHRI ASHOK J. PATIL )*'( , + ! / RESPONDENT BY : SHRI ABHINAY KUMBHAR , -$ / DATE OF HEARING : 12-09-2012 ./ , -$ / DATE OF PRONOUNCEMENT : 12-09-2012 %!0 / O R D E R PER RAJENDRA, A.M. THE APPELLANT HAS FILED THIS APPEAL AGAINST THE ORD ER DT. 04-07-2011 OF THE CIT(A)-29, MUMBAI ON THE FOLLOWING GROUNDS: 1) ON THE FACTS AND IN THE CIRCUMSTANCE S OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN DISMISSING THE APPEAL FILED U/S.246A(1)(A) ON THE GROUNDS THAT THE APPELLANT HAS NOT ADDUCED ANY VAL ID REASON FOR NOT FILING AN APPEAL IN TIME. I.TA. NO. 6922/MUM/2011 MAHENDRA H GANDHI (LEGAL HEIR OF H.C. GANDHI) 2 2) THE APPELLANT PRAYS THAT THE ORDER OF CIT (A) E RRED IN CONFIRMING THE AOS ORDER WITH RESPECT TO THE REFERENCE TO THE DVO WITH REGARDS TO THE VALUATION OF THE CAPITAL ASSET AS ON 01-04-1981 AS PER THE PROVISIONS OF SECTION 55A OF THE INCOME TAX ACT, 1961. 3) THE APPELLANT CRAVES LEAVE TO ADD, AMEND AND OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL. 2. ASSESSEE LATE SHRI H.C. GANDHI, PROPRIETOR OF M/S. GANDHI ICE-CREAM PARLOUR ALSO ENGAGED IN THE BUSINESS OF CYBER CAF (INTERNE T CAF), FILED HIS RETURN OF INCOME ON 31-10-2006 DECLARING TOTAL INCOME OF RS. 6,58,30 0/-. THE RETURN WAS PROCESSED U/S. 143(1) OF THE INCOME TAX ACT, 1961 (ACT). LAT ER ON, CASE WAS SELECTED FOR SCRUTINY IN COMPUTER ASSISTED SCRUTINY SYSTEM (CASS ) AND ASSESSMENT U/S. 143(3) OF THE ACT WAS PASSED ON 15-12-2008 DETERMINING TOTAL INCOME OF THE ASSESSEE AT RS. 34.91 LAKHS. 3. DURING THE ASSESSMENT PROCEEDINGS, ASSESSING OFFICE R (AO) FOUND THAT ASSESSEE HAD SOLD IMMOVEABLE PROPERTY DURING THE YEAR UNDER CONSIDERATION AND MADE THE INVESTMENT OUT OF THE SAID SALE PROCEEDS U/S. 54EC OF THE ACT. AO FOUND THAT THE COST OF ACQUISITION HAD BEEN ADOPTED BY THE ASSESSEE ON 01-04-1981 AT RS. 8.79 LAKHS THAT IN SUPPORT OF VALUATION ADOPTED BY HIM, A VALUATION REPORT DT. 12-01-2006 OF AN APPROVED VALUER WAS SUBMITTED. INVOKING PROVISIONS OF SECTION 55(A)(A) FOR THE PURPOSE OF VALUATION OF CAPITAL ASSET, AO MADE A RE FERENCE TO ASST. VALUATION OFFICER (AVO), MUMBAI. AFTER OBTAINING REPORT FROM THE AVO , AO RE-CALCULATED THE CAPITAL GAIN. HE HELD THAT ASSESSEE WAS LIABLE TO TAX UNDE R THE HEAD LONG TERM CAPITAL GAINS AMOUNTING TO RS. 28,33,597/- AS AGAINST THE LOSS OF RS. 68,630/- DECLARED BY THE ASSESSEE. 4. ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPEL LATE AUTHORITY (FAA). IT WAS NOTICED BY HIM THAT THERE WAS A DELAY OF 269 DAYS I N FILING THE APPEAL BEFORE THE FAA. ASSESSEE REQUIRED HIM TO CONDONE THE DELAY. HE SUB MITTED THAT HE WAS AN OLD MAN OF 98 YEARS, THAT HE DID NOT WANT TO PURSUE THE APPEAL , THAT SINCE PENALTY PROCEEDINGS WERE INITIATED AND EVENTUALLY PENALTY WAS LEVIED UP ON HIM, SO HE WAS COMPELLED TO FILE APPEAL AGAINST THE QUANTUM ADDITIONS. FAA HEL D THAT APPELLANT HAD NOT ADDUCED ANY VALID REASONS FOR NOT FILING APPEAL IN TIME, TH AT INITIATION OF PENALTY PROCEEDINGS WAS NOT A VALID REASON FOR NOT FILING APPEAL IN TIM E. FINALLY, HE REJECTED THE PRAYER FOR CONDONING THE DELAY AND ADMITTING THE APPEAL. 5. BEFORE US, AUTHORISED REPRESENTATIVE (AR) SUBMITTED THAT APPEAL FILED BY THE ASSESSEE SHOULD HAVE BEEN ADMITTED, THAT ASSESSES W AS A VERY SENIOR CITIZEN AND HIS HEALTH DID NOT PERMIT HIM TO PURSUE THE APPEAL, THA T MATTER SHOULD HAVE BEEN DECIDED AFTER HEARING THE SUBMISSIONS OF THE ASSESSEE. DEP ARTMENTAL REPRESENTATIVE (DR) SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 6. AFTER HEARING THE RIVAL SUBMISSIONS, WE ARE OF THE OPINION THAT IT WOULD HAVE BEEN BETTER HAD THE MATTER BEEN HEARD ON MERITS AND DECIDED ACCORDINGLY. WE ARE I.TA. NO. 6922/MUM/2011 MAHENDRA H GANDHI (LEGAL HEIR OF H.C. GANDHI) 3 AWARE THAT FAA HAS POWER TO DISMISS THE APPEALS AS PER THE PROVISIONS OF 256(A)(1)(A) OF THE ACT. BUT FACTS AND CIRCUMSTANC ES OF THE CASE UNDER CONSIDERATION ARE SUCH THAT ASSESSEE SHOULD HAVE BEEN GRANTED AN OPPORTUNITY TO SUBMIT HIS ARGUMENTS. IN THE INTERESTS OF JUSTICE, WE RESTORE BACK THE MATTER TO THE FILE OF THE FAA FOR PASSING A FRESH ORDER AFTER PROVIDING OPPOR TUNITY OF HEARING TO THE LEGAL HAIRS OF LATE SHRI H.C. GANDHI. APPEAL FILED BY THE LEGAL HEIRS OF SHRI H. C. GANDHI IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH SEPTEMBER, 2012. SD/- SD/- ( . / D. MANMOHAN) ( !'# / RAJENDRA) / VICE PRESIDENT !$ %& / ACCOUNTANT MEMBER MUMBAI, 1% DATE: 12 TH SEPTEMBER, 2012 TNMM %!0 %!0 %!0 %!0 , ,, , )-2 )-2 )-2 )-2 3!2/- 3!2/- 3!2/- 3!2/- / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. THE CONCERNED CIT (A) 4. THE CONCERNED CIT 5. DR B BENCH, ITAT, MUMBAI 6. GUARD FILE *2- )- //TRUE COPY// %!0 %!0 %!0 %!0 / BY ORDER, / DY./ASSTT. REGISTRAR , / ITAT, MUMBAI