Shri Maheshbhai Shantilal Patel, Ahmedabad V. The DCIT , Central Circle-1(2), Ahmedabad

ITSSA 22/AHD/2021

AI Insights

This case involves an appeal by Shri Maheshbhai Shantilal Patel against the order of the Commissioner of Income Tax (Appeals)-11, Ahmedabad, which was passed in relation to the assessment year 2011-12. The primary issues in the appeal were the validity of a notice issued under section 143(2) of the Income Tax Act after the stipulated time, and the rejection of an exemption claimed under section 54B for long-term capital gains on the sale of agricultural lands. The Assessing Officer (AO) had disallowed the exemption on the grounds that the lands were not proven to be used for agricultural purposes, a prerequisite for the exemption under section 54B. The CIT(A) upheld the AO's decision, leading to the present appeal before the ITAT. However, due to the significant delay in filing the appeal and the lack of convincing reasons for such delay, the ITAT dismissed the appeal without addressing the substantive issues.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 131375 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 12 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 20-04-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 27-03-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 09-03-2021
• Other Referred Cases: Mani Mandir Sewa Nyas Samiti Ramghat Ayodhya v. CIT, Amit Cotton Industries, Tractors & Farm Equipments Ltd., T. Kishan
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Tax effect; Condonation of delay
• Section: 54B; 153A; 143(2); 119

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “B” BENCH Before: Ms. Annapurna Gupta, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member Shri Maheshb hai Shantib hai Patel, B-202 Maruti Tower, Shivaranjini Ch ar Rasta, Ah medabad -3 80015 PAN: AB XPP 3026F (Appellant) Vs DCIT, Central Circle-1(2) Ah med abad (Resp ondent) Asses see b y : None Revenue by : Shri S udhendu Das, CIT-D. R. Date of hearing : 28-03 -2 023 Date of pronouncement : 21-04 -2 023 आदेश /ORDER PER : SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER:- This is an appeal filed by the assessee against the order of the ld. Commissioner of Income Tax (Appeals)-11, Ahmedabad, in proceeding u/s. 250 of the Act, vide order dated 03/07/2018 passed for the assessment year 2011-12. 2. The assessee has raised the following grounds of appeal:- IT(SS)A No. 22/Ahd/2021 Assessment Year : 2011-12 I.T(SS).A No. 22/Ahd/2021 A.Y. 2011-12 Page No. Shri Maheshbhai Shantilal Patel vs. DCIT 2 Grounds of Appeal Tax effect relating to each Ground of appeal 1. Notice issued u/s. 143(2) after expiry of 6 months from the end of the financial year in which the return is furnished. Ground: The ld. AO has erred in law in issuing notice u/s 143(2) of the Act after expiry of the stipulated time as per Proviso of section. The notice u/s. 143(2) is bad-in-law. Therefore, it is prayed that assessment so made may kindly be quashed / cancelled. Facts: There was IT search on appellant on 27-04-2011. Appellant had filed IT Return on 05-11-2012 in response to notice u/s 153A of the Act dated 22-09-2011. Notice u/s 143(2) of the Act was issued on 07-10-2013 i.e. after the expiry of the stipulated time limit u/s. 143(2) i.e. after 30-09-2013. Therefore, notice issued u/s. 143(2) of the Act is bad in law vis-a-vis assessment so made is bad- in-law and required to be cancelled / quashed. Rs.2,44,099/-(amt. of demand) 2. Exemption u/s. 54B from LTCG of capital gain on Agricultural lands Ground: The ld. CIT(A) has erred in law and on facts in rejecting exemption u/s. 54B of Rs. 632,321/- from LTCG of capital gain on Agricultural lands, on the ground that the conditions laid down u/s. 54B were not fulfilled. Therefore, it is prayed that exemption u/s. 54B may kindly be granted. Facts. The appellant is farmer and has sold Agricultural lands and shown long term capital gain of Rs. 632,321/-. The appellant also purchased another piece of Agricultural land and claimed exemption u/s. 54B of the Act. The AO rejected the claim u/s. 54B holding that it has not been proved that the lands were used for agricultural purpose. This stand of AO confirmed by CIT(A) also in Appellate Proceedings. I.T(SS).A No. 22/Ahd/2021 A.Y. 2011-12 Page No. Shri Maheshbhai Shantilal Patel vs. DCIT 3 3. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal. Total tax effect Rs. 2,44,099 3. The brief facts of the case are that during the course of assessment, the AO observed that assessee had shown long-term capital gains of 6,23,321/- on sale of two agricultural lands and the assessee had claimed deduction under section 54B of the Act to the tune of 16,60,750/- on account of reinvestment made in three agricultural lands in Rajasthan, and thereby restricted the claim of long-term capital gains to Nil. However, the AO disallowed the claim of deduction under section 54B of the Act on the ground that firstly, on perusal of the copies of sale deeds, nothing has been recorded to prove that the assessee or his parents have been using the aforesaid lands for agricultural purposes for the past two years, which is a prerequisite condition for availing the benefits of section 54B of the Act. Further, as per the AO, the assessee has also not been able to substantiate that the lands so purchased subsequently by the assessee for claiming benefit under section 54B of the Act are agricultural lands, so as to be eligible for deduction under section 54B of the Act. Though the assessee did produce certain bills issued by the Sarpanch of the village in which the lands were purchased, to the effect that some agricultural activities were going on, however, merely on the basis of these bills, it cannot be construed that agricultural activities are actually going on these three agricultural lands purchased by the assessee are agricultural lands. Therefore, in absence of any proof to the effect that the assessee was actually carrying out of I.T(SS).A No. 22/Ahd/2021 A.Y. 2011-12 Page No. Shri Maheshbhai Shantilal Patel vs. DCIT 4 agricultural activities on the lands sold by the assessee, the claim of the assessee for availing benefit of section 54B of the Act cannot be allowed. 4. In appeal before CIT(Appeals), he dismissed the appeal of the assessee with the following observations: “DECISION 5. Facts of the case, submission of the appellant and assessment order has been carefully considered. The only ground of appeal is against the additions of Rs.6,32,321/- made by the AO by disallowing the claim of the appellant made u/s.548 of the Act. The AO found that the appellant had sold agricultural land and shown LTCG of Rs.6,23,321/- and the same has been claimed exempt u/s.54B of the Act stating that another piece of agricultural land was purchased. The AO stated that the appellant could not prove that the agricultural land sold and agricultural land purchased were used for agricultural operations, as required u/s.54B of the Act. After detailed discussion in the assessment order, the AO disallowed the claim made by the appellant and made the additions. The appellant stated that from the records filed before the AO, it is clear that the land sold and purchased as agricultural, hence, additions made by the AO are not justified. On going through the reasons mentioned by the AO for disallowing the claim made by the appellant and the submissions of the appellant alongwith the documents filed, it is found that the appellant could not substantiate that the lands were used for agricultural purposes, hence, the AO is justified in disallowing the claim. Therefore, the additions made by the AO are confirmed. This ground of appeal is dismissed.” 5. The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(Appeals). We observe that there is an inordinate delay of 921 days in filing of the present appeal. The assessee has filed an application for condonation of delay but in the said application, apart from stating that the I.T(SS).A No. 22/Ahd/2021 A.Y. 2011-12 Page No. Shri Maheshbhai Shantilal Patel vs. DCIT 5 assessee has been suffering from Parkinson disease and that he is a senior citizen, the assessee has not been able to furnish any convincing reason for this inordinate delay in filing of the present appeal. Further, the assessee has been seeking adjournment from time to time. Even on the date of the present hearing, none appeared before us on behalf of the assessee and after several dates of hearings, again an application for adjournment was filed before us with a request to adjourn the matter. The letter filed by the assessee dated 27 th March, 2023 is reproduced below for ready reference: “With reference to the captioned subject, I have to state that Assessee is travelling out of India and accordingly affidavit for delay condonation cannot be executed and Assessee is also in process of engaging counsel for conduction of appeal, hence request for adjournment.” 6. From the perusal of the application for adjournment, the assessee has not been able to give any convincing reasons whatsoever as to give any justification for seeking adjournment nor has the assessee filed affidavit to condone the inordinate delay in filing of appeal of 921 days. Therefore, the application of the assessee of adjournment is hereby dismissed and further, given the facts of the present case, we are not inclined to condone the inordinate of 921 days in filing of the present appeal since we are not convinced with the vague reasoning given by the assessee for condoning the delay in filing of the present appeal. In the case of Mani Mandir Sewa Nyas Samiti Ramghat Ayodhya v. CIT [2020] 119 taxmann.com 383 (SC), the Hon'ble Supreme Court held that where assessee sought for condonation of delay of four and half years in filing appeal against order of Tribunal on ground of ailment of manager but High Court declined I.T(SS).A No. 22/Ahd/2021 A.Y. 2011-12 Page No. Shri Maheshbhai Shantilal Patel vs. DCIT 6 to condone delay on ground that there was nothing on record to show that manager was suffering from ailments which did not permit him to take initiative for filing of appeal, SLP against said decision was to be dismissed. In the case of Amit Cotton Industries [2022] 136 taxmann.com 328 (SC), the Hon'ble Supreme Court held that delay of 520 days in filing special leave petition cannot be condoned without satisfactory explanation and hence, dismissed. In the case of Tractors & Farm Equipments Ltd.[2007] 104 ITD 149 (Chennai) (TM), the ITAT held that where assessee justified delay of 310 days in filing appeal before Tribunal by stating that Commissioner (Appeals)’s order was misplaced and forgotten and when same was found while sorting out unwanted papers, steps were taken for preparation of appeal, the delay in filing of appeal before Tribunal could not be condoned as same was due to negligence and inaction on part of assessee and assessee could have very well avoided delay by exercise of due care and attention. While rejecting the assessee’s application for condonation of delay, the Tribunal made the following observations: The delay cannot be condoned simply because the appellant’s case is hard and calls for sympathy or merely out of benevolence to the party seeking relief. In granting the indulgence and condoning the delay, it must be proved beyond the shadow of doubt that the appellant was diligent and was not guilty of negligence, whatsoever. The sufficient cause within the contemplation of the limitation provision must be a cause which is beyond the control of the party invoking the aid of the provisions. The cause for the delay in filing the appeal, which by due care and attention, could have been avoided, cannot be a sufficient I.T(SS).A No. 22/Ahd/2021 A.Y. 2011-12 Page No. Shri Maheshbhai Shantilal Patel vs. DCIT 7 cause within the meaning of the limitation provision. Where no negligence, or inaction, or want of bona fides can be imputed to the appellant, a liberal construction of the provisions has to be made in order to advance substantial justice. Seekers of justice must come with clean hands. In the instant case, the assessee justified the delay only with reference to the affidavit of its director. In the said affidavit it was stated that the Commissioner (Appeal)’s order was misplaced and forgotten. It was found while sorting out the unwanted papers and thereafter steps were taken for the preparation of the appeal and consequently the delay was caused. That clearly showed that the delay was due to the negligence and inaction on the part of the assessee. The assessee could have very well avoided the delay by the exercise of due care and attention. There existed no sufficient and good reason for the delay of 310 days. Therefore, reasonings adduced by the Accountant Member were to be concurred with. [Para 8] 7. The ITAT Hyderabad in the case of T. Kishan[2012] 23 taxmann.com 383 (Hyderabad) held that in condoning delay in filing appeal, it must be proved beyond shadow of doubt that assessee was diligent and was not guilty of negligence whatsoever. 8. In the present case, we observe that despite several opportunities, the assessee did not cause appearance before us to argue the case on merits. Thereafter, after several dates of hearing, the assessee has simply filed I.T(SS).A No. 22/Ahd/2021 A.Y. 2011-12 Page No. Shri Maheshbhai Shantilal Patel vs. DCIT 8 application for adjournment without any affidavit for condonation of delay of 921 days in filing of the present appeal. However, on perusal of the application for condonation of delay, we observe that assessee has not been able to give any substantive or cogent reason for the inordinate delay of 921 days in filing of the present appeal. According, the application of the assessee for condonation of delay in filing of the present appeal is rejected and the appeal of the assessee is dismissed. 9. In the result, appeal of the assessee is dismissed. Order pronounced in the open court on 21-04-2023 Sd/- Sd/- (ANNAPURNA GUPTA) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad : Dated 21/04/2023 आदेश क त ल प अ े षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/ आदेश से, उप/सहायक पंजीकार आयकर अपील य अ धकरण, अहमदाबाद