MADHAVAN SUNDARAN PILLAI,KOLLAM V. ITO, WARD - 2, KOLLAM

ITA 739/COCH/2024

AI Insights

The case involves Shri Madhavan Sundaran Pillai, the appellant, who challenged the order of the National Faceless Appeal Centre (NFAC), Delhi, regarding the assessment year 2012-13. The primary issue arose from the Income Tax Officer's (ITO) allegation that the appellant's mother sold immovable property and transferred a significant part of the consideration directly to the appellant's account, which was treated as unexplained money under section 69A of the Income Tax Act. The appellant's initial returns were not accepted as proper, leading to further assessments and notices under various sections of the Income Tax Act. The appellant's appeal to the Ld.CIT(A) was dismissed for non-prosecution, prompting the current appeal to the Tribunal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 31177 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LEENA LAL; SNR
• Assessee Lawyers: N.S. PANICKER
• Keywords: Capital Gains; Source of fund
• Section: 142(1); 69A

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH : COCHIN BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI SOUNDARARAJAN K., JUDICIAL MEMBER ITA No. 739/Coch/2024 Assessment Year : 2012-13 Shri Madhavan Sundaran Pillai, Shobana Mandiram, Asramam, Kollam, Kerala – 691 002. PAN: CCSPP3625E Vs. The Income Tax Officer, Ward – 2, Kollam. APPELLANT RESPONDENT Assessee by : Shri N.S. Panicker, CA Revenue by : Smt. Leena Lal, Snr. AR Date of Hearing : 04-02-2025 Date of Pronouncement : 11-03-2025 ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER This is an appeal filed by the assessee challenging the order of the NFAC, Delhi dated 02/05/2024 in respect of the A.Y. 2012-13. 2. The assessee filed an application to condone the delay of 50 days before this Tribunal. We have gone through the reasons stated in the delay condonation application and satisfied ourselves that there are valid reasons for not presenting the appeal in time before this Tribunal and therefore we Page 2 of 4 ITA No. 739/Coch/2024 condone the said delay of 50 days in filing the appeal and proceeded to take up the main appeal. 3. The brief facts of the case are that the assessee had not filed his return of income and based on the information received by the department, the AO alleged that the assessee’s mother sold her immovable property and major part of the consideration was also directly transferred to the assessee’s account. In order to find out the source of funds, a notice u/s. 148 was issued and thereafter the assessee filed her return of income on 18/06/2018 declaring a Nil income. Since the return was not verified properly, no acknowledgements was received by the assessee from the CPC, Bangalore and therefore the AO treated the said return as not a proper return and issued notice u/s. 142(1). Thereafter a notice u/s. 144(1) was issued and the assessee filed his return of income on 28/11/2018 again showing a Nil income. The assessee filed a letter given by the purchasers in which they agree that they gave cheques to the assessee for an amount of Rs. 1,10,00,000/-. The assessee’s mother also gave a letter to the effect that she had given a sum of Rs. 1,79,50,000/- during the Financial Years 2010- 11 / 2011-12 through Mr. Abdul Wahid who owes money to her. The assessee also filed the documents including the bank account statements. The AO found that the total sale consideration was received through the bank accounts of the assessee but doubted about the credit worthiness of the company since they have not filed any return of income after the assessment year 2007-08. Therefore the AO issued a notice u/s. 142(1) calling for the details but the assessee had not filed the said details and therefore the AO had issued a summon u/s. 131. Another summon was also issued to the assessee’s mother but both of them not appeared before the AO and not filed any details to prove the fact that there are enough sources for the funds transferred. The AO also considered the fact that the assessee’s mother had received the sale consideration but not declared any capital gains by filing the return of income and therefore the AO had treated the amounts transferred into his bank account as unexplained money u/s. 69A of the Act. Page 3 of 4 ITA No. 739/Coch/2024 4. As against the said order, the assessee filed an appeal before the Ld.CIT(A). The Ld.CIT(A) had dismissed the appeal for non-prosecution. As against the order, the assessee is in appeal before this Tribunal. 5. At the time of hearing, the Ld.AR submitted that the assessee had not received the hearing notices and therefore he was not able to appear before the Ld.CIT(A). The Ld.AR further pointed out that in form no. 35, the assessee had specifically requested not to send the notices through email ID mentioned but unfortunately the Ld.CIT(A) had issued the notices through email and therefore the assessee has not viewed the said mails and therefore not able to make the submissions before the Ld.CIT(A) and prayed to grant one opportunity. 6. The Ld.DR submitted that the Ld.CIT(A) had sent the hearing notices to the assessee’s email ID and therefore the non-appearance of the assessee is not liable to be condoned and prayed to dismiss the appeal. 7. We have heard the arguments of both sides and perused the materials available on record. 8. We have gone through the assessment order in which the assessee had filed various documents in support of his contention that the amounts transferred into the bank accounts are nothing but the sale consideration received by her mother from the purchasers. Therefore the monies were transferred into the bank accounts only through proper banking channels but the AO had confirmed the assessment for the reason that no proper explanations were offered by the assessee and his mother. The AO also observed that the sale was effected by the assessee’s mother but she had not filed any return of income admitting the capital gains and therefore confirmed the addition made u/s. 69A of the Act. The assessee made submissions before the Ld.CIT(A) by way of grounds but unfortunately he has not appeared before the Ld.CIT(A) when the hearing notices were sent by Page 4 of 4 ITA No. 739/Coch/2024 him. We have also considered the fact that in form 35, the assessee had mentioned their email address but in the next column they have requested not to send the notices through email but it seems that the Ld.CIT(A) had sent the hearing notices to the email ID of the assessee. Therefore the submissions made by the assessee is that no notice was received by him and therefore no proper opportunity has been granted before disposing the appeal, seems to be a genuine one. In such circumstances, we are setting aside the order of the Ld.CIT(A) and remit the issue to the file of the Ld.CIT(A) to decide the appeal on merits after hearing the assessee. 9. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 11th March, 2025. Sd/- Sd/- (INTURI RAMA RAO) (SOUNDARARAJAN K.) Accountant Member Judicial Member Cochin, Dated, the 11th March, 2025. /MS / Copy to: 1. Appellant 2. Respondent 3. CIT 4. DR, ITAT, Cochin 5. Guard file 6. CIT(A) By order Assistant Registrar, ITAT, Cochin "