PANCHAM PAL,PATNA V. I.T.O, WARD- 6 (4), PATNA

ITA 7/PAT/2025

AI Insights

The case involves an appeal by Pancham Pal against the orders of the CIT(A)-NFAC, Delhi, and the Assessing Officer, concerning the assessment of long-term capital gains from a land development agreement. The Assessing Officer had reopened the case under sections 147/148 of the Income Tax Act, 1961, following information from the Registrar for Properties, Patna, and assessed capital gains which the assessee did not report. The CIT(A) upheld the assessment, leading to the appeal before the ITAT. The ITAT found that the assessee was not given adequate opportunity to present his case at both the assessment and appellate stages, leading to the decision to set aside the previous orders and remit the case back for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 312149 (ITAT-PATNA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2016-2017
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Condonation of delay; Set aside; Opportunity of being heard; Reasonable cause; Cost of acquisition; Capital Gains; Principle of natural justice; Competent authority
• Section: 148; 143(3); 271(1)(c); 54F; 133(6)

Judgement Text

"आयकर अपीलीय अधिकरण पटना पीठ, कोलकाता में IN THE INCOME TAX APPELLATE TRIBUNAL PATNA BENCH AT KOLKATA [वर्चुअल कोटु] [Virtual Court] श्री संजय शमाु, न्याधयक सदस्य एवं श्री राक ेश धमश्रा, लेखा सदस्य क े समक्ष Before SHRI SONJOY SARMA, JUDICIAL MEMBER & SHRI RAKESH MISHRA, ACCOUNTANT MEMBER I.T.A. No.: 7/PAT/2025 Assessment Year: 2016-17 Pancham Pal Vs. NFAC (Appellant) (Respondent) PAN: BPNPP7052N Appearances: Assessee represented by : Rakesh Kumar, Adv. Department represented by : Ashwani Kr. Singal, JCIT. Date of concluding the hearing : February 6th, 2025 Date of pronouncing the order : May 2nd, 2025 ORDER PER RAKESH MISHRA, ACCOUNTANT MEMBER: This appeal filed by the assessee is against the order of the CIT(A)- NFAC, Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2016-17 dated 21.07.2023, which has been passed against the assessment order u/s 143(3) r.w.s. 147 of the Act, dated 10.12.2019. Page | 2 I.T.A. No.: 7/PAT/2025 Assessment Year: 2016-17 Pancham Pal. 1.1. The Registry has informed that the appeal filed by the assessee is barred by limitation by 465 days. An application seeking condonation of delay has been filed by the assessee. The content of the application is as follows: “I, Pancham Pal, S/o Late Ram Bhajan Bhagat, Resident of AT- Near Telegraph Colony. Near Khan Complex, South Mandiri, Patna - 800001 do hereby solemnly affirm and state as follow: - 1. That the CIT(A)- NFAC has passed order u/s 250 dated 21/07/2023 related to appeal filed for the AY 2016-17. 2. That there was no communication of uploading of this order either on the registered email or registered mobile no. of the appellant. 3. That it is only recently that I came to know about the impugned order of NFAC in the second week of December, 2024 when I logged on the income tax web portal and hence I approached my CA who has retrieved the impugned order from the e-portal under the drop box 'For your Information 4. That the orders and/or the demands are uploaded on the drop box \"For your Action\" followed by e-mail or message on registered mobile number. It appears that since the impugned order has been uploaded on drop box \"For your Information\" and, therefore, there was no communication through email or message on registered mobile number. 5. That this appeal is being filed which can be said to be a belated appeal, if limitation is counted from the date of its order. However, it is stated that the impugned order came to my knowledge recently in the second week of December, 2024 and therefore, the present appeal is not a belated appeal. 6. That however, without entering into controversy, it is respectfully submitted that delay, if any, may kindly be condoned and the appeal may kindly be heard on merits. 7. That the contents of this affidavit vide para 1 to 6 are true to the best of my knowledge.” 1.2. Considering the application for condonation of delay and the reasons stated therein, we are satisfied that the assessee had a reasonable and sufficient cause and was prevented from filing the instant appeal within statutory time limit. We, therefore, condone the delay and admit the appeal for adjudication. Page | 3 I.T.A. No.: 7/PAT/2025 Assessment Year: 2016-17 Pancham Pal. 2. The assessee is in appeal before the Tribunal raising the following grounds of appeal: “1. For that the Ld. CIT(A) has erred in dismissing the appeal and upholding the order passed by the A.O. 2. For that the Ld. CIT(A) has erred in passing ex-parte order which is in violation of provisions of section 250(6) of the Income Tax Act. 3. For that the Ld. CIT(A) has erred in upholding the assessment order without affording proper and adequate opportunity of hearing to the appellant. 4. For that the Ld. CIT(A) has erred in upholding the assessment order passed in violation of Principle of Equity and Natural Justice. 5. For that the Ld. CIT(A) has erred in upholding the order passed by the Assessing Officer u/s 147 read with section 143(3). 6. For that the Ld. CIT(A), NFAC has erred in sending the notices on email although the notices were required to be sent on ITBA portal under the tab 'for your action' for enabling the appellant to make compliance through ITBA Portal. 7. For that the Ld. CIT(A), NFAC has erred in not uploading the notices on ITBA Portal under the tab 'For your action' and depriving any real time message on mobile number. 8. For that the Ld. CIT(A), NFAC has violated the mandatory provision of law by not uploading the notices on ITBA Portal and sending the notices through email and thereby alleging non-compliance on the part of the appellant 9. For that the appellant is prevented by sufficient and reasonable cause in not making compliance resulting into ex-parte appellate order. 10. For that the learned Commissioner of Income-tax (Appeals) has erred in not considering the fact that the reasons recorded by Assessing Officer has been erroneous and the assessment order passed is illegal, void ab initio and is fit to be quashed/ annulled. 11. For that the learned Commissioner of Income-tax (Appeals) has erred in not considering the fact that approval / sanction by the competent authority is mechanical and without application of mind. 12. For that the learned Commissioner of Income-tax (Appeals) has erred in not considering the fact that Assessing Officer has erred in initiating Page | 4 I.T.A. No.: 7/PAT/2025 Assessment Year: 2016-17 Pancham Pal. proceedings u/s 147/148 without existence of the condition precedent for such invocation. 13. For that the learned Commissioner of Income-tax (Appeals) has erred in not considering the fact that Assessing Officer has erred in invoking section 147 in the case of the appellant without appreciating that no income has escaped assessment. 14. For that the learned Commissioner of Income-tax (Appeals) has erred in not considering the fact that invocation of proceedings u/s 147/148 is ab initio void and without jurisdiction. 15. For that the learned Commissioner of Income-tax (Appeals) has erred in confirming the addition made by the Assessing Officer of Rs 4345,425/- made under long term capital gains. 16. For that the learned Commissioner of Income-tax (Appeals) has erred in sustaining the order of the Assessing Officer wherein LTCG has been determined at Rs. 4345,425/- as against the value of land at Rs. 1010,795/- as determined by the AO in the land development agreement. 17. For that the learned Commissioner of Income-tax (Appeals) has erred in sustaining the order of the Assessing Officer who has erred in making addition under Long term capital gains and not allowing deduction u/s 54F to the appellant. 18. For that the learned Commissioner of Income-tax (Appeals) has erred in sustaining the order of the Assessing Officer who has failed to consider that the capital gain pursuant to development agreement will arise in the year in which the possession of constructed portion is handed over by the developer and not in the year of execution of development agreement. 19. For that the learned Commissioner of Income-tax (Appeals) has erred in sustaining the order of the Assessing Officer who has erred in treating an amount of Rs. 4345,425/- as income under Long Term Capital Gain without considering the fact that the appellant has not received the constructed portion as stipulated in the Land development agreement and as a matter of fact, no construction has started in the year under consideration. 20. For that the learned Commissioner of Income-tax (Appeals) has erred in sustaining the order of the Assessing Officer who has failed to consider that there will be no capital gain in the hands of the appellant on the date of entering upon the land Development Agreement. 21. For that the learned Commissioner of Income-tax (Appeals) has erred in sustaining the order of the Assessing Officer who has failed to consider that the liability of capital gain in case of Development Agreement will arise in Page | 5 I.T.A. No.: 7/PAT/2025 Assessment Year: 2016-17 Pancham Pal. the year of exchange of the constructed portion falling to the share of the landlord and not as on the date of entering into the land Development Agreement. 22. For that the learned Commissioner of Income-tax (Appeals) has erred in sustaining the order of the Assessing Officer who has failed to allow the deduction of indexed cost of acquisition of land while computing long term capital gains. 23. For that the learned Commissioner of Income-tax (Appeals) has erred in sustaining the order of the Assessing Officer who has erred in considering and adopting higher value of consideration of property as compared to value of consideration of land as per LDA for purposes of computing LTCG. 24. For that the learned Commissioner of Income-tax (Appeals) has erred in sustaining the order of the Assessing Officer who has erred in relying on judicial decisions that too without confronting the appellant with the same and also without considering that the facts of the decision relied upon were starkly distinguishable from the facts of the appellant case. 25. For that learned Commissioner of Income-tax (Appeals) has erred in sustaining the order of the Assessing Officer who has charged interest under the provisions of the I.T. Act which is wrong, illegal and unjustified on the facts and in the circumstances of the appellant's case. 26. For that the order passed by the Ld. CIT(A) is wrong, illegal and unjustified in the facts and circumstances of the appellant's case. 27. For that the whole order is bad in fact and law of the case and is fit to be set aside/ quashed. 28. For that other grounds if any shall be urged at the time of hearing of the appeal” 3. Brief facts of the case are that on receipt of information u/s 133(6) of the Act from the office of the Registrar for Properties, Patna it was found by the Assessing Officer (hereinafter referred to as ld. 'AO') that the assessee Shri Pancham Pal had entered into a registered land development agreement with M/s. R.R. Builders & Developers in the FY 2015-16. The Ld. AO found that the assessee had not filed any return of income for the relevant assessment year. As a bundle of ownership rights over the share of land were transferred, the assessee had earned Page | 6 I.T.A. No.: 7/PAT/2025 Assessment Year: 2016-17 Pancham Pal. capital gains arising out of the transactions of the land development agreement which had escaped assessment. Notice u/s 148 of the Act was issued to the assessee after recording reasons to believe that the income had escaped assessment and the case of the assessee was reopened u/s 147/148 of the Act with the prior approval of the Jt. CIT, Range-6, Patna. Subsequently, notice u/s 148 of the Act was issued to the assessee on 24.09.2018 to file the return of income within 30 days from the service of the notice but the assessee failed to comply. Statutory notices under the Act were issued and duly served upon the assessee but no compliance was made. The Ld. AO computed the long- term capital gains at Rs. 43,45,425/-. Since the assessee had concealed the particulars of income, the Ld. AO also initiated penalty proceeding u/s 271(1)(c) of the Act. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A) who vide order dated 21.07.2023 dismissed the appeal of the assessee confirming the order of the Ld. AO after observing as under: “4.4 Considering the above facts and the records available, it is established that the appellant was provided many opportunities of being heard. However, the appellant has remained noncompliant. No material fact has been brought on record in support of the grounds of appeal or to rebut the findings of the Assessing Officer (AO). Further, the AO has also noted in Para 17 of the assessment order \"The assessee has been given several opportunity to furnish the cost of acquisition of the land rendered for JDA. The assessee however, at no point of time could furnish the same during the assessment proceedings. Therefore, indexed cost of acquissition is taken as Zero.\" Even at the appellate stage the appellant has not furnished any documents related to the cost of acquisition. The appellant inspite of being given ample opportunities during appellate proceedings, failed to offer any explanation/supporting documents in respect of grounds of appeal raised by the appellant. I have carefully considered the assessment order and since the appellant has not furnished any documentary evidence in support of the grounds of appeal filed by the appellant, I do not find any reason to interfere with the order of the AO. Hence, the assessment order passed by Page | 7 I.T.A. No.: 7/PAT/2025 Assessment Year: 2016-17 Pancham Pal. the AO stands confirmed. Accordingly, all the grounds of appeal taken by the appellant are dismissed. 5. In result, the appeal is dismissed.” 4. Rival contentions were heard and the submissions made have been examined. Since there was no proper compliance before both the Ld. AO as well as the Ld. CIT(A), in the interest of justice and fair play it was considered appropriate by the Bench that the request of the assessee to set aside the case before the Ld. AO may be allowed so that a proper opportunity of being heard may be provided. Hence, after examining the facts of the case, we set aside the order of the Ld. CIT(A) as well as the order of the Ld. AO and remit the matter back to the Ld. AO for making the assessment de novo. Needless to say, the assessee shall be given a reasonable opportunity of being heard to make any further submission it wants to make in support of its grounds of appeal and shall not seek unnecessary adjournments. Accordingly, the grounds taken by the assessee in his appeal are allowed for statistical purposes. 5. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 2nd May, 2025. Sd/- Sd/- [Sonjoy Sarma] [Rakesh Mishra] Judicial Member Accountant Member Dated: 02.05.2025 Bidhan (P.S.) Page | 8 I.T.A. No.: 7/PAT/2025 Assessment Year: 2016-17 Pancham Pal. Copy of the order forwarded to: 1. Pancham Pal, S/o- Late Ram Bhajan Bhagat, At- Near Telegraph Colony, Near Khan Complex, South Mandiri, Patna, Bihar, 800001. 2. NFAC. 3. CIT(A)-NFAC, Delhi. 4. CIT- 5. CIT(DR), Patna Bench, Patna. 6. Guard File. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata "