POPATRAO DASHRATHRAO SURYAWANSHI,PUNE V. INCOME TAX OFFICER 7(3), PUNE

ITA 2788/PUN/2024

AI Insights

The case involves two appeals by the assessee, Popatrao Dashrathrao Suryawanshi, against the orders of the Ld. CIT(A) / NFAC, Delhi for the assessment years 2014-15 and 2015-16. The primary issue revolves around the disallowance of exemptions claimed under Sections 54B and 54F of the Income Tax Act, 1961, due to the alleged failure of the assessee to respond to notices. The Assessing Officer had initially disallowed the claims based on the absence of satisfactory documentary evidence and the CIT(A) dismissed the appeals for want of prosecution without adjudicating on merits. The Tribunal found that the assessee was not properly informed about the proceedings, leading to the decision to restore the matter to the CIT(A) for a comprehensive review.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 471170 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARVIND DESAI; ADDL
• Assessee Lawyers: MANOJ JAIN
• Keywords: Set aside; Cost of acquisition; Capital Gains; Competent authority
• Section: 54B; 139

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND SHRI VINAY BHAMORE, JUDICIAL MEMBER ITA Nos.2788 & 2789/PUN/2024 Assessment Years : 2014-15 & 2015-16 Popatrao Dashrathrao Suryawanshi S.No.38, Tingre Nagar, Havaldar Mala, Vishrantwadi, Pune – 411015 Vs. ITO, Ward 7(3), Pune PAN: ADHPS2643F (Appellant) (Respondent) Assessee by : Shri Manoj Jain Department by : Shri Arvind Desai, Addl CIT DR Date of hearing : 24-02-2025 Date of pronouncement : 28-02-2025 O R D E R PER R. K. PANDA, VP : The above two appeals filed by the assessee are directed against the separate orders dated 27.11.2024 of the Ld. CIT(A) / NFAC, Delhi relating to assessment years 2014-15 and 2015-16 respectively. Since identical grounds have been raised by the assessee in both these appeals, therefore, for the sake of convenience, these were heard together and are being disposed of by this common order. 2. First we take up ITA No.2788/PUN/2024 for assessment year 2014-15 as the lead case. Facts of the case, in brief, are that the assessee is an individual and has filed his return of income u/s 139 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) on 28.11.2014 declaring total income of Rs.3,27,990/-. 2 ITA Nos.2788 & 2789/PUN/2024 The Assessing Officer noticed while completing the assessment proceedings for assessment years 2016-17 and 2017-18 that the assessee has wrongly claimed deduction u/s 54B/54F. He noted that the assessee has entered into a joint venture with Nandan Buildcon Pvt. Ltd. vide registered joint venture agreement dated 20.01.2011. The terms and conditions of the agreement clearly show that the assessee has transferred the land to the developers for development purpose and the Joint Venture agreement is also a registered agreement. The assessee has shown full value of consideration of Rs.1,14,06,128/-. He deducted an amount of Rs.6,13,982/- as cost of acquisition and the remaining amount of Rs.1,05,92,146/- was claimed as exemption u/s 54B of the Act. Accordingly, the assessee has shown LTCG at Rs.Nil on the capital gains derived from the transfer of same land. 3. He further noticed that the assessee has claimed the exemption u/s 54B on account of purchase of agricultural land in relevant year, however the capital gain on the transfer of asset is arisen on date of transfer of assets as on 20/01/2011 vide JV Agreement. Thus, the assessee has purchased the agricultural land beyond the period of two years from the date of transfer of original asset as mandated by the provisions of Section 54B of the IT Act. In view of the above facts, the assessee is not entitled for the claim of deduction/exemption u/s 54B as the investment is made beyond the period of two years from the date of transfer of original asset. Therefore, the jurisdictional assessing officer formed belief that income in respect of the information available has escaped assessment for which he reopened the assessment after recording reasons and obtaining necessary statutory approval from 3 ITA Nos.2788 & 2789/PUN/2024 the competent authority as per the prevailing provisions of section 151 of the IT Act, 1961. The Assessing Officer thereafter issued notice u/s 148. During the course of assessment proceedings, the assessee in response to such notice filed certain details. In absence of any documentary evidence to his satisfaction regarding the claim of exemption u/s 54B of the Act, the Assessing Officer rejected the claim of exemption u/s 54B of the Act. He accordingly made addition of Rs.1,05,92,146/- and determined the total income at Rs.1,09,20,136/-. 4. Since the assessee did not make any submission before the Ld. CIT(A) / NFAC despite a number of opportunities granted, the Ld. CIT(A) / NFAC relying on various decisions, dismissed the appeal of the assessee for want of prosecution. However, he did not decide the appeal on merit. 5. Aggrieved with such order of the Ld. CIT(A) / NFAC, the assessee is in appeal before the Tribunal by raising the following grounds: 1. The Ld. Commissioner of Income Tax (Appeals) erred in dismissing the appellant's appeal and confirming the addition of Rs.1,05,92,146/- made by the assessing officer under the following section, as detailed below, on the ground that the appellant failed to respond to the notices. The decision was made without considering the facts of the case or adjudicating the appeal on merits. Sr. No. Nature of Addition Amount 1 Disallowance of exemption claimed U/Sec.54B of the Act Rs. 1,05,92,146/- TOTAL Rs. 1,05,92,146/- 2. The Learned CIT(A) failed to appreciate that it was incumbent upon him to verify whether proper notices had been served before passing an ex-parte order. Therefore, the appellant prays that the order passed by the CIT(A) be set aside. 4 ITA Nos.2788 & 2789/PUN/2024 3. The Learned CIT(A) further erred in summarily dismissing the appellant's appeal on merits, solely relying on the AO's observations in the assessment order, without conducting an independent examination of the case or providing proper reasoning. 6. Identical grounds have been raised in ITA No.2789/PUN/2024 for assessment year 2015-16 which read as under: 1. The Ld. Commissioner of Income Tax (Appeals) erred in dismissing the appellant's appeal and confirming the addition of Rs.3,97,45,055/- made by the assessing officer under various sections, as detailed below, on the ground that the appellant failed to respond to the notices. The decision was made without considering the facts of the case or adjudicating the appeal on merits. Sr. No. Nature of Addition Amount 1 Disallowance of exemption claimed U/Sec.54B of the Act Rs. 3,60,35,153/- 2 Disallowance of exemption claimed U/Sec.54F of the Act Rs. 37,09,902/- TOTAL Rs. 3,97,45,055/- 2. The Learned CIT(A) failed to appreciate that it was incumbent upon him to verify whether proper notices had been served before passing an ex-parte order. Therefore, the appellant prays that the order passed by the CIT(A) be set aside. 3. The Learned CIT(A) further erred in summarily dismissing the appellant's appeal on merits, solely relying on the AO's observations in the assessment order, without conducting an independent examination of the case or providing proper reasoning. 7. The Ld. Counsel for the assessee at the outset submitted that the notices were sent to the e-mail of the Chartered Accountant who did not inform the assessee for which the assessee was not in a position to make any submission before the Ld. CIT(A) / NFAC. He submitted that in the interest of justice, the assessee should be given an opportunity to substantiate his case by filing the 5 ITA Nos.2788 & 2789/PUN/2024 requisite details before the Ld. CIT(A) / NFAC. Further, the Ld. CIT(A) / NFAC has not decided the issue on merit as required u/s 250(6) of the Act. He accordingly submitted that the matter may restored to the file of the Ld. CIT(A) / NFAC. 8. The Ld. DR on the other hand heavily relied on the orders of the Assessing Officer and the Ld. CIT(A) / NFAC. He submitted that the Assessing Officer has given valid reasons for rejecting the claim of exemption u/s 54B of the Act since the assessee has not filed any documentary evidence. Further, despite number of opportunities granted by the Ld. CIT(A) / NFAC, he did not make any submission, therefore, in absence of any further evidence, the order of the Ld. CIT(A) / NFAC be confirmed and the grounds raised by the assessee be dismissed. 9. We have heard the rival arguments made by both the sides and perused the orders of the Assessing Officer and Ld. CIT(A) / NFAC. We find the Assessing Officer in the instant case disallowed the claim of exemption u/s 54B of the Act amounting to Rs.1,05,92,146/- for want of evidence to his satisfaction. We find due to non submission of any details before the Ld. CIT(A) / NFAC despite number of opportunities granted, the Ld. CIT(A) / NFAC dismissed the appeal for want of prosecution. It is the submission of the Ld. Counsel for the assessee that the notices sent by the office of the Ld. CIT(A) / NFAC were delivered in the e- mail of the Chartered Accountant who did not inform the assessee for which all these unfortunate events happened. It is the submission of the Ld. Counsel for the 6 ITA Nos.2788 & 2789/PUN/2024 assessee that in the interest of justice, the assessee should be given an opportunity to substantiate his case by filing the requisite details before the Ld. CIT(A) / NFAC. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Ld. CIT(A) / NFAC with a direction to grant one final opportunity to the assessee to substantiate his case by filing the requisite details and decide the issue as per fact and law. The assessee is also hereby directed to make his submission, if any, before the Ld. CIT(A) / NFAC on the appointed date without seeking any adjournment under any pretext, failing which the Ld. CIT(A) / NFAC is at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes. Since the assessee has raised identical grounds in ITA No.2789/PUN/2024 for assessment year 2015-16, the said grounds are also allowed for statistical purposes. 10. In the result, both the appeals filed by the assessee are allowed for statistical purposes. Order pronounced in the open Court on 28th February, 2025. Sd/- Sd/- (VINAY BHAMORE) (R. K. PANDA) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; दिन ांक Dated : 28th February, 2025 GCVSR 7 ITA Nos.2788 & 2789/PUN/2024 आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: 1. अपीलार्थी / The Appellant; 2. प्रत्यर्थी / The Respondent 3. 4. The concerned Pr.CIT, Pune DR, ITAT, ‘B’ Bench, Pune 5. गार्ड फाईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अधिकरण ,पुणे / ITAT, Pune S.No. Details Date Initials Designation 1 Draft dictated on 27.02.2025 Sr. PS/PS 2 Draft placed before author 28.02.2025 Sr. PS/PS 3 Draft proposed & placed before the Second Member JM/AM 4 Draft discussed/approved by Second Member AM/AM 5 Approved Draft comes to the Sr. PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr. PS/PS 7 Date of uploading of Order Sr. PS/PS 8 File sent to Bench Clerk Sr. PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R. 11 Date of Dispatch of order "