PRAKASH KRISHNA GHULE,SATARA V. ITO, WARD-5, SATARA, SATARA

ITA 460/PUN/2024

AI Insights

The case involves Prakash Krishan Ghule, the appellant, who challenged the order passed by the Ld. CIT(A)/NFAC, which confirmed the assessment order by the Income Tax Officer, Ward-(5), Satara. The assessment was initially made under sections 143(3) r.w.s. 147 of the Income-tax Act, 1961, for the assessment year 2013-14, concerning capital gains from a property development agreement. The appellant argued that the property was agricultural land and not a capital asset, and that the development agreement did not constitute a transfer. The Ld. NFAC dismissed the appeal ex-parte due to non-appearance and non-submission of documents by the appellant, which was attributed to the COVID-19 pandemic. The ITAT, considering the circumstances and the principles of natural justice, decided to set aside the order and remit the case back for a fresh hearing.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 26322 (ITAT-PUNE)
• Duration Of Justice: 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 25-09-2024
• Assessment Year: 2013-2014
• Appeal Filed On: 09-03-2024
• Other Referred Cases: St. Paul’s Anglo Indian Education Society (2003) 262 ITR 377 (Pat)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARVIND DESAI LD.
• Keywords: Capital asset; Principle of natural justice; Competent authority
• Section: 148; 143(3); 143(2); 250

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, PUNE ‘B’ BENCH, PUNE ITAT-Pune Page 1 of 5 BEFORE HON’BLE SHRI G. D. PADMAHSHALI, ACCOUNTANT MEMBER AND HON’BLE SHRI VINAY BHAMORE, JUDICIAL MEMBER ITA No.0460/PUN/2024 Assessment Year : 2013-14 Prakash Krishan Ghule 165/9, Opp. Renukamata Mandir, Sahau Nagar, Godoli, Satara-415001. PAN: AHSPG1542N .......अपीलार्थी / Appellant V/s The Income Tax Officer, Ward-(5), Satara. ....... प्रत्यर्थी / Respondent Appearances Assessee by : None for the Assessee Revenue by : Mr Arvind Desai [‘Ld. DR’] Date of conclusive Hearing : 25/09/2024 Date of Pronouncement : 01/10/2024 ORDER PER G. D.PADMAHSHALI, AM; By present appeal, the assessee challenges DIN & order No. ITBA/NFAC/S/250/2023-24/1060078078(1) dt. 24/01/2024 passed u/s 250 of the Income-tax Act, 1961 [‘the Act’ onwards] by the first appellate authority [‘Ld. CIT(A)/NFAC’ onwards] which in turn confirmed the order of assessment dt. 19/12/2017 passed u/s 143(3) r.w.s. 147 of the Act by the Income Tax Officer, Ward-(5) Satara [‘Ld. AO’ onwards] for assessment year 2013-14 [‘AY’ onwards]; Prakash Krishan Ghule Vs ITO ITA No.0460/PUN/2024 AY: 2013-14 ITAT-Pune Page 2 of 5 2. The order sheet entries prima-facie reveals that this appeal was instituted u/s 253(1) of the Act on 09/03/2024 and thereafter case was listed for hearing first time on 11/06/2024 where none appeared at the behest of the assessee therefore case was adjourned. The case thereafter scheduled for hearing on; 08/07/2024, 31/07/2024, 05/09/2024 and 25/09/2024 however the counsel appearing on behalf of the appellant sought adjournments for various reasons which the bench granted following the principle of natural justice. Today when the case was called twice; none appeared at the behest of the assessee nor there is any application for adjournment placed on records. On the primary briefing from the Ld. DR, the case records ostensibly suggests that, the first appellate authority owning to non-prosecution of appeal had adjudicated the issue ex-parte but without the evidential material on record. In these circumstances, invoking the provisions of rule 24 of ITAT-Rules, 1963 we deem fit to proceed ex-parte and adjudicate the former limited issue with the able assistance from the Revenue. Advanced accordingly. 3. We have heard the Ld. DR on the limited issue of ex-parte dismissal of appeal by Ld. NFAC; and subject to provisions of rule Prakash Krishan Ghule Vs ITO ITA No.0460/PUN/2024 AY: 2013-14 ITAT-Pune Page 3 of 5 18 of ITAT-Rules perused material placed on record. We note that, the assessee is an individual who did file no return of income u/s 139 of the Act and was therefore identified as non-filer for the year under consideration. Upon the receipt of information that, the assessee jointly with other four/five person in relation to their property situated at S.No. 118/2, Godoli, Satara entered into development agreement with M/s Shriraj Vastu Nirmiti on 31/12/2012, the Ld. AO after recording the reasons and obtaining prior approval from the competent authority reopened the case of the assessee u/s 148 of the Act for assessing as capital gain arising from transfer of aforestated property in view of section 2(47)(v) of the Act. In response to such notice the assessee filed his return declaring total income ₹1,99,160/- on 05/12/20174, which was subjected to scrutiny u/s 143(2) of the Act. The twin contentions of the assessee that; (a) the property (land) is not a capital asset being agricultural land falling outside the local limits and (b) by entering into such development agreement the assessee did not part with the possession, hence there was no occasion to trigger any transfer vis- à-vis capital gain, did not inspire the Ld. AO. In consequence the Ld. AO computed the capital gain arising on transfer & proportionate share of assessee ₹54,91,410/- in the property Prakash Krishan Ghule Vs ITO ITA No.0460/PUN/2024 AY: 2013-14 ITAT-Pune Page 4 of 5 brought to tax vide assessment framed on 19/12/2017 u/s 143(3) r.w.s 147 of the Act. 4. Aggrieved assessee instituted an appeal thereagainst before Ld. NFAC on 29/01/2018. In the course of first appellate proceedings, Ld. NFAC provided as many as nine opportunities of hearing to the assessee right from December, 2019 till December, 2023. However, when these notices remained unwaged, the Ld. NFAC proceeded ex- parte and dismissed the appeal in the absence of documentary evidences, thus confirmed the addition in line with the assessment. 5. Ld. DR solidified that, much of these notices of hearing issued by Ld. NFAC to the appellant fell during the subsistence of COVID- 19 pandemic. Likely for the reasons such notices were remined unattended and therefore reasons behind such non-compliance capable of suggesting that it was accidental & undeliberate on the part of the appellant. After a holistic consideration of facts, reasons behind such accidental & undeliberate non-compliance vis-à-vis non prosecution by the appellant, we are of the considered view that, the assessee for sufficient reasons prevented from representing himself before Ld. NFAC, which triggered the ex-parte adjudication. Prakash Krishan Ghule Vs ITO ITA No.0460/PUN/2024 AY: 2013-14 ITAT-Pune Page 5 of 5 6. Relying on Hon’ble High court of Patna judgement in ‘St. Paul’s Anglo Indian Education Society’ (2003) 262 ITR 377 (Pat)’, we are mindful to hold that the appellant assessee was deprived of reasonable opportunity and time to produce all relevant documents to substantiate his claims therefore the impugned adjudication culminated without such evidential documents not only violated the principle of natural justice but rendered itself irregular, therefore deserving to be set-aside. In view of the aforestated discussion we deem it proper to accord one more opportunity to the assessee to place evidential material in support of grounds of appeal raised and claim made therein before the Ld. NFAC. Egro, without commenting on merits, we set-aside the impugned order and remit it back to the Ld. NFAC with a direction to adjudicate the subject matter a fresh in accordance with law after providing three effective opportunities and pass a speaking order u/s 250(6) of the Act. 7. The appeal in result is ALLOWED FOR STATISTCIAL PURPOSES. U/r 34 of ITAT Rules, order pronounced in open court on this Tuesday, 01st October, 2024. -S/d- -S/d- -S/d- -S/d- VINAY BHAMORE G. D. PADMAHSHALI JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / PUNE; दिन ांक / Dated : 01st October, 2024. आदेशकीप्रतितितिअग्रेतिि / Copy of the Order forwarded to : 1.अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr.CIT Concerned. 4. The CIT-Concerned(MH-India) 5. DR, ITAT, Bench ‘B’, Pune 6.ग र्डफ़ इल / Guard File. आिेश नुस र / By Order वररष्ठदनजीसदिव / Sr. Private Secretary आयकरअपीलीयन्य य दिकरण, पुणे / ITAT, Pune. "