PUNTHIL USMAN HAJEE SHAJAHAN,ALUVA V. INCOME TAX OFFICER, ALUVA RANGE, ALUVA

ITA 569/COCH/2023

AI Insights

The case involves Punthil Usman Hajee Shajahan, who appealed against the order of the CIT(A)/NFAC, which had dismissed his earlier appeal due to non-prosecution. The original dispute arose from the assessment of long-term capital gains from the sale of inherited land, where the assessee and his brothers sold 23.12 acres of land for Rs. 175 Lakhs. The assessee declared a fair market value of Rs. 28,500 per cent for the land, which was rejected by the AO who adopted a value of Rs. 1,230 per cent based on documents from the sub registrar. The Tribunal found that the CIT(A)/NFAC had not adjudicated the issues on merit and had dismissed the appeal without proper consideration of the assessee's submissions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 470437 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-04-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: LEENA LAL
• Assessee Lawyers: ANEESH VISHWANATHAN
• Keywords: Opportunity of being heard; Revised return; Fair market value; Capital Gains; Principle of natural justice
• Section: 148; 143(3); 142(1); 250; 143(1); 133(6)

Judgement Text

"ITA No.569/Coch/2023 Punthil Usman Hajee Shajahan, Aluva IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH:COCHIN BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI KESHAV DUBEY, JUDICIAL MEMBER ITA No.569/Coch/2023 Assessment Year: 2013-14 Punthil Usman Hajee Shajahan Shaji Nivas Thottakkattukara Aluva Ernakulam District Kerala 683 108 PAN NO :AWEPS1517N Vs. ITO Aluva Range Aluva APPELLANT RESPONDENT Appellant by : Shri Aneesh Vishwanathan, A.R. Respondent by : Smt. Leena Lal, Sr. D.R. Date of Hearing : 27.01.2025 Date of Pronouncement : 02.04.2025 O R D E R PER KESHAV DUBEY, JUDICIAL MEMBER: This appeal at the instance of the assessee is directed against the order of ld. CIT(A)/NFAC dated 26.05.2023 vide DIN & Order No.ITBA/NFAC/S/250/2023-24/1053225222(1) for the AY 2013- 14 passed u/s 250 of the Income Tax Act, 1961 (in short “The Act”). 2. The assessee has raised following grounds of appeal: ITA No.569/Coch/2023 Punthil Usman Hajee Shajahan, Aluva Page 2 of 6 ITA No.569/Coch/2023 Punthil Usman Hajee Shajahan, Aluva Page 3 of 6 3. The brief fact of the case are that the assessee is carrying on the business of lending of video and CD cassettes. The assessee is also a partner in the firm M/s. Classic Business Corporation, Aluva (PAN AACFC3001B). The return of income for the assessment year was originally e-filed on 15.01.2015 declaring a total income of Rs. 4,73,230/-. The return was processed u/s. 143(1) on 21.03.2015. Subsequently the assessee voluntarily filed a revised return on 16.12.2016 by declaring an enhanced income of Rs.14,96,560/-, which includes proportionate share of long-term capital gains arisen from the sale of landed property jointly held by two other brothers of the assessee. Thereafter, the AO issued notice on 28.03.2018 under section 148 of the Act directing to file ITA No.569/Coch/2023 Punthil Usman Hajee Shajahan, Aluva Page 4 of 6 a fresh return of income for the year concerned. Further a notice under section 142(1) of the Act was issued to the assessee on 27.07.2018 and the assessee e-filed return on 14.08.2018 declaring the same total income of Rs 14,96,560/- as reported in the revised return voluntarily filed on 16.12.2016. The assessee along with two brothers sold an aggregate extent of 23.12 acres (57.23 cents) of land situated adjacent to NH 47 and facing Aluva Thrissur Highway located at Thottakkattukara Kara, Aluva Municipality, Aluva West Village, Aluva Taluk as per document No 3358 dated 17.09.2012 for an aggregate consideration of Rs.175 Lakhs. The said landed property was inherited from assessee's mother Smt. Ayshu as per settlement deed Nos. 2147, 2148, 2149, 2150 & 2151 all dated 26.04.2004. Further, the property was originally purchased by mother in the year 1959.The fair market value adopted by the assessee at Rs. 28,500/- per cent as on 01.04.1981 for the purpose of computation of LTCG was primarily in view of the prominence of the location of the property (adjacent to NH 47 and facing Aluva — Thrissur National Highway). Further the same was also based on the strength of another referable sale deed No. 4752/1/2003 dated 21.11.2003 of Aluva Sub Registry Office executed by Smt. Rosakutty, W/o Late Mathew to the Federal Bank Ltd. The AO rejecting the fair market value of Rs. 28,500 per cent adopted by the assessee had adopted the fair value at Rs. 1,230/- per cent based on the documents provided by the sub registrar, Aluva u/s. 133(6) of the Act and taken the cost of the land at Rs. 70,380/- and accordingly recalculated the long term capital gain. The assessment was completed by AO on a total assessed income of Rs. 57,76,580/- u/s. 143(3) r.w.s. 147 of the Act. 4. Aggrieved by the assessment completed u/s. 143(3) r.w.s. 147 of the Act dated 21.12.2018, the assessee preferred an appeal before the ld. CIT(A)/NFAC. ITA No.569/Coch/2023 Punthil Usman Hajee Shajahan, Aluva Page 5 of 6 5. The ld. CIT(A)/NFAC dismissed the appeal of the assessee by holding that the assessee is not interested in prosecuting the appeal as neither any submission/document were submitted in support of his case nor sought for any adjournments. Accordingly, appeal filed by the assessee was dismissed. 6. Aggrieved by the order of ld. CIT(A)/NFAC dated 26.05.2023, the assessee has filed the present appeal before this Tribunal. 7. Before us, the ld. AR of the assessee submitted that the action of the ld. CIT(A)/NFAC in passing the order without addressing the assessee’s request for an extension of time filed on 24.05.2023 are unjustifiable and amounts to a denial of natural justice. Further, ld. AR submitted that despite the assessee’s timely response to the notice dated 22.05.2023 which was not rejected before the order was passed, the ld. CIT(A)/NFAC allegations of intentional delay are baseless. Lastly, the ld. AR of the assessee also submitted that the ld. CIT(A)/NFAC disregarding the merit of the case hastily passed an order without considering the grounds of appeal raised by the assessee and prayed to provide one more opportunity before the ld. CIT(A)/NFAC. 8. The ld. DR on the other hand supported the order of the authority below. 9. We have heard the rival submissions and perused the material available on record. A perusal of the fact of the case shows that the assessee could not represent his case before the ld. CIT(A)/NFAC as a result of which the ld. CIT(A)/NFAC has dismissed the appeal of the assessee on account of non- prosecution. Further on perusal of the order of the ld. CIT(A)/NFAC, it is found that the ld. CIT(A)/NFAC has also not adjudicated the issues on merit. As per the provision contained in section 250(6) of the Act, the order of the ld. CIT(A)/NFAC disposing of the appeal ITA No.569/Coch/2023 Punthil Usman Hajee Shajahan, Aluva Page 6 of 6 shall be in writing and shall state the points for determination, the decision thereon and the reason for the decision. 9.1 During the course of hearing, the ld. AR of the assessee requested that the assessee may be provided with one more opportunity to represent his case before the ld. CIT(A)/NFAC. In view of the above, considering the prayer of the ld. A.R. of the assessee, as well as in the interest of justice and fair play, we deem it fit to remit the entire issues involved in the present appeal to the file of ld. CIT(A)/NFAC for fresh adjudication in accordance with the law. Needles to say, reasonable opportunity of being heard must be granted to the assessee. The assessee is also directed to produce all the necessary documents/evidences/information in support of his claim and shall not seek unnecessary adjournments. It is ordered accordingly. In the result, appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open court on 2nd April, 2025 Sd/- (Inturi Rama Rao) Accountant Member Sd/- (Keshav Dubey) Judicial Member Bangalore, Dated: 2nd April, 2025. VG/SPS Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order Asst. Registrar, ITAT, Cochin. "