R AND R INFRASPACE PRIVATE LIMITED,NAVSARI V. PRINCIPAL COMMISSIONER OF INCOME TAX VALSAD, VALSAD

ITA 532/SRT/2024

AI Insights

The case involves R & R Infraspace Pvt. Ltd., which appealed against the order of the Principal Commissioner of Income-tax, Valsad, revising the assessment order for the assessment year 2018-19. The revision was based on the non-filing of income details by the assessee despite multiple opportunities. The Tribunal noted that the assessee did not appear or provide any submissions during the hearings, leading to the dismissal of the appeal. The main legal contention was whether the income should be added under section 68 or taxed under the head 'income from capital gain'. The Tribunal supported the PCIT's decision to add the income under section 68 and charge it at a higher rate.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 29809 (ITAT-SURAT)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-01-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAVIKANT GUPTA
• Keywords: Set aside; Business income; Opportunity of being heard; Capital Gains; Revision of order
• Section: 147; 148; 263; 139(1); 68

Judgement Text

" आयकर अपीलीय अिधकरण, सूरत Ɋायपीठ, सूरत IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No. 532/SRT/2024 (AY 2013-14) (Physical court hearing) R & R Infraspace Pvt. Ltd. Office No.A1, Giriraj Cinema Compound, Navsari-396 445 [PAN : AAFCR 1504 C] बनाम Vs Principal Commissioner of Income- tax, Valsad, 301, 3rd Floor, Palak Arcade, Shantinagar, Tithal Road, Valsad-396 001 अपीलाथŎ/Appellant ŮȑथŎ /Respondent िनधाŊįरती की ओर से /Assessee by None राजˢ की ओर से /Revenue by Shri Ravi Kant Gupta– CIT-DR सुनवाई की तारीख/Date of hearing 02.01.2025 उद ्घोषणा की तारीख/Date of pronouncement 02.01.2025 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee is directed against the order of Ld. Principal Commissioner of Income-tax, Valsad [for short to as “Ld. PCIT”] passed under section 263 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 14.03.2024 for assessment year (AY) 2013-14, in revising of assessment order passed by Assessing Officer under section 147 r.w.s. 144 r.w.s. 144B of the Act dated 25.03.2023 for assessment year 2018-19. The assessee has raised the following grounds of appeal: “1. The Hon’ble PCIT ought to have waited till the appeal of the assessee before Hon’ble CIT(A) could be disposed off. An order passed u/s 263 without taking cognizance of a pending appeal before Hon’ble CIT(A) is bad in law and erroneous. The Hon’ble PIT ought to have considered the facts evident from the Tax Audit report filed by the assessee and arguments put forward by the ITA No.532/SRT/2024 (A.Y.13-14) R & R Infraspace Pvt. Ltd. 2 assessee in Form 35 before coming to the conclusion that income be added u/s 68 instead of being taxed under the head “income from capital gain”. As the ingredients laid down u/s 68 are not satisfied, the order is bad in law and erroneous. The said receipts of Rs.1,55,63,560/- were sale proceeds of the inventory of premises held by assessee, from which their purchase price of raw materials, direct costs and other relevant expenses debited to P/L a/c ought to have been deducted before arriving at the taxable income. The income ought to have been taxed under the head “income from business and profession”. 2. None appeared on behalf of assessee, despite service of notices of hearing of this appeal on more than two occasions by way of RPAD as well as through e-mail. The registered notice sent at the address provided in Form-36 is returned bank by Postal Authorities. Today neither representative of the assessee appeared nor filed application of adjournment, thus, we left no option except to hear the submission of learned Commissioner of Income-tax Departmental representative (Ld.CIT-DR) for the revenue and to decide this appeal on the basis of material available on record. 3. The ld CIT-DR for the revenue submits that during the relevant financial year (FY) i.e. in 2012-13, the assessee sold immovable property on consideration of Rs.1.55 crore. No return of income was filed by assessee, though audit report inform-3CA and 3CD were filed reporting net income of Rs.69,09,822/- . Thus, case of assessee was reopened by issuing notice under section 148 of the Act. Even during re-assessment proceedings, assessee has not filed return of income in response to notice under section 148, nor filed any submission in response to various show causes notices. Assessment was completed under section 144 rws 147 & 144B on 29.03.2022. In the assessment order, the Assessing officer treated the sale consideration of Rs. 1.08 Crore as Capital ITA No.532/SRT/2024 (A.Y.13-14) R & R Infraspace Pvt. Ltd. 3 Gain. The assessment was revised by Ld. PCIT by taking view that the assessee has not furnished any details of immovable property nor offered any income on sale of property despite allowing opportunity and the sale consideration was to be added under section 68 of the Act and to be charged @ 30% instead of 20%. The Assessing Officer suo moto considered sale consideration as capital gain and taxed accordingly. The order of Ld. PCIT was erroneous and prejudicial to the interest of revenue. The assessee was given opportunity to contest revisional proceedings by issuing show cause notice through e-mail address as Sped Post. The assessee chose not to contest the said proceedings and again assessee is not contested the appeal and same was set aside the assessment order with a direction to pass fresh assessment order after giving reasonable and sufficient opportunity of being heard to assessee. The assessee again, despite filing this appeal failed to appear and neither filed any documentary evidence or any submissions, the appeal of the assessee may be dismissed. 4. We have heard the submission of Ld.CIT-DR for the Revenue and have gone through the order of Ld. PCIT carefully. We find that present appeal was filed on 09.05.2024 and Registry sent notices of hearing through e-mail as well as RPAD, which returned back by the postal authorities. The assessee has avoided the service of notice despite the fact that registered envelope contained the stamp of this Tribunal. The notice was sent at the address provided by assessee in Form-36. On further perusal, we find that this appeal relates to assessment year 2013-14, however, assessee has filed assessment order for assessment year 2018-19 dated 25.03.2023, which was not subject ITA No.532/SRT/2024 (A.Y.13-14) R & R Infraspace Pvt. Ltd. 4 matter of revision. Thus, appeal is filed in a casual manner. On perusal of order passed by Ld.PCIT, we find that there is categorical finding of lower authorities that no return was filed by assessee either under section 139(1) or in response to notice under section 148 of the Act. The Assessing Officer completed assessment under section 144 r.w.s. 144B of the Act on 28.04.2021and made addition of Rs.1,55,63,560/- under head “capital gains” and addition of Rs.69,09,822/- on account of business income as reported in Form-3CD. The assessment was revised by Ld. PCIT by taking view that the assessee has not furnished any details of immovable property nor offered any income on sale of property despite allowing opportunity and the sale consideration was to be added under section 68 of the Act and to be charged @ 30% instead of 20%. The Assessing Officer suo moto considered sale consideration as capital gain and taxed accordingly. We find that assessee has not countered such finding of Ld.CIT(A) by furnishing requisites details or submission. Therefore, in absence of any submission or details, we do not find any justification in interfering with the order passed by Ld. PCIT under section 263 of the Act. Accordingly, we affirm the same. In the result, the ground of appeal raised by the assessee are dismissed. 5. In the result, the appeal of the assessee is dismissed. Order pronounced in the open court on 02 /01/2025. Sd/- Sd/- (BIJAYANANDA PRUSETH) (PAWAN SINGH) लेखा सद˟/Accountant Member Ɋाियक सद˟/Judicial Member सूरत / Surat Dated:02/01/2025 Dkp Outsourcing Sr.P.S* ITA No.532/SRT/2024 (A.Y.13-14) R & R Infraspace Pvt. Ltd. 5 आदेश की Ůितिलिप अŤेिषत/ Copy of the order forwarded to :  अपीलाथŎ/ The Appellant  ŮȑथŎ/ The Respondent  आयकर आयुƅ/ CIT  िवभागीय Ůितिनिध, आयकर अपीलीय आिधकरण, सूरत/ DR, ITAT, SURAT  गाडŊ फाईल/ Guard File // True Copy // By order/आदेश से, सहायक पंजीकार आयकर अपीलीय अिधकरण, सूरत "