RAMESHWARDAS SHIVCHARANDAS AND COMPANY ,NANDED V. ITO WARD 1, JALNA

ITA 524/PUN/2025

AI Insights

The case involves Rameshwardas Shivcharandas and Company, a partnership firm, which appealed against the order of the National Faceless Appeal Centre, Delhi, concerning the Assessment Year 2015-16. The appeal was directed against the reassessment order passed under sections 147 and 144B of the Income-tax Act, 1961, which added Rs.3,03,09,000 as income from long-term capital gain from the sale of immovable property. The CIT(A) had confirmed this addition in an exparte order due to non-compliance by the assessee, which the assessee contested, citing improper service of notice and violation of natural justice. The Tribunal found merit in the assessee's arguments regarding the improper service of notice and the exparte nature of the CIT(A)'s decision, leading to the restoration of the case to the CIT(A) for a detailed examination on merits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 314089 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GANESH B BUDRUK
• Assessee Lawyers: RAJENDRA AGIWAL
• Keywords: Set aside; Reasonable cause; Principle of natural justice
• Section: 147; 148; 271(1)(c)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “B”, PUNE BEFORE DR.MANISH BORAD, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.524/PUN/2025 Assessment Year : 2015-16 Rameshwardas Shivcharandas and Company, H.No.3-2-552, Payal Plaza Building, Subhash Road, Near Multi Purpose High School, Vazirabad, Nanded 431 601 Maharashtra PAN : AAJFR5568B Vs. ITO, Ward-1, Jalna Appellant Respondent आदेश / ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER : The captioned appeal at the instance of assessee pertaining to A.Y. 2015-16 is directed against the order dated 16.12.2024 passed by National Faceless Appeal Centre, Delhi u/s.250 of the Income-tax Act, 1961 (in short ‘the Act’) arising out of the Assessment order dated 29.05.2023 passed u/s.147 r.w.s.144B of the Act. 2. Brief facts of the case are that the assessee is a partnership firm and has filed regular return of income u/s.139(1) of the Act. However, after the issuance of notice u/s.148 of the Act, return of income was furnished for A.Y. 2015-16 on 08.04.2023 declaring Nil income. As per the information available with the Appellant by : Shri Rajendra Agiwal Revenue by : Shri Ganesh B Budruk Date of hearing : 28.04.2025 Date of pronouncement : 07.05.2025 ITA No.524/PUN/2025 Rameshwardas Shivcharandas and Co. 2 Jurisdictional Assessing Officer, assessee entered into a transaction of immovable property for a consideration of Rs.5,05,15,000/-. Ld. AO carried out the re-assessment proceedings and finally concluded the same by making addition of Rs.3,03,09,000/- towards income from long term capital gain from sale of said land. 3. Aggrieved assessee preferred appeal before ld.CIT(A) placing various legal issues but on account of non-compliance ld.CIT(A) passed an exparte order and confirmed the addition made by AO without passing a speaking order. 4. Now the assessee is in appeal before this Tribunal raising the following grounds of appeal : “The appellant \"M/s Rameshwardas Shivcharandas and Company\" (hereinafter referred as appellant) has preferred this appeal against the assessment order passed by the Ld. AO u/s 147 r.w.s. 144B and upheld by the Ld. CIT(A) by passing order u/s 250 without deciding any issue on merits of the case and dismissed the appeal in summary manner for non-attendance by the appellant: Dismissing the appeal for non-attendance without passing order on merits 1. On the facts and circumstances of the case and in law the Ld. CIT(A) erred in dismissing the appeal holding that the appellant has nothing to say. The Ld. CIT(A) considering the non-attendance in response to notices issued through ITBA portal / emails, ought to have issued the notice through other modes of service as per mandate of section 282 of the Act. The order of the Ld. CIT(A) may kindly be set aside. Service of notice by the Ld. AO on non-existence email ID 2. On the facts and circumstances of the case and in law the assessment is invalid as the appellant denies service of notices. The appellant submits that the notices were issued on non-existence email Id as: \"[e-mail]\" as appearing on the notices issued which clearly were not served on registered email Id. The proceedings may kindly be held as invalid and bad in law. ITA No.524/PUN/2025 Rameshwardas Shivcharandas and Co. 3 Violation of principle of natural justice 3. On the facts and circumstances of the case and in law the Ld. CIT(A) erred in dismissing the appeal violating principle of natural justice. In any case the Ld. CIT(A) ought to have decided the appeal on merits by passing speaking order. Issue of notice u/s 148 on 22.04.2021 4. Without prejudice on the facts and circumstances of the case and in law the notice issued u/s 148 dated 22.04.2021 may kindly be held as invalid as it was issued as per law before amendment made by Finance Act, 2021. The notice issued dated 23.07.2022 is bad in law in view of non- applicability of provisions of TOLA for the impugned assessment year 4.1. On the facts and circumstances of the case and in law the Ld. CIT(A) ought to have held that as the provisions of Taxation and Other Laws Act 2020 (TOLA) is not applicable for the impugned assessment year 2015-16, the notice issued u/s 148 dated 23.07.2022 consequent to decision of Ashish Agarwal of Hon'ble Supreme Court as contended by the Ld. AO is bad in law and void ab initio. Information for alleged escapement of income for purchase of immovable property but assessment concluded by assessing long-term capital gain in pursuance of Joint Development Agreement 5. On the facts and circumstances of the case and in law the Ld. CIT(A) erred in upholding the assessment without appreciating the fact that the assessment was reopened on the basis of information alleging that the appellant has purchased immovable property for consideration of Rs. 5,05,15,000. While the Ld. AO has concluded the assessment assessing long term capital gain of Rs. 3,03,09,000. The assessment order is invalid and bad in law in view of the explanation 3 before amendment by Finance Act 2021 to section 148 as per the law laid down by the jurisdictional High Court. Assessment of long-term capital gain ignoring the facts of the case 6. On the facts and circumstances of the case and in law the Ld. AO erred in assessing the long-term capital gain of Rs. 3,03,09,000 disregarding the agreement entered with M/s. Shivalin Infrastructure on 31.12.2013. The Ld. AO has exceeded his jurisdiction while making the assessment. Conversion of asset into stock-in-trade 7. The Ld. AO erred in making addition of Rs.3,03,09,000/- as long- term capital gain on sale of land in in hands of appellant firm based on development agreement entered between appellant firm and M/s. ITA No.524/PUN/2025 Rameshwardas Shivcharandas and Co. 4 Shivalin Infrastructure without appreciating the fact that the appellant firm had converted the said land into stock in trade in FY 2013-2014. The addition made is arbitrary and unjustified. Erred invoking provisions of section 45(5A) inserted by Finance Act, 2017 8. On the facts and circumstances of the case and in law the Ld. AO erred in invoking the provisions of section 45(5A) of the Act which is applicable in the case of individual and HUF. 9. On the facts and circumstances of the case and in law the Ld. AO failed to appreciate that in any case the provisions of section 45(5A) have been inserted by Finance Act, 2017 w.e.f. 01.04.2018. The said provisions even otherwise are not applicable for AY 2015-16 i.e. impugned assessment year. Erred in not allowing any deduction while computing long-term capital gain 10.On the facts and circumstances of the case and in law the Ld. AO erred in not granting any deduction and levied the tax on alleged gross consideration. Double addition 11.On the facts and circumstances of the case and in law the Ld. AO erred in ignoring the submission of the appellant dated 18.04.2023 that the appellant had already offered the income in the subsequent assessment year as per the terms of Joint Development Agreement. The assessment of impugned long-term capital gain is resulting in double taxation. The addition may kindly be deleted. 12. The Ld. AO erred in initiating the penalty u/s 271(1)(c) and 271F. The appellant craves leave to add, amend, omit or alter any of the grounds before or at the time of the hearing.” 5. At the outset, Ld. Counsel for the assessee submitted that apart from legal issues raised before ld.CIT(A) assessee has also raised a new legal issue about the validity of the notice issued u/s.148 of the Act. He however considering the fact that the impugned order is exparte raised no objection if all the issues raised in the instant appeal are restored to the file of ld.CIT(A) for necessary adjudication. Ld. Departmental Representative did not oppose this request. ITA No.524/PUN/2025 Rameshwardas Shivcharandas and Co. 5 6. We have considered the rival submissions and perused the record placed before us. We notice that the impugned order is exparte and the reason for non appearance before ld.CIT(A) was mainly on account of sending the notice of hearing to a non- existing e-mail id/wrong e-mail id. Considering the fact that the assessee made proper compliance before the AO and before us detailed submissions have been made along with the paper book running into 88 pages in support of its grounds of appeal, we considering the prayer made by ld. Counsel for the assessee and also in the larger interest of justice deem it proper to restore all the issues raised by the assessee to the file of ld.CIT(A) for necessary adjudication. Ld.CIT(A) shall decide in accordance with law and pass a speaking order after providing reasonable opportunity of hearing to the assessee. Assessee is directed to provide latest email id and contact detail to the department for receiving the notices from ITBA portal. Assessee is also directed to remain vigilant and not to take unnecessary adjournment unless otherwise required for reasonable cause. Grounds of appeal raised by the assessee are allowed for statistical purposes. 7. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced on this 07th day of May, 2025. Sd/- Sd/- (VINAY BHAMORE) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; \u0001दनांक / Dated : 07th May, 2025. Satish ITA No.524/PUN/2025 Rameshwardas Shivcharandas and Co. 6 आदेश क\u0002 \u0003ितिलिप अ ेिषत / Copy of the Order forwarded to : 1. अपीलाथ / The Appellant. 2. \u000eयथ / The Respondent. 3. The Pr. CIT concerned. 4. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, “B” ब\u0014च, पुणे / DR, ITAT, “B” Bench, Pune. 5. गाड\u0004 फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune. "