SACHINKUMAR PREMANANDBHAI PATEL,ANAND V. THE ITO, WARD-1, ANAND

ITA 596/AHD/2025

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The case involves Sachinkumar Premanandbhai Patel, the appellant, who was accused of not reporting a Long Term Capital Gain (LTCG) from the sale of an immovable property, which was allegedly sold during the financial year 2014-15. The Income Tax Officer (ITO) initiated reassessment proceedings under section 147 r.w.s. 144 of the Income-tax Act, 1961, and added Rs. 45,00,000 as LTCG for the assessment year 2013-14. The Commissioner of Income-tax (Appeals) upheld this addition, leading to the appeal before the Tribunal. The Tribunal found that the property sale occurred in A.Y. 2015-16, not A.Y. 2013-14, and the assessee was not the owner of the property, leading to the quashing of the reassessment order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 712833 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2013-2014
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMIT PRATAP SIGH
• Assessee Lawyers: B.T. THAKKAR
• Keywords: Condonation of delay; Reasonable cause; Reassessment proceedings; Principle of natural justice
• Section: 147; 148; 142(1); 54

Judgement Text

"आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण,अहमदाबाद \bयायपीठ अहमदाबाद \bयायपीठ अहमदाबाद \bयायपीठ अहमदाबाद \bयायपीठ ‘SMC’ अहमदाबाद। अहमदाबाद। अहमदाबाद। अहमदाबाद। IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD ]BEFORE MS.SUCHITRA R. KAMBLE, JUDICIAL MEMBER AND SHRI MAKARAND V.MAHADEOKAR, ACCOUNTANT MEMBER ITA No.596/Ahd/2025 Asstt.Year : 2013-14 Sachinkumar Premanandbhai Patel Nr.Old Post Office Bhalej Anand Umreth, Gujarat PAN : AUHPP 8057 H Vs. ITO, Ward-1 Anand. (Applicant) (Responent) Assessee by : Shri B.T. Thakkar, AR Revenue by : Shri Amit Pratap Sigh, Sr.DR सुनवाई क तारीख/Date of Hearing : 28/07/2025 घोषणा क तारीख /Date of Pronouncement: 29/07/2025 आदेश आदेश आदेश आदेश/O R D E R PER MAKARAND V.MAHADEOKAR, AM: This appeal by the assessee is directed against the order passed by the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)”, dated 14.05.2024, for A.Y. 2013–14, confirming the addition of Rs.45,00,000/- made by the Assessing Officer under the head Long Term Capital Gain (LTCG), in reassessment proceedings initiated under section 147 r.w.s. 144 of the Income-tax Act, 1961. 2. Condonation of Delay 2.1 At the outset, it is noted that there is a delay of 233 days in filing the present appeal. The assessee filed an application for condonation of delay supported by a duly sworn affidavit dated 20.03.2025, explaining that the Printed from counselvise.com ITA No.596/Ahd/2025 2 delay occurred due to unawareness of e-proceedings before CIT(A) and inaction of the consultant who handled the earlier appeal. The assessee became aware of the rejection only upon receiving demand/recovery/VSVS- 2024 communication from the AO and thereafter promptly took steps to file the present appeal. 2.2 The reasons stated in the affidavit have not been rebutted by the Revenue, and on consideration, we find them to be sincere and bona fide. It is well settled in law that the power to condone delay under section 253(5) is to be exercised in a liberal and justice-oriented manner, especially where no mala fide intent or deliberate negligence is shown. The delay is attributable to a combination of miscommunication, lack of knowledge of online proceedings, and inaction by the earlier consultant, and not due to any lack of diligence or malafide conduct on the part of the assessee. 2.3 Accordingly, applying the principles of natural justice, we are satisfied that the cause shown constitutes sufficient and reasonable cause within the meaning of section 253(5) of the Act. The delay of 233 days is condoned, and the appeal is admitted for adjudication on merits. 3. Facts of the Case 3.1 The assessee is an individual and was treated as a non-filer. Based on information available on record, the Assessing Officer noted that the assessee had, along with 7 other joint holders, allegedly sold an immovable property for a total consideration of Rs. 3.50 crore during F.Y. 2014–15, and that the share of the assessee in such sale consideration was Rs.45,00,000/-. It was further alleged that the assessee did not file return of income for the relevant period and failed to offer capital gain arising from such transfer. 3.2 Accordingly, proceedings under section 147 were initiated, and notice under section 148 was issued on 09.12.2019. In response, the assessee filed Printed from counselvise.com ITA No.596/Ahd/2025 3 return of income declaring total income of Rs.2,59,990/-. The AO, however, held that the entire sum of Rs.45,00,000/- was liable to be assessed as Long Term Capital Gain, on the ground that no exemption under section 54 was claimed and that the income had escaped assessment. Various statutory notices under sections 142(1) and 143(2) were issued, and in the absence of compliance, assessment was completed ex parte under section 144 r.w.s. 147, making an addition of Rs.45,00,000/-. 3.3 The assessee challenged the said assessment before the CIT(A), NFAC. In the statement of facts assessee stated that the property referred to in the assessment order did not belong to the assessee. Despite these averments, the appeal was dismissed ex parte by the CIT(A) due to alleged non-prosecution. The CIT(A) observed that the assessee failed to respond to notices issued through ITBA and Faceless Appeal Scheme and held that no evidence had been furnished to substantiate the claim. Consequently, the addition made by the AO was upheld. 4. Aggrieved by the order of CIT(A), the assessee is in appeal before us raising basic grounds and later on filed following additional grounds: 1. Additional Grounds of the Appeal. The Ld. CIT (Appeal) erred in law and on facts in confirming addition of Rs.45,00,000/- as Long Term Capital Gain in Asst. Year 2013-14. 2. The Ld. CIT (Appeal) erred in law and on facts in confirming the addition of Long Term Capital Gain Rs. 45,00,000/- even though in the Assessment Order in Para-1, it is mentioned that an immovable property is sold during F.Y.2014-15, relevant to A.Y. 2015-16. The addition is made in A.Y. 2013-14, which is not in accordance with provision of the Act, therefore the Assessment Order is bad in law and ab initio void and required to be quashed. 3. The appellant says and submit that i) The Immovable Property which is referred by the Ld. A.O. in the Assessment Order do not belong to the appellant. Therefore, addition cannot be made in case of the appellant. 4. Notice U/s. 148 of the IT Act is issued by the A.O. for A. Y. 2015-16, whereas the addition is made in Asst. Year 2013-14, which is not in accordance with the law. Printed from counselvise.com ITA No.596/Ahd/2025 4 5. During the course of hearing, the learned Authorised Representative (AR) submitted that the Assessing Officer has committed a fundamental jurisdictional error in issuing notice under section 148 for A.Y. 2015–16 but proceeding to frame the assessment for A.Y. 2013–14, which is impermissible under the scheme of the Act. It was pointed out that the very basis of the addition, namely, the alleged transaction of sale of immovable property, is stated by the AO himself to have occurred during Financial Year 2014–15, and therefore, any income arising therefrom, if at all taxable, could be assessed only in A.Y. 2015–16 and not in A.Y. 2013–14. The AR further submitted that the assessee is not the owner of the property referred to in the assessment order and has not received any part of the alleged consideration of Rs.45,00,000/-. The entire assessment, it was urged, is vitiated by mistaken identity and proceeds on incorrect factual assumptions, rendering the impugned order wholly unsustainable both in law and on facts. 5.1 The learned Departmental Representative (DR) fairly conceded that the AO appears to have committed a glaring mistake in initiating proceedings and passing order in wrong assessment year and the CIT(A) has mechanically confirmed the addition without dealing with the jurisdictional defect, and the matter warrants reconsideration or annulment. 6. We have carefully considered the rival contentions and perused the orders of the lower authorities. The following material facts are undisputed: - The alleged transaction of sale of immovable property took place during F.Y. 2014–15, relatable to A.Y. 2015–16. - The assessment has been completed for A.Y. 2013–14, with no mention of any transaction pertaining to that year. - The AO has proceeded on incorrect facts and in incorrect assessment year, which is a fatal jurisdictional defect. Printed from counselvise.com ITA No.596/Ahd/2025 5 - The property in question has not been shown to be owned by the assessee, nor has any evidence of receipt of Rs.45,00,000/- been brought on record. Thus, the very foundation of the reassessment is legally flawed. It is well-settled that an income can be assessed only in the correct assessment year. In the present case, the AO has taxed income of A.Y. 2015–16 in A.Y. 2013–14, which is impermissible. 6.1 Accordingly, we hold that the impugned reassessment order passed under section 147 r.w.s. 144 for A.Y. 2013–14 is void ab initio and deserves to be quashed in entirety. 7. In the result, the appeal of the assessee is allowed. Order pronounced in the Court on 29th July, 2025 at Ahmedabad. Sd/- Sd/- (SUCHITRA R. KAMBLE) JUDICIAL MEMBER (MAKARAND V. MAHADEOKAR) ACCOUNTANT MEMBER Ahmedabad, dated 29/07/2025 vk* Printed from counselvise.com "