SANTANU DAS,KOLKATA V. I.T.O.,WARD-25(1), KOLKATA

ITA 2582/KOL/2024

AI Insights

The case involves Santanu Das, an individual engaged in real estate development, who appealed against the order of the Commissioner of Income Tax (Appeals) - NFAC, Delhi, which was passed under section 250 of the Income Tax Act, 1961. The appeal was initially dismissed due to a delay in filing, which the assessee attributed to negligence on the part of his Chartered Accountant. The Assessing Officer had earlier added a substantial amount to the assessee's income under section 56(2)(x) of the Act, considering the difference between the stamp duty value of a property and the amount recorded in the transaction. The Tribunal found that the delay in filing the appeal should have been condoned and that the assessment should be reconsidered, as the assessee had not purchased a property but entered into a joint development agreement.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 396897 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2020-2021
• Other Referred Cases: Pathapati Subba Reddy (Died) by Lrs and Ors vs. Special Deputy Collector (LA), Ajay Dabra Vs Sunder Singh & Anr, Basawaraj Basawar and Another versus Special Land Acquisition Officer
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Condonation of delay; Set aside; Opportunity of being heard; Reasonable cause; Principle of natural justice
• Section: 144

Judgement Text

"आयकर अपीलीय अधिकरण कोलकाता 'सी' पीठ, कोलकाता में IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘C’ BENCH, KOLKATA श्री जॉजज माथान, न्याधयक सदस्य एवं श्री राक ेश धमश्रा, लेखा सदस्य क े समक्ष Before SHRI GEORGE MATHAN, JUDICIAL MEMBER & SHRI RAKESH MISHRA, ACCOUNTANT MEMBER I.T.A. No.: 2582/KOL/2024 Assessment Year: 2020-21 Santanu Das Vs. I.T.O., Ward-25(1), Kolkata (Appellant) (Respondent) PAN: AGBPD8172H Appearances: Assessee represented by : Shreya Loyalka, Adv. Department represented by : Bonnie Debbarma, Addl. CIT, Sr. DR. Date of concluding the hearing : 20-May-2025 Date of pronouncing the order : 28-May-2025 ORDER PER RAKESH MISHRA, ACCOUNTANT MEMBER: This appeal filed by the assessee is against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2020-21 dated 11.11.2024, which has been passed against the assessment order u/s 144 r.w.s. 144B of the Act, dated 27.09.2022. Page | 2 I.T.A. No.: 2582/KOL/2024 Assessment Year: 2020-21 Santanu Das. 2. The assessee has raised the following grounds of appeal before the Tribunal: “1) For that upon facts and circumstances of the case, the order of the Ld. CIT(A) is bad and law and in facts and hence liable to be quashed. 2) For that upon facts and circumstances of the case, the Ld. CIT(A) erred in not condoning the delay in filing appeal before CIT(A) despite there being reasonable cause for the delay in filing of appeal before CIT(A). 3) For that upon facts and circumstances of the case, CIT(A) erred in not providing the appellant an opportunity to be heard by way of video conferencing before dismissing the appeal in complete violation of principles of natural justice, despite opportunity was sought for personal hearing before the CIT(A) by the appellant. 4) For that upon facts and circumstances of the case, the CIT(A) erred in dismissing the appeal and thereby confirming the addition of Rs.1,13,64,475 under section 56(2)(x) of the Act. 5) For that upon facts and circumstances of the case, the CIT(A) erred in not appreciating the fact.” 3. Brief facts of the case are that the assessee is an individual engaged in the business of real estate development in the name and style of 'Sandas Company’. The return of income for the impugned assessment year was filed declaring total loss of Rs.13,27,625/-. The case was selected for scrutiny to verify the returned income on the ground that the assessee had purchased a property for value less than the value as per the Stamp authority. During the assessment proceeding, the Assessing Officer (hereinafter referred to as Ld. 'AO') issued notices u/s 143(2)/142(1)/show cause notice on various dates giving an opportunity of being heard to the assessee. However, the assessee did not comply in terms of notices issued by the Ld. AO. On perusal of the information available on 'Insight portal' the Ld. AO noticed that the assessee had purchased a residential property situated at South 24 Parganans Premise no. 6/1A, Ward No. 092, Bank Colony, Page | 3 I.T.A. No.: 2582/KOL/2024 Assessment Year: 2020-21 Santanu Das. PS Jadavpur, Kolkata on 01.04.2019 from Dilip Kumar Roy. The Ld. AO further noticed that in the said information transaction amount related to buyer (i.e. the assessee) was shown at Rs. 2/- only whereas the value for the purpose of stamps was Rs.1,13,64,377/-. In the absence of any submission/explanation/documents from the assessee, the Ld. AO considered the difference amount of Rs. 1,13,64,375/- as income from other sources u/s 56(2)(x) of the Act and added the same to the total income for the year under consideration. Assessment u/s 144 r.w.s. 144B of the Act was completed on 27.09.2022 determining the total assessed income at Rs. 1,00,36,850/-. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A) which was delayed by 134 days. The reason seeking condonation of delay was that the assessee had relied on the statement of his Chartered Accountant Sh. Koushik Chakraborty but the Chartered Accountant did not inform the assessee regarding the addition made. The assessee had failed to furnish copy of communication/correspondence made with the Chartered Accountant which could substantiate his claim that delay in filing the appeal was on account of negligence on the part of Chartered Accountant and relying on the decision of Hon'ble Supreme Court in the case of Pathapati Subba Reddy (Died) by Lrs and Ors vs. Special Deputy Collector (LA) (Cicil appeal no. 31248 of 2018) (pronounced on 08.04.2024) while rejecting an application for condonation of delay for lack of sufficient cause, the Ld. CIT(A) has concluded in paragraph 26 as follows: \"On a harmonious consideration of the provisions of the limitation law and the law laid down by the Supreme Court, it is evident that— 1. Law of limitation is based upon public policy that there should be an end to litigation by forfeiting the right to remedy rather than the right itself; Page | 4 I.T.A. No.: 2582/KOL/2024 Assessment Year: 2020-21 Santanu Das. 2. A right or the remedy that has not been exercised or availed of for a long time must come to an end or cease to exist after a fixed period of time; 3. The provisions of the Limitation Act have to be construed differently, such as Section 3 has to be construed in a strict sense whereas Section 5 has to be construed liberally; 4. In order to advance substantial justice, though liberal approach, justice- oriented approach or cause of substantial justice may be kept in mind but the same cannot be used to defeat the substantial law of limitation contained in Section 3 of the Limitation Act; 5. Courts are empowered to exercise discretion to condone the delay if sufficient cause had been explained, but that exercise of power is discretionary in nature and may not be exercised even if sufficient cause is established for various factors such as, where there is inordinate delay, negligence and want of due diligence; 6. Merely some persons obtained relief in similar matter, it does not mean that others are also entitled to the same benefit if the court is not satisfied with the cause shown for the delay in filing the appeal; 7. Merits of the case are not required to be considered in condoning the delay; and 8. Delay condonation application has to be decided on the parameters laid down for condoning the delay and condoning the delay for the reason that the conditions have been imposed, tantamounts to disregarding the statutory provision\" 4. The Ld. CIT(A) has also relied on the decision of Hon'ble Supreme Court in the case of Ajay Dabra Vs Sunder Singh & Anr (SLP (C) 15793/2019) wherein the Hon'ble Supreme Court have held that belated appeals can only be condoned, when sufficient reason is shown before the court for the delay. The appellant who seeks condonation of delay therefore must explain the delay of each day. It is true that the courts should not be pedantic in their approach while condoning the delay, and explanation of each day's delay should not be taken literally, Page | 5 I.T.A. No.: 2582/KOL/2024 Assessment Year: 2020-21 Santanu Das. but the fact remains that there must be a reasonable explanation for the delay. 5. The Ld. CIT(A) has further relied on the decision of Hon'ble Supreme Court in the case of Basawaraj Basawar and Another versus Special Land Acquisition Officer (Civil Appeal no. 6974 of 2013) and other cases. The Ld. CIT(A) has held that the assessee had failed to prove beyond doubt that it had acted diligently and was not guilty of negligence and the appeal was dismissed on account of delay. Aggrieved with the order of the Ld. CIT(A) the assessee has filed the appeal before this Tribunal. 6. Rival contentions were heard and the submissions made have been examined. The Ld. AR submitted that the assessment order is also made u/s 144 of the Act and proper submission could not be made. It was stated that the assessee had entered into a development agreement. The Ld. AO noted that while the stamp value of the property is Rs. 1,13,64,377/-, the amount paid by the assessee is Rs. 2/- and therefore, the difference value of Rs. 1,13,64,475/- was added to the income of the assessee u/s 56(2)(x) of the Act. Before the Ld. CIT(A) the appeal was not admitted on account of delay in filing the appeal. It was submitted that no property was purchased but the assessee had entered into a joint development agreement for which the notional purchase price is mentioned as Rs. 2/- which was to be paid for registration of the agreement. It was argued that the assessee has sufficient evidence and if adequate opportunity is granted the details can be filed before the Ld. CIT(A). 7. We have considered the submissions made. The non-compliance occurred due to lack of communication between the authorized Page | 6 I.T.A. No.: 2582/KOL/2024 Assessment Year: 2020-21 Santanu Das. representative of the assessee and the assessee for which the assessee cannot be penalised and therefore, the Bench was of the view that the Ld. CIT(A) ought to have condoned the delay and not dismissed the appeal on technical ground of delay only. Moreover, the assessment order was ex parte and the assessee contends that no property had been purchased and the joint development agreement was executed with the owner of the property. Therefore, it is considered appropriate in the interest of justice to set aside the orders of the Ld. CIT(A) as well as the Ld. AO and remit the matter back to the Ld. AO for making the assessment de novo. Needless to say, the assessee shall be given a reasonable opportunity of being heard to make any further submission it wants to make in support of its grounds of appeal and shall not seek unnecessary adjournments. Accordingly, the grounds taken by the assessee in his appeal are allowed for statistical purposes. 8. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 28th May, 2025. Sd/- Sd/- [George Mathan] [Rakesh Mishra] Judicial Member Accountant Member Dated: 28.05.2025 Bidhan (P.S.) Page | 7 I.T.A. No.: 2582/KOL/2024 Assessment Year: 2020-21 Santanu Das. Copy of the order forwarded to: 1. Santanu Das, 26A, Kaligari Lane, Dhakuria, Kolkata, West Bengal, 700031. 2. I.T.O., Ward-25(1), Kolkata. 3. CIT(A)-NFAC, Delhi. 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. 6. Guard File. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata "