SUKHNANDAN SAHU,RAIPUR (C.G.) V. .INCOME TAX OFFICER-4(1), RAIPUR, RAIPUR

ITA 398/RPR/2024

AI Insights

Sukhnandan Sahu appealed against the order of the Commissioner of Income Tax (Appeals), which confirmed the addition of Rs. 57,60,216 to his income as long-term capital gain, denying exemption under section 54B of the Income Tax Act, 1961. The appeal also contested the legality of the reassessment order, which was claimed to be passed without mandatory notices. The Tribunal found that the assessee was not properly served with notices, leading to a decision to remand the case back to the CIT(A) for a fresh hearing.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 298993 (ITAT-RAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-12-2024
• 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: PRIYANKA PATEL; VIRTUALLY
• Assessee Lawyers: R. B. DOSHI
• Keywords: Condonation of delay; Set aside; Opportunity of being heard; Bonafide belief; Assessment record
• Section: 148; 142(1); 143(2); 250; 54B

Judgement Text

"आयकर अपीलीय अिधकरण, रायपुर Ɋायपीठ, रायपुर (Virtually) IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR ŵी रिवश सूद, Ɋाियक सद˟ एवं ŵी अŜण खोड़िपया, लेखा सद˟ क े समƗ । BEFORE SHRI RAVISH SOOD, JM & SHRI ARUN KHODPIA, AM आयकर अपील सं. / ITA No: 398/RPR/2024 (िनधा[रण वष[ Assessment Year: 2013-14) Sukhnandan Sahu, Near Krishna Public School, Ward No. 54, Dabripara, Dunda, Sejbahar, Raipur, (C.G.) V s Income Tax Officer-4(1), Raipur PAN: DZMPS6238E (अपीलाथŎ/Appellant) . . (ŮȑथŎ / Respondent) िनधाŊįरती की ओर से /Assessee by : Shri R. B. Doshi, CA राजˢ की ओर से /Revenue by : Dr. Priyanka Patel, Sr. DR (Virtually) सुनवाई की तारीख / Date of Hearing : 12.12.2024 घोषणा की तारीख/Date of Pronouncement : 17.12.2024 आदेश / O R D E R Per Arun Khodpia, AM: The captioned appeal is filed by the assessee, against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, [(in short “Ld. CIT(A)”] u/s 250 of the Income Tax Act, 1961 (in short “the Act”), for the AY 2013-14, dated 10.12.2022, which in turn arises from the order of Income Tax Officer-4(5), Raipur (in short “Ld. AO”), u/s 143(3) r.w.s. 147 of the Act, dated 26.12.2016. 2. The grounds of appeal raised by the assessee are as under: 2 ITA No. 398/RPR/2024 Sukhnandan Sahu vs ITO-4(1), Raipur 1. Ld. CIT(A) erred in deciding appeal without service of notice. Resultantly, appellate order is illegal & unsustainable. 2. Ld. CIT(A) erred in confirming addition of Rs. 57,60,216/- made by AO on account of long-term capital gain denying exemption u/s 54B claimed by appellant. The addition made by AO and confirmed by Ld. CIT(A) is arbitrary, illegal and not justified. 3. Ld. CIT(A) erred in confirming the addition made by AO without appreciating that the assessment order is illegal inasmuch as the same has been passed without issuance of mandatory notice u/s 143(2) is ab-initio void and not sustainable. Ld. CIT(A) erred in confirming the addition made vide an illegal and void order. 4. The reassessment order passed by the AO is illegal and unsustainable inasmuch as the reassessment was completed without providing copy of the reasons recorded for reopening of the case and approval u/s 151. The reassessment order is liable to be quashed. 5. The appellant reserves the right to amend, modify or add any of the ground/s of appeal. 3. The brief facts of the case are that the assessee has sold his 0.805 Hectare Agriculture land situated at village Sejbahar, Raipur for Rs. 64,40,000/- to M/s R. L. Developers, on 26.07.2012. Assessee had not filed his return of income. However, considering the final transaction carried out by the assessee, the case of assessee was reopened u/s 148 of the Act by issuing a notice on 14.08.2015. In response, assessee has filed his return of income on 14.09.2015, declaring total income of Rs.1,72,370/-, thereafter notice u/s 142(1) along with questionnaire was issued, in response to which assessee along with his counsel appeared before the Ld. AO and have produced relevant documents. After considering the written submission and documents furnished by the assessee, Ld. AO observed that the 3 ITA No. 398/RPR/2024 Sukhnandan Sahu vs ITO-4(1), Raipur assessee is not eligible for claim of exemption u/s 54B of the Act, therefore, the long-term gain arose to him on sale of agricultural land is liable to taxed without deduction of the amount claimed as exempt u/s 54B. The reasons assigned by Ld. AO for rejecting the claim of assessee was that the assessee have purchased agricultural land during 10.10.2011 to 17.02.2012, whereas the subject land situated at Sejbahar was sold on 26.07.2012 i.e., subsequent to the date of purchased agricultural land at Alekhunta & Kurud. 4. It is further observed by the Ld. AO that the possession of land sold was also given to the assessee to the purchaser on 06.04.2011, however, as per statement of partner of M/s R. L. Developer recorded on oath dated 09.12.2016, that the possession of land was taken from the assessee after registry. Therefore, the assessee’s claim that the possession was handover on 06.04.2011 was not found, tenable. It is also noted that the purchased agricultural land was in name of assessee’s father, therefore, assessee is not eligible for exemption u/s 54B of the Act, since the purchase of land was made in the name of assessee. In terms of aforesaid observations, Ld. AO had made certain calculations for added an amount of Rs.57,60,216/- to the income of the assessee under the head “LTCG”. 4 ITA No. 398/RPR/2024 Sukhnandan Sahu vs ITO-4(1), Raipur 5. Aggrieved with the aforesaid order of Ld. AO, assessee preferred an appeal before the Ld. CIT(A), wherein the decision of Ld. AO has been confirmed by the Ld. CIT(A) and the appeal of assessee is dismissed. 6. Dissatisfied with the order of Ld. CIT(A), assessee has carried the matter before us, which is under consideration in the present appeal. 7. At the outset, registry has pointed out of the appeal of assessee is defective being barred by limitation on account of delay in filing of the appeal by 566 days. In response, assessee furnished before us an application for condonation of delay along with affidavit of the assessee, the same is extracted as under: 5 ITA No. 398/RPR/2024 Sukhnandan Sahu vs ITO-4(1), Raipur 6 ITA No. 398/RPR/2024 Sukhnandan Sahu vs ITO-4(1), Raipur 7 ITA No. 398/RPR/2024 Sukhnandan Sahu vs ITO-4(1), Raipur 8 ITA No. 398/RPR/2024 Sukhnandan Sahu vs ITO-4(1), Raipur 9 ITA No. 398/RPR/2024 Sukhnandan Sahu vs ITO-4(1), Raipur 10 ITA No. 398/RPR/2024 Sukhnandan Sahu vs ITO-4(1), Raipur 11 ITA No. 398/RPR/2024 Sukhnandan Sahu vs ITO-4(1), Raipur 8. As per aforesaid condonation application along with affidavit furnished by the assessee, considering the same and after hearing the contention of both the parties, we find substance in the reasons given by the assessee qua the delay involved in the present appeal, that the assessee has opted “NO” against question in Form 35 that “whether notices / communication may be sent on email”? The assessee therefore was under bonafide belief that notice/ communications including the appellate order issued / passed by the appellate authority will be received in physical form, however, no such services was rendered by the by the revenue. Under such facts and circumstances, we find merits in the request of assessee, therefore, the delay found to be substantiated with sufficient cause, thus, we condone the same. 9. It is further, brought to our notice by the Ld. AR that the assessee could not attend and represent in the proceedings before the Ld. CIT(A), in absence of any communication sent to him in physical mode as requested in form 35 by the assessee before First Appellate Authority, therefore, the order passed by the Ld. CIT(A) was without hearing the assessee, against the principal of natural justice, thus, shall be held as illegal and unsustainable. 12 ITA No. 398/RPR/2024 Sukhnandan Sahu vs ITO-4(1), Raipur 10. Per contra, Ld. Sr. DR on behalf of the revenue, vehemently supported the orders of revenue authorities. 11. We have considered the rival submissions, perused the material available on record and judicial pronouncements relied upon by the assessee. As the appeal of assessee was delayed by 566 days and the same was condoned, basis the ground that the assessee was not served with notices/ orders as mandated in the law. It is pertinent to mentioned that in form 35 in the appeal memo before the First Appellate Authority, the assessee has opted “NO” while opting for the more of communication towards the option “Whether notices / communication may be sent on email”, however, the communications are not served on the assessee through any other permissible method of communication as per law. On perusal of the order of Ld. CIT(A), we find that the conclusion drawn by the Ld. CIT(A) are based on material available with him in the form of assessment order and assessment records, there was no whisper about any submissions or representations by the assessee. We observed that as the assessee was deprived of from receiving the notices, there was no occasion for the assessee to remain informed about the appellate proceedings before the First Appellate Authority, therefore, the assessee was unable to represent. Such incidents shows that the opportunity of fair representation was not afforded to the assessee, therefore, in our considered 13 ITA No. 398/RPR/2024 Sukhnandan Sahu vs ITO-4(1), Raipur opinion, the issue on merits should have been decided only after hearing the affected party. We, therefore, without adhering to the grounds of appeal raised by the assessee, find it appropriate to restore this matter back to the file of Ld. CIT(A) to decide the same afresh after hearing the assessee, affording him reasonable opportunity of being heard as mandated in the law in the set aside appellate proceedings. 12. In result, the appeal of assessee is partly allowed in terms of our aforesaid observations. Order pronounced in the open court on 17/12/2024. Sd/- (RAVISH SOOD) Sd/- (ARUN KHODPIA) Ɋाियक सद˟ / JUDICIAL MEMBER लेखा सद˟ / ACCOUNTANT MEMBER रायपुर/Raipur; िदनांक Dated 17/12/2024 Vaibhav Shrivastav आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant- Sukhnandan Sahu 2. ŮȑथŎ / The Respondent- ITO-4(1), Raipur 3. आयकर आयुƅ(अपील) / The CIT(A), 4. The Pr. CIT, Raipur (C.G.) 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, रायपुर/ DR, ITAT, Raipur 6. गाडŊ फाईल / Guard file. // स×याǒपत Ĥित True copy // 14 ITA No. 398/RPR/2024 Sukhnandan Sahu vs ITO-4(1), Raipur आदेशानुसार/ BY ORDER, (Senior Private Secretary) आयकर अपीलीय अिधकरण, रायपुर/ITAT, Raipur "