PRAMOD KUMAR,PATNA vs. ITO WARD- 6(5), PATNA

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ITA 77/PAT/2023Status: DisposedITAT Patna31 May 2023AY 2013-145 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the notices sent by the appellate authority were not properly served on the assessee. Therefore, the case was restored to the CIT(A) for a fresh decision on merits after providing a reasonable opportunity of hearing.

What were the facts?

The assessee entered into a joint development agreement for a property, which the Assessing Officer treated as a transfer and levied capital gains tax. The CIT(A) passed an ex-parte order without the assessee receiving proper notice.

What were the issues?

Whether the CIT(A) erred in passing an ex-parte order due to improper service of notice, and whether the handing over of land under a joint development agreement constitutes a taxable transfer.

Which sections of the Income-tax Act were involved?

Section 144,Section 50C,Section 48

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA-PATNA ‘e-COURT’, KOLKATA

Before: Shri Rajpal Yadav, Vice- & Dr. Manish Borad

order : May 31, 2023 O R D E R Per Dr. Manish Borad, Accountant Member:- This appeal at the instance of assessee for assessment year 2013-14 is directed against the order of ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 21.02.2023,

1.

Pramod Kumar which is arising out of the order under section 144 of the Act dated 10.12.2019 framed by ITO, Ward-6(5), Patna.

2.

The assessee has raised the following grounds of appeal:-

(i) That the order passed by Id CIT(A), NFAC, Delhi is unjust, unwarranted and bad in law. (ii) That the Id CIT(A), NFAC, Delhi erred in treating the handing over of the demised land as transfer of property. (iii) That the Id CIT(A), NFAC, Delhi erred in computing the capital gain tax on transfer of such property. (iv) That the Id CIT(A), NFAC, Delhi erred in invoking the provisions of section 50C of the act when the consideration for transfer of property was indeterminate. (v) That the Id CIT(A), NFAC, Delhi erred in determining the consideration for transfer of the basis of notional figure. (vi) The Id CIT(A], NFAC, Delhi erred in computing the capital gain on the basis of such notional value as determined by him. (vii) That the Id CIT(A), NFAC, Delhi failed to compute the admissible deduction on account of cots of acquisition as admissible u/s 48 of the act. (viii) That the Id CIT(A), NFAC, Delhi erred in not extending any deduction on account cots of acquisition as admissible u/s 48 of the Act.

3.

Brief facts of the case are that the assessee is an individual engaged in retail trade. For the relevant year, the assessee had filed his return of income declaring income of Rs.1,96,200/- after claiming admissible deductions. However, during the relevant

Pramod Kumar year, the assessee jointly with his brother entered into a joint development agreement dated 19.10.2012 with AGR Estate Private Limited for construction of multi-storied building. As per the terms of the agreement, the assessee was entitled for 50% of share in super built-up area of the property to be divided equally amongst both the brothers including the assessee. The assessee thus was entitled for 25% share in the said super built-up area. The land was handed over to the developer and construction over the said land was commenced by the said builder. Ld. Assessing Officer construed the said transaction as transfer of property and brought the same under the ambit of taxation, determining the capital gain so arisen to the assessee at Rs.26,13,360/- and levied huge tax liability on the assessee. During the course of appellate proceedings, no notices were received by the assessee and as such ld. CIT(Appeals) passed an ex-parte order without considering the merit of the case.

4.

At the outset, ld. Counsel for the assessee submitted that the notices issued by the appellate authority were not served on the assessee as the notices were sent on the mail address i.e. camaitin@gmail.com The ld. A.R. submitted that the assessee entered into an joint development agreement with AGR Estate Private Limited for construction of multi-storied building. However, mail address was duly mentioned in the Form No. 36 before the ld. Appellate authority before entering joint development agreement. However, the notices were sent

Pramod Kumar on the e-mail, which was there prior to the agreement with AGR Estate Pvt. Limited. Ld. A.R., therefore, prayed that for the interest of justice and fair play, the appeal may kindly be restored to the file of ld. CIT(Appeals) for deciding the same afresh on merit after affording reasonable opportunity of hearing to the assessee.

5.

The ld. Departmental Representative, on the other hand, heavily relied on the order of authorities below.

6.

We have heard the rival submissions and perused the relevant material available on record. From the record, we find that the ld. 1st Appellate Authority has sent the notices by e-mail on the address, which mentioned in Form 36. There is a settled law that once amalgamated, the notices can no longer be served to the amalgamating entity. Once amalgamated the old entity ceases to exist and no notices are to be issued to them. Under these circumstances, we are of the view that end of justice could be made if the appeal is restored to the file of ld. CIT(Appeals) to decide the same on merit after affording reasonable opportunity of hearing to the assessee. Accordingly, we restore the appeal back to the file of ld. CIT(Appeals) with a direction to decide the same afresh on merit after affording reasonable opportunity of hearing to the assessee.

Pramod Kumar 7. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on May 31st , 2023.

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