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Income Tax Appellate Tribunal, JODHPUR BENCH, JODHPUR.
Before: DR. M. L. MEENA & SH. ANIKESH BANERJEE
Per Anikesh Banerjee, JM:
The instant appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals), NFAC, Delhi {in brevity the CIT(A)}, order passed u/s 250 of the Income Tax Act 1961, [in brevity ‘the Act’] for A.Y. 2011-12. The impugned order was emanated from the order of the Income Tax Officer, Ward -3, Sriganga Nagar,[in brevity ‘the AO’] order passed u/s 147/143(3) of the Act.
2. The assessee has taken the following ground:
I.T.A.No. 492/Jodh/2023 2 &S.A.No.10/Jodh/2023 “1. That the assessment completed by the Income Tax Officer and sustained by CIT(A) is illegal and against the law.
That no notice has been served on the email id of the assessee as such bad in law, in view of judgment of Mutharamman Traders Vs State Tax officer (Madras High Court) W.P. Nos. 17600 & 17604 of 2023 dated 14.06.2023.
3. That the re-opening of the assessment u/s. 147/148 of I.T. Act is illegal and against the law.
4. That neither there was issuance of valid notice nor proper service of notice under section 147/148 of It Act, 1961 as such as in the assessment completed is illegal.
That the advocate assisted in execution of the Sale Deed, appearing before the A.O and the Chartered Accountant appointed for CIT(A) while arguing before the CIT (Appeals) not presented the correct full facts in spite of having all documents with him, therefore the assessee for the act of mistake of professionals hence the assessee should not penalized and was prevented by reasonable cause.
6. That the addition of Rs. 500000/- under section 68 of IT Act and Rs.5658164/- made by the Assessing Officer and sustained by CIT (A) is illegal and against the law.
That the amount of addition in question Rs.500000/- deposited with the bank is fully explained in view of the fact the entire amount deposited with the bank is out of sale I.T.A.No. 492/Jodh/2023 3 &S.A.No.10/Jodh/2023 proceeds of land, and partly out of withdrawal from the bank and income.
That the Assessing officer as well as CIT (Appeals) should have considered the amount of withdrawal from the hank while treating the matter in respect of deposit with the bank.
9. That the addition of Rs,565S164/- sustained by the ClT(Appeals) is illegal and should have appreciated the claim of the assessee wherein the cost of acquisition of asset was not allowed, claimed base value amounting to Rs.275140/- and Rs.3699010/-(Rs.3580000/-+Rs.119010) as cost of improvement which after indexation amounts to Rs.502S91/-andRs.6732691/- (Rs.6543393/-+Rs.l8929S) respectively which are evident from the assessment order.
The Income Tax Officer as well as CIT(A) fails to discharge his duty in respect of allowing the lawful deduction under section 48 of IT Act which is mandatory and still available on the statue therefore the order passed by the assessing officer is not sustainable.”
Brief fact of the case is that the assessee’s case was reopened u/s 148. The addition was made related to deposit of cash in bank account amount of Rs.5 lac u/s 68 and the capital gain for sale of land amount to Rs.56,58,164/-. The assessee claimed that the land is agricultural,so, no capital gain tax will be applicable. The ld. AO in assessment decided that the land is within 8 K.M. of the Municipal Area, so the nature of land is not agricultural, as per the Income
I.T.A.No. 492/Jodh/2023 4 &S.A.No.10/Jodh/2023 Tax Act. The assessee filed an appeal before the ld. CIT(A). The ld. CIT(A) upheld the order of the ld. AO. Being aggrieved, assessee filed an appeal before us.
The ld. AR filed a written submission and draw our attention in the additional evidence, which is afresh list submitted before the ITAT. The copy of the submission related additional evidence of the assessee is reproduced as below:
“Sir, With reference to above it is stated that the assessee preferred an appeal before the ITAT Jodhpur Bench, Jodhpur and same is still pending, also submitted an application for additional evidence along with affidavit. The assessee suffered loss in the business and as such, he was broke due to this suffering business losses and his mental condition had become so weak that he was not in a position to bear any kind of loss and taking advantage of this, the buyer's lawyer not wrote in the sale deed about construction on land, conversion of land and loan on this property and got registered by writing the wrong content. The assessee received notice under 147 of the TT Act and for their compliance engaged one advocate. The advocate by one reason or the other has not made full compliance based on the document provided to him by the assessee and no proper explanation was submitted in detail therefore
I.T.A.No. 492/Jodh/2023 5 &S.A.No.10/Jodh/2023 again the assessee was put in the wrong/incomplete facts. This was also due to the mistake of advocate. On account of not furnishing the incomplete details/ information the income tax officer made addition and not accepted the capital loss declared by the assessee. After that the assessee engaged one chartered accountant for filing the appeal and the chartered accountant mention or taken absolutely wrong grounds in respect of the status of the agriculture land from urban to rural. Whereas the part of the land in question was converted in residential land. On account of this wrong taken of ground in the appeals before the CIT (Appeals) the assessee suffered loss. Furthermore, the Chartered Accountant also not submitted the response. The Commissioner of Income Tax appeal passed the order without any argument. This too is on account of mistake of advocate/chartered accountant, Due to this, the assessee suffered a loss and losses the battle in spite of having all material. Whatever has been built on this land has been built in the past, and the evidence of this has already been submitted in the application for additional evidence before the Hon'ble Tribunal, the facts of application supported by the affidavit, for the convenience, I am attaching the copy of registered deed with the written submission of appeal. The fact written in registry is not true; the reality is available in the computation of income. All this happened due to the mistake of Advocate and Chartered Accountant.
I.T.A.No. 492/Jodh/2023 6 &S.A.No.10/Jodh/2023 In these circumstances the assessee was prevented by reasonable cause that is due to the mistake of advocate. The proper representation/information was not provided. You are there for requested that additional evidence may kindly be entertained, admitted and sent aback the matter to A.O to pass a fresh assessment order after allowing reasonable opportunity.”
4.1 The ld. AR placed that the assessee was not able to submit any evidence related to agricultural land before the ld. CIT(A). Now, the assessee submitted an affidavit duly executed on 09.12.2023 accompanied with registered deed of the assessee to prove the nature of land. The assessee was unable to submit these documents before the ld. CIT(A) due to the incompetency of the consultant who was ignorant to submit the documents before the ld. AO and before the ld. CIT(A). The ld. AR relied on the order of:
Tirath Singh S/o Shri Sewa Singh vs. ITO, Ward-3, Phagwara Amritsar Bench in ITANos. 703 & 704/Asr/2017 order dated 23.03.2023.
“9. From the above, it is evident that additional material in respect of the two assessment years under consideration is vital to decide the issues of cash deposits in the bank and the investment in the property. Accordingly, we direct the learned CIT appeal to admit the additional evidence and decide the appeals on merit. Accordingly, we vacate the findings of the ld. CIT(A) in respect of both the assessment years
I.T.A.No. 492/Jodh/2023 7 &S.A.No.10/Jodh/2023 under consideration and restore the matter to his file with the directions to re adjudicate the issues on merits, in accordance with law after allowing sufficient opportunity to both the parties. 10. In the result, both the appeals filed by the assessee are allowed for statistical purpose” 5. The ld. DR vehemently argued and had not made any strong objections of the submission of the additional evidence before the Bench.
We heard the rival submission and considered the documents available in the record. The additional evidence of the assessee is accepted. The ld. DR has accepted the fact. The assessee claimed that he has proper explanation related to deposit cash in bank amount to Rs. 5 lac. But due to the inability of the consultant, the entire issue is in vain. The assessee is suffered due to ignorance of the consultant. We set aside the appeal order. We remit back the matter to the file of the ld. CIT(A) for further adjudication de novo and direct to accept the additional evidence of the assessee as per Rule 46A of the Income Tax Rule, 1962. Both the revenue and the counsel of the assessee had not made any objection for remanding back the issue before the ld. CIT(A). We do not make any comment on merit of the case as it should not influenced the observation of the CIT(A). Needless to say, that the ld. CIT(A) shall provide proper and adequate opportunity of being heard to the assessee in set aside proceedings. The evidence/explanation submitted by assessee in its defence shall be admitted
I.T.A.No. 492/Jodh/2023 8 &S.A.No.10/Jodh/2023 beforethe ld. CIT(A) and adjudicated on merits in accordance with law. We order accordingly. 7. In the result, the appeal bearing ITA 492/Jodh/2023 is allowed for statistical purposes.
8. Although, we decided CIT(A). Hence, the Stay Application No. 10/Jodh/2023 of the assessee is infructuous and dismissed.
In the result, ITA 492/Jodh/2023 is allowed for statistical purposes and the Stay Application No.10/Jodh/2023 is dismissed as infructuous.
Order pronounced in the open court on 15 .12 .2023