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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Before: SHRI PAVAN KUMAR GADALE
Assessee by : Shri. Sumit Mantri.AR Revenue by : Shri G.J. Ninawe.Sr. DR Date of Hearing 31.10.2023 Date of Pronouncement 31.10.2023 आदेश / O R D E R
PER PAVAN KUMAR GADALE JM:
This appeal is filed by the assessee against the order of the National Faceless Appeal Centre(NFAC), Delhi / CIT(A) passed u/sec143(3) r.w.s 147 and U/sec 250 of the Ac. The assessee has raised the following grounds of appeal:
1 Ground - 1 On the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax (appeals) NFAC, erred
Shekhar Gajanan Govekar, Mumbai. - 2 - in confirming the issuance of notice under section 148 and the order passed u/s 143(3) rws 148 on the deceased person. Ground - 2 On the facts and circumstances of the case and in law, the ld. Commissioner of Income Tax (appeals) NFAC, erred in confirming the addition of Rs.16,38,893/- on account of long- term capital gain, without granting the exemption of section 54 of the Income Tax Act, 1961.
The Assessing officer (AO) has received information that in the A.Y. 2011-12, the assessee has not disclosed long term capital gains and claim of exemption U/sec54 of the Act. The AO has reason to believe that the income has escaped assessment and issued notice u/s 148 of the Act, further the AO has issued notice u/s 142(1) of the Act and there was no compliance from the legal heir of the assessee. Whereas the legal heir of the assessee has submitted the details through mail dated 20.12.2018 referred in the Para 2 of the assessment order. Whereas the AO has dealt on the facts, circumstances and submissions observed at page 3 Para 4 of the order as under:
In response to the above show cause notice the legal heir of the assessee vide mail dated 25.12.2018 reproduced his submission as stated above vide mail dated 20.12.2018The legal heir of the assessee has nothing new to offer in this regard As per the AIR information available and information received from ITO 35(3)(2)Mumbai a immovable property was sold on 22.10.2010 by assessee along with his son also legal heir Shri Shekhar Govekar at consideration of Rs.80,00,000/-The same
Shekhar Gajanan Govekar, Mumbai. - 3 - was purchased on 19.11.2005The Long Term capital gain arises out of the sale of the said property was Rs.32,77,786/-. Shri Shekhar Govekar offered half of the capital gain of Rs16,38,893/- and balance of Rs16,38,893/- was to be offered by his father Late Shri Gajanan GovekarSince Late shri Gajanan Govekar has not filed Income tax return for the A.Y 2011-12 therefore Rs.16,38,893/- has escaped from taxation Hence an amount of Rs. 16,38,893/- is treated as income of the assessee under the head Long Term Capital Gain" for the A.Y 2011-12. Penalty proceedings u/s 271(1)(c) of the I.T Act are hereby initiated for concealing the particulars of income.
On perusal of the AIR it is seen that assessee has received interest income of Rs.15,287 during the F.Y 2010-11This amount has not been offered for taxation Hence the same is treated as income under the head income from other sources for the A.Y 2011-12.
Finally the assessing officer has made addition of Long Term Capital Gains of Rs,16,38,893/- and interest income of Rs.15,287/- and passed the order U/sec 143(3)r.w.s147 of the Act dated 26-12-2018.
4. Aggrieved by the order, the assessee has filed an appeal before the CIT(A), whereas the CIT(A) has considered the grounds of appeal, statement of facts and findings of the AO and has issued notices of hearing and since there was no compliance by the assessee to notices. Therefore the CIT(A) considering the information on record has confirmed the action of the A.O and dismissed the appeal. Aggrieved
Shekhar Gajanan Govekar, Mumbai. - 4 - by the order of the CIT(A), the assessee has filed an appeal before the Hon'ble Tribunal.
5. At the time of hearing, the Ld. AR submitted that the CIT(A) has erred in confirming the action of the Assessing officer overlooking the submissions made in the assessment proceedings. Further the assessee has a good case on merits and shall substantiate with the material evidences and prayed for an opportunity to explain before the lower authorities. Contra, the Ld. DR supported the order of the CIT(A).
Heard the rival submissions and perused the material on record. Prima-facie the CIT(A) has passed the order considering the fact that there is no appearance in spite of providing adequate opportunity of hearing and the notices were issued. Therefore, the CIT(A) was of the opinion that the assessee is not interested in prosecuting the appeal and dismissed the appeal ex-parte confirming the action of the assessing officer. The Ld. CIT(A) has issued the notices of hearing referred at Page 4 of the order, but there was no response and thus the Ld.CIT(A) came to a conclusion that the assessee is not interested and decided the appeal based on the information available on record. Whereas the Shekhar Gajanan Govekar, Mumbai. - 5 - assessee has raised grounds of appeal challenging the additions of the A.O and there could be various reasons for non appearance which cannot be overruled. Therefore, considering the principles of natural justice shall provide with one more opportunity of hearing to the assessee to substantiate the case with evidences and information. Accordingly, set aside the order of the CIT(A) and remit the entire disputed issues to the file of the CIT(A) to adjudicate afresh and the assessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information for early disposal of the appeal. Accordingly, allow the grounds of appeal of the assessee for statistical purposes.
In the result, the appeal filed by assessee is allowed for statistical purposes.
Order pronounced in the open court on 31.10.2023.