MR. PALANISAMY (HUF),COIMBATORE vs. ITO, WARD-1,POLLACHI, POLLACHI

This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi, dated 18.05.2023 for assessment year 2012-13.

Brief facts of the case are that the assessee filed the return of income for the assessment year 2012-13 on 21.07.2015 declaring income of ₹.1,58,300/-. As the return of income was a belated one, no action was taken and the return was lodged. The Department was having information that as per sale deed Nos. 2676/11 and 2677/11 both dated 02.05.2011, the assessee has sold immovable properties at SF No. 409 and 410, Vilankurichi village within the Coimbatore Corporation limits to a total extent of 25 cents (or 10890 sq. ft.) for a total consideration of ₹.1,25,01,720/- to M/s. ABT Foundation Ltd., Coimbatore. The above property was a capital asset within the meaning of section 2(14) of the Income Tax Act, 1961 [“Act” in short] attracting capital gains tax. Vide letter dated 14.05.2015, the Assessing Officer requested the assessee to furnish the details regarding PAN No., copy of the return filed by the assessee, etc. By filing copy of return of income and acknowledgement, the assessee has submitted with regard to the transactions in immovable properties, the said transaction was a sale of agricultural land. On verification of the return of income, the Assessing Officer has noted that the assessee has admitted income from other sources to the extent of ₹.1,58,300/-. Since the assessee has not admitted the capital gains on sale of the property, the Assessing Officer believed that the income chargeable to tax has escaped assessment within the meaning of section 147 of the Act and thus, notice under section 148 of the Act was issued to the assessee on 17.03.2017. In response to the notice, the assessee filed the return of income on 02.11.2017 declaring income of ₹.14,84,020/- which includes capital gains of ₹.13,25,720/-. Thereafter, the Assessing Officer issued notice under section 143(2) of the Act dated 08.11.2017.

On being aggrieved, the assessee is in appeal before the Tribunal. The ld. Counsel for the assessee has submitted that before concluding the appellate order, no final opportunity before framing ex-parte order was afforded and since the assessee was prevented by reasonable cause, he was unable to furnish the details before the ld. CIT(A) and prayed that one more opportunity may be afforded to substantiate his case.

On the other hand, the ld. DR strongly supported the order passed by the ld. CIT(A).

We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. In the assessment order, the Assessing Officer made addition towards short term capital gains against which, the assessee preferred an appeal before the ld. CIT(A). Despite various opportunities afforded by issuing hearing notices, neither the assessee has replied to hearing notices nor submitted any documentary evidences to substantiate its claim and thereby, the ld. CIT(A) dismissed the appeal filed by the assessee. Before the Tribunal, the ld. Counsel for the assessee has explained that the assessee was prevented by reasonable cause for not filing the explanation/details with supporting evidence in support of its claim. Accordingly, we are of the considered opinion that the assessee shall be afforded one more opportunity of being heard to substantiate its case before the ld. CIT(A) as prayed by the ld. Counsel for the assessee. Thus, we set aside the exparte appellate order and remit the matter back to the file of the ld. CIT(A) to afford one more opportunity of being heard to the assessee to substantiate its case with suitable explanation and evidences and thereafter decide the issue in accordance with law.

In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 31st October, 2023 at Chennai.