P.KUPPURAJ,SALEM vs. ITO WARD -1 (4), SALEM

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 20.07.2022 relevant to the assessment year 2014-15.

Brief facts of the case are that the assessee is an individual and during the previous year the assessee has sold immovable property measuring total area of 4564 sq. ft. at Salem. The sale of the above said immovable property attracts capital gain tax as well as provisions of section 50C of the Income Tax Act, 1961 [“Act” in short]. The assessee has not filed any return of income for the assessment year 2014-15. Hence, to assess the income of the assessee, the Assessing Officer has issued a notice under section 148 of the Act dated 27.03.2017, which was served on the assessee on 30.03.2017. Subsequently, a reminder letter also issued to the assessee on 03.11.2017. However, the assessee has not complied with the above notices. In the interest of natural justice, one more opportunity was given to the assessee to file the return of income by issue of notice under section 142(1) of the Act which was served on the assessee on 13.11.2017. Despite the above notices issued, the assessee failed to comply with the above said notices. Accordingly, the Assessing Officer send a proposal under section 144 of the Act to the assessee on 11.12.2017 which was served on the assessee on 12.12.2017 proposing the taxability of long term capital gain at ₹.12,12,600/- for the assessment year 2014-15 by giving sufficient time to file his objections, if any, on or before 15.12.2017. Since there was no response from the assessee, the Assessing Officer proceeded to conclude best judgement assessment under section 144 of the Act.

During the previous year, the assessee has sold property vide documents Nos. 2307 & 2308 dated 10.04.2013 and the extent of loan sold was 2282 sq. ft. each for sale consideration of ₹.4,91,000/- each and the market value as fixed by the Government was ₹.11,42,000/- each. Accordingly, the Assessing Officer calculated the long term capital gain tax at ₹.12,12,600/- and assessed the total income of the assessee at ₹.14,18,880/- and completed the assessment under section 144 r.w.s. 147 of the Act dated 28.12.2017. On appeal, the ld. CIT(A) confirmed the order passed by the Assessing Officer by dismissing the appeal filed by the assessee.

On being aggrieved, the assessee carried the matter in appeal before the Tribunal. The ld. Counsel for the assessee has submitted that the assessee was not given sufficient time to file his objections towards long term capital gain tax proposed under section 144 of the Act, in which notice was served on the assessee on 12.12.2017 and directed to file the objection on or before 15.12.2017. It was further submission that the ld. CIT(A) has not provided the copy of the remand report obtained from the Assessing Officer for filing assessee’s counter and prayed that the matter may be remitted back to the file of the Assessing Officer.

On the other hand, the ld. DR has not expressed any serious objection for remitting the matter for fresh consideration.

We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. Before the Tribunal, the assessee has filed a duly notarized an affidavit, wherein, it was stated that the assessee is aged about 82 years and filed return of income for the above assessment year on 31.07.2014. Moreover, it was also stated that the assessee was not aware of the relevant provisions of law with respect to validity of notice under section 148 of the Act. The assessee has also raised a ground that the copy of the remand report was not given to the assessee for filing his objection before the ld. CIT(A). Before the ld. CIT(A), the assessee has contended that the sale consideration of ₹.40,88,000/- from the POA Chinthamanai was received in financial year 2007-08 relevant to the assessment year 2008-09 and another sum of ₹.11,00,000/- was received from Lavanya in the financial year 2007-08 and possession of the property was handed over to the purchaser. Hence, the assessment has to be considered in the assessment year 2008-09 only as against the assessment year 2010-11.

In the result, the appeal filed by the assessee is allowed for statistical purposes.