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Income Tax Appellate Tribunal, CIRCUIT BENCH “SMC”, VARANASI
Before: SHRIVIJAY PAL RAO & SHRI RAMIT KOCHAR
This appeal in for assessment year 2012-13 has arisen from the appellate order dated 23/08/2022 (DIN & order No. ITBA/NFAC/S/250/2022-23/1044863836[1]) passed by learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre(NFAC), Delhi (Hereinafter called “CIT(A)”) under section 250 of the Income-tax Act, 1961(hereinafter called “the Act”), the appellate I.T.A. No.42/VNS/2022 Assessment Year:2012-13 2 RadheyShyam,Agra, U.P. v. ITO,Ward 2(3), Varanasi,U.P. proceedings before ld. CIT(A) had arisen from assessment order dated 24.11.2019 passed by ld. Assessing Officer(hereinafter called “the AO”) u/s 144 read with Section 148 of the Act. In this appeal, the assessee has raised following grounds of appeal in Memo of Appeal filed with Income Tax Appellate Tribunal, Circuit Bench, Varanasi, U.P.:
“1. That the A.O. has failed to issue notice u/s 143(2) which is mandatory requirement as such assessment is illegal and ab initio void.
That the addition made on account of CAPITAL GAIN is wholly wrong and against the facts of the case.
3. That in any case the authorities below have not allowed the proper opportunity to explain the case.
That the authorities below have erred in holding the cost of acquisition of property to be nil as per provision of the Income Tax Act read with section 48 and 49 and proviso and explanation therein the deduction of the cost of acquisition taken the circle rate as on 1.4.2001 should be allowed.
That the authorities below have wrongly and arbitrarily not allowed deduction in respect of stamp duty etc. which is incurred to purchase the new asset.
6. That the orders of the authorities are wrong and against the facts and provisions of law.”
2. At the outset , it is noted that this appeal is filed two days late beyond the time prescribed under section 253(3) of the Act. The assessee has filed an application explaining reasons for delay in filing this appeal late beyond the time prescribed u/s 253(3) , in which assessee has claimed that the assessee had sent the appeal, by Speed Post on 19th October, 2022 , while Assessment Year:2012-13 3 RadheyShyam,Agra, U.P. v. ITO,Ward 2(3), Varanasi,U.P. last date for filing the appeal with Tribunal was 25th October, 2022. It is submitted in the application that there is no negligence on the part of the assessee as the Speed Post was duly sent on 19th October, 2022. The envelope is also placed on record in file, in which speed post receipt is also enclosed(EU450201195IN, dated 19.10.2022) . It is also submitted in the said application that offices were closed from 21st October to 26th October,2022 due to Diwali holidays , as such Speed Post sent by the assessee on 19.10.2022 was received by ITAT , Circuit Bench , Varanasi , on 27th October, 2022. This appeal was received by ITAT, Circuit Bench , Varanasi on 27.10.2022 , while the last date for filing this appeal was 25.10.2022 as stipulated u/s 253(3).The assessee sent speed post on 19.10.2022. The assessee is based in Agra , while jurisdiction of his appeal lies with ITAT, Circuit Bench, Varanasi, U.P.. The application of the assessee is reproduced here as under: Assessment Year:2012-13 4 RadheyShyam,Agra, U.P. v. ITO,Ward 2(3), Varanasi,U.P.
I.T.A. No.42/VNS/2022 Assessment Year:2012-13 5 RadheyShyam,Agra, U.P. v. ITO,Ward 2(3), Varanasi,U.P. 2b. None appeared on behalf of the assessee when this appeal was called for hearing before the Division Bench, on 06.02.2023. Learned Sr. D.R. was apprised with the fact of delay of two days in filing of this appeal beyond the time prescribed u/s 253(3) in order to seek his objections , although the Speed Post was sent by the assessee well in advance on 19.10.2022 and keeping in view that it takes at least 4-5 days of normal delivery from Agra to Varanasi by Speed Post, the envelope ought to have been delivered in the office of the Tribunal by 24th October , 2022. Diwali was on 24.10.2022 22nd 23rd which was Monday, while and October 2022, being Saturday/Sunday, and under the normal course , at the best it could have been delivered by 25th October, 2022 being Tuesday(24th being Diwali), but it was delivered on 27.10.2022 in the office of Tribunal. Learned Sr. D.R. fairly submitted that Department has no objection if the delay is condoned in this case before us. After keeping in view the entire facts and circumstances of the case and the bonafide shown by the assessee as well that he act diligently , we are inclined to condone the delay of two days in filing of this appeal beyond the time stipulated u/s 253(3) , as the assessee did his part of sending all the appeal documents well in time on 19.10.2022 by speed post , while last date for filing this appeal was 25.10.2022. The appeal was received in the office of the Tribunal on 27.10.2022, mainly due to delays caused by Diwali festival .The assessee is based in Agra, while jurisdiction of this appeal falls with ITAT, Circuit Bench, Varanasi, Assessment Year:2012-13 6 RadheyShyam,Agra, U.P. v. ITO,Ward 2(3), Varanasi,U.P. U.P..When substantial justice is pitted against technicalities, the Courts will lean towards advancement of substantial justice, unless malafide on the part of thelitigant is at writ large in filing the appeal belatedly. In the instant case, we have observed that there is no malafide on the part of the assessee in filing this appeal late beyond the period prescribed under the Act and the assessee is not likely to gain anything by filing this appeal late beyond the time prescribed under statute. Thus the delay of 2 days in filing this appeal belatedly by the assesseeis condoned, and weproceed to adjudicate this appeal on merits.
The assessee is an individual, and he has claimed that his source of income is pension and interest income and ,since income was below threshold taxable limits , he did not filed return of income with Revenue for assessment year 2012-13. The Assessing Officer initiated proceedings u/s 147 and issued notice u/s 148 of the Act, dated 25.03.2019 to the assessee. As is emerging from records that the assessee did not file any return of income even in pursuance of notice issued by the AO u/s 148. The assesseesent letter before the AO, stating that the assessee had sold his parental land for Rs.43 lacs and had received his half part of the sale amount amounting to Rs. 21.50 lacs on 20.12.2011, but due to some problem with respect to the parental land, the sale deed had to be cancelled and assessee refunded his part of the sale amount of Rs. 21.50 lacs on Assessment Year:2012-13 7 RadheyShyam,Agra, U.P. v. ITO,Ward 2(3), Varanasi,U.P. 28.02.2012 by cheque no. 065194. The assessee enclosed sale deed and copy of pass book, along with the reply sent to the AO.The AO issued notice u/s 142(1) , dated 28.07.2019, asking for explanations . In reply , the assessee submitted that the assessee received Rs. 21.50 lacs on sale of land on 19.12.2011 and paid Rs. 21.50 lacs for cancellation of sale on 26.12.2011. The AO issued another notice u/s 142(1), dated 19.10.2019, asking assessee to explain that as per sale deed there is no mention of cancellation of sale, rather it mentions that the assessee has purchased the property. The AO also asked assessee vide notice u/s 142(1) to explain that the assessee has sold a plot of land of 2430 square meters in PraganaJaswant Nagar, Etawah on 20.12.2011 for a sale consideration of Rs. 43 lacs with ShriHukum Singh(brother of the assessee), and the market value of the plot is Rs. 65.61 lacs. The AO asked assessee to submit cost of acquisition of the said property on 01.04.1981, otherwise cost of acquisition will be taken at Nil. The assessee was also asked by the AO to submit computation of income for the ay: 2012-13. The assessee submitted computation of income which is reproduced by the AO in his assessment order, in which indexed cost of acquisition was taken by assesseeat Rs. 13,46,391, by taking the acquisition of the said property in the year 1996- 97. The assessee after taking the sale value of his share as per circle rates in the impugned assessment year, and after taking the benefit of indexed cost of acquisition as well the benefit u/s 54 for investment in new property Assessment Year:2012-13 8 RadheyShyam,Agra, U.P. v. ITO,Ward 2(3), Varanasi,U.P. , showed Long Term Capital Gains of Rs. Nil chargeable to tax, in the aforesaid computation of income filed with the AO during assessment . The AO asked assessee vide notice dated 03.11.2019, to explain with documentary evidence that the property was transferred/acquired in the name of the assesee along with his brother Mr. Hukum Singh in the financial year 1996-97. The assessee did not submitted any reply to this notice dated 03.11.2019.The AO denied the benefit of cost of acquisition in the absence of evidence that the said land was transferred in the name of the assessee in the year 1996, and the AO computed Long Term Capital Gains to the tune of Rs. 11,30,500/- chargeable to income-tax, vide assessment order dated 24.11.2019 passed by the AO u/s 144/148 of the 1961 Act.
4. Aggrieved by assessment framed by the AO as aforesaid vide assessment order dated 24.11.2019, the assessee filed first appeal with learned CIT(A), and ld. CIT(A) dismissed the appeal of the assessee, by holding as under: Assessment Year:2012-13 9 RadheyShyam,Agra, U.P. v. ITO,Ward 2(3), Varanasi,U.P. Assessment Year:2012-13 10 RadheyShyam,Agra, U.P. v. ITO,Ward 2(3), Varanasi,U.P.
5. Being aggrieved by appellate order passed by ld. CIT(A), the assessee filed second appeal with the Tribunal. The assessee did not appear before Assessment Year:2012-13 11 RadheyShyam,Agra, U.P. v. ITO,Ward 2(3), Varanasi,U.P. Tribunalwhen this appeal was called for hearing before DB on 06.02.2023. Learned Sr. D.R. opened arguments before the Bench and submitted that there is sale of land by the assesseeand then it has been shown to have been repurchased. It was submitted that no evidences of cost of acquisition of the said property was furnished by the assessee, and hence cost of acquisition was taken at Nil. Learned Sr. D.R. fairly submitted that the matter can go back to the Assessing Officer for fresh adjudication after considering the entire reply of the assessee. From the statement of facts filed before tribunal, it is observed that the assessee had claimed to have received a parental land along with his brother Mr. Hukum Singhon the death of his father , which was sold by the assessee in the impugned assessment year and the assessee got his share of land of Rs.21,50,000/- (50%). The total sale consideration being Rs. 43,00,000/- while the Circle Rate was Rs. 65,61,000/- . The Assessing Officer adopted Circle rate as the deemed full value of consideration u/s 50C while computing Long Term Capital Gains chargeable to tax, but the AO did not allowed the benefit of cost of acquisition of the said property for the want of evidences. The assessee’s claim was rejected for deduction for cost of acquisition for want of evidences, but the assessee did claimed indexed cost of acquisition in its computation of income filed before the AO during assessment proceedings, but the AO rejected said claim of deduction of cost inflation index in the absence of evidences. The assessee has stated that the property was a I.T.A. No.42/VNS/2022 Assessment Year:2012-13 12 RadheyShyam,Agra, U.P. v. ITO,Ward 2(3), Varanasi,U.P. parental property acquired by assessee , on the death of his father , even then when property is acquired by inheritance the assessee would be eligible for deduction of benefit of cost of acquisition , keeping in view provisions of Section 49(1)(iii)(a) of the 1961 Act , but the onus is on the assessee to produce credible evidences to substantiate cost of acquisition by the previous owners as is stipulated u/s 49(1). Thus, in the interest of justice and keeping in view facts and circumstances of the case, we are of the considered view that one more opportunity be provided to the assessee to furnish complete details before the AO , to substantiate its claim for Long Term Capital Gains including cost of acquisition . It is also observed that the assessee has not only raised the contentions on merit but has also raised legal ground that no notice u/s 143(2) was issued by the AO .We observe that the assessee has not filed any return of income and the reassessment proceedings were initiated against the assessee by Revenue u/s 147/148 of the Act. It is emerging from the records before us as that the assesseeeven did not filed any return of income in pursuance to the notice issued u/s 148 of the Act. If that be so and if the assessee has not even filed any return of income in pursuance to notice u/s 148, there is no question of issuing of any notice by AO u/s 143(2) of the Act. The AO has issued several notices u/s 142(1), which found recorded in the assessment order. Thus, this objection raised by the assessee as to non issuance of notice u/s 143(2) lacks merit and is rejected. Thus, keeping in view over all Assessment Year:2012-13 13 RadheyShyam,Agra, U.P. v. ITO,Ward 2(3), Varanasi,U.P. facts and circumstances of the case and in the interest of justice , we are inclined to restore the matter back to the file of the Assessing Officer for denovo assessment after providing sufficient and reasonable opportunity to the assessee. We clarify that we have not commented on the merits of the issue’s involved in this appea. The onus is on the assessee to produce credible evidences to support deduction towards cost of acquisition and its indexation, as well other evidences to substantiate its claim. In case the assessee do not cooperate before the AO in the set aside remand proceedings, the Assessing Officer shall be free to frame de novo assessment on merits in accordance with law. We order accordingly.
In the result, the appeal of the assesseein ITA No.42/VNS/2022 stands allowed for statistical purposes. Order pronounced in the Open Court on 06.02.2023 at Varanasi, U.P. in the presence of Ld. Sr. DR and reduced to writing and signed on 07.02.2023 at Varanasi, U.P.