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Income Tax Appellate Tribunal, KOLKATA-PATNA ‘e-COURT’, KOLKATA
Before: Shri Duvvuru RL Reddy, Vice-(KZ) & Shri Rajesh Kumar
Per Duvvuru RL Reddy, Vice-President (KZ):- The present appeal is directed at the instance of assessee against the order of ld. Commissioner of Income Tax (Appeals),
Brief facts of the case are that the assessee is an individual, who is engaged in real estate business to obtain development rights from land owners by entering into a Land Development Agreement between owners of the land and its developers to construct immovable property in terms of buildings and land appurtenant thereto. In order to ascertain the compliance to the provisions of Income Tax Act by the parties engaging in land development agreement in Patna revenue district information regarding such land development agreement was requisitioned after due prior approval under section 133(6) of the Income Tax Act, 1961 from the Offices of the Registrar for Properties in Patna District.
On receipt of the information under section 133(6) in terms of copies of land development agreement, it was found that the assessee Shri Birendra Kumar Singh has entered into a registered land development agreement with M/s. Gayatri Engicon Pvt. Limited, Patna in the financial year 2014-15. On perusal of the land development agreement, it was noticed by the ld. Assessing Officer that the assessee and the developer have agreed with the development arrangement that there should be a construction of building. The developer will be entitled to ownership of 55% of total constructed area of 14,463 sq. ft. As per the registered land development agreement, the total value of land is Rs.1,15,42,000/- and the value of share owned by the assessee stands at (A.Y. 2015-2016) Birendra Kumar Singh Rs.51,93,900/-. As a bundle of ownership rights over assessee’s share of land was relinquished by the assessee in terms of the land development agreement as well as the facts of the case has attracted the provisions of section 53A of the Transfer of Property Act, 1882 and capital gains arising out of such transfer has attracted the provisions of sections 2(47)(v), 45 and 48 of the Income Tax Act.
The assessee has not filed any return of income, therefore, a notice under section 148 was issued. There was no response and again a notice under section 143(2) was issued, but there was no response from the assessee. Hence, the ld. Assessing Officer completed the assessment under section 144 read with section 147 of the Act and assessed income at Rs.91,11,200/-.
On being aggrieved, the assessee preferred an appeal before the ld. CIT(Appeals). Before the ld. CIT(Appeals), the assessee did not appear inspite of issuance of several notices. Thereafter ld. CIT(Appeals) passed an ex-parte order confirming the addition made by the ld. Assessing Officer.
On being aggrieved, the assessee preferred an appeal before the Tribunal raising the following issues:-
(1) For that the National Faceless Appeal Centre (NFAC), Delhi, ['the CIT(A)'] erred on facts and in law in dismissing the appeal filed by the appellant, vide order passed under section 250 of the Act dated 28-12-2023.
(A.Y. 2015-2016) Birendra Kumar Singh (2) For that the CIT(A) erred in confirming the assessment order passed by the assessing officer assessing the appellant under section 144 read with section 147 of the Act, vide order dated 10-12-2019 at an income of Rs 91,11,200/- against the returned income of Rs 3,47,340/-, by working out Long Term Capital Gains on the execution of the Land Development Agreement by the appellant and also not taking cognizance of the return filed under section 139 of the Act. (3) For that the learned CIT(A) has erred in the facts and circumstances of the case in confirming the action of the AO in vaguely initiating the reassessment proceedings under section 147 of the Act, which is wrong, illegal and unjustified. (4) For that the learned CIT(A) has erred in the facts and circumstances of the case in confirming the action of the AO in computing Long Term Capital Gains on the execution of the Land Development Agreement without appreciating the fact that the transfer of asset could not take place due to litigation, which is wrong, illegal and unjustified. (5) For that the learned CIT(A) has erred in the facts and circumstances of the case in arbitrarily confirming the action of the AO in wrongly computing Long Term Capital Gains on the execution of the Land Development Agreement as no cost of the land has been computed, which is wrong, illegal and unjustified. (6) For that the learned CIT(A) has erred in the facts and circumstances of the case in confirming the action of the AO in arbitrarily passing ex-party order without allowing roper opportunity of being heard, which is wrong, illegal and unjustified. (7) For that the learned CIT (A) has erred passing an ex-party order without allowing proper opportunity of being heard, which is wrong, illegal and unjustified in the facts and circumstances of the case. (8) That the whole order passed by the CIT (A) is bad in facts and law.
(A.Y. 2015-2016) Birendra Kumar Singh 7. As per Grounds No. 6 & 7, the main grievance of the assessee is that without providing proper opportunity, the ld. CIT(Appeals) has passed the ex-parte order.
We have heard both the sides and perused the material available on record. It was the submission of the ld. Counsel for the assessee that the assessee has not received any notice from the ld. CIT(Appeals), therefore, he could not present the case before the ld. CIT(Appeals). He further submitted that the assessee has a strong case and, therefore, he pleaded for one more opportunity before the ld. CIT(Appeals) to substantiate his case.
On the other hand, ld. Departmental Representative submitted that there were several opportunities to the assessee but he failed to substantiate his case. Therefore, he pleaded to confirm the order passed by the ld. CIT(Appeals).
We have heard the rival submissions and perused the material available on record. Considering the facts and circumstances of the case, in order to meet the principle of natural justice, we are inclined to set aside the order passed by the ld. CIT(Appeals) and remit the matter back to the file of ld. CIT(Appeals) with a direction to provide one more opportunity of being heard to the assessee. At the same breath, we also hereby caution the assessee to promptly co-operate with the proceedings before the Ld. CIT(Appeals) failing which the Ld. CIT(Appeals) shall be at liberty to pass appropriate order in accordance with law and
In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 10/12/2024.
Sd/- Sd/- (Rajesh Kumar) (Duvvuru RL Reddy) Accountant Member Vice-President (KZ) Kolkata, the 10th day of December, 2024