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Income Tax Appellate Tribunal, HYDERABAD BENCHES “B”, HYDERABAD
Before: SHRI R.K. PANDA & SHRI LALIET KUMAR
सुिवधई की तधरीख/Date of hearing: 21.12.2023 घोर्णध की तधरीख/Pronouncement on: 22.12.2023 O R D E R PER LALIET KUMAR, J.M.
The captioned appeal is filed by the assessee feeling aggrieved by the order of Commissioner of Income Tax (Appeals) National Faceless Appeal Centre (NFAC), Delhi dt.17.09.2023 invoking proceedings under section 144 of the Income Tax Act, 1961 (in short, “the Act”) for the A.Y 2014-15.
The grounds raised by the assessee read as under :
“1. On the facts and circumstances of the case, the order passed by the Ld. CIT(Appeals), NFAC, Delhi is bad both in the eyes of law and on facts.
2. The Ld. CIT(A) erred in dismissing the appeal on the ground that the appellant has not mentioned any reason for delay of 32 days in filing appeal.
3.The Ld. CIT(A) ought to have condoned the delay of 32 days and ought to have decided the appeal on merits.
4.The Ld. CIT(A) erred in dismissing the appeal as inadmissible without giving proper opportunity of being heard to the appellant and the Hon'ble ITAT may please condone the delay of 32 days in filing appeal before the Ld. CIT(A) and to admit the appeal.
5. The Ld. CIT(A) erred in not raising any objection on the delay in presenting the appeal at the time of hearing of the appeal as required as per Supreme Court decision in the case of Mela Ram & sons vs CIT [1956] 29 ITR 607(S.C.)
6. The Ld. CIT(A) ought to have appreciated the fact that the AO has reopened the assessment made u/ s 147 which is purely based upon borrowed satisfaction without performing any necessary enquiries or inspection which is against the provisions of the IT Act.
The Ld. CIT(A) ought to have appreciated that the Ld. AO erred in passing the assessment order exparte and completed the assessment proceedings without giving the opportunity of being heard to the assessee.
8. The Ld. CIT(A) ought to have appreciated that the notices/sumrnons issued by the ITO, Ward-10(3) have not been served on the assessee as the assessee was residing in a different location and hence could not comply with the notices issued.
9.The Ld. CIT(A) ought to have appreciated that the Ld. AO erred in considering the fact that the assessee offered the capital gains in subsequent years as and when the sale proceeds realised.
10. The Ld. CIT(A) ought to have appreciated that the Ld. AO erred in considering the fact that the assessee has not received any monetary consideration at the time of entering into development agreement cum General Power of Attorney dt. 19-09-2013 and wherein no possession of property was taken place in the hands of the Developer.
The Ld. CIT(A) ought to have appreciated that the Ld. AO erred in not considering the fact that the provisions of Sec 2(47)(V) r.w.s. 45 of the IT Act, 1961 are not applicable in the case of the assessee.
The Ld. CIT(A) ought to have appreciated that the reasons recorded u/ s 148(2) of the IT Act for issuing notice u/s 148 of the Act by the AO are not in accordance with the facts of the case and thus the notice u/s 148 is invalid and is without jurisdiction.
The Ld. CIT(A) ought to have appreciated the fact that the Ld. AO erred in taxing the entire consideration as long-term capital gains arising from development agreement without allowing deduction u/ s 54F of the Act, 14. The Ld. CIT(A) ought to have appreciated that the Ld. AO erred in not deducting/considering the indexed cost of acquisition of the land for the purpose of computation of capital gains arising on the development agreement.”
The brief facts of the case are that assessee filed his return of income for the AY 2014-15 on 31.08.2014 with a total income of Rs.3,91,500/-. The return of income was processed u/s 143(1) on 03.01.2015 with nil demand. In this case, information was received by the ITO, (I&CI)-3, Hyderabad that the assessee along with three others entered into a Joint Development Agreement with M/S Nikhil Sai Constructions in respect of property situated at Serilingampally Mandal, R.R District with a stipulation that the landowners will get 50% and the developers will get 500 of the built up area. Further vide para 11 of the JDA, the assessee permitted and handed over the property to the developer to start construction formalities/activity on account of the said agreement thereby fulfilling the provisions of section 2(47) of the I.T.Act and the assessee is liable for capital gains by virtue of JDA. On perusal of the income tax return filed by the assessee for A.Y.2014-15, it was noticed that the assessee has not disclosed the transaction and has not offered any income under the head ‘income form capital gain’. As the assessee has not disclosed any details of income under the head capital gain, thereby income escaped assessment to the extent of consideration of assessee’s share in the total consideration as per JDA amounting to Rs.18,73,95,000/-. 3.1. On perusal of the income tax return filed by the assessee, Assessing Officer noticed that assessee has not disclosed the transaction and has not offered any income under the had ‘income from capital gains’. Hence, issued notice u/s 133(6) of the Act dt.20.06.2017, 27.02.2018 and 06.07.2018
4 calling for information regarding the taxability of the capital gains. On perusal of the reply filed by the assessee and on verification of Encumbrance Certificate, Assessing Officer observed that assessee sold some flats during F.Y. 2014-15 contrary to the reply of the assessee that no construction activity has taken place during F.Y. 2014-15. Assessing Officer did not accept the reply of assessee due to the fact that as per section 2(47) of the Act, assessee is liable for payment of capital gains tax in the year in which the transfer of property takes place. 3.2. Basing on the above, Assessing Officer believed that income chargeable to tax amounting to Rs.3,74,79,000/- (being 1/4th share of the assessee) has escaped assessment within the meaning of Section 147 of the Act. Thereafter, as there was no reply from the assessee to the final show cause notice dt.19.07.2019, as no option left Assessing Officer completed the assessment exparte u/s 144 r.w.s. 147 of the Act interalia making an addition of Rs.3,74,79,000/- to the returned income and passed assessment order on 04.10.2019.
Feeling aggrieved with the order of Assessing Officer, assessee filed an appeal, which was later migrated to the ld.CIT(A), NFAC, Delhi, who dismissed the appeal of assessee as inadmissible.
Aggrieved with the order of ld.CIT(A), assessee is now in appeal before us on the grounds mentioned hereinabove.
In the present case, the ld.CIT(A) in para 6.2 has noted that there was a delay of 32 days in filing the appeal by the assessee. The ld.CIT(A) while passing the order had not condoned the delay and dismissed the appeal filed by the assessee.
7. The ld.AR before us has filed the appeal on the grounds mentioned hereinabove. It is the contention of the assessee that if given a chance to the assessee then the assessee would appear before the ld.CIT(A) and file all the documents and evidence before the ld.CIT(A). It was submitted that the delay in filing the appeal before the ld.CIT(A) may kindly be condoned and appropriate direction may be given to ld.CIT(A) to decide the appeal on merit.
Per contra, the ld.DR has relied upon the orders passed by the lower authorities.
We have heard the rival submissions and perused the material on record. In the present case, Assessing Officer had made the addition in the hands of the assessee for a sum of Rs.3,74,79,000/-, for the reason mentioned in para 5 of the assessment order. Against the order passed by the Assessing Officer assessee filed the appeal before the ld.CIT(A) with a delay of 32 days and the appeal filed by the assessee was without any application for condonation. The ld.CIT(A) was constrained to dismiss the appeal as there is no reason for delay in filing appeal was mentioned (refer Para 6.2 of the order of ld.CIT(A)). Before us, the ld.AR submitted that the delay may kindly be condoned and to that effect filed an application was filed before us. Having considered the totality of the circumstances, we are of the view that substantial justice is required to be done to the parties and in view thereof, we deem it appropriate to remand back the appeal to the file of ld.CIT(A) with a direction to condone the delay in filing the appeal., if the assessee files the application for condonation of delay before the ld.CIT(A), explaining the delay of 32 days in preferring the appeal against the impugned order before the ld.CIT(A). In case, the assessee is able to explain the plausible
6 reason for not preferring the appeal within the time, then we direct the ld.CIT(A) to condone the delay and thereafter decide the matter afresh after due opportunity of hearing to the assessee. Accordingly, the order passed by the Ld.CIT(A) is set aside with a direction to pass afresh order in accordance with the law after granting due opportunity of hearing to the assessee. The assessee shall be at liberty to file documents, if any, as required for proving his case and the ld.CIT(A) shall consider such evidences, if any, filed by the assessee. Needless to say, the ld.CIT(A) shall examine those documents / evidence filed by the assessee and thereafter pass a detailed speaking order. Accordingly, the appeal of assessee is allowed for statistical purposes.
In the result, the appeal of assessee is allowed for statistical purposes.