LALITADEVI GIRIRAJ KISHORE MALPANI,MUMBAI vs. ITO WARD 41(4)(2), MUMBAI, MUMBAI

The Applicant had filed an appeal to the ld. Addl/Jt.CIT, NFAC against the order u/s 143(3) of the Act challenging not only the validity of assessment but also on merits in respect of assessing the long-term capital loss on transfer of rights in under construction flat as short-term capital gain.

Subsequent to the filing of appeal, the Applicant was diagnosed with cancer in or around February 2020 and is presently at the 4th stage of the said disease. The Applicant in the year 2021 changed her CA and her income tax matters were then looked after by the staff of her son who was not aware of the pending matters. The Applicant and the said staff was not in the practice to check the e-proceeding A/c.

The Applicant through post received a letter dt.04.08.2025 of the Verification Unit, NFAC intimating that the Applicant has not responded to the show cause notice issued by the Penalty Unit u/s 271(1)(c) of the Act.

The Applicant then immediately appointed a new CA who checked the e-filing portal and noticed that the said notices were indeed issued & remained to be complied with. On further probing, he noticed that the ld.Addl / Jt.CIT has dismissed the quantum appeal for want of prosecution vide order dt.28.06.2024. 5. The Applicant was not aware of the fact that the ld.Addl/Jt.CIT has disposed of the appeal as the entire proceeding was conducted online and in a facelessmanner which was a regime change with regard to the appeal proceedings, to which the Applicant is not yet accustomed.

It was only due to the receipt of letter from the Verification Unit and appointment of the new CA, it came to knowledge of the Applicant about

Accordingly the appeal is now being filed which is belated by 346 days. The impugned appeal is thus delayed on account of the reasons mentioned hereinabove which constitute reasonable cause and it is respectfully submitted that the delay is not wilful or unreasonable.

The Applicant submits that under these circumstances the appeal has not been filed in time and crave your honor's indulgence in the matter and request that the delay in filing of the appeal be condoned and the same be admitted so that justice can be given to the Applicant.

It is submitted that the Applicant is not benefitted in any way from the delayed filing of the appeal and that irreparable loss will be caused if the delay is not condoned and the appeal is not admitted.

It is further submitted that no hardship or prejudice will be caused to the Respondent in case the delay is condoned and the appeal is admitted. However, if the delay is not condoned and the appeal is not admitted, the Applicant will suffer substantially and irreparable loss will be caused.

In light of the above facts and in the interest of natural justice, the Applicant pray before your honours to kindly condone the delay in filing the appeal and admit and adjudicate the same on merits, in the interest of natural justice.”

The assessee has claimed that she was diagnosed with cancer, in or around February, 2020 and is presently at the fourth stage of the said disease and in the year 2021, changed her CA and her income tax matters were then looked after by the staff of her son, who was not aware of the pending matters. The assessee and her son‟s staff were not in practice to check the e-proceedings regularly, which resulted into delay. However, on appointing new

Now coming to merits of the case, it is observed thatthe Assessing Officer by perusing the details observed that the assessee had sold an immoveable property i.e., Flat No. 1502, RNA Exotica, Goregaon West, Mumbai, on a total consideration of Rs. 1,45,5000/-vide agreement for sale dt. 24-09- 2014,registered on 22-09-2014. However, the assessee subsequently, purchased the same flat on a consideration of Rs. 1,25,94,687/-vide agreement dt.30-07-2014 registered on 11- 08-2014 and has not shown any Short Term Capital Gain on the said property. On the contrary, the assessee claimed Long Term Capital Loss of Rs.(-)7,35,995/-on sale of others (Right in property) which was under construction at the time of purchase and sale by the assessee. The AO, therefore, in order to verify the transactions, show caused the assessee.

The AO thus, in view of theaforesaid facts, referred the matter to the Jt. Commissioner of Income Tax, Range-31(2), Mumbai, vide letter dt. 11-10-2017 and sought for direction u/s. 144A of the Act.

The Jt. Commissioner of Income Tax, Range-31(2), Mumbai, vide letter dt. 29-11-2017 opined that the assessee‟s claim of Long Term Capital Gain is not acceptable, as the purchase and sale agreement of the property, is executed in financial year 2014-15. 8. Thus the AO on the basis of direction u/s 144A of the Act, vide Assessment Order, treated the capital gain of Rs. 11,98,813/- earned from the said property, as Short Term Capital Gain, and 6 added the same in the income of the assessee, by passing the assessment order.

The assessee being aggrieved, challenged the said addition of disallowance by filing first appeal before the Ld. Commissioner, however, despite affording four opportunities, made no compliance.

As observed above that the Assessee was detected with cancer in February, 2020 and therefore due to such medical exigencies/cancer disease, delay in filing the instant appeal has also been occurred and, therefore, it can easily be construed that medical exigencies/cancer disease also caused non-appearance before the Ld. Commissioner, as well. And therefore considering the non-appearance of the Assessee as plausible cause, this Court is inclined to condone the non-appearance of the assessee before the Ld. Commissioner.

On merit, it is observed that Ld. Commissioner dismissed the appeal of the assessee as ex-parte and in limine on non- prosecution, without adjudicating the merits of the case, which is not permissible in view of the judgment of the juri ictional High Court in CIT v. Premkumar Arjunda(2107) 297 CTR 614 (Bombay), wherein it has been held as under :- “Section 251(1)(a) and (b), along with the explanation in Section 251(2) of the Act, mandates that the CIT(A) must apply their mind to all issues arising

The Hon'ble juri ictional High Court in the case of in the case of PCIT-3 Vs. Vembo Vaidyanathan (2019) 261 taxman 376 (Bom.) has dealt with the identical issue and approved the acquisition of property from the date of "letter of allotment" and in fact directly or indirectly given sanctity to the letter of allotment" by holding as under: "Issue raised by the revenue in its appeal before the Hon'ble High Court was, as to whether the Tribunal was justified in reckoning the acquisition of the property from the date of letter of allotment which though did not lead to creation of any proper and effective right over the capital asset, and not from the date on which the agreement" which spelled out the exact terms and conditions for acquisition was executed. It was observed by the Hon'ble High Court, that the CBDT vide its Circular No. 471, dated 15.10.1996 had clarified that when an Assessee purchases a flat to be constructed by Delhi Development Authority (D.D.A) for which allotment letter is issued, date of such allotment would be the relevant date for the purpose of capital gain tax as the date of acquisition. Further, referring to the clarification issued by the CBDT, vide its Circular No. 672, dated 16.12.1993, it was observed by the Hon'ble High Court, that the Board had clarified that if the terms of the schemes of allotment and construction of flats/houses by the co-operative societies or other institutions were similar to the terms of allotment and construction by D.D.A, then on the same basis the acquisition of the property was to be related to the date on which the allotment letter was issued. On the basis of its aforesaid observations, the Hon'ble High Court had dismissed the appeal of the revenue. In the backdrop of our aforesaid deliberations, we are of the considered view that as no infirmity emerges from the order of the CIT(A), who we find had rightly concluded that the date of acquisition of the property under consideration was to be reckoned from the date of the allotment letter i.e. 03.12.1999, therefore, we uphold his order."