KHUSBHU RAMCHANDRA YADAV,MUMBAI CITY vs. INCOME TAX OFFICER, WARD 2 (2), KALYAN, KALYAN

The brief facts of the case are that the assessee is a non filer of return for the impugned assessment year. The case was reopened u/s 147 of the Act. Finally, the assessment order was passed u/s 147 r.w.s.144 r.w.s. 144B of the Act by making addition of Rs. 80 lakhs. The Ld.AO received information that the assessee being a seller had sold and transfer the premises approximately admeasuring 40.30 square metres carpet area, bearing Flat no. 301 on the 3rd floor building known as Earth Pillar situated at 22-24B, Khadilkar Road, Girgaum, Mumbai- 400004 on the land bearing C S No. 538 of Girgaum division, Mumbai City to Mr Ranjeet Motilal Jain and Smt Mankush Ranjeet Jain for a sale consideration of Rs. 80,00,000/-. Further, it is found that the transaction was carried out on the assessee's PAN (ADJPY2038K) not on the Company's PAN. The Ld. AO issued the notice to the assessee but due to non-compliance of said notices finally the Ld. AO completed assessment exparte. The Ld.AO considered the transaction as the short term capital gain & calculated tax u/s 45 after considering the cost of acquisition at Nil. The addition was confirmed amount to Rs. 80,00,000/-. The aggrieved assessee filed an appeal before the Ld. CIT(A) with a delay of 101 days. The Ld.CIT(A) dismissed the appeal for contravening provisions of section 249(2) of the Act for delay in filing the appeal and upheld the addition. Being aggrieved, the assessee filed an appeal before us.

The Ld. DR supported the orders of the revenue authorities, though no substantive rebuttal was made against the factual submissions advanced by the Ld. AR.

We have heard the rival submissions and perused the material available on record. On examination, it is evident that the assessee is merely a Director of the company which sold the property on 01/12/2014, and the company has duly disclosed the impugned transaction in its return of income and paid tax thereon. The assessment, however, was completed ex parte, thereby denying reasonable opportunity to the assessee. The relevant evidence and documents were also not available before the Assessing Officer at the time of the assessment. The Ld. CIT(A) dismissed the appeal on the ground of limitation due to a delay of 101 days. The assessee filed an affidavit explaining the delay. We find that reasonable opportunity was not afforded to the assessee at either stage of the proceedings. Accordingly, in the interest of justice, the matter is restored to the file of the Ld. CIT(A) with a direction to consider the assessee’s request for condonation of delay liberally. The assessee is directed to furnish all relevant evidence and documents before the Ld. CIT(A) during the set-aside proceedings. The Ld. CIT(A) shall thereafter pass a speaking order on merits, as the factual matrix has not been examined by any authority thus far. Needless to state, the assessee shall be afforded adequate opportunity of being heard. Simultaneously, the assessee is expected to remain diligent and co- operative to ensure expeditious disposal of the appeal.