BIPINBHAI DESAIBHAI PATEL,ANAND vs. NFAC, DELHI JURIS. AO -THE DY.CIT, CIRCLE ANAND, ANAND

There was delay of 408 days in filing of this appeal. The assessee has filed a condonation application, explaining the reason for delay. It has been submitted that the assessee is senior citizen and dependent upon his counsel for compliance to the Income Tax proceedings. He explained

The brief facts of the case are that the assessee had filed his return of income for A.Y. 2013-14 on 25.09.2013, declaring total income of Rs.1,08,17,574/-. The case was reopened on the basis of information received by the AO that the assessee had sold a property during the year for a consideration of Rs. 1,16,57,000/- but had declared Nil income as Long Term Capital Gain (LTCG). Before the AO, the assessee had explained that the deduction of Rs. 64,27,651/- was claimed u/s. 54F of the Act towards purchase of a new property. The AO had noticed that the assessee had claimed indexed cost of improvement of Rs. 30,42,977/- in respect to the property sold. According to the assessee, an expenditure of Rs. 6,14,310/- was incurred in the financial year 2012-13 towards improvement of the property. However, in the absence of any detail in this regard, the indexed cost of improvement as claimed by the assessee was disallowed. Further, the assessee also could not produce the purchase deed of the new property, copy of expenses for construction and no evidence was brought on record that the capital gain earned by the assessee was utilized towards purchase/construction of a new property. Therefore, the deduction claimed u/s. 54F of the Act, was also disallowed. The assessment was completed u/s. 147 r.w.s. 144B of the Act 23.09.2021 at total income of Rs. 2,02,84,290/-.

Now the assessee is in second appeal before us. The following grounds have been taken in this appeal:

Ms. Arti N Shah, the Ld. AR of the assessee submitted at the outset that no compliance could be made by the assessee before the Ld. CIT(A) and, therefore, he had dismissed the appeal of the assessee without adjudicating the grounds taken by the assessee on merits. She explained that all the notices were received on the e-mail I’d cashless.nehrcls@gmail.com, which was not regularly accessed by the assessee. Therefore, the assessee had failed to make compliance before the Ld. CIT(A). She requested that the assessee may be allowed another opportunity of being heard by setting aside the matter to the file of the Ld. CIT(A).

Per Contra Shri Amit Pratap Singh, the Ld. SR-DR had no objection if the matter was set aside to the file of Ld. CIT(A) for allowing another opportunity to the assessee.

We have considered the rival submissions. The AO had disallowed the indexed cost of improvement and the deduction u/s 54F of the Act claimed by the assessee on the ground that the assessee had failed to substantiate the claims with supporting documentary evidence. It is noticed from the impugned order that despite issuance of notices by the learned CIT(A), the assessee had failed to appear or furnish any written submissions. Consequently, the learned CIT(A) had disposed of the appeal without the benefit of the assessee's submissions. Before us, the learned AR submitted that the notices were received on an e-mail address which was not being regularly accessed by the assessee and, therefore, the assessee remained unaware of the appellate proceedings. It is found from Form no. 35 that the e-mail address mentioned therein was cashless.nehrcls@gmail.com. The assessee had also given an option to receive notices/communication on this e-mail address. Having opted to receive the notices on the e-mail, the assessee cannot take a plea that the notices sent by the Ld. CIT(A) on the same e-mail id were not accessed by him. The Ld. CIT(A) had allowed 4 opportunities to the assessee during the period from 19.12.2023 to 05.02.2024, still no compliance was made on any of the occasion. Once an appeal is filed, it is incumbent upon the assessee to remain vigilant and ensure compliance with the notices issued by the appellate authority. The explanation that the registered e-mail account was not regularly monitored does not constitute a satisfactory justification for complete non-compliance. Such conduct

At the same time, we find that the issues involved relate to the allowability of indexed cost of improvement and deduction u/s 54F of the Act, both of which require examination of documentary evidence. Since the impugned appellate order does not contain any adjudication on the merits of these issues, we are of the considered view that one final opportunity deserves to be granted to the assessee in the interest of justice. However, such indulgence cannot be granted without imposing appropriate terms so as to balance the equities and to discourage casual prosecution of appellate proceedings. Accordingly, while setting aside the impugned order, we direct the assessee to deposit costs of Rs.20,000/- (Rupees Twenty Thousand only) with the Prime Minister's National Relief Fund within thirty days from the date of receipt of this order. Proof of such payment shall be furnished before the learned CIT(A) at the time of the first hearing. The restoration of the appeal shall be subject to compliance with this direction. Subject to this condition, the impugned order of the learned CIT(A) is set aside and the matter is restored to his file for adjudication afresh. The assessee shall produce all documentary evidence in support of the indexed cost of improvement and the claim for deduction u/s section 54 of the Act. The learned CIT(A) shall consider the evidence that may be produced, obtain a remand report from the Assessing Officer, if considered necessary, and thereafter pass a reasoned and speaking order in accordance with law. The assessee is also directed to comply in the restored appellate proceeding and shall not seek unnecessary adjournments. In case of any further default without sufficient cause, the learned CIT(A) shall be at liberty to dispose of the

In the result, the appeal of the assessee is allowed for statistical purpose.