BALASAHEB VITTHAL LOKHANDE,PUNE vs. ITO, WARD-9(5), PUNE, PUNE

Briefly stated, the facts of the case are that the assessee is an individual and did not file his return of income for the AY. 2012-13. Based on the information available from Non Filer Monitoring System (NMS) data and AIR information, it was found that the assessee had entered into certain transactions relating to sale of immovable property and cash deposits in his bank account, which was not disclosed by him due to non- filing of return of income. The case of the assessee was thus reopened u/s. 147 of the Act by issuing notice u/s. 148 of the Act on 28-03-2019. The assessee failed to file any response to the said notice. Thereafter, statutory notice u/s. 142(1) of the Act as well as show cause notice issued by the Ld. Assessing Officer (“AO”) also remained un-complied with by the assessee. It is only at the fag end of the year that the assessee‟s son along with his authorized representative attended the assessment proceedings and submitted before the Ld.AO that the impugned land in question is an agricultural land and out of capital asset, but without producing any documentary evidences in support of his claim. The Ld.AO, therefore, proceeded to finalise the assessment ex-parte u/s. 144 on the basis of material available on record. He completed the assessment, vide his order passed u/s. 144 r.w.s. 147 of the Act, dt. 30-12-2019 by making addition of – (i) Rs. 1,40,00,000/- in respect of the land sold/transferred by the assessee during the relevant AY under consideration and (ii) Rs. 3,31,953/- on account of interest income earned by the assessee from Time Deposits with Lonavala Sahakari Bank Ltd. after calling for information u/s. 133(6) of the Act from the said bank.

Aggrieved, the assessee is in appeal before the Ld.CIT(A)/NFAC. Despite service of notice of hearing issued during the appellate proceedings, there was non-compliance, which resulted in ex-parte

Dissatisfied, the assessee is in appeal before the Tribunal.

The Ld.AR submitted that non-compliance to the notice(s) issued by the Ld.CIT(A)/NFAC was not intentional, but due to certain unavoidable circumstances faced by the assessee at the time of appellate proceedings. He submitted that the Ld.CIT(A)/NFAC has in his impugned order simply endorsed the findings of the Ld.AO, without dwelling into the merits of the assessee‟s case due to lack of any explanation/documentary evidence filed by the assessee. The Ld.AR submitted that the land in question is an agricultural land and the assessee is now in a position to substantiate his case by filing the requisite explanation/details/documents. He, therefore, humbly requested that the Bench may consider sending the matter back to the file of the Ld.AO as the above contention of the assessee requires verification.

The Ld.DR supported the order of the Ld.CIT(A)/NFAC and submitted that since the assessee failed to make compliance in spite of several opportunities granted, the Ld.CIT(A)/NFAC was completely justified in dismissing the appeal of the assessee.

We have heard the Ld. representatives of the parties and perused the material available on record. We find that the Ld.AO completed the assessment proceedings ex-parte qua the assessee by making additions of – (i) Rs. 1,40,00,000/- in respect of the land sold/transferred by the assessee during the relevant AY under consideration and (ii) Rs. 3,31,953/- on account of interest income earned by the assessee from 4 Time Deposits with Lonavala Sahakari Bank Ltd. Due to assessee‟s failure to submit any documentary evidence in support of his claim, the Ld.AO made the aforesaid additions. Admittedly, there was non-compliance by the assessee to the various notice(s) issued by the Ld.CIT(A)/NFAC, which constrained him to pass an ex-parte order for non-prosecution, endorsing the findings of the Ld.AO. We observe that the Ld.CIT(A)/NFAC has passed the impugned order without himself going into the merits of the case and endorsed the findings of the Ld.AO due to lack of any documentary evidences what-so-ever filed by the assessee during the appellate proceedings to disprove the findings of the Ld.AO and dismissed the appeal of the assessee applying the decision of the Hon'ble Supreme Court in the case of B.N. Bhattacharjee and Another [118 ITR 461] and various other decisions mentioned in his impugned order for non-prosecution.

We find that it has been the contention of the assessee through out the proceedings before the lower authorities that the impugned land in question is an agricultural land and, therefore, not subject to capital gains tax. However, the assessee could not substantiate its claim by filing the supporting documents, which resulted in the impugned addition on account of transfer/sale of land by the Ld.AO, which has been sustained by the Ld.CIT(A)/NFAC. Before us, the Ld.Counsel for the assessee has submitted that the non-compliance to the notices of hearing before the Ld.CIT(A)/NFAC was not intentional and that the assessee is now in a position to substantiate his case by filing the requisite explanation/details/documents in support of his claim.

On the facts and in the circumstances of the case enumerated above, we deem it fit that in the interest of justice, to set aside the impugned order of the Ld.CIT(A)/NFAC and restore the matter back to the 5 file of the Ld.AO for adjudication afresh, on merits as per fact and law, after due verification of the assessee‟s claim and modify the assessment as a result of such verification thereof. The Ld.AO shall provide reasonable opportunity of hearing to the assessee. Needless to say, the assessee shall provide the requisite support in terms of submitting the relevant documents/evidence as may be required/called upon on the appointed date, without seeking any adjournment, unless required for a sufficient cause failing which the Ld.AO shall be at liberty to pass the appropriate order in accordance with law. We hold and direct accordingly. The grounds of appeal raised by the assessee are accordingly allowed for statistical purposes.

In the result, the appeal filed by the assessee is treated as allowed for statistical purposes.

The concerned Pr.CIT, Pune

DR, ITAT, „A‟ Bench, Pune 5. ग र्ड फ ईल / Guard file. आदेशानुसार/ BY ORDER, ////