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Facts
The assessee, a senior citizen, did not file a return of income. The AO initiated reassessment proceedings under Section 147 r.w.s. 144 based on information about the sale of an immovable property, leading to an addition of Rs. 95,98,600/-. The CIT(A) dismissed the assessee's appeal in limine due to a delay of 496 days.
Held
The Tribunal held that the CIT(A)'s denial to condone the delay was not justified, considering the assessee's age and the explanation provided. It was found that the assessee was a co-owner only for name-sake and the capital gains were already offered to tax by her husband.
Key Issues
Whether the CIT(A) erred in dismissing the appeal due to delay without condoning it, and whether the addition made was sustainable when the capital gains were already offered to tax by the husband.
Sections Cited
250, 69, 148A, 148, 147, 144, 139, 270A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” BENCH, MUMBAI
Before: SHRI RAJ KUAMR CHAUHAN, JM
IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, MUMBAI BEFORE MS PADMAVATHY S, AM & SHRI RAJ KUAMR CHAUHAN, JM (Assessment Year: 2017-18) Sohag Dilip Kapadia, Income Tax Officer -19(3)(1), 114, B V P Road, R. K Wadi, Piramal Chambers, Lalbaug, Vs. Girgaon, Mumbai-400004. Mumbai-400012. PAN: AWHPK3783B Appellant) : Respondent) Appellant /Assessee by : Shri Bhupendra Shah, AR Revenue / Respondent by : Shri Leyaqat Ali Aafaqui, Sr. DR : 15.07.2025 Date of Hearing : 18.07.2025 Date of Pronouncement O R D E R Per Padmavathy S, AM:
This appeal by the assessee is against the order of the Commissioner of Income Tax (Appeals)/ National Faceless Appeal Centre (NFAC), Delhi [In short 'CIT(A)'] passed under section 250 of the Income Tax Act, 1961 (the Act) dated 22.02.2025 for Assessment Year (AY) 2017-18. The assessee raised the following grounds of appeal: “1) Ground No. 1: Violation of Natural Justice On facts and circumstances, Ld. CIT(A) has erred in passing the order without providing proper opportunity of hearing to the appellant. Said addition Sohag Dilip Kapadia confirmed is bad in law and liable to be deleted as order is passed without opportunity of being heard and violating the principles of natural justice. 2) Ground No.2: Denial of Condonation of Delay On facts and circumstances, Ld. CIT(A) has erred in denying the reasons for condonation of delay in appeal. Said denial is bad in law and additions are liable to be deleted as order is passed without opportunity of being heard and violating the principles of natural justice. 3) Ground No.3: Addition u/s 69 of Rs. 95,98,600/- On facts and circumstances, Ld. CIT(A) has erred in confirming addition of Rs. 95,98,600/- on account of short term capital gain. Such direction by Ld. CIT(A) is bad in law and erroneous in facts and thereby Ld. CIT(A) be directed to delete the addition of Rs. 95,98,600/-.
2. The assessee is a senior citizen aged about 84 years. The assessee did not file the return of income for the year under consideration. The AO noticed from the information available on record that the assessee has sold an immovable property for a consideration of Rs. 90,00,000/- and the stamp duty value of the property was determined at Rs. 95,98,600/-. Since the assessee has not filed the return of income, the AO issued a notice under section 148A(b) of the Act. After passing the order under section 148A(d), the AO reopened the assessment by issue of notice under section 148 of the Act. Since the assessee did not respond to the notices issued, the AO completed the assessment under section 147 r.w.s. 144 of the Act wherein he added Rs. 95,98,600/- as income of the assessee. Aggrieved the assessee filed further appeal before the CIT(A). The assessee submitted before the CIT(A) that the email ID to which the AO sent the notices belongs to the employee of assessee's consultant who has left the office and hence the assessee was not aware of the reassessment proceedings. The assessee further submitted that though she is stated to be the co-owner of the property she is added only for the document purposes for name sake. The assessee also submitted that assessee's husband Mr. Dilip Kapadia has already offered the entire sale consideration as Capital Gains in his return of Sohag Dilip Kapadia income after paying the taxes due thereon. Since there was a delay of 496 days in filing the appeal before the CIT(A), the appeal was dismissed in limine by the CIT(A) without condoning the delay. Aggrieved assessee is in appeal before the Tribunal.
The ld. AR submitted that the assessee is a senior citizen and is wholly dependent on her consultant for handling the income tax matters. The ld. AR further submitted that the assessee was not aware of the reassessment proceedings since the email ID to which the notices were sent belongs to that of an ex-employee of the Consultant. The ld. AR also submitted that the assessee came to know of the demand raised in the reassessment proceedings only when the refund for AY 2023- 24 was adjusted against the tax demand for AY 2017-18. The ld. AR drew our attention to the affidavit filed by the assessee in this regard as reason for delay in filing the appeal before the CIT(A). On merits the ld. AR submitted that the assessee's husband has already offered the entire capital gains arising out of the impugned transaction of sale of property in his return of income for AY 2017-18. Our attention was further drawn to the ITR filed, computation of income, Capital a/c and balance sheet of assessee's husband Mr. Dilip Kapadia (page 47 to 72 of PB). Accordingly, the ld. AR submitted that the assessee is included in the document only for name sake and that assessee's husband who is the actual owner of the property has offered the capital gains after paying the taxes.
The ld. DR on the other hand made a detailed written submission to the effect that the assessee has been consistently not responding to the notices issued by the AO and the CIT(A) and there is no violation of natural justice as claimed by the assessee. The ld. DR further argued that the claim of the assessee that the delay in filing the appeal before the CIT(A) is due to the assessee not being aware of the Sohag Dilip Kapadia reassessment proceeding cannot be accepted. The ld. DR also argued that since the assessee failed to provide proper explanation and documentary evidences before the lower authorities, the addition under section 69 is fully justified.
We heard the parties and perused the material on record. The AO noticed from the information available on record that the assessee during the year under consideration has sold a property, the stamp duty which is Rs. 95,98,600/- and that the assessee has not filed the return of income. Therefore, the AO reopened the assessment and since the assessee did not respond to the notices issued completed the assessment under section 147 r.w.s. 144 in which he made an addition of the stamp duty value. There was a delay of 496 days in filing the appeal by the assessee before the CIT(A). The CIT(A) did not condone the delay and without going into the merit of the issue dismissed the appeal in limine. On perusal of the documentary evidences submitted before us, we notice that the assessee and her husband have sold a property for a total consideration of Rs. 90,00,000/- vide sale-deed dated 13.06.2016 (page 73 to 114 of PB). We also notice from the computation of income of assessee's husband (page 68 to 70 of PB) that the entire consideration of Rs. 90,00,000/- has been declared as STCG in the hands of assessee's husband Mr. Dilip Kapadia. Therefore, we see merit in the submissions of the assessee that the assessee has been added in the property document for name sake only and that the entire consideration from the impugned transactions have already been offered to tax. Before us, the ld. AR filed an affidavit by the assessee stating the reasons for delay in filing the appeal before the CIT(A), the extract of which is as given below:
Considering the fact that the assessee being a senior citizen and the affidavit filed explaining the reasons for the delay in filing the appeal before the CIT(A), we are of the view that the CIT(A)'s denial to condone the delay is not justified. As already stated the claim of the assessee that she is the co-owner in the property only for name sake and claim that the income is already offered to tax by assessee's husband cannot once again be added in assessee's hand are well substantiated based on the documentary evidences. In view of the above discussion and the facts peculiar to the case, we hold that the addition made by the AO towards the sale of property is not sustainable for the reason that the entire consideration is already been Sohag Dilip Kapadia offered to tax in the hands of assessee's husband. Accordingly, we direct the AO to delete the addition made in assessee's hands in this regard.
In result, appeal of the assessee is allowed.