SEENAPPA CHANDRA SHEKAR, ,BENGALURU vs. INCOME TAX OFFICER, WARD-4(2)(3), BENGALURU

Facts related to the merit of the case is that assessee has made a sale of immovable property of 2 acres and 21 gunta for ₹ 1,00,06,500/- on 16/10/2015 to Shri Satyanarayana Educational Trust and tax deduction at source of ₹ 106,015/– was made. Thus, the net consideration was received of ₹ 14,098,950. The permission for conversion of land to non-agricultural purposes was also obtained on 29/9/2015 from the Deputy Commissioner, Bangalore. Therefore, this transaction of the sale of immovable property is subject to capital gain. As no information is forthcoming, the learned assessing officer treated 15% of the sale consideration of ₹ 10,605,000 as cost of acquisition and on sale consideration of ₹ 10,605,000 computed long-term capital gain of ₹ 9,014,250.

The assessee preferred an appeal before the learned CIT – A and in form number 35 the email address at which the notices to be served was shown as chandra1965000@gmail.com. In the statement of the facts detailed reason were stated that before the learned assessing officer no proper opportunity was granted and further on the merits it was stated that assessee has purchased an agricultural land on 19/05/2006 and the assessee has sold the agricultural land to the educational Institute on 22/6/2015 for a sale consideration of ₹ 14,098,950. The assessee has received a substantial part of sale consideration of ₹ 100 Lacs and has delivered the possession of the land and original documents pertaining to the title of the property. At the request of the purchaser, the assessee applied for change of land use for educational purposes and the purchaser has obtained the change of land use on 29/9/2015. The purchaser has got the land registered in their favour by executing the sale deed on 16/10/2015. Therefore, the assessee has only sold the agricultural land which is not chargeable to tax as capital gain.

The learned and CIT – A in paragraph number 3.1 of his order has tabulated that 5 opportunities was granted to the assessee but none of them have been availed of and therefore the assessee has no information to offer and does not want to prosecute the appeal and therefore same was dismissed.

The assessee aggrieved with the same is in appeal before us and has filed a paper containing 32 pages. It was stated that absolute sale deed was executed on 19/05/2006 which is placed at page number 2 – 11 of the paperbook which was purchase by the assessee from 3 different persons. As per the recital it is clearly stated that assessee is a cultivator of the land. Further in absolute sale deed dated 16/10/2015 placed at page number 12 – 29 of the paperbook to show that the assessee has sold an agricultural land but as mentioned in the sale deed it is non- agricultural land, converted by the assessee and to support his case the assessee also produced an affidavit of the buyer stating that they have purchased the agricultural land on 22/6/2015 and subsequent to the purchase of the above land where they have applied for the change of land use from agricultural to education purposes in name of the trust. Thus, the claim of the assessee that impugned properties sold is the agricultural land. To support the case of the assessee, the learned

The learned departmental representative vehemently supported the orders of the learned lower authorities and submitted that the assessee has not submitted any details before the Ld. lower authorities as well as before the learned CIT – A and therefore the addition is correctly made. It was further stated that the assessee has categorically sold non- agricultural land and therefore the capital gain is chargeable to tax in the hands of the assessee. He submitted that all these documents submitted by the assessee before the Tribunal are submitted for the first time and they have not been looked into by the learned lower authorities. Therefore, issue cannot be decided now, without giving an opportunity to the learned lower authorities.

We have carefully considered the rival contention and perused the orders of the learned lower authorities. We are concerned with the appeal order of the learned CIT – A. In form number 35 the assessee has given a categorically an email address and stated in affirmative that the notices may be sent through email. However, the order of the learned CIT – A does not speak about any opportunity granted to the assessee by sending the notices through email. The learned CIT – A has categorically noted that all notices were issued in ITBA portal. Therefore, all the five opportunities granted by the learned CIT – A is not in accordance with the law. None of the notices were shown to have been sent to the assessee through email. Therefore naturally, the order of the learned CIT – A is passed ex parte without giving any opportunity of hearing to the assessee and therefore not sustainable.

Before the learned assessing officer, the assessee has not provided any information, assessee also even did not respond to the notices under section 148 of the Income Tax Act. The reason stated by the assessee that notice under section 148 of the Act was not found on the assessee and the reasons recorded and sanction is also not proper. However, before us the assessee has submitted the deed of purchase and sale of the impugned property along with the affidavit of the purchaser. Without going into the merits of the case, as the learned AO as well as the learned CIT – A have both decided the issue ex parte, in the interest of the justice, we restore the whole issue back to the file of the learned assessing officer with a direction to the assessee to substantiate its case

Thus, deciding all the grounds of appeal, we restore the whole appeal back to the file of the learned assessing officer with a direction to the assessee to substantiate its claim and the learned assessing officer may examine the detail, carry out the necessary enquiries, and then decide the issue in accordance with the law after giving an opportunity of hearing to the assessee.

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