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Facts
The assessee sold an immovable property for Rs. 56 lakhs. The case was reopened under Section 147/148 of the Act as the assessee had not filed the return of income. Despite notices, the assessee did not respond, leading to an ex-parte assessment. The assessee later claimed they were unaware of the proceedings.
Held
The Tribunal noted that the assessee did not submit any documents to substantiate the cost of acquisition. In the interest of justice, the issue was remitted to the jurisdictional AO for fresh consideration with a cost of Rs. 5,000/- to the assessee, with directions for effective opportunities.
Key Issues
Whether the entire sale consideration of a property should be treated as income due to lack of substantiation of cost of acquisition, and if an ex-parte order should be set aside to allow the assessee to present their case.
Sections Cited
147, 148, 144, 133(6)
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Income Tax Appellate Tribunal, “B” BENCH : BANGALORE
Before: SHRI LAXMI PRASAD SAHU & SHRI KESHAV DUBEY
Per Laxmi Prasad Sahu, Accountant Member :
This is an appeal filed by the assessee against the ex-parte Order passed by the CIT(A) vide DIN &Order No: ITBA/NFAC/S/250/2024- 25/1073184331(1) dated 12.02.2025, challenging the ex-parte Order passed by the learned CIT(A) as per his grounds of appeal.
2. Briefly stated, the facts of the case are that as per portal of Income Tax Department as NMS formulated by the CBDT, it was noticed that the assessee has not filed return of income for the year under consideration and has sold immovable property worth Rs.56 lakhs. Therefore, after following the due procedure for reopening of assessment under section 147/148 of the Act, notice was issued on 30.03.2022 and assessee was given opportunity to file return of income. Subsequently, various other statutory notices were issued to the assessee but there was no response from the assessee’s side. For want of response from the assessee, AO was bound to complete the assessment under section 144 of the Act and before invoking section 144 of the Act, the AO provided opportunity to the assessee. In spite of that, there was no response. In order to ascertain the genuineness of the transaction, notice under section 133(6) of the Act was issued to the purchaser and in response sale deed was received from the purchaser along with payment details as per sale deed dated 11.03.2015 registered vide document No.6581 of 2014-15. It was found that assessee had sold vacant plot bearing 27 formed in Survey No.21 and 27 situated at Thanniranahalli Village, Yashwantpora Hoble, Bangalore North. As per the said agreement, the land sold was received as gift by the assessee from his father in 2014 while the property was received by his father as inherited property which suggests that assets sold by the assessee is a long term capital asset. Further, assessee failed to furnish any further details of SCN issued to the assessee. Therefore, the entire sale consideration received by the assessee was treated as income and income was assessed at Rs.54,83,162/-.
3. Aggrieved from the above Order, assessee filed appeal before the learned CIT(A) raising various grounds. The learned CIT(A) issued notice of hearing on different dates but there was no response from the assessee’s side. Thereafter, the learned CIT(A) completed the assessment on the basis of materials available on records and dismissed the appeal of the assessee.
4. Aggrieved from the above Order, assessee filed appeal before the Tribunal. The learned Counsel reiterated the statement of facts submitted before the learned CIT(A) and submitted that the assessee was not aware about the income tax proceedings and no hearing notice was received by the assessee. He further submitted that the notice issued by both the authorities might have settled in the spam folder. The learned Counsel requested and undertook and further submitted that if a chance is given to the assessee, assessee will prove with cogent documents regarding the sale of property and its cost of acquisionw.
On the other hand, learned DR relied on the Order of the lower authorities and submitted that inspite of giving several opportunities the assessee did not bother to file return of income and has not claimed any cost of acquisition. The AO got information after issue of notice under section 133(6) of the Act to the purchaser and opposed to giving further chance to the assessee.
Considering the rival submissions, we noted that the assessee has sold capital asset for Rs.53 lakhs and as per information available with the Income Tax Department, the assessee did not file his income tax return for the year under consideration, therefore the case has been reopened under section 147/148 of the Act. During the reassessment proceedings as well as appellate proceedings, assessee did not submit any documents. He did not file any documents to substantiate the cost of acquisition of the property. We noted from the Assessment Order that for want of documentary evidence claiming cost of acquisition, the AO has treated the entire sale consideration as income. Therefore, considering the facts of the case and in the interest of justice, we are remitting this issue to the file of the jurisdictional AO for fresh consideration and decide the issue as per law with a cost of Rs.5,000/- to the assessee. Before taking up the case by the jurisdictional AO, assessee has to show the cost of payment of Rs.5,000/- to the jurisdictional AO and jurisdictional AO is directed to give 3 effective opportunity to the assessee and assessee is directed to produce necessary documents for substantiating his case and not seek unnecessary adjournments, for early disposal of the case. In case of failure, no second leniency shall be granted to the assessee
In the result, appeal filed by the assessee is allowed for statistical purposes.