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Facts
The assessee sold ancestral property for Rs. 58,00,000 and disclosed capital gain of Rs. 22,51,125 considering indexed cost. The Assessing Officer considered the original cost and computed capital gain at Rs. 16,86,124, leading to an addition of Rs. 15,63,999.
Held
The CIT(Appeals) dismissed the appeal as time-barred for 189 days without condoning the delay. The Tribunal condoned the delay and remitted the matter back to the CIT(Appeals) for disposal on merits.
Key Issues
Whether the delay in filing the appeal before the CIT(Appeals) should be condoned, and if the appeal should be decided on merits.
Sections Cited
147, 148, 50C, 54EC, 45
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Income Tax Appellate Tribunal, ‘SMC’ BENCH, KOLKATA
Before: Shri Duvvuru RL Reddy, Vice-(KZ)
Assessment Year: 2018-2019 Rina Ray,………….………………….………...……Appellant C/o. Amit Kumar Ray, St. Josoph School Road, Matigara, Siliguri-734010, West Bengal [PAN:BHIPR4602M] -Vs.- Income Tax Officer,…………………………..…..Respondent Ward-3(2), Darjeeling, 27/19, AJC Bose Road, Near Lal Kuthi, P.O. & P.S. Darjeeling, Darjeeling-734101, West Bengal Appearances by: Shri Sujit Basu, Advocate and Shri Rajib Mukherjee, Advocate, appeared on behalf of the assessee Shri Kallol Mistry, JCIT, Sr. D.R., appeared on behalf of the Revenue Date of concluding the hearing: December 09, 2025 Date of pronouncing the order: December 31, 2025 O R D E R
The present appeal is directed at the instance of assessee against the order of Id. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 19.08.2025 passed for Assessment Year 2018-2019.
(A.Y. 2018-2019) Rina Ray 2. Brief facts of the case are that as per information available received from the ld. Assessing Officer, assessee entered into financial transaction of the value of Rs.79,12,732/- during the FU 2017-18 relevant to AY 2018-19 but failed to furnish his return of income for the AY 2018-19. The father of the appellant Late Dinesh Ch. Dasgupta had purchased a plot of land measuring 1.5 (one point five) katha on 13.07.1974 for Rs.50,000/- on which he had constructed a residential house measuring 1000 Sqft., before his death in the year 1978 leaving his legal heirs, his wife and his two daughters, Smt. Rina Ray (Appellant), and Smt. Sampa Ghosh. The appellant and her sister became the owners in possession having equal share in the aforesaid properties of their late father on demise of their mother. The appellant and her sister had sold their aforesaid properties during the year under appeal for Rs.58,00,000/-, in which the share of the appellant was for Rs.29,00,000/-. The stamp duty value of the sold property was for Rs.77,66,250/- and the share of the appellant was for Rs.38,83,125/-, being full value as per section 50C of the Act. The appellant had duly disclosed the capital gain in her return filed on 30.05.2022 u/s.148 considering the full value of Rs.38,83,125/-. The appellant had considered the cost of acquisition of the sold property as on 01.04.2001 for Rs.6,00,000/- and computed her capital gain at Rs.22,51,125/- after considering the indexed cost of acquisition. The appellant had invested in REC Bond for (A.Y. 2018-2019) Rina Ray Rs.21,00,000/-, eligible for exemption u/s.54EC of the IT Act. After deduction of Rs.21,00,000/- u/s.54EC and payment of commission of Rs.29,000/-, the net capital gain of the appellant was for Rs.1,22,125/- as per her return. However, as per Reverse Mechanism Method of valuation, accepted by courts and tribunals, the 50 percent cost of acquisition of the sold property as on 01.04.2001 was for Rs.14,27,620/-. The appellant did not have any expertise, either in income tax provisions or in e filing return, e assessment etc. Hence, the appellant had to depend on a third person who also did not have any fair knowledge and concept in income tax and had wrongly submitted at ‘e’assessment portal that the capital gain of the appellant was for Rs.9,77,124/- for which no revised return had been filed. The Ld. Assessing Officer did not allow the FMV of the sold property for Rs.6,00,000/- as on 01.04.2001 and had considered the actual cost of acquisition of Rs.50,000/- in the hand of the Late father of the appellant when he purchased the property as on 13.07.1974. The capital gain had been considered by the Ld. Assessing Officer at Rs.16,86,124/- without referring the matter to DVO as per decision of jurisdiction at High Court in the case of Sunil Kumar Agarwal Vs. CIT (2014) 47 taxman.com 158 (Cal)//372 ITR 83 (Cal), in which case it has been held that the AO is duty bound to refer the matter to DVO, even though no specific request is made by the assessee. As the assessee declared the total capital gain in his return of income filed u/s 148 of the Income (A.Y. 2018-2019) Rina Ray Tax Act, 1961 at Rs.1,22,125/-and the total capital gain computed at Rs.16,86,124/-, the ld. Assessing Officer determined the addition of Rs.15,63,999/- to the total income of assessee u/s. 45 of the Act. Finally, ld. Assessing Officer assessed the total income of the assessee at Rs.17,88,619/- [income as per return of income filed (comprising LTCG of Rs.1,22,125/- plus other income of Rs.1,22,497/-)].
Dissatisfied with the assessment order, the assessee carried the matter in appeal before the ld. CIT(Appeals). The appeal is time-barred by 189 days before the ld. CIT(Appeals) and assessee failed to file any application for condonation of delay. The ld. 1st Appellate Authority has dismissed the appeal of the assessee simply for non-filing of condonation petition within the stipulated period of time saying that the delay has been caused by her ignorance, lack of awareness or knowledge about the law and the contention of assessee is not unacceptable. Ignornance of law cannot be considered as a good and sufficient cause for the delay in filing of appeal. The maxim ‘Ignorantia juris non-excusat’, or ‘ignorance of law is no excuse’. The ld. CIT(Appeals) has not touched these issues on merit except mentioning the factum of appeal being time-barred.
On being aggrieved, the assessee preferred an appeal before the ITAT. At the time of hearing, the ld. Counsel for (A.Y. 2018-2019) Rina Ray the assessee stated before the Bench that filing the appeal in time before the ld. CIT(Appeals) was beyond her control and the assessee was not negligent and there was no inaction on her part in filing the appeal in time. The ld. CIT(Appeals) dismissed the appeal without touching the issues on merits except mentioning the factum of appeal being time-barred.
On the other hand, ld. Departmental Representative supported the order of ld. CIT(Appeals) and pleaded to confirm the order of ld. CIT(Appeals).
I have heard both the sides and perused the material available on record. The ld. CIT(Appeals) has not condoned the delay of 189 days and dismissed the appeal in limine. On this aspect, the main contention of the assessee is that she has not received the assessment order, therefore, the delay was occurred. Considering the non-service of the assessment order, the delay was occurred, therefore, there is no wilful negligent or latches on the part of the assessee. Considering the facts and circumstances of the case, I am of the view that it is a fit case to condone the delay of 189 days. Therefore, I condone the delay and remit the matter back to the file of ld. CIT(Appeals) with a direction to dispose of this appeal on merits after giving opportunity of being heard to the assessee.
(A.Y. 2018-2019) Rina Ray 7. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 31/12/2025.