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Facts
The assessee, a private limited company, declared NIL income and was engaged in developing land. The land purchased was not permitted for construction, and no buyers were found. The Assessing Officer assessed income at Rs. 30,50,000/- based on the difference between stamp duty value and sale value.
Held
The Tribunal allowed the appeal, setting aside the order of the CIT(Appeals) to meet the principle of natural justice. The matter was remitted back to the CIT(Appeals) with a direction to provide one more opportunity to the assessee to be heard, while cautioning the assessee to cooperate.
Key Issues
Whether the assessee was denied natural justice by not being provided with a reasonable opportunity of being heard by the lower authorities.
Sections Cited
143(3)
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Income Tax Appellate Tribunal, ‘SMC’ BENCH, KOLKATA
Before: Shri Duvvuru RL Reddy, Vice-(KZ)
Appearances by: Shri Sonal Agrawal, A.R., appeared on behalf of the assessee Shri Nicholash Murmu, Addl. CIT, D.R., appeared on behalf of the Revenue Date of concluding the hearing: January 7, 2025 Date of pronouncing the order: February 26, 2025 O R D E R
The present appeal is directed at the instance of assessee against the order of ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 5th July, 2023 passed for Assessment Year 2014-15.
(A.Y. 2014-2015) Baisakhi Infraprojects Private Limited 2. Brief facts of the case are that the assessee is a Private Limited company, which filed its return of income declaring total income at ‘NIL’. The assessee is engaged in the business of developing land for the purpose of residential and commercial buildings. The specific land was purchased for the said purpose but the concerned Department did not give the permission for the construction of the residential flat on the said piece of land. The main reason behind the non-giving of the permission for development was that the land was wet and not suitable for the purpose of development/construction of residential flats. Thereafter appellant had decided to sale the land and approached to the several brokers for the sale of land. However, no buyers were interested to buy the said piece of land at the market price/stamp duty value, because the land was not fit for the development. The assessee company has no plausible explanation in this regard. Due to non-compliance by the assessee, the ld. Assessing Officer has left with no alternative but to assess the income of assessee on the basis of information/data available on the records and the assessment was completed under section 143(3) of the Act assessing the taxable income at Rs.30,50,000/-, which was made on account of difference between the stamp duty value and sale value of the land to the total income of the assessee.
On being aggrieved, the assessee filed an appeal before the ld. CIT(Appeals).
The ld. CIT(Appeals) has given several opportunities to the assesese to substantiate its claim, but the appellant did not file the (A.Y. 2014-2015) Baisakhi Infraprojects Private Limited written submissions and did not represent the case before the ld. CIT(Appeals). The ld. CIT(Appeals) dismissed the appeal filed by the assessee confirming the order passed by the ld. Assessing Officer dated 5th July, 2023.
The assessee filed an additional ground before the ITAT stating that “natural justice was denied to the appellant-assessee by not providing reasonable opportunity of being heard to the assessee”. By considering the totality of the facts and circumstances of the case, the additional ground filed by the assessee is allowed.
At the time of hearing, it was the submission of the ld. Counsel for the assessee that ld. CIT(Appeals) did not consider the case on merit, rather he just upheld the order passed by the ld. Assessing Officer. Therefore, he pleaded to delete the addition made by the ld. Assessing Officer as confirmed by the ld. CIT(Appeals).
At the outset, ld. D.R. brought to my notice that the assessee did not produce the relevant documents as asked by the ld. Assessing Officer during the assessment proceedings. Therefore, the ld. Assessing Officer passed the assessment order assessing the taxable income at Rs.30,50,000/- as unexplained. Thereafter the assessee preferred an appeal before the ld. CIT(Appeals). The ld. CIT(Appeals) has given many opportunities to the assessee and the assessee neither filed written submission nor any evidence (A.Y. 2014-2015) Baisakhi Infraprojects Private Limited before the ld. CIT(Appeals). He further submitted that before the ITAT, the assessee did not substantiate its claim. Therefore, he pleaded to uphold the orders passed by the revenue authorities.
I have heard the rival submissions and perused the material available on record. Considering the facts and circumstances of the case, I am inclined to set aside the order passed by the ld. CIT(Appeals) in order to meet the principle of natural justice, and remit the matter back to the file of ld. CIT(Appeals) with a direction to provide one more opportunity of being heard to the assessee. At the same breath, I also hereby caution the assessee to promptly co-operate with the proceedings before the Ld. CIT(Appeals) failing which the Ld. CIT(Appeals) shall be at liberty to pass appropriate order in accordance with law and merits based on the materials available on the record. Thus, the grounds raised by the assessee are allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 26/02/2025.