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Facts
The assessee, Mekala Shankar Reddy (HUF), claimed an exemption of Rs. 30,00,824/- under Section 54F of the Income Tax Act. The Assessing Officer disallowed the claim, and subsequently, the CIT(A) partially allowed Rs. 13 lakhs but rejected the balance amount of Rs. 17,00,824/- due to the assessee's inability to produce supporting evidence.
Held
The Tribunal, acknowledging that the non-production of evidence by the assessee was due to reasons beyond their control and considering principles of natural justice, decided to grant one final opportunity. It set aside the CIT(A)'s order and restored the matter to the CIT(A) for a fresh decision on merits after providing the assessee with an opportunity to be heard and submit evidence.
Key Issues
Entitlement of the assessee to exemption under Section 54F of the Income Tax Act and whether adequate opportunity was provided to produce supporting evidence for the claim.
Sections Cited
54F, 143(3), 254
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Hyderabad ‘B’ Bench, Hyderabad
Before: SHRI LALIET KUMAR & SHRI MADHUSUDAN SAWDIA
आदेश/ORDER PER MADHUSUDAN SAWDIA, A.M.: This appeal is filed by Mekala Shankar Reddy (HUF) (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT(A)”), dated 31.07.2024 for the A.Y. 2009-10. 2. At the outset, the Learned Authorised Representative (“Ld. AR”) submitted that, before the Learned Assessing Officer (“Ld. AO”) the assessee could not produce the evidence in support of exemption of Rs.30,00,824/- u/s. 54F of the Income Tax Act, 1961 (“the Act”). Consequently, the Ld. AO completed the assessment u/s. 143(3) r.w.s. 254 of the Act disallowing the exemption of Rs.30,00,824/- u/s. 54F of the Act.
Aggrieved with the order of Ld. AO, the assessee filed appeal before the Ld. CIT(A). Before the Ld. CIT(A), the assessee produced the following documents in support of exemption of Rs.30,00,824/- u/s. 54F of the Act : i) Copy of deed of sale of ancestral property to Metro cash and carry on Dt.15.09.2008, vide Doc. No.8643/2008, in Survey Nos.588 & 59. ii) Agreement for completion dated 09.01.2009. iii) Copy of bank statement of Deccan Grameena Bank account. iv) Copy of Partition Deed of the members of HUF.
The Ld. CIT(A) found that, the agreements for completion dated 09.01.2009 was an unregistered document regarding the purchase of a semi-finished flat for a consideration of Rs.13 lakhs. However, the assessee had claimed an amount of Rs.30,00,824/- u/s.54F of the Act. Accordingly, the Ld. CIT(A) allowed the claim of Rs.13 lakhs and rejected the balance claim of Rs.17,00,824/- as the assessee could not produce any evidence in support of balance claim.
Aggrieved with the order of Ld. CIT(A), the assessee filed appeal before us. The Learned Authorised Representative (“Ld. AR”) submitted that, the assessee could not produce the evidence in support of balance claim of Rs.17,00,824/- before the Ld. CIT(A). Therefore, the Ld. AR prayed before the bench for providing one more opportunity for producing the evidence in support of balance claim of Rs.17,00,824/- before the Ld. CIT(A).
Per contra, the Learned Department Representative (“Ld. DR”) made objection towards granting of any further opportunity to the assessee.
We have heard the rival contentions and also gone through the record in the light of the submissions made by either side. It could be seen from the orders of the Ld.CIT(A) that, the assessee failed to substantiate his case by providing necessary documentary evidence in support of exemption of Rs.30,00,824/- u/s. 54F of the Act, which resulted in passing the orders without consideration thereof. However as submitted by the Ld. AR, non production of the relevant evidence on the part of the assessee was only due to the reasons beyond the control of the assessee. Further, it is a fact that the assessee does not stand to gain by not producing such documents. Be that as it may, now the assessee is ready to produce all such documentary evidence in support of their contentions and get the matter disposed of on merits. The highest that would happen by allowing an opportunity to the assessee is that a cause would be decided on merits. With this view of the matter and considering the principle of natural justice, we are of the view that one last opportunity should be given to the assessee. Accordingly, we set aside the impugned order and restore the issue to the file of the Ld. CIT(A) for passing a fresh order on merits after affording the opportunity of hearing to the assessee. Grounds of appeal
are answered accordingly.
7. In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced in the open Court on 16th Jan., 2025.