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Facts
The assessee, an individual, received significant payment for the sale of immovable property and rent without furnishing an original return. The Assessing Officer initiated reassessment proceedings under Section 147 due to non-furnishing of return. Technical glitches and subsequent notices led to the assessee filing the return beyond the prescribed time, which was treated as invalid by the AO.
Held
The Tribunal held that the Ld. CIT(A)/NFAC did not adjudicate each ground separately and did not pass a speaking order. Finding force in the assessee's arguments, the Tribunal set aside the order and remanded the matter back to the Ld. CIT(A)/NFAC for a fresh decision.
Key Issues
Whether the CIT(A) failed to consider all grounds of appeal and provide a speaking order, and whether the reassessment proceedings were conducted in violation of natural justice due to technical glitches and short notice.
Sections Cited
147, 144, 143(2), 148, 2(47), 54F, 45, 250, 139, 142(1), 144B, 54
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE
Before: SHRI MANISH BORAD & SHRI VINAY BHAMORE
ORDER PER VINAY BHAMORE, JM: Both the above captioned appeals filed by the assessee are directed against the separate orders dated 05.06.2024 and 29.07.2024 passed by Ld. CIT(A)/NFAC for the assessment years 2014-15 and 2013-14 respectively. 2. Since the identical facts and common issues are involved in both the above captioned appeals, we proceed to dispose of the same by this common order.
& 2038/PUN/2024 3. First we shall take up the appeal of the assessee in for A.Y. 2014-15 for adjudication. A.Y. 2014-15 : 4. The assessee has raised the following grounds of appeal :- “1) The impugned assessment order u/s 147 rws 144 dated 31/03/2022 is illegal, invalid, bad in law & passed against the principles of natural justice, the same shall be quashed & set aside. 2) The notice u/s 143(2) is not issued in the instant case rendering entire assessment proceedings illegal, invalid, bad in law & without jurisdiction. 3) The valid return of income filed in response to notice u/s 148 is treated as invalid. 4) Show Cause Notice dated 29/03/2022 issued in the instant case is not a valid notice and hence subsequent assessment order u/s 147 rws 144 dated 31/03/2022 is invalid and bad in law. 5) Show cause notice u/s 144 dated 29/03/2022 digitally signed at 23:00:38 was issued with instructions to file response till 30/03/2022 which is in complete violation of principles of natural justice. 6) Appellant made complete submissions in the instant case on three occasions i.e. 10/12/2021, 24/03/2022 & 24/03/2022 and SCN u/s 144 was issued on 29/03/2022 proposing to pass order u/s 144 as best judgment order which is invalid & illegal. 7) The impugned order u/s 147 rws 144 passed as best judgment order was required to passes u/s 147 rws 143(3) of the Act. 8) The total sale consideration was fixed at Rs. 2,37,00,000/- out of which 72,38,000/- which is major amount is unpaid till today towards sale of land attracting capital gains. In the circumstances entire sale deed in invalid & void and cannot be termed as valid transfer u/s 2(47) of the Act. 9) The Net Consideration of Rs. 1,64,62,000/- received towards sale of land shall be considered for the purpose of calculation of Capital Gains. 10) Exemption u/s 54F shall be allowed on Rs. 93,00,000/- being appropriated as per provisions of law against Rs. 1,00,00,000/- received partly on 20/09/2016 towards sale of land.
& 2038/PUN/2024 11) The appellant had to pay compensation of Rs. 38,00,000/- on late payment to other parties as per court order due to delayed receipt of funds from sale of land shall be allowed as expenses against sale of land taxed u/s 45. 12) The findings of CIT(A) on important submission raised above at ground number 8 to 11 are missing in the order. Therefore the CIT(A) order u/s 250 suffers from non-application of mind, is invalid and bad in law. 13) The Ld. CIT(A) erred in law and on facts of the case while dismissing the case of the appellant on the aforesaid ground number 1 to 12. 14) The appellant prays to be allowed to raise, add, amend, delete, modify, and rectify any grounds of appeal at the time of hearing.”
5. Facts of the case, in brief, are that the assessee is an individual and has not furnished its original return of income u/s 139 of the Act. As per the information available NMS/AIMS Cycle, the assessee has received payment of Rs.2,37,00,000/- against sale of immovable property and also received rent of Rs.2,18,500/- on which TDS was deducted, however no return was furnished by the assessee. Accordingly, the Jurisdictional Assessing Officer initiated reassessment proceedings u/s 147 of the Act and notice u/s 148 of the Act was issued on 31.03.2021. However, due to technical glitches, the assessee could not furnish return in response to notice u/s 148 of the Act. Another notice u/s 142(1) was issued to the assessee on 08.07.2021. Subsequently, the proceedings were transferred to Faceless Assessment Unit and another notice u/s & 2038/PUN/2024 142(1) was issued to the assessee on 29.11.2021. The assessee comply to the above notice and submitted that due to technical glitches on the portal the return of income could not be furnished, however manual income tax return computation of income and tax paid challan for assessment year 2014-15 was furnished before the Assessing Officer. On 07.03.2022 another notice u/s 142(1) was issued to the assessee by the Faceless Assessment Unit and the assessee in compliance to the same furnished on 24.03.2022 relevant details such as sale deed, purchase dates, rental agreements etc. After considering the submissions of the assessee, a show cause notice dated 29.03.2022 was sent to the assessee asking as to why the proposed variation should not be made and the reply was required to be submitted on or before 30.03.2022. On 30.03.2022 the assessee could furnish online income tax return in compliance to the notice issued u/s 148 of the Act. Since the return of income was furnished beyond the time prescribed in the notice, the Assessing Officer treated the same as invalid return. The Assessing Officer vide order dated 31.03.2022 completed the assessment u/s 147 r.w.s. 144 r.w.s. 144B of the Act by determining the income at Rs.2,03,87,948/-.
& 2038/PUN/2024 6. Being aggrieved with the above assessment order, the assessee preferred an appeal before Ld. CIT(A)/NFAC. After considering the reply furnished by the assessee, Ld. CIT(A)/NFAC dismissed the appeal filed by the assessee and confirmed the order passed by the Assessing Officer.
It is the above order against which the assessee is in appeal before this Tribunal.
Ld. AR appearing from the side of the assessee submitted before us that the order passed by Ld. CIT(A)/NFAC is unjustified. Ld. AR submitted before the bench that Ld. CIT(A)/NFAC has not considered all the grounds raised before him and has also not considered the submissions made by the assessee in this regard. For instance the issue of technical glitch was not considered as reasonable cause for not furnishing the return in response to notice u/s 148 of the Act. Ld. AR also pointed out that the assessee furnished last reply on 24.03.2022 and the Assessing Officer could have issued show-cause notice on 25th or 26th of March 2022, however the Assessing Officer choose to issue show cause notice at the fag end of the year i.e. on 29.03.2022 and provided only 24- hour’s time to respond to the same which is clear cut violation of & 2038/PUN/2024 principles of natural justice. Ld. AR further submitted that Ld. CIT(A)/NFAC has not considered the contentions with regard to net consideration of Rs.1,64,62,000/- and also not considered submission with regard to exemption u/s 54 of the Act of Rs.93 lakh and has also not considered the payment of compensation of Rs.38 lakh as per court order. Ld. AR also submitted that Ld. CIT(A)/NFAC has not given his finding regarding the illegality of the assessment order passed u/s 147 r.w.s. 144 of the Act. Accordingly, Ld. AR requested before the bench to set-aside the order passed by Ld. CIT(A)/NFAC and further requested to pass appropriate order.
Ld. DR appearing from the side of the Revenue relied o the orders passed by the subordinate authorities and requested to confirm the same.
We have heard Ld. Counsels from both the sides and perused the material available on record including the paper book, additional contentions and copy of case laws furnished by the assessee. In this regard, we find that Ld. CIT(A)/NFAC has not adjudicated each and every ground separately and has not passed a speaking order. Considering the totality of the facts of the case, we find some force & 2038/PUN/2024 in the arguments of Ld. Counsel of the assessee and therefore, we deem it appropriate to set-aside the order passed by Ld. CIT(A)/NFAC and without going into merits of the case remand the matter back to his file with a direction to decide the issues raised in this appeal as well as additional ground legal or factual, if any, raised by the assessee before him afresh as per fact and law after providing reasonable opportunity of hearing to the assessee. The assessee is also hereby directed to respond to the notices issued by Ld. CIT(A)/NFAC in this regard and to produce relevant documents/evidences/explanations in support of grounds of appeal
without taking any adjournment under any pretext, otherwise Ld. CIT(A)/NFAC shall be at liberty to pass appropriate order as per law. Thus, the grounds of appeal raised by the assessee are allowed for statistical purposes.
11. In the result, the appeal filed by the assessee in for A.Y. 2014-15 is allowed for statistical purposes. A.Y. 2013-14 :
12. Since the facts and issues involved in the appeal of the assessee for the assessment year 2013-14 are identical to the facts of