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Facts
The assessee, a Non-Resident Indian (NRI), failed to file a return of income for AY 2018-19. The Assessing Officer initiated reassessment proceedings under Section 147 based on information about the sale of an immovable property. The assessee did not comply with notices and the appeal was dismissed by the CIT(A) for non-prosecution.
Held
The Tribunal condoned a delay of 172 days in filing the appeal. It noted that the CIT(A) dismissed the appeal for non-prosecution without adjudicating on merits. The Tribunal set aside the CIT(A)'s order and restored the matter to the Assessing Officer to decide the issues afresh.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal for non-prosecution without considering the merits of the case, and whether the matter should be restored to the Assessing Officer for fresh adjudication.
Sections Cited
147, 144, 144B, 148A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, PUNE
Before: SHRI R.K. PANDA & MS. ASTHA CHANDRA
ORDER
PER ASTHA CHANDRA, JM :
The appeal filed by the assessee is directed against the order dated 26.07.2024 of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [“CIT(A)”] pertaining to Assessment Year (“AY”) 2018-19.
There is delay of 172 days in filing of the present appeal. We are satisfied with the reasons mentioned in the application for condonation that the assessee was prevented by sufficient cause for not filing the appeal within the prescribed time limit. After hearing both the sides, we condone the delay of 172 days and proceed to adjudicate the appeal.
The assessee has raised the following grounds of appeal :-
1. Incorrect Assessment Year: The sale of the property on 12.04.2018 should be taxable in AY 2019-20, but it has been incorrectly assessed in AY 2018- 19 by the Assessing Officer.
2. Proportional Taxation: The assessee's ownership is only 50%, and hence the capital gain should be taxed proportionately. The Assessing Officer has failed to account for this.
AY 2018-19 3. Indexed Costs: The indexed cost of acquisition and improvement should be allowed as deductions. The Assessing Officer has not correctly calculated these indexed costs The purchase price of the property purchased on 10.06.2011 is Rs. 36,05,500/-. The indexed cost of purchase should be allowed as a deduction. The purchase price should include stamp duty & registration paid Rs. 1,94,600/-. The indexed cost of purchase should be allowed as a deduction. The purchase price should include service tax, VAT & other charges paid for purchase deduction. Rs. 1,11,875/-. The indexed cost of purchase should be allowed as a deduction. The cost of improvement of the property in FY 2012-13 is Rs. 10, 06,823/-. The indexed cost of improvement should be allowed as a deduction. Total Deduction Particulars Cost of Year Index Indexed Cost of Acquisition/ Acquisition/Improve Improvement ment F.Y. 2019-20 Cost of Flat 36,05,500/- 2011-12 184 54,86,630/- Stamp Duty 1,94,600/- 2011-12 184 2,96,130/- Registration Service Tax and VAT 1,11,875/- 2011-12 184 1,70,246/- and Other Cost of Improvement 10,06,823/- 2012-13 200 14,09,554/- Total 73,62,560/- 4. Incorrect Tax Calculation: The tax on long-term capital gain should be calculated as capital gain – ((maximum amount not chargeable to tax i.e. 2,50,000 – interest income)) * 20%. The Assessing Officer has used an incorrect formula.
TDS and Advance Tax Credit: TDS on property and interest, as well as advance tax paid, should be given credit in the correct assessment year, i.e. AY 2019-20. TDS on property of rs.74,000/- reported by the buyer in AY 2018-19 should be given credit in the year the properly is taxed, i.e. AY 2019-20.”
Briefly stated the facts as culled put from the statement of facts filed along with Form 36 are that the assessee is a Non-Resident Indian (“NRI”) and presently residing along with his family and parents in Australia. He visits India very rarely and since pandemic he has last visited India in the month of July 2023. For AY 208-19, the assessee did not file his return of income. Based on the information flagged by the Department under the category of NMS regarding the sale of immovable property by the assessee, the Ld. Assessing Officer (“AO") issued a show cause notice u/s 148A(b) on 19/03/2022 seeking clarification as to why Return of Income has not been filed by the assessee, in response to which the assessee had given a submission stating that he resides in Australia and has not filed the return of income as his income from India was below the taxable limit. Also, he had no documentary evidences available with him at that point of time as the same AY 2018-19 were in India and no one had access to these documents except the assessee himself. The assessee had later on communicated the same and had submitted the documents against the notices issued for recovery and penalty as soon as he came to India. As the assessee failed to comply with the statutory notice(s) and show cause notice(s) issued from time to time, the Ld. AO proceeded to complete the assessment u/s 147 r.w.s. 144 r.w.s. 144B of the Income Tax Act, 1961 (the “Act”) vide his order dated 21.03.2023 thereby making an addition of Rs.74,00,000/- on account of sale of immovable property on the basis of the SFT filed by the Sub Registrar, Haveli No.15, Pune who has reported the same in A.Y. 2017-18 as well in A.Y. 2018-19.
5. Aggrieved, the assessee carried the matter before the Ld. CIT(A)/NFAC. The Ld. CIT(A)/NFAC in his appellate order noted that various notices of hearing were issued to the assessee which remained uncomplied with. In the absence of any response to the said notices, applying the decision of the Hon’ble Supreme Court in the case of B.N. Bhattacharjee & other (118 ITR 461 [SC]) the Ld. CIT(A)/ NFAC dismissed the appeal of the assessee for non-prosecution without dwelling into the merits of the cased by observing as under: “4. Findings:- The appellant were issued notices on 11.03.2024, 09.04.2024 and 16.04.2024 to submit its response, only adjournment was requested on 24.04.2024. Further on 08.05.2024 notice was again issued to the appellant (vide ITBA/NFAC/F/APL_1/2024-25/1064712864(1)] to submit its response by 14.05.2024, in which it was specifically mentioned that "Please refer to this office notice dated 11.03.2024, 09.04.2024 and 16.04.2024. It is observed that, compliance was to be made to this office notice by you on 22.04.2024, but however the same was ignored and adjournment has been asked by you. Hence, please consider this as a last opportunity to file your details by or before 14.05.2024 failing which the undersigned shall have little choice than to dismiss the appeal. But the same remains un-complied with till date and rather ignored. The aforesaid mentioned circumstances shows that, either the appellant is not interested in pursuing this appeal or that he does not have reasons / proof enough even to defend it. These un-necessary adjournments from the side of the appellant are only prolonging the appeal pendency with no positive outcome. The maxim 'vigilantibus non-dormientibus jura subvenunt i.e. the law assists those who are vigilant and not those who sleep over their right, is applicable in this case. Hon'ble ITAT in for the AY 2002-03 in the case of M/s Chhabra Land & Housing Ltd. after following the decision of Hon'ble Supreme Court in the case of B.N. Bhattacharjee & other 118 ITR 461 [SC] held that the appeal does not mean merely filing of the appeal but effectively pursuing the same. Considering the above facts and material on record, it is held that the then assessing officer has made the addition on merits considering facts of the case and no infirmity is noticed in the order of the Assessing officer, Hence the appeal of the assessee is dismissed.
AY 2018-19 In the result, appeal of the assessee is dismissed.” 6. Dissatisfied, the assessee is in appeal before the Tribunal and all the grounds of appeal relate thereto.
7. The Ld. AR submitted that the non-appearance/non-compliance before the Ld. AO as well as the Ld. CIT(A)/NFAC was not deliberate as the assessee is a NRI and mostly residing in Australia. His India visits are very rare which can be established by entries made in his passport which is available on record. He submitted that the Ld. AO issued the final show cause notice on 10.03.2023 seeking compliance by 13.03.2023 and hence the assessee was not provided with sufficient time to respond. On merits, he submitted that the impugned transaction of sale of the property took place on 12.04.2018 and should therefore be taxable in AY 2019-20, but it has been incorrectly assessed in AY 2018-19 by the Ld. AO. He submitted that the assessee has a strong case on merits and given an opportunity the assessee is in a position to substantiate his case by filing the requisite details/ documentary evidence before the Ld. CIT(A)/NFAC. He, therefore, prayed that in the interest of justice, the matter may be restored to the file of the Ld. AO or Ld. CIT(A)/NFAC, as may be deemed fit by the Bench, to decide the issues raised by the assessee afresh on merits after affording an opportunity of hearing to the assessee.
8. The Ld. DR, on the other hand, heavily opposed the arguments advanced by the Ld. Counsel for the assessee and submitted that despite number of opportunities granted, the assessee never bothered to make any submission before the Ld. AO as well as the Ld. CIT(A)/NFAC. He, accordingly submitted that the order of the Ld. CIT(A)/NFAC dismissing the appeal filed by the assessee should be upheld and the grounds raised by the assessee should be dismissed.
9. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. CIT(A)/NFAC and the paper book filed by the Ld. AR on behalf of the assessee. It is an admitted fact that despite number of opportunities granted, the assessee did not make any submission before the Ld. AO as well as Ld. CIT(A)/NFAC which constrained them to pass an ex-parte order qua the assessee. The Ld. AR has submitted that there was no deliberate non-compliance but it resulted on account of reasons already mentioned in preceding paragraph. Perusal of the appellate order reveals that