Loading judgment…
Facts
The assessee filed a defective return of income, failing to offer for taxation the full consideration of agricultural land sold. The Assessing Officer reopened the assessment and added the market value of the land as Long Term Capital Gains. The CIT(A) partly allowed the appeal.
Held
The Tribunal found that the CIT(A) order was passed on a dead assessee, rendering it non-est. The order was set aside with a direction to decide the appeal after bringing on record the legal heirs.
Key Issues
Whether the CIT(A) order passed on a dead assessee is valid, and the consequent directions for re-adjudication.
Sections Cited
147, 148, 142(1), 144, 54F
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE
Before: SHRI R. K. PANDA & MS. ASTHA CHANDRA
Sharad Ramgonda Patil ITO, Ward-1, Sangli Represented by the Legal heris Smt. Saroj Jiten Raynade & Ors. Vs. Gajanan Co-operative Housing Society, Kupwad Road, Vishrambhag, Tal. Miraj, Dist. Sangli – 416436 PAN: AVGPP8941G (Appellant) (Respondent) Assessee by : Shri B.C. Malakar Department by : Shri Arvind Desai, Addl CIT-DR Date of hearing : 20-02-2025 Date of pronouncement : 21-02-2025 O R D E R PER R. K. PANDA, VP :
This appeal filed by the assessee is directed against the order dated 15.02.2024 of the Ld. CIT(A) / NFAC, Delhi relating to assessment year 2017-18.
Facts of the case, in brief, are that the assessee is an individual who filed defective return of income on 04.08.2017 declaring total income of Rs.11,11,500/-. As per the information received from ACIT Circle 1 & 2, Sangli, the Assessing Officer noted that the assessee has sold agricultural land situated at S.No.336/1-B, Kupwad, Sangli for a consideration of Rs.51,00,000/- whereas the market value is of Rs.1,13,93,000/-. However, from the defective return of income so filed, he noted that the sale of land amount was not disclosed and not offered for taxation in the return of income. Since this amount has escaped assessment within the meaning of the provisions of section 147 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’), the Assessing Officer, after recording reasons, reopened the assessment u/s 147 of the Act after obtaining the approval of the competent authority. The Assessing Officer thereafter issued a notice u/s 148 of the Act on 31.03.2021. However, there was no response from the side of the assessee to this notice. Subsequently, the Assessing Officer issued a notice u/s 142(1) of the Act which also remained un-complied with. The Assessing Officer thereafter proceeded to complete the assessment u/s 144 of the Act and determined the total income of the assessee at Rs.1,25,04,500/- by making the addition of Rs.1,13,93,000/- being the market value of the agricultural land sold.
In appeal the Ld. CIT(A) / NFAC partly allowed the appeal of the assessee with certain directions by observing as under: “5. CIT(A)'s Decision: It was observed by the AO that the appellant had sold agricultural land situated at S.No.336/1-B, Kupwad, Sangli for a consideration of Rs.51,00,000/- wherein the market value was Rs.1,13,93,000/-. The AO in his order mentions that the appellant has not furnished the cost of acquisition, or the cost of improvement involved, and hence these values were taken as "Nil", and the entire consideration received, of Rs.1,13,93,000/- was brought to tax as Long-Term Capital Gains. Before me, the appellant submits as: The Learned Assessing Officer has mentioned on page no. 3 of the assessment order at point no 5 for arriving at basis of forming reason to believe that, the appellant has not offered the capital gain income in ITR.
However, it is quite pertinent to note that, at the time of filing return of income for the year under consideration, the appellant had claimed indexed cost of acquisition to the tune of Rs.15,89,681/- against the sale consideration and disclosed the long-term capital gain in Sr no. 8 (1) of Schedule CG: Capital Gain of ITR form. While concluding the assessment proceedings, the Learned Assessing Officer, considered the value adopted for the purpose of stamp duty as full value of consideration, however, the Learned Assessing Officer has not considered the indexed cost of acquisition, even after it was readily available in the return of income filed by the appellant and made impugned addition of Rs.1,13,93,000/-. I have gone through the facts of the case. Considering the submissions filed before me, the AO is directed to verify the return of income, and re-work the Capital Gains figure. APPEAL IS PARTLY ALLOWED.”
Aggrieved with such order of the Ld. CIT(A) / NFAC, the assessee is in appeal before the Tribunal by raising the following grounds:
1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A), National Faceless Appeal Centre (NFAC) erred in confirming the addition made by the Ld. Assessing Officer, National Faceless Assessment Centre, Delhi in the assessment order of Rs.1,13,93,000/- on account of Long Term Capital Gains thereby allowing Indexed Cost of Acquisition of Rs.15,89,681/- against the sale consideration of the property given on estimate in the return filed and passing the appellate order without allowing due and adequate opportunity of being heard to the appellant. The appellate order therefore so passed without giving due opportunity of hearing against the principles of natural justice being arbitrary, illegal and bad-in-law be deleted.
2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A), National Faceless Appeal Centre (NFAC) erred in confirming the addition made by the Ld. Assessing Officer, National Faceless Assessment Centre, Delhi in the assessment order of Rs.1,13,93,000/- on account of Long Term Capital Gains thereby allowing Indexed Cost of Acquisition of Rs.15,89,681/-against the sale consideration of the property given on estimate in the return filed by the appellant ignoring and without appreciating the facts that as per the Valuation Report of the Registered Valuer obtained by the appellant the same was more entitled to the appellant. The lower authorities be directed to allow due Indexed Cost of Acquisition entitled to the appellant.
3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A), National Faceless Appeal Centre (NFAC) erred in confirming the addition made by the Ld. Assessing Officer, National Faceless Assessment Centre, Delhi in the assessment order of Rs.1,13,93,000/- on account of Long Term Capital Gains without allowing the Indexed Cost of Improvement as eligible to the appellant for computation of correct income from Long Term Capital Gains. The lower authorities be directed to allow due Indexed Cost of Improvement entitled to the appellant.
4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A), National Faceless Appeal Centre (NFAC) erred in confirming the addition made by the Ld. Assessing Officer, National Faceless Assessment Centre, Delhi in the assessment order of Rs.1,13,93,000/- on account of Long Term Capital Gains without allowing the deduction u/s 54F of the IT Act, 1961 on account of acquisition of a new asset out of sale consideration in absence of not producing the documentary evidence in this regard for not providing due and adequate opportunity of being heard to the appellant. The lower authorities be directed to allowing the deduction u/s.54F of the Act as entitled to the appellant.
5. The appellant craves leave to add, alter, amend, withdraw, modify, change or substitute any ground or grounds of appeal or to add any new ground or grounds of appeal during or before the hearing of the appeal.
We have heard the rival arguments made by both the sides and perused the orders of the Assessing Officer and Ld. CIT(A) / NFAC. A perusal of the record shows that there is a delay of 235 days in filing of this appeal before the Tribunal. One of the reasons for such delay as mentioned in the condonation application that due to the death of the assessee on 27.12.2023, an appeal has been filed by the legal heir Smt. Saroj Jiten Raynade, daughter of the deceased assessee. Thus, when the Ld. CIT(A) / NFAC passed the order on 15.02.2024 the assessee was already dead and since the order has been passed on a dead assessee the same is a non est order. We, therefore, set aside the order of the Ld. CIT(A) / NFAC with a direction to decide the same by bringing on record the legal heirs and decide the issue as per fact and law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 21st February, 2025.
Sd/- Sd/- (ASTHA CHANDRA) (R. K. PANDA) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; दिन ांक Dated : 21st February, 2025 GCVSR आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: अपीलार्थी / The Appellant; 1. 2. प्रत्यर्थी / The Respondent 3. The concerned Pr.CIT, Pune 4. DR, ITAT, ‘B’ Bench, Pune 5. गार्ड फाईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अधिकरण ,पुणे / ITAT, Pune
S.No. Details Date Initials Designation 1 Draft dictated on 20.02.2025 Sr. PS/PS 2 Draft placed before author 20.02.2025 Sr. PS/PS Draft proposed & placed before the 3 JM/AM Second Member Draft discussed/approved by Second 4 AM/AM Member 5 Approved Draft comes to the Sr. PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr. PS/PS 7 Date of uploading of Order Sr. PS/PS 8 File sent to Bench Clerk Sr. PS/PS Date on which the file goes to the Head 9 Clerk 10 Date on which file goes to the A.R. 11 Date of Dispatch of order