ANIL JAYWANT BALWADKAR L/R OF LATE JAYWANT KASHIRAM BALWADKAR,PUNE vs. THE ASSESSING OFFICER, WARD 9(1), PUNE, PUNE

Although a number of grounds have been raised by the assessee, however, these all relate to the ex-parte order of the Ld. CIT(A) / NFAC in confirming the addition of Rs.8,05,61,300/- made by the Assessing Officer on account of long term capital gain.

Facts of the case, in brief, are that the assessee is an individual and had not filed his return of income for the impugned assessment year. The Assessing Officer observed from the ITS details that the assessee along with other family members had transferred two pieces of land and the transaction amount of one piece of land was Rs.5,79,61,300/- and the transaction of the other piece of land was Rs.2,26,00,000/-. In order to verify the capital gain liability of assessee on the aforesaid transaction, the Assessing Officer, after obtaining prior permission of the PCIT-5, Pune called for information u/s 133(6) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). However, the assessee did not furnish any information in response to the said notice. The Assessing Officer therefore, was of the opinion that the assessee was liable for capital gain tax which was undisclosed on account of such land transaction. He, therefore, after recording reasons and after obtaining prior approval of the competent authority, reopened the assessment u/s 147 of the Act and a notice u/s 148 of the Act was accordingly issued on 30.03.2019 which was served on the assessee by post on 03.04.2019. However, the assessee did not file any return in response to the notice u/s 148 of the Act. The Assessing Officer, thereafter, issued a notice u/s 142(1) of the Act. Since there was non-compliance from the side of the assessee, the Assessing Officer also initiated penalty proceedings u/s 271(1)(b) of the Act. Finally, the Assessing Officer issued another show cause notice dated 20.09.2019 proposing completion of the assessment u/s 144 of the Act by making the above addition. However, still there was no compliance from the side of the assessee. In view of the above non- compliance from the side of the assessee to such statutory notices, the Assessing Officer proceeded to complete the assessment u/s 144 of the Act. Relying on various decisions, the Assessing Officer determined the long term capital gain at Rs.8,05,61,300/-.

Since there was non-compliance to the various notices issued by the Ld. CIT(A) / NFAC, the Ld. CIT(A) / NFAC relying on the decision of Hon’ble Madhya Pradesh High Court in the case of Estate of Late Tukojirao Holkar vs. CWT 223 ITR 480 (MP) and the decision of the Tribunal in the case of Pradeep Kumar Jhawar vs. DCT vide for assessment year 2006-07 dismissed the appeal for want of prosecution.

Aggrieved with such order of the Ld. CIT(A) / NFAC, the assessee is in appeal before the Tribunal.

The Ld. Counsel for the assessee at the outset submitted that the assessee passed away on 17.04.2021 and thereafter the matter is being looked after by the son of the assessee. He submitted that since the assessee was not keeping well before his death, he could not respond to the statutory notices issued by the Assessing Officer as well as the Ld. CIT(A) / NFAC. He submitted that in the interest of justice the assessee should be given an opportunity to represent his case since the property in question belongs to various family members and does not belong to the assessee alone. Further, the cost of acquisition has also not been deducted from computation of such long term capital gain. He accordingly submitted that the matter may be restored to the file of the Assessing Officer for proper adjudication of the issue.

The Ld. DR on the other hand while supporting the order of the Ld. CIT(A) / NFAC submitted that despite number of opportunities granted by the Assessing Officer as well as the Ld. CIT(A) / NFAC, there was non-compliance from the side of the assessee. Therefore, the addition made by the Assessing Officer and sustained by the Ld. CIT(A) / NFAC should be upheld.

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 assessment order shows that the assessee during the year under consideration along with other family members had transferred two pieces of land both totaling to Rs.8,05,61,300/- and the entire capital gain has been taxed in the hands of the assessee without allocating to the other family members whose names are appearing in the sale deed. We find despite calling for information u/s 133(6) of the Act, issue of notice u/s 148 and issue of notice u/s 142(1) of the Act, there was complete non-compliance from the side of the assessee for which the Assessing Officer was constrained to pass the order u/s 144 of the Act determining the long term capital gain in the hands of the assessee at Rs.8,05,61,300/-. We find due to non-compliance to the notices issued from the office of the Ld. CIT(A) / NFAC thrice, the assessee sought adjournment on one occasion and did not file any submission on the other two occasions for which the Ld. CIT(A) / NFAC was also constrained to pass the ex-parte order dismissing the appeal of the assessee for want of prosecution. It is also an admitted fact that no deduction of cost of acquisition has been allowed by the Assessing Officer. It is the submission of the Ld. Counsel for the assessee that given an opportunity, the assessee is in a position to substantiate his case by filing the requisite details. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Assessing Officer with a direction to grant one final opportunity to the assessee to substantiate his case by filing the requisite details and decide the issue as per fact and law after giving due opportunity of being heard to the assessee. The assessee is also hereby directed to make his submissions, if any, before the Assessing Officer on the appointed date without seeking any adjournment under any pretext, failing which the Assessing Officer is at liberty to pass appropriate order as per law. 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.