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Facts
The assessee filed a return declaring income including Long Term Capital Gain (LTCG). The Assessing Officer treated the sale consideration as business income and denied exemption u/s 54F and indexed cost. The assessee's appeal was dismissed by the CIT(A). The assessee is in appeal before the tribunal.
Held
The Tribunal set aside the order of the CIT(A) to the file of the CIT(A) with a direction to allow another opportunity to the Legal Heirs of the deceased assessee, who had expired during the proceedings.
Key Issues
Whether the CIT(A) erred in dismissing the appeal without proper opportunity to the legal heirs of the deceased assessee, and if the grounds regarding issuing notice to a deceased person and not considering submissions are valid.
Sections Cited
143(3), 54F, 250
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Income Tax Appellate Tribunal, AHMEDABAD “D” BENCH, AHMEDABAD
Before: MS. SUCHITRA KAMBLE & SHRI NARENDRA PRASAD SINHA
O R D E R
PER SHRI NARENDRA PRASAD SINHA, AM:
This appeal is filed by the assessee against the order of the National Faceless Appeal Centre (NFAC), Delhi (in short “the CIT(A)”) dated 18.12.2024 for the Assessment Year (A.Y.) 2013-14 in the proceeding under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).
The brief facts of the case are that the assessee had filed his return of income for the A.Y. 2013-14 on 07.08.2013 declaring total income of Rs.89,32,010/- which was subsequently revised to income of Rs.89,84,450/-. The case was selected for complete scrutiny under (Assessment Year: 2013-14) Heta Rawal LH of Lt. Shri Shailesh Induprasad Rawal vs DCIT Page 2 of 5 CASS. In the return, the assessee had disclosed Long Term Capital Gain (LTCG) of Rs.75,83,600/- after claiming indexed cost of acquisition and exemption under Section 54F of the Act. In the course of assessment, the Assessing Officer had treated the sale consideration of the asset as income from business and accordingly deduction claimed under Section 54F of the Act as well as deduction for indexed cost of acquisition was denied. The assessment was completed under Section 143(3) of the Act on 29.01.2016 at a total income of Rs.1,67,53,350/-.
Aggrieved with the order of the Assessing Officer, the assessee had filed an appeal before the first appellate authority which was decided by the Ld. CIT(A) vide the impugned order and the appeal of the assessee was dismissed.
Now the assessee is in second appeal before us. The following grounds have been taken in this appeal: -
“1. The Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi has erred in law and in facts in issuing notice u/s.250 in the name of dead person as the assessee was demised on 13.08.2017, which was intimated to the Id. CIT (A)-5, Vadodara on 24.02.2020 during the appellate proceedings. The notice so issued is illegal and invalid in law. The order passed consequent to such illegal/invalid notice is prayed to be quashed.
2. The Ld. CIT (Appeals), NFAC, Delhi has erred in law and in facts in passing the order without giving proper opportunity of being heard and thus, the order so passed is prayed to be set aside.
3. The Ld. CIT (Appeals), NFAC, Delhi has further erred in law and in facts in not considering the detailed submissions made by the appellant physically before the Ld. CIT(A)-5, Vadodara along with necessary documents/ evidences and paper book on different dates i.e.
(Assessment Year: 2013-14) Heta Rawal LH of Lt. Shri Shailesh Induprasad Rawal vs DCIT Page 3 of 5 14.09.2018, 06.11.2018, 19.09.2018, 20.02.2020, 24.02.2020 and 18.03.2020 during the course of appeal proceedings before him.
4. Without prejudice to the above, the Ld. CIT (Appeals), NFAC, Delhi has erred in law and in facts in confirming the action of the Ld. A.O. in (a) not granting the exemption u/s. 54F amounting to Rs.62,55,086/- claimed by the appellant,
(b) not allowing the Indexed Cost of Acquisition of Rs.47,13,814/- as claimed by the appellant,
(c) taxing the profit of Rs.1,53,52,500/- as business income.
(d) treating the income of Rs.77,68,900/- offered under the head 'Capital Gains' by the appellant in the return of income filed as profit/gains earned under the head "Business or Profession', and accordingly making an addition of an amount of Rs.77,68,900/- treating the same as unexplained profit/gains earned under the head ‘Business or Profession’. The addition of Rs.77,68,900/- being bad in law and in facts is prayed to be deleted.
Your appellant craves liberty to add, alter. amend, substitute or withdraw any of the ground(s) of appeal hereinabove contained.”
5. Shri Manish J. Shah, Ld. AR of the assessee, submitted that no compliance could be made before the Ld. CIT(A), who had dismissed the appeal of the assessee without examining the merits of the grounds taken before him. The Ld. AR explained that the assessee had expired on 13.08.2017 and for that reason no compliance could be made before the Ld. CIT(A). He, therefore, requested that another opportunity may be allowed to the Legal Heir of the assessee by setting aside the matter to the file of the Ld. CIT(A).
(Assessment Year: 2013-14) Heta Rawal LH of Lt. Shri Shailesh Induprasad Rawal vs DCIT Page 4 of 5 6. Per contra, Shri Rameshwar P. Meena, Ld. DR, had no objection, if the matter was set aside to the file of the Ld. CIT(A) for allowing another opportunity to the assessee.
We have considered the request of the assessee. It is found that the Ld. CIT(A) has allowed as many as 14 opportunities but no compliance was made on any of the occasion. Even the Form No.35 was filed in the name of the deceased assessee and the legal heirs were not brought on record before the ld. CIT(A). Since the assessee has expired, in the interest of justice, we deem it proper to set aside the matter to the file of the Ld. CIT(A) with a direction to allow another opportunity to the Legal Heirs of the deceased assessee. The assessee is also directed to make compliance before the Ld. CIT(A) in the course of set aside proceeding. In case the assessee does not make compliance, the Ld. CIT(A) will take at liberty to pass the order on merits, on the basis of the materials available on record.
In the result, the appeal of the assessee is allowed for statistical purpose.
Order pronounced in the open Court on this 11th December, 2025.