MUKESH BATUBHAI DESAI,AHMEDABAD vs. THE ITO, WARD-3(3)(1), AHMEDABAD

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 the us. The following grounds have been taken in this appeal: -

On the facts and in the circumstances of the case as well as the law on the subject that as per the amended law by Finance Act 2021 and with Mukesh Batubhai Desai vs. ITO Page 3 of 6

On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in making addition of Rs.50,56,000/- on account of alleged long term capital gain. The Ld. AO has not calculated index cost of acquisition of property and sale consideration treated as long term capital gain; hence it is unwarranted.

On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in making addition of Rs.1,00,00,000/- on account of time deposit with Standard Chartered Bank treated as alleged unexplained investment u/s.69 rws.115BBE of the Act.

On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has not offered adequate opportunities to hear the case and passed ex-parte order and hence the case may please be set aside and restored back to the CIT(A) or AO.

On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in initiating penalty proceedings u/s.271(1)(c) of the Income Tax Act, 1961. 8. It is therefore prayed that the above addition may please be deleted as learned members of the tribunal may deem it proper.”

Shri P. M. Jagatsheth, the Ld. AR of the assessee explained that the Ld. CIT(A) had dismissed the appeal of the assessee on technical ground that the appeal was not maintainable. He explained that there was delay of 442 days in filing the appeal which was not condoned by the Ld. CIT(A). The Ld. AR explained that the assessee had duly filed a condonation application and reasons for the delay was explained before the Ld. CIT(A). According to the Ld. AR, the assessee was a non-resident and residing in USA since last many years. He had sold a plot of land at Surat on 15.09.2014 and the transaction was done through his father-in- law. Further that the assessee was divorced in the year 2014 itself and, thereafter, there was no communication or any personal relation of the assessee with his ex-wife and her family. As a result, no compliance could be made before the Assessing Officer and there was also a delay in filing the appeal before the Ld. CIT(A). The Ld. AR submitted that considering the facts of the case, the matter may be set aside to the file of Ld. CIT(A) with a direction to condone the delay in filing the appeal and to decide the appeal of the assessee on merits.

Per contra, Shri B.P. Srivastava, the Ld. Sr. DR supported the orders of the lower authorities. However, he had no serious objection if the matter was set aside to the Ld. CIT(A) for deciding the matter on merits of the case.

We have considered the submissions of the assessee. It is found that the assessee had duly explained the reason for delay in filing the appeal before the Ld. CIT(A); who had rejected the contention of the assessee for the reason that no material evidence was brought on record which prevented the assessee from filing the appeal in time. Considering the fact that the assessee was a non-resident, the delay in filing the appeal should have been sympathetically considered. It is found that the entire sale consideration of land Rs.50,56,000/- was considered as income of the assessee without allowing any set-off for the cost the acquisition of property, which was not correct. Further, the sale consideration of the land being utilised for making the investment in FDR, for which separate addition was made by the AO, was also required to be examined. Considering the nature of additions made by the Assessing Officer, it is found that there are merits in the grounds as taken by the assessee. It has been held by the Hon’ble Gujarat High Court in the case of Vareli Textile Industries vs. CIT, 284 ITR 238 (Guj) that a meritorious case should not be thrown out on the ground of limitation. We are, therefore, of the considered opinion that the Ld. CIT(A) should have examined the appeal filed by the assessee on merits rather than dismissing the appeal on technical grounds of limitation. Accordingly, the matter is set aside to the file of the Ld. CIT(A) with direction to condone the delay in filing the appeal by the assessee and thereafter adjudicate the grounds taken by the assessee on merits. The assessee is also directed to make compliance before the Ld. CIT(A) and produce the documents and clarifications as required by him. In case the assessee doesn’t make any compliance in the course of set aside appeal proceeding, the Ld. CIT(A) will be free to decide the matter on merits on the basis of the facts and material as available on record.

In the result, appeal of the assessee is allowed for statistical purpose.