SRI SUKUMAR DAS,KOLKATA vs. CIT, KOLKATA -V, KOLKATA, KOLKATA

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ITA 522/KOL/2015Status: DisposedITAT Kolkata31 October 2022AY 2007-200815 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal decided the issues as follows: 1. The delay of 14 days in filing the appeal was condoned, accepting the assessee's plea of ill health and delayed communication of the order. The Tribunal found plausible reasons for the delay. 2. The order passed by the learned CIT under Section 263 was not sustainable. The Tribunal held that for action under Section 263, twin conditions must be fulfilled: the order must be erroneous and prejudicial to the revenue. The CIT failed to demonstrate how the assessment order was erroneous. The Tribunal relied on the Delhi High Court's decision in DG Housing Projects Ltd. [2012] 343 ITR 329 (Delhi), stating that the CIT should not merely relegate the point of error to the AO but must record a categorical finding with valid reasons. The CIT did not conduct an independent inquiry to question the valuer's report used by the AO for the cost of acquisition. Therefore, the impugned order of the CIT was quashed.

What were the facts?

The assessee, Sri Sumitro Das (legal heir of late Sri Sukumar Das), filed an appeal against the order of the Commissioner of Income Tax (CIT), Kolkata-V, passed under Section 263 of the Income Tax Act, 1961, for Assessment Year 2007-08. The appeal was filed 14 days late. The original assessment order was passed on 22/12/2011, reopening the assessment under Section 147 based on the belief that income chargeable to tax had escaped assessment due to the sale of two flats for Rs. 24,50,000/-, while the market value determined by the Registrar of Assurance was Rs. 48,02,500/-. The Assessing Officer applied Section 50C of the Act and calculated Short Term Capital Gain (STCG) of Rs. 25,68,125/-. The CIT initiated proceedings under Section 263, considering the assessment order erroneous and prejudicial to the revenue.

What were the issues?

1. Whether the delay of 14 days in filing the appeal can be condoned for Assessment Year 2007-08? 2. Whether the order passed by the learned CIT under Section 263 of the Income Tax Act, 1961, is sustainable? Assessee's contentions: - The delay in filing the appeal was due to the assessee's ill health and the delayed communication of the impugned order by the CIT. - The Assessing Officer had considered all relevant aspects, including the cost of acquisition based on a valuer's report, and the CIT failed to conduct an independent inquiry to demonstrate why the AO's findings were erroneous. - The CIT erred in his understanding of the law and failed to provide valid reasons for deeming the assessment order erroneous. Revenue's contentions: - The judgment does not record specific contentions from the revenue regarding the issues.

Which sections of the Income-tax Act were involved?

Section 263,Section 143(1),Section 154,Section 148,Section 147,Section 50C,Section 48,Section 45

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH, KOLKATA

Before: SHRI RAJPAL YADAV, HON’BLE & SHRI RAJESH KUMAR, HON’BLE

For Appellant: Shri A.K. Ghosh, Advocate
Hearing: 06/09/2022Pronounced: 31/10/2022

O R D E R

PER SHRI RAJPAL YADAV, VICE PRESIDENT:

1.

The present appeal is directed at the instance of the assessee against the order of the learned Commissioner of Income Tax, Kolkata-V Kolkata (hereinafter the “ld. CIT”) dt. 26/03/2014, passed u/s 263 of the Income Tax Act, 1961 (“the Act’), for Assessment Year 2007-08.

2.

This appeal has a very checkered history, namely, it is time barred by 14 days. It was dismissed ex-parte on merits vide order dt. 22/11/019. It emerges out that Shri Sukumar Das, i.e., the assessee has expired during the pendency of the appeal, and this appeal was disposed off on merits ex-parte. The legal heir of the assessee filed a miscellaneous application bearing M.A. No. 72/Kol/2020, pleading therein that no valid notice was served upon them. The Tribunal allowed this application and recalled its order dt. 22/11/2019, vide order dt. 10/02/2021. The Tribunal has restored the appeal to its original number.

3.

As far as the condonation of delay part is concerned, it is pertinent to note that the impugned order of the ld. CIT dt. 26/03/0214 was not communicated to the assessee for almost 11 months. It was served upon the assessee on 20/02/2015. Assessment Year: 2007-08 Sri Sumitro Das {legal heir of late Sri Sukumar Das} 2 Thereafter, the assessee was not keeping good health. Medical record has been placed on record along with his affidavit for explaining the delay of 14 days in filing of the appeal.

4.

With the assistance of the ld. Representatives, we have gone through all the details and are satisfied that the assessee was prohibited by plausible reason for not filing the appeal before the Tribunal within the period of limitation and, therefore, we condone the delay of 14 days and proceed to decide this appeal on merits.

5.

The brief facts of the case are that the assessee has filed his return of income on 11/03/2008 declaring total income of Rs.4,50,760/-. This return was processed u/s 143(1) of the Act on 23/02/2009. The Assessing Officer thereafter issued a notice u/s 154 of the Act on 17/11/2009 intimating that certain rectification is required to be undertaken. However, this proceeding was dropped vide order dt. 28/04/2010.

6.

The assessment was reopened by issuance of notice u/s 148 of the Act on 28/04/2010. The reasons for reopening are placed on page no. 19 of the paper book and they read as under:- “OFFICE OF THE INCOME TAX OFFICER: WARD-14(1) 169,AJ.C. BOSE ROAD, 2 FLOOR,BAMBOO VILLA,KOLKTA-700014. NO. I.TO.,Wd-14(1)/Scrut./11-12/Kol/ 393 Dated: 15.12.2011 To Shi Sukumar Das, 65B, Linton Street, Kolkata-700014. Sir, Sub: Supply of reasons for reopening of assessment u/s.147 of the I.T.Act, 1961 in the case of Shri Sukumar Das, PAN:AGGPD1946A for the A.Y. 2007-08. Ref: Your letter dt.1S.12.2011. Assessment Year: 2007-08 Sri Sumitro Das {legal heir of late Sri Sukumar Das} 3 Please refer to the above. You are requiring the reasons for reopening the assessment ws.147 of the I.T.Act.1961 for the A.Y. 2007-08 vide letter dt. 15.12.2011, though the same has already been discussed with you/your representative several times as because without knowing reasons it is not possible to continue the above assessment proceedings. It is noted that you have not applied before the said reasons recorded for reopening ws.147 of the I.T. Act, 1961 for the A.Y. 2007-08 officially. However, as required by you the reasons recorded for reopening u/s.147 of the I. T. Act, 1961 for the A.Y. 2007-08 are given as below:- Reasons for reopening the assessment. It appears that assessce has sold two flats during the A.Y. 2007-08 to 1. Smt. Kusum Devi Baid and Sri Ravi Baid and 2. Sri Ram Narayan Verma of Rs.24,50,000/- ( Rs.12,00,000/- + Rs. 12,50,000/-) whercas the market value is determined of two flats as per

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