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Facts
The assessee filed an appeal with a delay of 149 days, explaining it was due to a professional's inaction. The assessee had also not complied with notices from the AO and CIT(A). The AO made ex-parte additions for unsecured loans and LTCG from property sales, re-opening the case under Section 147.
Held
The Tribunal condoned the delay, acknowledging the assessee's reliance on a professional and the fact that the merits of the additions were not examined by the CIT(A). The Tribunal set aside the matter to the CIT(A) for fresh examination.
Key Issues
Whether the delay in filing the appeal should be condoned and whether the ex-parte additions made by the AO, which were not examined on merits by the CIT(A), should be reconsidered.
Sections Cited
147, 143(1), 144, 50C, 148
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” BENCH, AHMEDABAD
Before: SHRI SANJAY GARG & SHRI NARENDRA PRASAD SINHA
This appeal is filed by the assessee against the order of National Faceless Appeal Centre, Delhi, (in short ‘the CIT(A)’), dated 10.02.2024 for the Assessment Year (A.Y.) 2012-13.
There was a delay of 149 days in filing of this appeal. The assessee has filed an affidavit explaining the reason of delay. It has been submitted that the assessee had engaged a professional to represent his case before the AO and the CIT(A) who did not attend the matter properly and therefore all the orders were passed ex-parte. The notices of CIT(A) were received on his email id plpatel.sivam@gmail.com which was not accessed on regular basis, as the same was not used for general business purpose. Further, the assessee was also not regular in accessing the Income Tax portal. Only when the new Chartered Accountant brought to his notice the order of CIT(A), the present appeal was filed. For this reason, there was delay in filing the present appeal. The assessee has submitted that the delay in the filing of the present appeal was not intentional and that there was no mala- fide intention on the part of the assessee. The ld. SR-DR, on the other hand, objected to the condonation of delay on the ground that the assessee had not complied before the lower authorities.
2.1 We have considered the explanation of the assessee. It is found that the assessee was dependent on the professional person for timely action in the matter of Income Tax proceedings. As explained, the delay was due to fault of the professional who didn’t take timely action in the matter. Though the assessee should have remained vigilant for the timely action on his part, the fact remains that the merit of the additions made by the AO was not examined by the CIT(A). If the delay is not condoned and the matter is not examined on merits, it will cause injustice to the assessee. The AO had considered the entire sale consideration of the properties as LTCG without allowing deduction for cost of acquisition of the properties. It has been held by Hon’ble Gujarat High Court in the case of Vareli Textile Industries (154 Taxman 33) (Gujarat) that while rejecting application for condonation of delay in filing appeal/cross-objections, meritorious case should not be thrown out on ground of limitation. Considering the fact that the additions as made by the AO was not examined on merits, the delay in filing the present appeal is condoned.
The brief facts of the case are that the assessee had filed his return of income for A.Y. 2012-13 on 29.03.2013 declaring income of Rs.10,34,390/- , which was processed u/s 143(1) of the Act. Thereafter, the AO had received an information that the assessee hat advanced unsecured loan of Rs.15,00,000/- to M/s Shrushti Developer and received interest thereon. However, loan and advance of Rs.5,60,146/- only was disclosed in the return of income. Therefore, the case was reopened u/s 147 of the act after recording proper reason. In the course of assessment, no compliance was made by the assessee. On verification of AIR information, the AO had found that the assessee had sold two immovable properties during the year but no LTCG was disclosed in the return. Further, the assessee had also purchased certain immovable properties during the year and the source of investment therein was also not explained. Therefore, the AO had completed the assessment ex- parte u/s 144 rws 147 of the Act on 06.12.2019 at total income of Rs.2,23,75,120/-.
Aggrieved with the order of the Assessing Officer, the assessee had filed an appeal before the First Appellate Authority which was decided vide the impugned order and appeal of the assessee was partly allowed by remanding the matter to the AO for verification of loan of Rs.15,00,000/- and by confirming all other additions.
The assessee is now in second appeal before us. The following grounds have been taken in this appeal: - “01 The learned CITA) has erred in confirming the reassessment notice under Section 147 in as much as there was no tangible material or any other evidences for the purpose of Assessing Officer to form a view about reason to believe and that there is no escapement of income and therefore the notice issued is bad in law.
1.1 The appellant says and submits that the reasons given in the Assessment Order does not result into escapement of income about giving of unsecured loan and therefore the question of issue notice under Section 148 does not arise.
02 The learned CIT(A) has erred in setting aside for verification of loan given to M/s. Shrushti Developers of Rs.15.00,000/- in as much as the loan was given by account payee cheque from bank statement and interest income has already been offered [the reasons itself confirm this] and therefore there was no question of setting aside to Assessing Officer for verification.
03 The learned CIT(A) has erred in confirming the addition of Rs.74,86.500/- under Section 50C in as much as the agreement to sale was entered into and the consideration thereof was received prior to the change in juntry rate from 19.04.2011 and therefore the stamp value as per Section 50C would be applicable as on the date on which agreement to sale was entered into and therefore the proviso to Section 50C would be applicable.
04 The learned CIT(A) has erred in confirming the addition of Rs.86,04,225/- under Section 50C in as much as the agreement to sale was entered into and the consideration thereof was received prior to the change in juntry rate from 18.04.2011 and therefore the stamp value as per Section 50C would be applicable as on the date on which agreement to sale was entered into and therefore the proviso to Section 50C would be applicable.
05 The learned CIT(A) has erred in confirming and addition of Rs.37,50,000/- being unaccounted investment in purchase of property in as much as the entire consideration is paid from a bank account and from disclosed sources of income.”
Shri Dhinal Shah, Ld. AR of the assessee submitted that the Ld. CIT(A) has dismissed the appeal of the assessee without examining the merits of the addition. He explained that no compliance could be made by the assessee before the Ld. CIT(A) and for this reason the appeal was virtually dismissed as only one ground was remitted back of AO and all other additions were confirmed. He, therefore, requested that the assessee may be allowed another opportunity to explain the capital gain arising on sale of properties as well as the source of investment in the new properties and the matter may be set aside to the file of the Assessing Officer.
Per contra, Shri Rohit Asudani, Ld. SR-DR submitted that the assessee neither made compliance before the Assessing Officer nor before the ld. CIT(A). He further submitted that the ld. CIT(A) had allowed two opportunities to the assesses but no compliance was made by the assessee on any of these occasions. The ld. SR-DR, however, had no objection if the matter was set aside to the ld. CIT(A) for allowing another opportunity to the assessee.
We have considered the rival submissions. The undisputed fact is that the assessee neither complied before the Assessing Officer nor before the Ld. CIT(A). We, therefore, deem it proper to impose a cost of Rs.10,000/- on the assessee which should be paid to the Prime Minister National Relief Fund within 15 days of the receipt of this order. We are also of the opinion that the Assessing Officer was not correct in treating the entire proportionate sale consideration of the two properties as LTCG without allowing any deduction in respect of cost of acquisition of the properties. The ld. AR of the assessee has filed a paper book with details of ledger account of loan, bank statements, copy of sale deeds, copy of purchase deed etc. which are in the nature of fresh evidences and were not considered by the lower authorities. We, therefore, 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 assessee to explain the additions as made by the AO and thereafter decide the matter on merits. The assessee will be free to bring on record the evidences as filed before us or any other evidence and the ld. CIT(A) will be free to call for the remand report of the AO thereon, if so required. Since the matter in this case is quite old and pertains to AY 2012-13, the ld. CIT(A) is advised to dispose this matter expeditiously, preferably within six months. The assessee is also directed to promptly comply before the ld. CIT(A) and not to seek any adjournment.
In the result, the appeal of the assessee is allowed for statistical purpose.
This Order pronounced on 13/05/2025