Loading judgment…
Facts
The assessee sold an immovable property for Rs. 3,00,000, but the Stamp Valuation Authority valued it at Rs. 45,98,550. The AO initiated reassessment under Section 147/148, applying Section 50C, and completed the assessment ex-parte, assessing the total income at the higher stamp duty value. The original assessee had died before the reassessment notice, and the legal heir contended that notices were not properly served and principles of natural justice were violated, leading to the NFAC dismissing the appeal ex-parte.
Held
The Tribunal acknowledged the assessee's demise and the allegations of non-service of notice and violation of natural justice. In the interest of substantial justice, the Tribunal restored the case to the Assessing Officer, directing that the assessee/legal heir be given another opportunity to present their case and evidence.
Key Issues
Whether assessment proceedings initiated against a deceased person without proper notice to legal heirs are valid, and if ex-parte orders passed by NFAC violate principles of natural justice, warranting a fresh opportunity to the assessee/legal heir for correct application of Section 50C.
Sections Cited
50C, 147, 148, 142(1), 144, 271(1)(c), 250, 159
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, SMC BENCH, LUCKNOW
Before: SHRI. SUDHANSHU SRIVASTAVA
Assessment Year: 2012-13 Rajeev Gupta v. The Income Tax Officer 3(3) Legal Heir of Late Ramesh Kanpur Chandra Gupta 133/118, Transport Nagar Kanpur Nagar TAN/PAN:AIYPG8690G (Appellant) (Respondent) Appellant by: None Respondent by: Shri Sanjeev Krishna Sharma, D.R. Date of hearing: 18 03 2025 Date of pronouncement: 20 03 2025 O R D E R
This appeal has been preferred by the assessee against order dated 30.03.2024, passed by the National Faceless Appeal Centre, Delhi (NFAC) for Assessment Year 2012-13.
The brief facts of the case are that the Income Tax Department was in receipt of information that the assessee had sold an immovable property during the year under consideration for a sale consideration of Rs.3,00,000/- whereas the value adopted by the stamp Valuation Authority for the purpose of payment of Stamp Duty was Rs.45,98,550/-. The Assessing Officer (AO) noted that as per the provisions contained in the section 50C of the Income Tax Act, 1961 (hereinafter called “the Act’), the value adopted by the Stamp Valuation Authority for the purpose of payment of Stamp Duty is deemed to be the full value of consideration received as a result of such transfer and that, therefore, the capital gain as arising, by adopting Rs.45,98,550/- as sale consideration, had escaped assessment for the year under consideration. The AO, accordingly, after recording the reasons, initiated proceedings under section 147 of the Act and issued notice under section 148 of the Act to the assessee, requiring the assessee to furnish the return of income for the year under consideration. The AO also issued notices under section 142(1) of the Act, requiring the assessee to furnish all the relevant documents. However, there was no compliance from the side of the assessee. The AO, therefore, completed the assessment under section 147 read with section 144 of the Act, assessing the total income of the assessee at Rs.45,98,550/- after making addition of Rs.45,98,550/- under section 50C of the Act.
2.1 The AO also initiated penalty proceedings under section 271(1)(c) of the Act, separately.
Aggrieved, the assessee preferred an appeal before the Ld. First Appellate Authority. The case of the assessee was migrated to NFAC, which dismissed the appeal of the assessee by passing an order ex-parte qua the assessee.
Now, the assessee has approached this Tribunal challenging the orders of the AO as well as the NFAC by raising the following grounds of appeal:
That the order passed by CIT (Appeal)/National Faceless Appeal Centre (NFAC) under section 250 of the Income Tax Act 1961 dated 30/03/2024 in Appeal no. NFAC/2011-12/10027332, dismissing the appeal of the assessee / appellant is without considering the merits of the case and grounds of appeal
submitted.
2. The action of the Learned CIT (A)/NFAC is illegal, unjustified, bad in law and uncalled for and is liable to be set aside as the same has been passed in gross violation of principles of natural justice as the appellant was not given any adequate opportunity of hearing before passing of the said order.
3. That the assessment framed by the learned Assessing Officer is illegal as no notice has been served by him on the legal heirs of the assessee who is deceased (Ramesh Chandra Gupta having PAN: ACQPG5331G). No notice was given to the legal heirs, despite providing all the relevant information regarding the same to the Learned Assessing officer and Learned CIT (Appeal)/NFAC, along with Mr. Gupta's death certificate.
4. That the order under section 144/147 of the Income Tax Act 1961 dated 28-12-2017 as passed by the Learned Assessing Officer and confirmed by the learned CIT (A)/NFAC on 30/03/2024, is bad in law.
5. That the learned Assessing officer has erred in completing the ex-parte assessment order on the deceased assessee, i.e., Ramesh Chandra Gupta who expired on 04-08-2016. The same error was also made by the CIT (Appeal)/NFAC by upholding the order of the learned Assessing officer.
6. That the learned Assessing officer has erred in issuing notice under section 148 of the Income Tax Act 1961 dated 14-10-2017 on the non-existing person/entity i.e. Ramesh Chandra Gupta who expired on 04-08-2016, which was also confirmed by the CIT (Appeal)/NFAC's order dated 30-03-2024.
7. That the Appellant/legal heir has filed a partial response on 19-03-2024 in compliance to notice under section 250 of the Income Tax Act 1961 dated 05-03-2024, DIN:- ITBA/NFAC/F/APL-1/2023-24/11062005961(1) for the assessment year-2012-13. The Learned CIT (A) has wrongly considered the partial response as full response of the Appellant/legal heir, at the time of framing of order under section 250 of Income Tax Act 1961.
8. That the Learned assessing officer has wrongly and illegally calculated the long term capital gain under section 50C of Income Tax Act 1961 and has also failed to follow the due process laid down under section 50C of the Income Tax Act 1961.
9. That the Learned CIT (A) / NFAC has wrongly and illegally confirmed the order of the Assessing Officer. The Learned CIT (A) has not applied the correct facts of the case and the legal position before upholding the learned Assessing officer's order. There is a lack of application of mind by CIT (A) /NFAC.
Because under the facts and circumstances of the case, the value taken by the Learned Assessing Officer is highly excessive.
Because the proceedings initiated under section 147 by issue of notice u/s 148 in the peculiar facts and law while taking recourse to section 50C of Income Tax Act 1961 is wrong, illegal and bad in law.
That the Learned Assessing officer and Learned CIT (A)/NFAC has not followed the procedure lay down in section 159 of the Income Tax Act 1961 before passing the order of CIT (A) under section 250 of the IT Act 1961 dated 30-03-2024. 13. That the appellant craves, add, to alter, leaves, add, amend, delete, substitute and grounds of appeal
on or before the final hearing of the case, if necessity so arises.
5. During the course of hearing, it was brought to my notice that there was a delay of one day in filing the appeal before the Tribunal. Since there was a nominal delay of one day in filing the appeal before the Tribunal, I condone the delay in filing of the appeal and admit the appeal for hearing, to which the Ld. Sr. D.R. had no objection.
None was present for the assessee when the appeal was called out for hearing nor was any adjournment application received in this regard. However, looking into the facts of the case, I proceed to adjudicate the appeal ex-parte qua the assessee.
The Ld. Senior D.R. had no objection to the restoration of appeal to the file of the Assessing Officer.
I have heard the Ld. Senior Departmental Representative and have also perused the material on record. Looking into the facts of this case, I am of the considered view that the Assessee deserves one last opportunity to present his case and, therefore, in the interest of substantial justice, I restore this file to the Office of the Assessing Officer with the direction to provide one more opportunity to the Assessee to present his case and produce the necessary evidences in support of the transactions entered into by the Assessee. I also caution the Assessee to fully comply with the directions of the Assessing Officer in the set-aside proceedings when called upon to do so, failing which, the Assessing Officer would be at complete liberty to pass the order in accordance with law, based on the material available on record even if it is ex-parte qua the assessee.
In the result, the appeal of the assessee stands allowed for statistical purposes.
Order pronounced in the open Court on 20/03/2025.