BHARAT SHETTY,LUCKNOW vs. ITO-2(1), LUCKNOW-NEW

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ITA 639/LKW/2024Status: DisposedITAT Lucknow15 January 2025AY 2018-19Bench: SHRI KUL BHARAT (Vice President), SHRI ANADEE NATH MISSHRA (Accountant Member)9 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal set aside the impugned order dated 30/08/2024 passed by the learned CIT(A). The Tribunal directed the learned CIT(A) to decide the limitation issue afresh, giving respectful consideration to the Supreme Court's order dated 21st September, 2021 (cited as 23rd September, 2021 in the judgment). If the learned CIT(A) admits the assessee's appeal after considering the limitation issue, the Tribunal further directed the learned CIT(A) to decide the appeal on its merits after providing a reasonable opportunity to the assessee. The Tribunal noted that the Supreme Court's order provided for exclusion of the period from 15.03.2020 till 02.10.2021 in computing the period of limitation. The Tribunal did not decide the merits of the addition or the applicability of Section 56(2)(x) as the appeal was being remanded on the preliminary issue of limitation. The issue of personal hearing and consideration of written submissions was implicitly addressed by the direction to decide on merits after admission.

What were the facts?

The assessee, Bharat Shetty, filed an appeal for Assessment Year 2018-19 against an order dated 30/08/2024 passed by the learned Commissioner of Income Tax (Appeals) [CIT(A)]. The CIT(A) had dismissed the assessee's appeal on grounds of limitation, without condoning the delay. The original assessment order dated 19/04/2021, passed by the Assessing Officer under section 143(3) read with section 144B of the Income Tax Act, had assessed the total income at Rs.1,13,35,754/- against a returned income of Rs.49,50,790/-, making an addition of Rs.63,84,964/- under section 56(2)(x). The assessee contended that the delay in filing the appeal before the CIT(A) was due to the COVID-19 pandemic and relied on the Supreme Court's order dated 23rd September, 2021, which excluded the period from 15/03/2020 till 02/10/2021 for computing limitation.

What were the issues?

1. Whether the appeal filed by the assessee before the learned CIT(A) was time-barred and not maintainable, as held by the learned CIT(A)? (Question of law and fact, concerning Section 249 of the Income Tax Act, 1961). 2. Whether the learned CIT(A) ought to have granted sufficient opportunity to the assessee to submit reasons for the delay in filing the appeal? 3. Whether the learned CIT(A) ought to have granted a personal hearing to the assessee as requested? 4. Whether the learned CIT(A) ought to have considered the written submissions on merits and decided the appeal on merits? 5. Whether the addition of Rs. 63,84,964/- made by the Assessing Officer ought to have been deleted? 6. Whether the provisions of Section 56(2)(x) of the Income Tax Act, 1961, were applicable, considering the assessee's submission that the immovable property was stock-in-trade and not a capital asset? Assessee's Contentions: The assessee argued that the delay in filing the appeal was due to the COVID-19 pandemic and relied on the Supreme Court's order dated 23rd September, 2021, which extended the period of limitation. The assessee contended that had this order been considered, the appeal would have been within the limitation period. The assessee also argued that the CIT(A) failed to grant sufficient opportunity, personal hearing, and consider written submissions on merits. The assessee further argued that Section 56(2)(x) was not applicable as the property was stock-in-trade. Revenue's Contentions: The revenue's representative expressed no objection to the assessee's request for reconsideration of the limitation issue.

Which sections of the Income-tax Act were involved?

Section 56(2)(x),Section 249,Section 143(3),Section 144B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, LUCKNOW BENCH ‘B’, LUCKNOW

Before: SHRI KUL BHARAT & SHRI ANADEE NATH MISSHRA

For Appellant: Shri Sandeep Kumar, C.A

2018-19 against impugned appellate order dated 30/08/2024 passed by learned Commissioner of Income Tax (Appeals) [“CIT(A)” for short]. In this appeal the assessee has raised the following grounds:

“1. Because the learned CIT(A), NFAC erred in law and on facts in inferring that the appeal filed by the assessee is time barred and is not maintainable void abinitio.

2.

Because the learned CIT(A), NFAC ought to have granted sufficient opportunity to the assessee to submit reasons/ explanation based on which the appeal was filed by the assessee beyond the time limit of 30 days as prescribed in section 249 of the Income Tax Act, 1961.

3.

Because the assessee having requested for personal hearing for making oral submissions, the learned CIT(A), NFAC ought not to have disposed the appeal without granting personal hearing requested by the assessee.

4.

Because the learned CIT(A), NFAC ought to have considered the written submissions filed by the assessee on the merits of the issues involved in the appeal and ought to have decided the appeal on the merits of the issues involved in the appeal.

5.

Because the learned CIT(A), NFAC ought to have deleted the addition of Rs. 63,84,964/- made by the learned assessing officer to the total income returned by the assessee.

6.

Because the learned CIT(A), NFAC ought to have considered the submissions of the assessee that since the immovable property is stock in trade and not capital assets of the assessee, hence, the provisions of section 56(x) of the Income Tax Act, 1961 are not applicable to the assessee.

7.

Because the learned CIT(A), NFAC has passed the appellate order on the basis of conjectures and surmises and without considering the facts, the applicable law and without application of mind.

8.

Because the order appealed against is contrary to the fact, law and principles of natural justice.”

(A.1) Assessment order dated 19/04/2021 was passed by the Assessing Officer (DIN No.ITBA/AST/S/143(3)/2020-21/1032510761(1) under section 143(3) read with section 144B of the I. T. Act whereby the assessee’s total income was assessed at Rs.1,13,35,754/- as against returned income of Rs.49,50,790/-. In the aforesaid assessment order, an addition of Rs.63,84,964/- was made by the Assessing Officer u/s 56(2)(x) of the I. T. Act. The assessee’s appeal against the aforesaid assessment order was dismissed by the learned CIT(A) vide impugned appellate order dated 30/08/2024 on grounds of limitation. The learned CIT(A) did not condone the delay in filing of the appeal. The present appeal before us has been filed by the assessee against the aforesaid impugned appellate order dated 30/08/2024 of the learned CIT(A). At the time of hearing the learned A.R. submitted that the delay in filing of the appeal was because of outbreak of COVID-19 pandemic. He drew our attention to the order of Hon'ble Supreme Court dated 23rd September, 2021 in Miscellaneous Application No. 665 of 2021 in SMW(C) No. 3 of 2020; in RE: Cognizance for extension of limitation; reproduced here for the ease of reference; whereby period from 15/03/2020 till 02/10/2021 has been excluded in computing the period of limitation.

(B) At the time of hearing, learned Authorised Representative for the assessee submitted that in the impugned appellate order dated 30/08/2024, passed by learned CIT(A), the aforesaid order dated 21/09/2021 of Hon'ble Supreme Court was not considered. He further submitted that had the learned CIT(A) considered the aforesaid order of Hon'ble Supreme Court, the appeal filed by the assessee in the office of the learned CIT(A) would have been found to have been filed within limitation period. He requested that the learned CIT(A) be directed to reconsider the matter, to admit the appeal, and to decide the appeal on merits. The learned Departmental Representative for Revenue expressed no objection to this.

(C) In view of the foregoing, we set aside the impugned order dated 30/08/2024 of learned CIT(A) with the direction to decide the limitation issue afresh, after giving respectful consideration to aforesaid order dated 21/09/2021 of Hon'ble Supreme Court. If the assessee’s appeal is admitted by learned CIT(A) in view of our aforesaid direction, then learned CIT(A) is further directed to decide the assessee’s appeal on merits after giving reasonable opportunity to the assessee.

(D) In the result, the appeal is partly allowed for statistical purposes.

(Order pronounced in the open court on 15/01/2025)

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