GAJENDRA KAUR,HAPUR vs. ITO WARD 3(4), HAPUR

Facts of the case, in brief, are that the assessee is an individual. On the basis of AIR Information that the assessee has sold an immovable property amounting to Rs. 28 lakhs during the year under consideration, the AO issued verification letters to the assessee. Since, there was non compliance from the side of the assessee, the case of the assessee was reopened under the provision of section 147 and notice u/s 148 was issued. Again there was no compliance. The AO, thereafter, issued statutory notice which also remained non complied with. The AO, therefore, proceeded to complete the assessment u/s 144 of the Act and determined the total income of the assessee at Rs. 31 lakhs on account of LTCG by invoking the provision of section 50C of the Act which was the value adopted by the Stamp Valuation Authority.

In appeal, the Ld. CIT(A) gave part relief to the assessee out of the long term capital gain. However, the claim of the assessee regarding benefit of provision of section 54 was denied by him on the ground that assessee could not furnish any details/documents to support the claim of deduction u/s 54 of the Act for investment in the new house.

Aggrieved with such order of the CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds:

The Ld. Counsel for assessee submitted that the assessee lives in a village and is not well versed with the complicated tax laws. Further, the notice u/s 148 was not served upon the assessee. He submitted that although the assessee has invested the proceeds for construction of the house benefit u/s 54 was denied. He, accordingly, submitted that in the interest of justice, the matter may be set aside to the file of the AO for fresh adjudication after giving due opportunity of being heard to the assessee.

The Ld. DR on the other hand, heavily relied on the order of the CIT(A).

I have considered the rival arguments made by both the sides and perused the orders of the AO and the CIT(A). I have also gone through the PB filed on behalf of the assessee. I find the AO in the order passed u/s 147/144 of the Act determined the total income of the assessee at Rs. 31 lakhs which has been partly reduced by the CIT(A). It is the submission of the Ld. Counsel for the assessee that no notice u/s 148 was received by the assessee and the assessment was completed u/s 144 of the Act. Further, the claim of deduction u/s 54 on account of investment in the new house property was not considered by the CIT(A) in the right perspective. Since, the assessee comes from a rural area and the assessment was completed u/s 144 of the Act, therefore, considering the totality of the facts of the case and in the interest of justice, I deem it proper to restore the issue to the file of the AO with a direction to give one more opportunity to the assessee to substantiate her case and decide the issue as per fact and law. The assessee is also hereby directed to appear before the AO and explain her case failing which the AO is at liberty to pass appropriate order as per law. I hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.