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Facts
The assessee did not file an income tax return for AY 2010-11. The AO reopened the case based on information that the assessee sold two shops and capital gains escaped assessment. The addition was made by treating the Sub-Registrar's valuation as the sale consideration instead of the declared amount, due to allegations of fraud by the assessee's nephew.
Held
The Tribunal condoned the delay in filing the appeal. While the CIT(A) dismissed the appeal for non-prosecution, the Tribunal noted that the AO had not considered court orders and evidence related to the alleged fraud by the assessee's nephew. The matter was restored to the AO to consider the court's decision and evidence to decide on the capital gains.
Key Issues
Whether the delay in filing the appeal should be condoned, and whether the AO's addition based on the sub-registrar's valuation was justified, considering allegations of fraud and subsequent court orders.
Sections Cited
147, 143(3), 234A, 234B, 234C, 50C, 133(6), 148
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JAIPUR BENCHES,”SMC’’ JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;djvihy la-@ITA. No. 251/JPR/2025
fu/kZkj.ko"kZ@Assessment Years : 2010-11 Shri Panchu Ram Bairwa cuke The ITO, Bhattiwali Dhani, Purani Chungi Vs. Ward-5 (3) Agra Road, Paldi Meena, Jaipur Jaipur LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: ADUPB 3864 A vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@Assessee by : Shri Yogesh Sharma, Advocate jktLo dh vksj ls@Revenue by : Shri Gautam Singh Choudhary, Addl.CIT -DR a lquokbZ dh rkjh[k@Date of Hearing : 07/04/2025 mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 29 /04 /2025 vkns'k@ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM The assessee has filed an appeal against the order of the ld. CIT(A), National Faceless Appeal Centre, Delhi dated 27-05-2023 [hereinafter referred as “(CIT(A)/NFAC” ] for the assessment years 2010-11 in the matter of Section 147/143(3) of the Income Tax Act, 1961 and thus raising therein following grounds of appeal; ‘’1. The CIT(A) erred in law and on facts by dismissing the appeal for non- prosecution without adjudicating the merits of the case.
SHRI PANCHU RAM BAIRWA VS ITO, WARD 5(3), JAIPUR 2. That the Learned Assessing Officer (Ld. AO) erred in law and in fact by making an addition of Rs. 19,12.525/-on account of excessive DLC (District Level Committee) rates, despite the appellant never having sold the property in question. A copy of the fake sale deed is attached herewith as Annexure-3 for your kind consideration 3. That the Ld. AO failed to appreciate that the appellant was a victim of fraud perpetrated by his nephew, Mr. Ghanshyam Das, and that no real transaction of sale had taken place.
That the Ld. AO did not consider the legal proceedings and FIR lodged against Mr. Ghanshyam Das and failed to appreciate the subsequent court order dated 22.12.2024 in favor of the appellant. Copy of the FIR and Ball cancellation order is attached herewith as Annexure-4 and Newspapers cuttings as Annexure-5 for yout kind consideration.
That the Hon'ble Court ruled in favor of the appellant on 22.12.2024, acknowledging that Mr. Ghanshyam Das had fraudulently created the sale deed instead of a loan agreement as per the filed agreement before the Hon'ble Court dated 05.11.2024. A copy of the Honorable Court Order with filed agreement before the Hon'ble Court dated 05.11.2024 is attached herewith as Annexure-6 for your kind consideration 6. That the Ld. AO erred in not considering the material evidence, including loan agreements and the fraudulent nature of the sale deed, while making the assessment.
That the Ld. AO wrongly levied interest under sections 234A, 2348, and 234C of the Income Tax Act, 1961, without any justification, as no fax liability arises in the absence of an actual sale transaction.’’ 2.1 At the outset of hearing of the appeal of the assessee, the Bench noted that there is delay of 576 days in filing the appeal by the assessee for which the assessee has filed an applications dated 21-03-2025 for condonation of delay narrating therein following reasoning:-
‘’1. That the appellant has filed the present appeal before the ITAT against the order passed by the ld. CIT(A) dated 27-05-2023.
SHRI PANCHU RAM BAIRWA VS ITO, WARD 5(3), JAIPUR 2. That there is a delay of 576 days in filing the present appeal which was beyond the control of the appellant due to the reasons explained herein below.
That the appellant is an illiterate person working as a labour and has limited understanding of tax matters and legal proceedings.
4. That the appellant had engaged a tax professional for handling his case but unfortunately the said professional failed to inform him about passing of the impugned order and the requirement to file an appeal within the prescribed limitation period.
5. That the appellant became aware of the ld. CIT(A)’s order only when he received a notice from the Income Tax Department regarding the tax demand, after which he immediately sought legal advice and initiated the process of filing this appeal.
That the delay in filing the appeal is neither intentional nor deliberate but was solely due to lack of knowledge and proper guidance regarding the legal remedy available.
7. That the appellant humbly submit that he has a strong case of merits, and if the delay is not considered he will suffer irreparable loss and hardship.
That it is well settled law that technicalities should not defeat the cause of justice and in the interest of substantial justice, the delay in filing the appeal deserves to be condoned. Prayer: In view of the above, it is most respectfully prayed that the Hon’ble ITAT may kindly condone the delay of 576 days in filing the appeal and admit the same for adjudication on merits.’’ To this effect, the assessee has filed an affidavit deposing the above facts as to the delay made in filing the above-mentioned appeal.
2.2. During the course of hearing, the ld. DR objected to assessee’s applications for condonation of such inordinate delays and prayed that Court may decide the issue as deemed fit and proper in the interest of justice.
SHRI PANCHU RAM BAIRWA VS ITO, WARD 5(3), JAIPUR 2.3 We have heard both the parties and perused the materials available on record. The Bench noted that the reasons as advanced by assessee for condonation of delay in respect of the above mentioned appeal has sufficient reasons to condone the delay which has merit. Thus, we concur with the submission of the assessee and condone the delay so made in filing the appeal by the assessee in view of the decision of Hon’ble Supreme Court in the case of Collector, land Acquisition vs. Mst. Katiji and Others, 167 ITR 471 (SC) as the assessee was prevented by sufficient cause.
3.1 Apropos grounds of appeal of the assessee, it is noticed that the ld. CIT(A) has dismissed the appeal of the assessee on the ground that his office has not received any information or document so as to make a judgement based on merit and he has no option but to dismiss the appeal. The narration as made by the ld. CIT(A) in his order is reproduced as under:- ‘5. FINDINGS & DECISION 5.1 The assessee is on appeal before this office against the order passed under section 147 r.w.s143(3) of the Income Tax Act. 5.2 The assessee was provided multiple opportunities by this office to submit documents and make submissions in response to the appeal filed. However, the assessee has not exercised this option despite multiple reminders. The table below indicates the dates and the compliance status of the various notices issued.
Date of Compliance Remarks Notice Date 13.01.2021 20.01.2021 No details furnished nor any petition for adjournment was received 12.04.2023 20.04.2023 No details furnished nor any petition for adjournment was received 22.05.2023 26.05.2023 No details furnished nor any petition for adjournment was received The conduct of the Appellant, as inferred from the aforesaid table, evidences that the Appellant is not interested in prosecuting the Appeal. 5.3 The law aids those who are vigilant, not those who sleep upon their rights. This principle is embodied in the well-known Latin dictum, "VIGILANTIBUS ET NON DORMIENTIBUS JURA SUB VENIUNT The conduct of the Appellant, as inferred from the aforesaid table, evidences that the Appellant fails on this principle of equity. Even the Hon'ble Courts, in various pronouncements, have frowned upon the Appellants who file appeals but thereafter do not take any further interest in prosecuting those appeals. 5.3.1 The Hon'ble Income Tax Appellate Tribunal Kolkata in the case of Pradeep Kumar Jhawar Kolkata vs. DCIT-CCXXI (15 March, 2016) (ITA Nos. 450/Kol/2013 for Asstt. Year: 2006-07) dismissed the appeal of the Appellant for non- prosecution 5.3.2. The Hon'ble Madhya Pradesh High Court in the case of Estate of Late Tukojirao Holkar vs. CWT (223 ITR 480) held as under: "If the party, at whose instance the reference is made, fails to appear at the hearing, or fails in taking steps for preparation of the paper books so as to enable hearing of the reference, the court is not bound to answer the reference." 5.3.3. Similarly, the Hon'ble Punjab & Haryana High Court in the case of New Diwan Oil Mills vs. CIT ((2008) 296 ITR 495] returned the reference unanswered since the assessee remained absent and there was no assistance from the assessee.
5.4 In view of the above, it is clear that the Appellant is not aggrieved with the assessment order impugned herein and is not interested in prosecuting the same. Accordingly, the additions/disallowances as challenged in the Grounds of Appeal and in the Appeal Memo are hereby confirmed. 5.5 Based on the above it appears that the assessee is not keen on pursuing the appeal. Accordingly given that this office has not received any information or document so as to make a judgment based on merits, this office is left with no option but to dismiss this appeal. Accordingly the appeal of the assessee stands dismissed.
6. Accordingly, the appeal of the Appellant for AY 2010-11 is dismissed.’’ 3.2 During the course of hearing, the ld. AR of the assessee submitted that the addition made by the AO amounting to Rs.19,12,525/- as STCG is not justified for the reason that his nephew Shri Ghanshyam Das fraudulently made him victim and no real transaction had taken place by him. The ld. AR further submitted that the AO did not consider the legal proceedings and FIR lodged against Shri Ghanshyam Das and also failed to appreciate the subsequent Court order dated 22-12-2024 passed in assessee’s favour for which the ld. AR of the assessee has filed the copy of FIR and Bail cancellation order as annexure A and News paper cutting as Annexure B. The ld. AR further submitted that the Court ruled in favour of the assessee on 22-12-2024 acknowledging that Shri Ghanshaym Das had fraudulently created the sale deed instead of a loan agreement as per the filed agreement before the Court dated 5-11-2024 and the copy of the SHRI PANCHU RAM BAIRWA VS ITO, WARD 5(3), JAIPUR Court order dated 5-11-2024 is filed as Annexure 6. Thus the ld. AR further submitted that the addition so made by the AO needs to be quashed and order passed by the Court should be followed. 3.3 On the other hand, the ld.DR supported the order of the ld. CIT(A) as the assessee could not advance the documents/ submission to controvert the findings of the AO in spite of multiple opportunities. 3.4 We have heard both the parties and perused the materials available on record. Brief facts of the case are that the assessee did not file his return of income for the A.Y. 2010-11. It came to the office of the AO from the AST software (BCP/EFS/CIB/AIR Processing/Non filer w.r.t. 26AS)/50C that the assessee had sold two shops situated B-145, Terminal Muhana, Jaipur amounting to Rs.2,00,000/- each during the F.Y. 2009-10 relevant to A.Y. 2010-11. The Sub-Registrar had also evaluated this property amounting to Rs.11,50,146/- u/s 50C of the Act. As per AST System, no return of income had been filed by the assessee and the capital gain on sale of property has escaped for taxing. Hence, there was reason to believe that income amounting to Rs.23,00,292/- had remained undisclosed and had escaped assessment. Accordingly, the case was reopened after seeking requisite approval from the competent authority and SHRI PANCHU RAM BAIRWA VS ITO, WARD 5(3), JAIPUR notice u/s 148 of the Act was issued on 27-03-2017 which was duly served upon the assessee by speed post. In response to the notice, the assessee furnished copy of e-filed ITR filed on 5-11-2017 showing total income of Rs.720/-. Conclusively made an addition of Rs.19,12,525/-in the hands of the assessee by observing as under:- 2. Addition on sale of STCG On perusal of sale deed as well as purchase documents in respect both the sold shops and computation of income, it is revealed that the assesse has sold two shops situated at 3-145, Terminal Muhana, Sanganer, Jaipur at Rs. 11,50,146/- each (value evaluated by the SR-VII, Jaipur for the purpose of stamp duty as well as value as per 30C) whereas the assesse had taken the sale consideration of Rs 2,00,000 each shop and computed the Short Term Capital loss of (-) Rs. 353/-on each shop. As per information available with this office it is gathered that the hee value as per deed of both the shops are (200000X2) Rs. 4,00,000/- however, the Sub-registrar for the purpose of levying stamp duty, evaluated the same al (1150146x2) Rs. 23,00,292 This valuation should have been adopted as FMV for the purpose of computation of capital gain on both the shops as per provisions of section 50C of the Act. Thessee has taken the value of sale consideration of Rs 4,00,000 and after benefit of cost, computing the Short Term Capital loss at (-)Rs. 706/-. The assessee has declared the sale value consideration at Rs.2,00,000/-as against the fair market value of Rs 23,00,292 as evaluated by Registering Authority (Sub Registrar, Jaipur VIII) on the analogy of the provisions of See 50C of the 11 Act, 1961 Thus, the evaluated value in terms of Sec. 50C Rs.23,00,292/- is adopted for computing the short term capital gain in this case. The Capital Gain/loss has been re-computed on the property sold in terms of the provisions of Sec.50C of the Income ax Act, 1961 is as under:-
Sale Consideration u/s 50C Rs 23,00,292/- Less: Cost of acquisition of shops Rs. 3,87,767/- (including lease money & registry exp.) (376596+7061+4110) STCG Rs.19,12,525/- SHRI PANCHU RAM BAIRWA VS ITO, WARD 5(3), JAIPUR In first appeal, the ld. CIT(A) has dismissed the appeal of the assessee as the assessee did not submit any documents to controvert the findings of the AO, in spite of multiple opportunities. From the entire conspectus of the case, the Bench noticed that the AO did not comply with the directions as made by the Court in the case of the assessee wherein it is observed that the assessee was fraudulently implicated by his Nephew Shri Ghanshyam Das. In this situation, the matter is restored to the file of the AO to take into consideration the decision of the Court in order to avoid contempt proceedings and also give effect to the order of the Court after getting the evidence in this matter and therefore, for this ld. AO issue necessary letter u/s 133(6) and get the details as to whether as agreed in the court the reversal of property transaction is completed in the office of registrar of property or not and if so, necessary effect be given as early as possible. Thus, the appeal of the assessee is allowed for statistical purposes and the ld. AO will in accordance with the information decide as to whether the transaction of capital gain arises or not.
SHRI PANCHU RAM BAIRWA VS ITO, WARD 5(3), JAIPUR 4.0 In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 29/04 /2025.
Sd/- Sd/- ¼Mk0 ,l- lhrky{eh ½ ¼jkBksMdeys'kt;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;dlnL;@Judicial Member ys[kklnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 29 /04 /2025 *Mishra आदेश की प्रतिलिपिअग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- Shri Panchu Ram Bairwa, Jaipur 2. izR;FkhZ@The Respondent- ITO, Ward- 5(3), Jaipur. 3. vk;djvk;qDr@CIT 4. विभागीय प्रतिनिधि] आयकरअपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. 5. xkMZQkbZy@Guard File { } vkns'kkuqlkj@By order
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