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Facts
The assessee's appeal challenges the order of the National Faceless Appeal Centre (NFAC) for assessment year 2009-10, which arose from an assessment order passed under section 271(1)(c) of the Income Tax Act. The primary issues revolve around incorrect addresses used in notices, leading to non-service and subsequent ex-parte assessment and penalty.
Held
The Tribunal noted that the quantum appeal had already been decided. Consequently, the penalty appeal, being dependent on the quantum appeal, was rendered infructuous. The Tribunal also observed that the assessee was guilty of latches and negligence in filing the appeal within the prescribed time, and sufficient cause for condoning the delay was not provided.
Key Issues
The appeal concerns the validity of an assessment and penalty order passed due to alleged non-compliance with notices, where the assessee claims incorrect addresses were used, leading to a violation of natural justice and incorrect calculation of capital gains.
Sections Cited
271(1)(c), 144, 147, 142(1), 156, 55, 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, vk;dj vihy la-@ITA No. 1328/JP/2024
आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC” JAIPUR Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa Jh jkBksM deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, vk;dj vihy la-@ITA No. 1328/JP/2024 fu/kZkj.k o"kZ@Assessment Year : 2009-10 cuke Late Sushma Sharma, Income Tax Officer, Vs. through Legal representative Ward 5(1), Mahendra Kumar Sharma, Jaipur Plot No. 1, Narada Colony, Opposite Queen’s Road, Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: ANVPS3110K vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Sh. Arbind Sharma jktLo dh vksj ls@ Revenue by : Sh. Gautam Singh Choudhary, JCIT lquokbZ dh rkjh[k@ Date of Hearing : 19/02/2025 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 17/04/2025 vkns'k@ ORDER PER: DR. S. SEETHALAKSHMI, J.M.
By way of the present appeal the above named assessee challenges the order of the National Faceless Appeal Centre, Delhi dated 24/09/2024 [here in after ‘NFAC’ ] for assessment year 2009-10. The said order of the ld. CIT(A) arises because the assessee challenged the order of the assessment dated 26.04.2017 passed under section 271(1)(c) of the Income Tax Act, [ for short Act] by ITO, Ward 5(1), Jaipur [ for short AO].
(A) Appeal No. 484/2018-19 u/s 271(1)(b)- against penalty of Rs. 10,000/- for non –compliance of notice dt. 14.09.2016 (U/s 142(1)). (B) Appeal No. CIT(A) Jaipur 2/11446/2017-18 under section 144, 147 against the addition of Rs. 11,50,000/- as a short capital gain by the AO (ITA Ward 5(1), Jaipur) (C) Appeal No. CIT(A) Jaipur 2/11448/2017-18 – under section 271 (1)(c) against the penalty of Rs. 2,79,851/-.
Wrong and different-different addresses in notices:- (a.) That the Assessment Order & Computation Form by AO dated 7-10-2016 itself has wrong address and has address of Plot No.
Although this Assessment Order and addition of amount in assessment has been quashed pending appeal of present impugned order. (b.) The demand notice u/s 156 dated 7-1024 has another address of plot No. 48. (c.) The Impugned Penalty order of present case & its Computation of the appeal have wrong address of Plot No. 28 of the assessee. The plot No. 28 never had any relevancy to the Assessees. Due to wrong address they were not served and came in the knowledge of the Appellant. The delay condone was justified but mechanically impugned order has been issued and rejected the appeal under section 271(1)(c) I.T. Act. The AO (ITO Ward 5(1), Jaipur) has already complied the CIT (AS) order and issued his order on dt. 8-10-2024 as income revised as ‘Nil’. This show there was no conceal of income.
3. That after quashing re-assessment & holding NIL revision vide order on dated 14.09.24 and also penalty for non-compliance of notice under 271(1)(b) on dated 24.01.2019, the impugned order of 271(1)(c) dated 24.09.2024 being it self without genesis and base & became illegal. It has been passed mechanical and deserves to be quashed.
That the assessed was earlier residing at house No. 88, Boarodi Ka Kuva Ka Rasta, gangori Bazar, Jaipur up to the middle of the year 2011. This house became dangerous building and complaints were made and inspected by the Municipal Authtorities. This house No 88 was demolished & converted in to Malba, due to being dangerous building on the compliance of the notice No 30 dated 11-7-2011 of the Commissioner (West) of Municipal corporation, Jaipur in the year. The copy of notice dated 11-7-2011of the Municipal Corporation. Prior to the month of July 2011 she was residing at Plot No. 1 Narada Colony. Jaipur and no notice were issued by the A.O at this address. The Quashed assessment order of A.O dated 7-10-2016 has mentioned that the notice under section 148 was issued on dated 15-3-16 through speed Sushma Sharma vs. ITO post AD but returned back as unserved from postal authorites. Subsequently it was send through notice server and he also reported that assessee is not residing their. After these reports the Inspector without going to site where house was as mulba has madse service as by affixture service and on thijs basis the A.O. has made assessment. There is no report of identification of site and existence of house and identification & details of witness as the assessee residing their. This assessment has been quashed and ITO Ward No 5 (i) Jaijpur has also issued his order accordingly as revision Nil. Due to wrong addresss in all the correspondence and orders, they wre not served. The Deptt was under obligation to serve them. Their is violation of natural justice and more particulalry when Assessement has been quashed and penalty for non compliance of notice has been also quashed, There is a want of NATURAL JUSTICE and violation of Article 14, 21,301 Constitution of India. The impunged order of this appeal is consequential to Annexure I & II and when they were quashed it deserves to be quashed.
5. That in the assessment order although that has been quashed in the appeal, the cost of acquisition of property and their subsequent development cost was not considered. They considered this as Nil. & total sale consideration was considered as a short capaital gain and it was a illegal order. That in the present appeal penalty is being bassed on the whole amount and thus deserves to be quashed.
6. The income tax department on the basis of the said wrong service by affixture has reassessed the I.T. return of year 2009-10 and added total sale consideration of the plot as a income of Rs 11,50,000 as short term capital gain of sale of plot but has not deducted the cost of getting the plot acquired (purchased) and their development cost incurred subsequently. They have erred in the compliance of section 55 of IT Act. The re-assessment order has mention that cost of the acquisition of the property is "Nil", which could be possible for the plinth level Rajasthan Housing board plot. Althtoujgh this reasssessment has been quashed & accordingly the ITO Warad No 5(1) as AO has issued orders as re-assesssment Nil. After quashing the Assessment and penalty for non-compliance of notice, the present impunged order deserves to be quashed.
That after getting the allotment of said plinth level plot from housing board, ground floor was construction was raised by the deceased Appellant and this fact has been clearly mentioned in the sale deed conveyance deed, map of the housing board also that illegal construction was there at the time of execution of these documents between the assesses and housing board. In the said Sushma Sharma vs. ITO construction more that Rs 10 Lac was incurred and as per BSR rates of the Rajasthan Government PWD such construction was of Rs 9,84,531. The plot was sold with heavy financial losses. Thus there was no short term gain to the Assessee & it has been rightly held in the CIT (A) judgements against assessment order That due to faceless hearing. That in the impunged order during the Appeal the arguments at the time of hearing could be be submitted and it is against natural justice.
The brief facts of the case are that in this case, notice u/s 148 was issued on 15.03.2016 after recording reasons and taking approval from the Pr.CIT-II, Jaipur.
The notice u/s 148 was issued and sent to the assessee through speed post A/D however, same was returned back unserved from the postal authorities. Subsequently, Notice Server of this was deputed to serve the notice u/s 148 dated 15.03.2016 and he reported that the assessee is not residing at present on the address mentioned on notice, therefore, notice u/s 148 could not be served. Thereafter, notice u/s 148 was served upon the assessee through affixture by Inspector of this office.
However, the assessee did not comply with notice u/s 148. Thereafter, notice u/s 142(1) issued on 14.09.2016 and served upon the assessee on 14.09.2016 through affixture by Inspector of this office However, the assessee did not comply with notice u/s 142(1) dated 14.09.2018 also.
15.03.2016 and notice u/s 142(1) dated 14.09.2016, therefore, I have no alternate but to complete. the assessment ex-parte u/s 144 on merits, on the basis of material available on record.
Addition on a/c of unexplained capital Gain:
As per 50C information for the F.Y. 2008-09, the assessee has sold immovable property amounting to Rs. 11,50,000/-, vide registered sale deed dated 23.01.2009 to Sh. Mohal Lal Panchal (purchaser).
To verify the above transaction, information was called for from Sub- Registrar-IV, Jaipur u/s 133(6) of the Income-tax Act, 1961. The Sub- Registrar has sent certified copy of registered sale deed dated 23.01.2009.
As per above sale deed dated 23.01.2009, the assessee has sold immovable property namely Plot No. 3/MB/467 (Pilanth) located at Indra Gandhi Nagar, Jagatpura, Jaipur te Sh. Mohan Lal Pancha at Rs.
11,50,000/-. The Sub-Registrar has valued the above property at Rs. 11,50,000/- for the purpose of charging stamp duty.
As the assessee did not submit any details/documents in her defence in compliance to notice u/s 142(1) dated 14.09.2016, therefore, I have no on the basis of material available on record. In the absence of submission of the assessee, cost of indexed of above property cannot determined, therefore, same has been treated as nil. Further, as per sale-deed dated 23.01.2009, the assessee had acquired the property in question on 22.12.2008. Thus, the assessee has said the property in question before three years from its acquisition.
4. Aggrieved from the order of Assessing Officer, assessee preferred an appeal before the ld. CIT(A). Apropos to the grounds so raised the relevant finding of the ld. CIT(A) is reiterated here in below:
Thus, it is trite in law that the appellant must show that he was diligent in taking proper steps and the delay was caused notwithstanding his due diligence. It is for the appellant to explain the reason for the delay and it is not the function of authorities to find the cause for delay. The Appellate authority has to examine whether the sufficient cause has been shown by the appellant for condoning the delay and whether such cause is acceptable or not. Even though substantial justice should not be defeated by technicalities but that does not mean that any plea without any possible or acceptable basis and even without hearing, semblance or rationality has to be accepted and delay has to be accepted and condoned which shall be against the very spirit of law. The time prescribed for filing the appeal will become meaningless in such an event. Merely because substantial justice is to be done law of limitation cannot be ignored and that also when there is no sufficient and reasonable cause for such inordinate delay. 6.1. The appellant, in the present situation, appears to be guilty of latches or negligence and does not take appropriate steps to peruse the remedy till about 305 days and thus does not take appropriate action in filing the appeal within the prescribed time. In the light of the above discussion and considering the facts and position of the law on this issue, I find that there is no sufficient cause for condoning the delay in the institution of appeal by the appellant and thus the application of the appellant for condonation of delay is hereby rejected. 6.2 Since the appeal is being dismissed on account of being filed beyond period prescribed under the Act, therefore, I am not expressing any opinion on merit of the case. 6.3. The appeal of the appellant is dismissed for statistical purpose.
We have both the parties perused the records and the order of lower authorities. We observe from the submissions made by the Ld. AR for the assessee that the quantum appeal has been decided and the Ld. DR also consented that the quantum appeal has been decided in these circumstances when the quantum appeal has been decided, the penalty appeal becomes infructuous.
Therefore, the assessee’s appeal has been dismissed as infructuous.
Order pronounced in the open court on 17/04/2025.
Sd/- Sd/- ¼jkBksM deys'k t;UrHkkbZ ½ ¼MkWa-,l-lhrky{eh½ (RATHOD KAMLESH JAYANTBHAI) (Dr. S. Seethalakshmi) ys[kk lnL; @Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 17/04/2025 *Ganesh Kumar, Sr. PS Sushma Sharma vs. ITO आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. The Appellant- Late Sushma Sharma, Jaipur 2. izR;FkhZ@ The Respondent- ITO, Ward 5(1), Jaipur 3. vk;dj vk;qDr@ The ld CIT 4. vk;dj vk;qDr¼vihy½@The ld CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत xkMZ QkbZy@ Guard File (ITA No. 1328/JP/2024) 6. vkns'kkuqlkj@ By order,
सहायक पंजीकार@Aेेज. त्महपेजतंत