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Facts
The assessee, represented by his legal heir, filed an appeal after a delay of 455 days. The delay occurred because the assessee had expired, and his legal heir did not receive notices sent to the previously provided email address. The case involves the addition of Rs. 28,33,600/- on account of short-term capital gains from the sale of agricultural land.
Held
The Tribunal condoned the delay of 455 days in filing the appeal, citing sufficient cause. However, the Tribunal noted that the assessee remained non-compliant throughout the assessment and appellate proceedings. The matter was restored to the file of the AO for fresh adjudication, providing one more opportunity for the assessee to contest the case, with a strict warning against frivolous adjournments.
Key Issues
Whether the delay in filing the appeal can be condoned due to the death of the assessee and non-receipt of notices. Whether the matter should be restored to the AO for fresh adjudication despite the assessee's non-compliance.
Sections Cited
147, 148, 143(3), 142(1), 144, 151, 50C, 54F, 2(14)
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Income Tax Appellate Tribunal, JAIPUR BENCHES,”SMC JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM
fu/kZkj.k o"kZ@Assessment Years : 2014-15 Late Sh. Shri Ram cuke Income Tax Officer, Through L/h Shri Ramesh Kumar Vs. Ward- Bhiwadi C/o Kalani & Co. Chartered Accountants, 5th Floor, Milestone Building, GandhinagarTurn, Tonk Road, Jaipur 302 015 LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: CCIPR 9150 E vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri P.C. Parwal, C.A. jktLo dh vksj ls@ Revenue by : Sh. Gautam Singh Choudhary, JCIT- DR (Through V.C,) lquokbZ dh rkjh[k@ Date of Hearing : 01/04/2025 mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 16/04/2025 vkns'k@ ORDER PER: DR. S. SEETHALAKSHMI, J.M. This appeal filed by the assessee is directed against the order of the ld. CIT(A) dated 24-08-2023, National Faceless Appeal Centre, Delhi [ hereinafter referred to as (NFAC) ] for the assessment year 2014-15 raising therein following grounds of appeal.
‘’1. The Ld. CIT(A), NFAC has erred on facts & in law in confirming the assessment order by serving the notice on the e-mail address provided in Form No.35 which never came to the notice of legal heir as the assessee expired before the date of Issue of such notice.
The Ld. CIT(A), NFAC has erred on facts & in law in holding that assessee has been habitually non compliant to the numerous notices issued by the AO ignoring that the assesser has submitted the reply to the jurisdictional AO and the National Faceless Assessment Unit issued only one notice on 15.02.2021
The Ld. CIT(A), NFAC has erred on facts & in law in confirming the addition of Rs 28,33,600/- on account of short term capital gain on sale of agricultural land by not considering the fact that the agricultural land sold is not a capital asset u/s 2(14) of the Act, it is not a short term capital asset and that assessee has also invested the sale proceeds in construction of residential house eligible for deduction u/s 54F of the Act.’’ 2.1 At the outset of hearing, the Bench observed that there is delay of 455 days in filing of the appeal by the assessee for which the ld. AR of the assessee filed an application dated 24-01-2025 for condonation of delay with following prayers.
‘’Reg: Late Sh. Shri Ram (Through Legal Heir Ramesh Kumar) AY 2014-15
Sub: Application for condonation of delay in filing the appeal With reference to above it is to submit that the ld. CIT(A), NFAC vide order dt. 24.08.2023 has upheld the order passed by AO in case of Late Sh. Shri Ram assesing the total income at Rs.28,11,600-. The appeal was to be filed on or before 23.10.2023. However, for the reasons stated hereunder, the appeal could not be filed in time-
1. 1. I am legal heir of Late Sh. Shri Ram who expired on 25.04.2022. Copy of death certificate is enclosed 2. My father along with Sh. Mehar Chand and Sh. Jawahar Lal sold an agriculture land at village Udaipur. Tehsil Tijara, District Alwar on 25.05.2013. On sale of this land my father received sales consideration of Rs.28 lacs, Sh. Mebar Chand Rs.33 lacs and Sh. Jawahar Lal Rs.33 lacs.
3. The income tax department issued notice u/s 148 for AY 2014- 15 to all the above three persons. All these persons manually filed the return & computation of total income to ITO Ward-Bhiwadi on 24.09.2021. The ITO, Ward-Bhiwadi assessed the income of Sh. Mehar Chand and Sh. Jawahar Lal vide order dt. 27.09.2021 by considering the land sold as long term capital asset and allowing deduction u/s 54F of the Act.
4. When our counsel Advocate Kavinder Yadav enquired from ITO, Ward-Bhiwadi, it came to his notice that case of Sh. Shri Ram has been transferred to faceless assessment center The National Faceless Assessment Center passed the assessment order on 27.09.2021 by treating the DLC value of the land at Rs.28,33,600/- as short term capital gain. 5 Against the assessment order appeal was filed on 02.11.2021 In Form No.35 e-mail address was given as shriram9875053160@.gmail.com. After filing the appeal my father expired on 25.04.2022. The Ld. CIT(A), NFAC issued notice for hearing between 17.05.2022 to 14.08.2023 at the e-mail address mentioned in Form No.35. However, these notices never came to my knowledge.
When the penalty notice dt. 09.12.2024 was served on me by the inspector of Income tax department at our residential address, I met Advocate Kavinder Yadav on 21.12.2024 and showed him the notice. Thereafter he browsed the e-portal when it came to the notice that appellate order has been passed on 24.08.2023. 7.I am advised by my advocate to file the appeal before Hon’ble ITAT with a request to condone the delay in filing the appeal and accordingly, the appeal is now file by me as legal heir of late Sh. Shri Ram. Thus the delay in filing the appeal before Hon’ble ITAT is due to a reasonable cause and therefore, the same be condoned and appeal be admitted for hearing for imparting substantial justice.’’ To this effect, the legal heir Shri Ramesh Kumar has filed an affidavit deposing the above facts in the case. It is also noteworthy to mention that the legal heir Shri Ramesh Kumar has filed the death certificate of his father late Shri Ram who passed away on 25-04-2022 and this certificate is issued by the Govt. of Rajasthan, Directorate of Economics & Statistics, Registrar-Thada, Tijara, Alwar.
2.2 During the course of hearing, the ld. DR objected to assessee’s application for condonation of delay and prayed that Court may decide the issue as deemed fit and proper in the interest of justice.
2.3 We have heard both the parties and perused the materials available on record. The Bench noted that the reasons advanced by assessee (supra) for condonation of delay of 455 days in filing the above appeal is sufficient to condone the delay which has merit. Thus, we concur with the submission of the assessee and condone the delay of 455 days 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 nothing has been submitted by the assessee to rebut the finding of the AO in spite of numerous notices to the assessee. The narration as made by the ld. CIT(A) in his order is reproduced as under:-
‘’4…
5.3. It is worth mentioning that the appellant has been habitually non-compliant. He did not file any reply to the numerous notices u/s 142(1) and the show-cause issued by the AO, leading to the assessment being completed on an ex- parte basis u/s 144. Even in the present appellate proceedings, he has remained non-compliant and has not filed even a letter seeking an adjournment.
5.4 Due to the non-compliant attitude of the appellant, the appeal has to be decided on merits and facts available on record. I have carefully perused the grounds of appeal, statement of facts and the assessment order to look for any fact which may be helpful in furthering the cause of the appellant, but could not find any. The A.O had made the addition specifically because the appellant failed to give any satisfactory explanation as to why he did not offer the capital gains arising from the sale of property, despite being provided with reasonable opportunity Even during the present appellate proceedings, the appellant failed to give any submission / evidence whatsoever and chose to remain non-compliant. The facts stated in the grounds of appeal are very cryptic, vague and general in nature and do not come to rescue of appellant. In the Grounds of Appeal, the appellant claimed that by AO did not allow exemption under section 54F without going through the facts and circumstances of the case, but the appellant himself failed to produce even a shred of evidence in this regard either before the AO or during the present appellate proceedings. Thus, the appellant has not discharged the primary onus of explaining his case The appellant has not produced any material to controvert the finding of A.O. on merits. Further, from the above conduct of the appellant, it is clear that the appellant is not interested in pursuing his appeal. In the event, I have no reason to interfere with the findings of the AO. In view of these facts, I am of the opinion that no interference is called for in the AO's assessment order and therefore, the grounds of appeal are dismissed.
6. Accordingly, the appeal of the appellant is hereby dismissed. ‘’ 3.2 During the course of hearing, the ld. AR of the assessee submitted that the assessee was ex-parte before the AO and before the ld. CIT(A) as he did not receive any communication/ notice. The ld. AR further submitted that the main assessee Sh. Shri Ram passed away on 25-04-2022 and thus his legal heir Shri Ramesh Kumar has to pursue the case before the Department and he will submit all the details with regard to the addition made by the AO and the legal heir may be given one chance to contest the case of the late assessee before the AO and also settle the dispute in question.
3.3 On the other hand, the ld. DR supported the orders of the lower authorities.
3.4 We have heard both the parties and perused the materials available on record. Brief facts of the case are that there was information with the Department that the assessee had jointly sold an immovable property situated at Village Udaipur, Tehsil (Alwar) to Shri Surajmal S/oShri Ramswaroop, 28/18, Friends Colony,Gurgaon (Haryana) for sale consideration of Rs.1,33,88,000/- on 25-05-2013. The Sub-Registrar, Bhiwadi had adopted the value of sale consideration at Rs.1,34,98,056/- for Stamp Duty purposes. In view of the provisions of Section 50C of the Act, the total sale consideration of this property was treated at Rs.1,34,98,056/-. Thus based on said information and sale deed documents, the share of the assessee late Shri Ram was worked out at Rs.28,33,600/-. It is noted by the Department that since no return of income was filed by the assessee for the period under consideration, the reasons were recorded and approval u/s 151 of the Act was sought from the Ld. Pr. CIT, Alwar for initiating proceedings u/s 147 of the Act. Accordingly, notice u/s 148 of the Act was issued on 21-02-2020 requiring the assesseee to file the return in response to notice u/s 148 . It is notice by the Department that no return was filed by the assessee in response to notice u/s 148 of the Act. It is also indicated to the assessee that that in case of failure to file reply of the questionnaire issued, the case will be decided ex-parte u/s 144 of the Act but the assessee did not respond to the notice. Conclusively the AO made addition of Rs.28,33,600/- in the hands of the late assessee Shri Ram by observing as under:-
‘’Since no return has been filed, nor any reply furnished during the course of assessment proceedings, it is clear that no capital gains tax has been paid on the said sale. No information regarding the date of the purchase of the property which has been sold during the year under consideration is available nor furnished by the assessee. Therefore, in the interest of the Revenue, the entire share of the sale consideration of Rs.28,33,600/- is brought to tax under the head ‘’Short Term Capital Gains.’’ In first appeal, the ld. CIT(A) has dismissed the appeal of the assessee holding therein that the assessee had not produced any material to controvert the findings of the AO on merits. The grievance of the assessee is that against the assessment order, appeal was filed on 02.11.2021 In Form No.35 e-mail address was given as shriram9875053160@.gmail.com. After filing the appeal, his father expired on 25.04.2022. The Ld. CIT(A), NFAC issued notice for hearing between 17.05.2022 to 14.08.2023 at the e-mail address mentioned in Form No.35. However, these notices never came to the notice of legal heir. However, the ld.AR of the assessee submitted that one more chance should be given to the assessee to contest the case before the AO and also to file the necessary documents with a view to settling the dispute of addition made by the AO. Thus the Bench noted that it is an admitted fact that the assessee is ex-parte before the AO and also before the ld. CIT(A). Therefore, he could not put forth his defence. It was the bounded duty of the assessee to appear before the statutory authorities as and when called for. It is noticed that various opportunities were provided to the assessee for settling the issue but the assessee remained lethargic and unserious in pursuing his case. However, the Bench is of the view that lis between the parties has to be decided on merits so that nobody’s rights could be scuttled down without providing opportunity of being heard to the assessee. Hence, the matter is restored to the file of the AO to decide it afresh by providing one more opportunity of hearing, however, the assessee will not seek any adjournment on frivolous ground and remain cooperative during the course of proceedings. Thus the appeal of the assessee is allowed for statistical purposes.