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Facts
The assessee's appeal is against the CIT(A)'s order confirming additions made by the AO. The AO reopened the assessment u/s 147 and made additions for short-term capital gain and cash deposits. The assessee failed to provide details, leading to an ex-parte assessment.
Held
The Tribunal noted the assessee's prolonged delay in filing the appeal due to medical reasons, which was condoned. However, it observed that the assessee was ex-parte before the AO and CIT(A) and did not present their case effectively. The matter was restored to the AO for fresh adjudication.
Key Issues
Whether the delay in filing the appeal should be condoned and whether the ex-parte assessment and confirmation by CIT(A) should be set aside, restoring the matter to the AO for fresh adjudication on merits.
Sections Cited
147, 144, 50C, 143(6), 142(1), 148
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Income Tax Appellate Tribunal, JAIPUR BENCHES,”SMC” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA. No.28/JPR/2025
fu/kZkj.k o"kZ@Assessment Years : 2012-13 cuke Sh. Somesh Parnami Income Tax Officer, 737-A, Sumer Nagar, near Gagan Vs. Ward -2(4), Bharti School, Sanganer, Jaipur. Jaipur 302 029. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: ADJPP6358G vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Tarun Mittal, C.A. jktLo dh vksj ls@ Revenue by : Sh. Gautam Singh Choudhary, Addl. CIT lquokbZ dh rkjh[k@ Date of Hearing : 18/02/2025 mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 28 /03/2025 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 03-11-2023, National Faceless Appeal Centre, Delhi [ hereinafter referred to as (NFAC) ] for the assessment year 2012-13 raising therein following grounds of appeal.
1. On the facts and in the circumstances of the case and in law, ld. CIT(A) has erred in confirming the action of Id. AO in reopening the assessment u/s 147 of the Income Tax Act, arbitrarily.
2. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in confirming the order passed by ld.AO, in an ex-parte manner u/s 144 without providing an adequate opportunity of being heard which is against the principle of natural justice.
3. On the facts and circumstances of the case, the ld.CIT(A) has erred in confirming the action of ld.AO in making addition of Rs. 25,02,750/- under the head "short-term capital gain" on sale of immovable property, arbitrarily.
3.1. That, ld.CIT(A) has further erred in confirming action of ld.AO in making addition of entire stamp duty value of Rs.25,02,750/-of sale of property (sale consideration of property was Rs.18,00,000/-) without allowing deduction on account of cost of acquisition. Appellant prays that taxing of gross Stamp duty value is against the principle of taxation, according to which only net income can be taxed and therefore addition made by Id.AO deserves to be deleted.
On the facts and circumstances of the case, the ld.CIT(A) has erred in confirming the action of ld.AO in making an addition of Rs. 1,11,000/- on account of cash deposited in the bank account during the year under consideration by considering the same as income of the assessee from undisclosed sources, arbitrarily. Appellant prays that deposits made in bank account are fully explained and therefore addition made by Ld. AO deserves to be deleted.
5. The appellant craves leave to add, alter, modify or amend any ground on or before the date of hearing.”
2.1 At the outset of hearing, the Bench observed that there is delay of 376 days in filing of the appeal by the assessee for which the ld. AR of the assessee filed an application for condonation of delay with following prayers. Besides this, the assessee has filed a medical certificate from the Doctor Vaihav Mathur, DM (Neurology), SMS Medical College, Jaipur diagnosing disease of Parkinson.
“In the aforesaid context, it is humbly submitted that order u/s 250 was passed by Ld. CIT(A) in the case of assessee on 31.10.2023, which stood uploaded on the e portal of assessee. Against the order so passed, appeal could have been filed within 60 days, from date on which order was passed. However, the appeal got delayed by 376 days, as the appeal was filed on 10.01.2025 for the reasons as explained below:
1. 1. That, the order u/s 250 was passed by CIT(A), NFAC on 31.10.2023.
2. That, the assessee was suffering from Parkinsons disease coupled with other medical problems and is unable to keep track of the notices issued against him. This prevented him from following up on the notices issued against him. Necessary copy of medical certificate in this regard has been enclosed herein.
3. Thus, it is submitted that the delay in filing the appeal is absolutely inadvertent and has occurred due to circumstances beyond the control of assessee.
4. That, the assessee always has acted in a bona fide manner and the delay is of only 376 days. In the circumstances of the matter it is humbly prayed to yourgoodself to please accept the application/prayer of the condonation of delay which is merely of 376 days and to please be kind enough to direct the listing of the appeal for disposal on the merits.” Further, the assessee has filed an affidavit in support of his contentions as to delay made in filing the appeal.
2.2 The ld. AR of the assessee appearing in this appeal submitted that the assessee is serious on his duties and the delay of 376 days in filing the appeal is on account of critical medical treatment. Hence, the delay so made in filing the appeal may kindly be condoned. 2.3. 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. 2.4 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 376 days are sufficient to condone the delay which has merit. Thus, we concur with the submission of the assessee and condone the delay of 376 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, it is noted from the assessment order that the case of the assessee was re-opened u/s 147 of LT. Act, 1961 after getting prior approval of competent authority on the basis of information that during the F.Y. 2011-12 relevant to A.Y 2012-13, the assessee had sold an immovable property on 19.09.2011 situated at Plot No. J-1230 in Sitapura Industrial Area, Sanganer, Jaipur for sale consideration of Rs. 18,00,000/-. The stamp duty authority valued the property at Rs. 25,02,750/- for stamp duty purpose. It is noted that Notice U/s 148 of I.T. Act, 1961 was issued to the assessee on 26.03.2019. The assessee did not make any compliance to the notice U/s 148 of the I. T. Act. Thereafter, Notice U/s 142(1) of the I.T. Act, 1961 were issued on 10.06.2019.11.07.2019 and 27.07.2019 fixing date for furnishing of details / documents/information on 19.06.2019, 19.07.2019 and 06.08.2019 respectively. The assessee neither made any compliance nor sought any adjournment in response to notice issued U/s142(1) of the 1.T.Act. Further a notice U/s 142(1) along with show cause notice for ex- parte assessment giving last and final opportunity to the assessee issued on 10.10.2019 fixing date for filing of details/documents on 16.10.2019 stating in case of non attendance the matter will be decided on merit as per the material available on the face of record U/s 144 of the IT. Act i.e assessment as per the best judgment of the LT Act. In compliance to show cause notice the assessee filed reply on ITBA portal and requested for adjournment for 15 days. Considering the request of the assessee, case was adjourned for 04-11-2019 by the AO. In compliance to the notice, the assessee has not furnished any details / documents. Further a notice u/s 142(1) along with show cause for ex-parte assessment giving last and final opportunity to the assessee issued on 13-11-2019 fixing the date for furnishing the details/documents/information on 20-11-2019 stating therein that in case of non submission of details/documents, the matter will be decided on merits as per the material available on the face of record U/s 144 of the I.T. Act i.e. assessment as per the best judgment of the IT Act. Hence, it is noted that the assessee has not filed return of income for the A.Y. 2012-13 and no capital gain was declared. Information U/s 133(6) was sought from concerned Sub-Registrar and in response to which, certified copy of the sale deed executed on 19.09.2011 by the assessee received in the AO office. As per registered document, the immovable property was acquired by the assessee on 13.04.2010 and sold on 19.09.2011 for Rs. 18,00,000/-. The stamp duty authority valued the property at Rs. 25,02.750/- for stamp duty purpose. According to the AO, as per provision of sec 50C of I.T. Act, 1961 higher of the sale consideration and value adopted by the stamp authority is taken as sale consideration of the property. Therefore, in this case for the purpose of capital gain, sale consideration is taken at Rs 25,02,750/-. Thus the AO made addition in the hands of the assessee amounting to Rs.25,02,750/- and Rs.1,11,000/- by observing as under:-
‘’In this transaction of immovable property, the transaction is of Short term capital gain asset which has been verified by the sale deed. The assessee acquired the property on 13.04.2010 but neither submitted the proof of cost of acquisition nor submitted any proof of passing the sale consideration to the original allottee. In view of above, I have no other option except to complete the assessment U/s 144 of 1.T.Act. 1961 as best judgment based on merit considering the sale consideration of Rs. 25,02,750/- as Short term capital gain of the assessee which resulted into an addition of Rs.25,02,750/- to the total income. Information u/s 133(6) of L.T. Act was also called for from the Indian Overseas bank. Mansarovar, Jaipur. In response to which, the bank has furnished the bank statement of the assessee for the relevant period. As per the bank statement provided by the concerned bank, it is noticed that the assessee has deposited cash of Rs. 1,11,100/- in his saving bank account during the relevant period. During the course of asstt proceedings the assessee has not submitted any details/ documents/ explanation in respect of cash deposit in his saving bank account No. 162202000000571 maintained with Indian overseas bank, Mansarovar, Jaipur. In the circumstances, the cash deposits is treated as earned out of undisclosed sources and therefore an amount of Rs. 1,11,000/- is hereby added to the total income of the assessee.
3.2 Aggrieved from the order of the AO, the assessee filed the appeal before the ld.CIT(A) who confirmed the addition made by the AO holding that no cogent material and valid arguments were provided by the assessee in spite of providing various to the assessee. The narration as made by the ld.CIT(A) at para 4.6 & 5of his order is reproduced as under:-
4.6 Before parting, it is trite that an appellate authority is essentially called upon to balance the two sides of an argument presented before him as held in Nirmal Singh and Others of the Hon'ble Punjab and Haryana High Court [Cr No. 3791 of 2013 (O&M) dated 01.05.2014] and in the absence of any reasonable, cogent and valid arguments/contentions advanced by the appellant in the instant appeal to counter the AO's decision as contained in the assessment order, as mentioned earlier, the additions/disallowances made by the AO is sustained in terms of the observations herein-above.
In the result, the appeal of the appellant is dismissed.” 3.3 During the course of hearing, the ld. AR of the assessee prayed that the assessee being patient of Parkison could not represent his case before the lower authorities and thus the lower authorities passed ex-parte orders in his case. The ld.AR submitted that one more chance may be given to the assessee to argue the case and submit the documents before the AO so that the issue could be settled on merit in the interest of equity and justice.
3.4. Per contra, Ld. DR objected to the prayer of the assessee and relied upon the order of the ld. CIT(A)
3.5. We have heard both the parties and perused the materials available on record. The Bench noted from the assessment order that the AO made two additions in the hands of the assessee i.e. (i) Rs.25,02,750/- on account of short term capital gain and (ii) cash deposits of Rs.1,11,100/- on account of undisclosed sources. The AO passed an ex-parte order as the assessee did not submit any details/documents/ proof and explanation against the above additions. Further, the ld.CIT(A) has also passed an ex- parte order confirming the action of the AO as the assessee did not provide the details / information / valid arguments. Since 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, we are 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.
3.6 Before parting, we may make it clear that our decision to restore the matter back to the file of the AO shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by AO independently in accordance with law.