Loading judgment…
Facts
The assessee filed an appeal with a delay of 158 days, attributing it to non-service of the appellate order due to being a resident of a remote village and not receiving notices. The assessee claimed that the CIT(A) dismissed the appeal for non-prosecution without providing sufficient opportunity, violating principles of natural justice.
Held
The Tribunal condoned the delay in filing the appeal, acknowledging the violation of natural justice and the assessee's affidavit. The Tribunal found that the CIT(A) had no power to dismiss the appeal for non-prosecution and decided to remand the matter back to the AO for fresh adjudication.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal for non-prosecution without affording sufficient opportunity, and whether the delay in filing the appeal by the assessee should be condoned.
Sections Cited
143(3), 250(6), 10(37), 48, 133(6), 142(1), 143(2)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JAIPUR BENCHES,”B” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM
fu/kZkj.k o"kZ@Assessment Years : 2017-18 Sh. Madan Lal Choudhary cuke The ITO, Village-Tilawas, Post-Dewla Via Vs. Ward-7(1), Jaipur. Bagrum Ajmer Road, Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AGIPC6444J vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Rajendra Sisodiya (Adv.) jktLo dh vksj ls@ Revenue by : Shri Anup Singh (Addl.CIT) lquokbZ dh rkjh[k@ Date of Hearing : 11/11/2024 mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 20/01/2025 vkns'k@ ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM This appeal is filed by the assessee aggrieved from the order of the National Faceless Appeal Centre, Delhi [for short “CIT(A)/NFAC”] dated 09.01.2024 for the assessment year 2017- 18, which in turn arise from the order dated 23.12.2019 passed under section 143(3) of the Income Tax Act,1961 [ for short “Act” ] by the ITO, Ward-7(1), Jaipur [ for short AO]. 2.1 At the outset of hearing, the Bench observed that there is delay of 158 days in filing of the appeal by the assessee for which Sh. Madan Lal Choudhary vs.ITO the ld. AR of the assessee filed application for condonation of delay with following prayers and the assessee to this effect also filed an affidavit :-
“There has been a delay of 158 days in filing of appeal before the Hon'ble Tribunal, which has been on account of non-service of the appellate order on the assessee. The assessee has had only primary education and lives in a remote village. He had not received the order of CIT(A) by post. He came to know of the appellate order only when he visited the office of ITO, Ward-7(1), Jaipur, on 12.08.2024. As a matter of fact, the assessee was called by the staff of ITO, Ward-7(1), Jaipur, asking him to deposit the outstanding demand. The assessee in order to ascertain the demand came to Income Tax Department, Jaipur, where he came to know that order u/s 250 has been passed in his case in January, 2024. he was advised to file appeal before ITAT. Being aggrieved by the said order he requested the undersigned to file the appeal. The undersigned logged into the assessee's account and downloaded the appellate order, after obtaining the efiling password from his ex-AR, and filed the appeal. The assessee's affidavit detailing the aforesaid facts may kindly be placed before the Hon'ble Appellate Tribunal for condonation of the delay in submission of the appeal.”
2.2 The ld. AR of the assessee vehemently argued that reasons for delay and dismissal of appeal are same as the assessee was not served the notices as required and even the order was not served upon the assessee and the assessee came to know when the recovery proceeding the assessee was called upon and that being the fact resulted into a delay of filling the present appeal by 158 days. Ld. AR considering that fact and relying on the decision of the apex court in the case of Collector, Land & Acquisition Vs. Mst. Katiji& Others 167 ITR 471(SC) submitted that the delay may Sh. Madan Lal Choudhary vs.ITO be condone as the assessee is at risk of not filling the appeal on time and on being aware immediately presented the appeal. 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 deem 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 email id was of the counsel and the same was put to the notice of the assessee and thereby resulted to the delay in filling the present appeal. As pointed out the fact are clear that in this case the principles of natural justice has been violated as confirmed by the assessee in his affidavit. Our constitution guarantee that right vide Article 14. Since that is so and was not controverted by placing anything contrary we considered the reasons advanced in the affidavit by the assessee and condone the delay in filling the present appeal.
3. The assessee has marched this appeal on the following grounds:- “1. The Ld CIT(A) has erred on facts and in law in dismissing the appeal of the assessee for non-prosecution, whereas in view of Section 250(6) of the Act, the CIT(A) has no power to dismiss an appeal on account of non-prosecution, as held by Hon'ble Bombay High Court in CIT vs. Premkumar Arjundas Luthra HUF, (2017) 291 CTR 614 (Bom.)
2. The Ld CIT(A) has erred on facts and in law in confirming the addition made by the AO who had arbitrarily rejected the explanation of assessee and not considered Indexed cost of acquisition of Rs. 75,86,705/- u/s 48 in computing capital gain.
3. The Ld CIT(A) has erred on facts and in law in confirming the addition made by the AO who had rejected the explanation of assesse and not considered cost of improvement of Rs. 2,50,000/- u/s 48 in computing capital gain.
4. The Ld CIT(A) has erred on facts and in law in confirming the addition made by the AO not considering the fact that exemption u/s 10(37) was otherwise available to the assessee. 5. That the Appellant reserves his right to add, amend/modify the grounds of appeal. “
The fact as culled out from the record is that the assessee e- filed his Income Tax Return for the A.Y. 2017-18, on 30-06-2017 by declaring total income of Rs. 3,69,350/-. Thereafter, the case was selected for scrutiny under CASS. Therefore, notice u/s 143(2) of the Income Tax Act, 1961 was issued on 09-08-2018, which was duly served upon the assessee. Further, notice u/s 142(1) of the Act, 1961 along-with query letter was issued, and change in new incumbent a fresh notice u/s 142(1) of the I.T. Act, 1961 was issued. In response, thereto the assessee has filed submissions through online portal and furnished part details / information. Thereafter show cause notice dated 18-11-2019 and 25-11-2019 3.1 The assessee running a floor mill in the name and style M/s Shree Shyam Food Product and declared income under the head of business and profession and income from other sources in the year under consideration. On the basis of information gathered during the proceedings through portal. It is under preview the reason of CASS that the assessee has sold an immovable property and not declared capital gain and amount equal to sales consideration declared as exempted income in ITR. Further he made cash deposits in bank accounts between 9th November, 2016 to 30th December, 2016 during Financial Year 2016-17 relevant to Assessment Year 2017-18. The assessee was asked to furnish documentary evidences regarding capital gain and exempt income but he fails to remain explained about capital gain.
3.2 During the course of proceedings A/R of the assessee has provided part reply dated 11-11-2019 and ask reasonable time. Thereafter due to limitation of time to compete assessment proceedings show cause notices were issued on 18-11-2019 and 25-11-2019, but no response of assessee neither his A/R, show Sh. Madan Lal Choudhary vs.ITO that they are willfully avoiding statutory proceedings to hide the unexplained income. At last A/R of the assessee has submitted reply dated 11-12-2019, in which he stated that immovable property transaction is exempted u/s 10(37) the Income Tax Act, 1961, due to sold residential property has allotted by JDA in conversion of his agriculture land. The assessee is treating said land as agriculture land with no evidence provided regarding the cost of acquisition. In the absence cost of evidence and land conversion details sold residential property was fall in definition of capital assets. After examination the details/documents already available on record as well as information collected from the Sub. Registrar-V, Jaipur in response to notice u/s 133(6) of the I.T. Act, 1961, ld. AO noted that the assessee explained the agriculture land compulsory acquired by the JDA, Jaipur and in consideration of that JDA issued the residential plot and out of these residential plot, the assessee has sold one residential plot. Since, the converted residential plot can't be treated as agriculture land (declared as exempt income under section 10(37) of the I.T. Act, 1961) and not eligible for exempt under section 10(37) of the Income Tax Act, 1961. The assessee has sold such converted one residential Immovable property as on 30.06.2016 for consideration Sh. Madan Lal Choudhary vs.ITO of Rs. 75,00,000/- with jointly with mother and not disclosed the same in ITR under the head capital gain but offer consideration of Rs. 75,00,000/- as exempt u/s 10(37) of the Income Tax Act, 1961 in ITR and claimed the TDS of Rs. 75000/-. The assessee was asked to explain details regarding capital again and to furnish supporting evidence. But he had not provided the original cost of acquisition to claim as cost of acquisition. The assessee was claiming the DLC rate of converted land at the time of converted land issued as cost of acquisition. The assessee has not provided any documentary evidence whether any capital gain declared at the time of converted land issued. The assessee has failed to show capital gain transaction and no evidence of cost of acquisition of property produced hence, in absence of cost ld. AO treated entire sales consideration of Rs. 75,00,000/- as long term capital gain income and added to the total income of the assessee.
4. Aggrieved by the above order of the Assessing Officer the assessee preferred an appeal before the ld. CIT(A). After perusing the submissions of the assessee, the ld. CIT(A) has dismissed the appeal of the assessee. The relevant finding of the ld. CIT(A) is as under:-
Sh. Madan Lal Choudhary vs.ITO “4. The hearing in this case was fixed on 20.12.2023. However, neither anybody attended nor was any request for adjournment made by the appellant till date. Before this several notices were issued fixing the case for hearing, but they were neither responded to nor any adjournment was sought. The details of opportunities offered are as under- Sl. No. Date of notice Date of hearing Remarks 1. 07.11.2022 Enablement window 2. 16.10.2023 26.10.2023 No reply 3. 14.12.2023 20.12.2023 No reply 4. 21.12.2023 29.12.2023 No reply
5. All notices were sent by registered mail. Sufficient opportunity has been afforded to the appellant. It appears that, the appellant is not interested in pursuing the appeal. The law aids those who are vigilant, not those who sleep upon their rights. This principle is embodied in the well-known dictum, VIGILANTIBUS ET NONDORMIENTIBUS JURA SUB VENIUNT". 5.1 It is seen from the assessment order that the appellant claimed exemption of capital gain amounting to Rs.75,00,000/- u/s.10(37) of the Act. However, it is seen that the plot sold was not an agricultural land and the appellant is not eligible for exemption u/s.10(37) of the Act. Hence, the action of the AO is sustained. In view of the above, the appeal is dismissed on merits also.
6. The provisions of Sec.250(6) provides that the appellate orders of CIT(A) are to state the points arising out of appellant's appeal. The order shall give out the reasons for such decisions. The underline rationale of the position is that such order is further appealed.
7. Speaking order obviously will enable any party to know positively the points decided in his favor or against. Absence of formulation of the point of decision for want of quality due to the lack of information inadvertently puts the authority in a Quandary. 8. Sec.250(6) expressly embodies such provision, if an appellant fails to appear before the CIT(A) and fails to submit the relevant documents, Sh. Madan Lal Choudhary vs.ITO the CIT(A) is restricted to the disposal of the appeal based on the merits available in the record. 9. This stand was furthered by the High Court in the following Judgements. 1. SHREE BALAJI WOOLLEN MILLS vs. ASSISTANT COMMISSIONER OF INCOME TAX, ITAT, DELHI 'G' BENCH.
& 1239/De1/2011; Asst. yr. 2005-06.
PRAVEEN KUMAR PRUTHI vs. INCOME TAX OFFICER, ITAT, DELHI 'F' BENCH Asst. yr. 1999-2000.
3. ASSISTANT DIRECTOR OF INCOME TAX vs. WHITE INDUSTRIES AUSTRALIA LTD, ITAT, BENCH 'C' KOLKATA Asst yr. 1992-93.
JAI INTERNATIONAL VS. DEPUTY COMMISSIONER OF INCOME TAX ITAT, JODHPUR BENCH, Asst. Yr. 2012- 13.
RAMESH SHARMA vs. ASSISTANT COMMISSIONER OF INCOME TAX, ITAT, DELHI 'F' BENCH, Asst. yr. 2006- 07.
ESTATE OF LATE TUKOJIRAO HOLKAR vs. COMMISSIONER OF WEALTH TAX HIGH COURT OF MADHYA PRADESH, Misc. Civil Case No. 302 of 1991.
U-LIKE PROMOTERS (P) LTD. ASSISTANT COMMISSIONER VS. OF INCOME TAX,ITAT, DELHI 'H' BENCH, to 1572/De1/2009 and 1377 to 1379/De1/2012; Asst. yrs. 1998-99 to 2004-05.
Following the above explained rationale, the appeal stands dismissed.”
5. As is evident that the ld. CIT(A) has dismissed the appeal of the assessee without giving the sufficient opportunity to the assessee. The assessee contended that vide his affidavit that his Sh. Madan Lal Choudhary vs.ITO counsel has not intimated to the hearing of the appeal and has not placed on record the required submission. Even when the matter was going on before AO he has not given sufficient time which resulted into the principles of natural justice and thereby he prayed that the assessee intend to prove that his income is exempt as per provision of section 10(37) of the Act. To support the contention ld. AR of the assessee filed a detailed paper book in support of the contention and the index of the document submitted reads as under:-
S. No. Particulars Page No. 1. Copy of ITR along with computation of income 1-4 2. Copy of Aarakshan Patra and Allotment letter 5-8 3. Copy of registered sale deed 9-19 4. Copy of jamabandi evidencing share of assessee 20 5. Copy of bank account of the assessee 21-23 6. Copy of DLC rates of the impugned property 24 7. Copies of reply filed before AO 25-26
6. Per contra, ld. DR objected to the prayer of the assessee. Ld. DR submitted that four opportunity were sufficient after filing the appeal the assessee should be vigilant and cannot remain dependent merely on the counsel. Based on these arguments ld. DR relied upon the orders of the lower authority.
Sh. Madan Lal Choudhary vs.ITO 7. We have heard both the parties and perused the materials available on record. The bench noted from the submission made by the ld. AR for the assessee that the assessee’s case is adjudicated as an ex-parte in both the proceeding before lower authorities and was not given sufficient opportunity of being heard. The bench noted that Principles of natural justice are soul of an administration of justice and need to be adhered to in order to make the order as a just and fair order. The concept of speaking order is the essential part of the principles of natural justice. The principles of natural justice have come to be known as being part of guarantee contained in Article 14 of our constitution. Thus, the bench noted that at the stages the contention raised was not providing the opportunity in fairness to the assessee. Even otherwise as pleased by the AR of the assessee that the order passed in both proceedings are ex-parte but whereas as per provision of section 250(6) of the Act, the CIT(A) has no power to dismiss an appeal on account of non-prosecution, as held by Hon’ble Mombay High Court in CIT vs. Prem Kumar Arjundas Luthra HUF, (2017) 291 CIT 614 (Bom.)” . Considering that peculiar aspect of the matter we deem it fit to remand the matter to the file of the ld. AO who will consider the factual aspect of the Sh. Madan Lal Choudhary vs.ITO matter as raised by the assessee after due verification of the facts and charge the correct income in hands of the assessee if so to be taxed in accordance with law after affording due opportunity to the assessee. However, the assessee will not seek any adjournment on frivolous ground and remain cooperative during proceedings before the ld. AO.
Before parting, we may make it clear that our decision to restore the matter back to the file of the ld. AO shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the ld. AO independently in accordance with law. In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 20/01/2025.
Sd/- Sd/- ¼ Mk0 ,l- lhrky{eh ½ ¼ jkBkSM+ deys'k t;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judcial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 20/01/2025 *Santosh आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- Sh. Madan Lal Choudhary, Jaipur. 2. izR;FkhZ@ The Respondent- ITO, Ward-7(1), Jaipur.