VALAPPIL KANDY LAKSHMI,THALASSERY vs. THE INCOME TAX OFFICER,WARD -2,, KANNUR

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ITA 773/COCH/2023Status: DisposedITAT Cochin27 May 2025Bench: SHRI INTURI RAMA RAO (Accountant Member), SHRI SOUNDARARAJAN K. (Judicial Member)3 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal observed that the V.A.O. report was not communicated to the assessee and the Ld. CIT(A) had decided the appeal without proper submissions from the assessee. Therefore, the Tribunal set aside the order of the Ld. CIT(A) and remitted the appeal back for a fresh decision on merits after hearing the assessee in accordance with law.

What were the facts?

The assessee sold agricultural land, claiming a deduction under Section 54F. The Assessing Officer denied the deduction, treating the land as a capital asset based on a Village Administrative Officer's report, and levied long-term capital gains. The Ld. CIT(A) confirmed the AO's order without providing the assessee an adequate opportunity of being heard.

What were the issues?

1. Whether the land sold was an agricultural land or a capital asset liable for long-term capital gains. 2. Whether the assessee was provided a proper opportunity of being heard by the lower authorities.

Which sections of the Income-tax Act were involved?

Section 54F

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, COCHIN BENCH : COCHIN

Before: SHRI INTURI RAMA RAO & SHRI SOUNDARARAJAN K.

For Appellant: Shri Suresh Kumar, CA, Shri Omanakuttan, Snr

ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER

This is an appeal filed by the assessee challenging the order of the NFAC, Delhi dated 21/08/2023 in respect of the A.Y. 2014-15.

2.

The brief facts of the case are that the assessee had filed her return of income and claimed deduction u/s. 54F of the Act on the sale of agricultural lands. The AO not accepted the case of the assessee on the ground that the Page 2 of 3 Village Administrative Officer had furnished a report to the effect that the property is situated within the limits of Mattannur Municipality and therefore the same is a capital asset liable to be taxed under the long term capital gains. As against the said order, the assessee filed an appeal before the Ld.CIT(A). The Ld.CIT(A) had decided the appeal in the absence of the assessee and confirmed the order of the AO. As against the said order, the assessee is in appeal before this Tribunal.

3.

At the time of hearing, the Ld.AR submitted that the assessee is aged about 80 years and therefore she is not conversant with the computer and therefore she has no knowledge about the hearing notices sent through the email and prayed for an opportunity to represent the matter before the Ld.CIT(A). Further the Ld AR submitted that the lands sold are agricultural lands and therefore no LTCG would arise.

4.

The Ld.DR relied on the orders of the lower authorities.

5.

We have heard the arguments of both sides and perused the materials available on record.

6.

We have perused the assessment order which was made based on the report furnished by the Village Administrative Officer. It seems that the said report was not communicated to the assessee before passing the assessment order. The assessee also not having enough opportunity to appear before the Ld.CIT(A).Even though the Ld.CIT(A) had discussed the grounds and passed the orders, the same is without the submissions made by the assessee and therefore, the ld CIT could not have decided the appeal on merits. In such circumstances and also in order to decide the issue on merits, we are setting aside the order of the Ld.CIT(A) and remit the appeal to the file of the Ld.CIT(A) to decide the appeal on merits and in accordance with law, after hearing the assessee.

Page 3 of 3 ITA No. 773/Coch/2023

7.

In the result, the appeal filed by the assessee is partly allowed for statistical purposes.

Order pronounced in the open court on 27th May, 2025.

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