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Facts
The assessee sold a landed property and declared long-term capital gains based on a fair market value of Rs. 28,500 per cent as of 01.04.1981. The Assessing Officer, however, adopted a much lower fair value of Rs. 1,230 per cent based on sub-registrar documents, leading to an increased assessment under Section 143(3) read with Section 147. The ld. CIT(A) dismissed the assessee's appeal for non-prosecution without addressing the merits, despite the assessee's request for an extension and timely response to a notice.
Held
The tribunal found that the CIT(A) erred by dismissing the appeal for non-prosecution without adjudicating the issues on merit, thereby denying natural justice. Consequently, the tribunal remanded the entire matter back to the ld. CIT(A)/NFAC for fresh adjudication, directing the assessee to produce all necessary documents and ensuring a reasonable opportunity of being heard.
Key Issues
Whether the CIT(A) was justified in dismissing the assessee's appeal for non-prosecution without considering the merits, and if such dismissal constitutes a denial of natural justice warranting a remand for fresh adjudication.
Sections Cited
250, 143(3), 147, 148, 142(1), 133(6), 250(6), 143(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, COCHIN BENCH:COCHIN
Before: SHRI INTURI RAMA RAO & SHRI KESHAV DUBEY
Assessment Year: 2013-14 Punthil Usman Hajee Shajahan Shaji Nivas Thottakkattukara ITO Aluva Aluva Vs. Ernakulam District Range Kerala 683 108 Aluva PAN NO :AWEPS1517N APPELLANT RESPONDENT Appellant by : Shri Aneesh Vishwanathan, A.R. Respondent by : Smt. Leena Lal, Sr. D.R. Date of Hearing : 27.01.2025 Date of Pronouncement : 02.04.2025 O R D E R
PER KESHAV DUBEY, JUDICIAL MEMBER:
This appeal at the instance of the assessee is directed against the order of ld. CIT(A)/NFAC dated 26.05.2023 vide DIN & Order No.ITBA/NFAC/S/250/2023-24/1053225222(1) for the AY 2013- 14 passed u/s 250 of the Income Tax Act, 1961 (in short “The Act”).
The assessee has raised following grounds of appeal:
The brief fact of the case are that the assessee is carrying on the business of lending of video and CD cassettes. The assessee is also a partner in the firm M/s. Classic Business Corporation, Aluva (PAN AACFC3001B). The return of income for the assessment year was originally e-filed on 15.01.2015 declaring a total income of Rs. 4,73,230/-. The return was processed u/s. 143(1) on 21.03.2015. Subsequently the assessee voluntarily filed a revised return on 16.12.2016 by declaring an enhanced income of Rs.14,96,560/-, which includes proportionate share of long-term capital gains arisen from the sale of landed property jointly held by two other brothers of the assessee. Thereafter, the AO issued notice on 28.03.2018 under section 148 of the Act directing to file Punthil Usman Hajee Shajahan, Aluva Page 4 of 6 a fresh return of income for the year concerned. Further a notice under section 142(1) of the Act was issued to the assessee on 27.07.2018 and the assessee e-filed return on 14.08.2018 declaring the same total income of Rs 14,96,560/- as reported in the revised return voluntarily filed on 16.12.2016. The assessee along with two brothers sold an aggregate extent of 23.12 acres (57.23 cents) of land situated adjacent to NH 47 and facing Aluva Thrissur Highway located at Thottakkattukara Kara, Aluva Municipality, Aluva West Village, Aluva Taluk as per document No 3358 dated 17.09.2012 for an aggregate consideration of Rs.175 Lakhs. The said landed property was inherited from assessee's mother Smt. Ayshu as per settlement deed Nos. 2147, 2148, 2149, 2150 & 2151 all dated 26.04.2004. Further, the property was originally purchased by mother in the year 1959.The fair market value adopted by the assessee at Rs. 28,500/- per cent as on 01.04.1981 for the purpose of computation of LTCG was primarily in view of the prominence of the location of the property (adjacent to NH 47 and facing Aluva — Thrissur National Highway). Further the same was also based on the strength of another referable sale deed No. 4752/1/2003 dated 21.11.2003 of Aluva Sub Registry Office executed by Smt. Rosakutty, W/o Late Mathew to the Federal Bank Ltd. The AO rejecting the fair market value of Rs. 28,500 per cent adopted by the assessee had adopted the fair value at Rs. 1,230/- per cent based on the documents provided by the sub registrar, Aluva u/s. 133(6) of the Act and taken the cost of the land at Rs. 70,380/- and accordingly recalculated the long term capital gain. The assessment was completed by AO on a total assessed income of Rs. 57,76,580/- u/s. 143(3) r.w.s. 147 of the Act.
Aggrieved by the assessment completed u/s. 143(3) r.w.s. 147 of the Act dated 21.12.2018, the assessee preferred an appeal before the ld. CIT(A)/NFAC.
Punthil Usman Hajee Shajahan, Aluva Page 5 of 6 5. The ld. CIT(A)/NFAC dismissed the appeal of the assessee by holding that the assessee is not interested in prosecuting the appeal as neither any submission/document were submitted in support of his case nor sought for any adjournments. Accordingly, appeal filed by the assessee was dismissed.
Aggrieved by the order of ld. CIT(A)/NFAC dated 26.05.2023, the assessee has filed the present appeal before this Tribunal.
Before us, the ld. AR of the assessee submitted that the action of the ld. CIT(A)/NFAC in passing the order without addressing the assessee’s request for an extension of time filed on 24.05.2023 are unjustifiable and amounts to a denial of natural justice. Further, ld. AR submitted that despite the assessee’s timely response to the notice dated 22.05.2023 which was not rejected before the order was passed, the ld. CIT(A)/NFAC allegations of intentional delay are baseless. Lastly, the ld. AR of the assessee also submitted that the ld. CIT(A)/NFAC disregarding the merit of the case hastily passed an order without considering the grounds of appeal raised by the assessee and prayed to provide one more opportunity before the ld. CIT(A)/NFAC.
The ld. DR on the other hand supported the order of the authority below.
We have heard the rival submissions and perused the material available on record. A perusal of the fact of the case shows that the assessee could not represent his case before the ld. CIT(A)/NFAC as a result of which the ld. CIT(A)/NFAC has dismissed the appeal of the assessee on account of non- prosecution. Further on perusal of the order of the ld. CIT(A)/NFAC, it is found that the ld. CIT(A)/NFAC has also not adjudicated the issues on merit. As per the provision contained in section 250(6) of the Act, the order of the ld. CIT(A)/NFAC disposing of the appeal Punthil Usman Hajee Shajahan, Aluva Page 6 of 6 shall be in writing and shall state the points for determination, the decision thereon and the reason for the decision.
9.1 During the course of hearing, the ld. AR of the assessee requested that the assessee may be provided with one more opportunity to represent his case before the ld. CIT(A)/NFAC. In view of the above, considering the prayer of the ld. A.R. of the assessee, as well as in the interest of justice and fair play, we deem it fit to remit the entire issues involved in the present appeal to the file of ld. CIT(A)/NFAC for fresh adjudication in accordance with the law. Needles to say, reasonable opportunity of being heard must be granted to the assessee. The assessee is also directed to produce all the necessary documents/evidences/information in support of his claim and shall not seek unnecessary adjournments. It is ordered accordingly.
In the result, appeal filed by the assessee is partly allowed for statistical purposes.