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Facts
The assessees, along with co-owners, sold agricultural lands. The Assessing Officer treated these as capital assets and computed long-term capital gains, passing orders under Section 143(3) read with Section 147. The CIT(A) dismissed the appeals, either ex-parte due to non-compliance or in limine for delay in filing the appeal before the CIT(A), thereby confirming the AO's actions.
Held
The Tribunal condoned the delay in filing the appeals. It set aside the CIT(A)'s orders and remanded all disputed issues back to the CIT(A) for fresh adjudication on merits, subject to the assessees paying a cost of Rs. 2,000/- and cooperating in submitting information.
Key Issues
Whether the agricultural land sold constituted a capital asset; proper application of Section 50C for capital gains calculation; validity of ex-parte orders due to natural justice violation; and condonation of delay in filing appeals.
Sections Cited
143(3), 147, 250, 2(14), 50C, 250(6), 148, 143(2), 142(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, NAGPUR
Before: SHRIPAVAN KUMAR GADALE
The assesses have filed five appeals against separate orders passed by the CIT(A)/National Faceless Appeal Centre(NFAC) Delhi, u/sec 143(3) r.w.s147 and u/sec 250 of the Income Tax Act, 1961 (for short "the Act") for the A.Y. 2014–15 and 2015–16. Since the issues in these five appeals are common and identical, hence they are clubbed, heard and a consolidated order is passed. For the sake of convenience, the appeal in for the A.Y. 2014–15 is taken as lead case and facts narrated.
At the time of hearing, the Ld.AR of the assessee submitted that there is a delay in filing these appeals before the Hon’ble Tribunal and the assessee has filed an application and affidavit for condonation of delay explaining the sufficient cause. Whereas the facts mentioned in the Affidavit are reasonable and the learned D.R. has no specific objections. Accordingly, the delay is condoned and the appeals are admitted.
Assessee’s appeal – A.Y. 2014–15
The grounds of appeal raised by the assessee are as under:–
3 Pavan Sharadrao Khadse Alkesh Sharadraoji Khadse Lata Sharadraoji Khadse 536 544/NAG./2025 ITA no.537,549/NAG./2025
“The Appellant respectfully submits the following grounds of appeal against the order dated 29.07.2022 passed by the Learned Commissioner of Income Tax (Appeals) -NFAC, Delhi, for the Assessment Year 2015-16:
1. Violation of Natural Justice: The order of the Ld. CIT(A) is bad in law and void ab initio as it has been passed ex parte, without affording the Appellant effective opportunity of being heard, thereby violating the principles of natural justice.
2. Non-speaking Order: The Ld. CIT(A) erred in law in not passing a reasoned and speaking order as mandated under section 250(6) of the Act.
3. Agricultural Land not a Capital Asset: The authorities below erred in holding that the land sold by the Appellant was a "capital asset" u/s 2(14) of the Act, ignoring that the said land was situated beyond 8 kilometres from the nearest municipal limits and thus constituted rural agricultural land, outside the ambit of capital asset.
4. Erroneous Determination of Distance: The authorities below erred in adopting the distance of 6.99 km without credible evidence or authentic measurement, rendering the finding perverse and unsustainable.
5. Wrong Application of Section 50C: The authorities below erred in invoking section 50C of the Act by substituting the actual sale consideration of 248,00,000/- with the stamp duty valuation of ₹48,30,000/-, despite the difference being less than the tolerance limit of 5% prescribed under the proviso to section 50C.
6. Arbitrary Fair Market Value as on 01.04.1981: The Assessing Officer erred in adopting the fair market value of 25,000/- per acre as on 01.04.1981 on the basis of an alleged "field inquiry," without producing any supporting evidence or comparable sale instances, and the Ld. CIT(A) erred in confirming the same mechanically.
7. Invalidity of Assessment Order for want of DIN: The assessment order is bad in law and liable to be quashed, as it does not bear a valid Document Identification Number (DIN) as mandated by CBDT Circular No. 19/2019 dated 14.08.2019, thereby rendering it invalid and non est in the eyes of law.
4 Pavan Sharadrao Khadse Alkesh Sharadraoji Khadse Lata Sharadraoji Khadse 536 544/NAG./2025 ITA no.537,549/NAG./2025
8. General Grounds: a) The Ld. CIT(A) erred in upholding the assessment without properly appreciating the facts, evidence, and submissions of the Appellant. b) The impugned orders are unjust, arbitrary, and contrary to settled principles of law. c) The Appellant craves leave to add, alter, amend, modify, or withdraw any ground of appeal at the time of hearing.”
The brief facts of the case are that, the assessee has not filed return of income for A.Y.2014-15 and the Assessing Officer has received information that the assessee along with eleven other co–owners have sole two properties during F.Y. 2013–14 and there is variation in the fair market value as per SRO and the sale consideration mentioned in the sale deed. The Assessing Officer found that the assessee has sold agricultural lands, which is a capital asset within the meaning of section 2(14) of the Act and the lands are situated within 8 kms of Nagpur Municipal Corporation. The Assessing Officer has reason to believe that the income has escaped assessment and issued notice u/sec148 of the Act. The assessee has filed return of income for the A.Y. 2014–15 on 05/12/2018 disclosing a total income of Rs.2,34,930/-. Subsequently, notice u/sec143(2) and 142(1) of the Act are issued calling for the details and material evidences. The Assessing Officer dealt on the facts that the assessee has sold capital asset and worked out the long term capital gains and the cost acquisition towards assessee’s share. The assessee
5 Pavan Sharadrao Khadse Alkesh Sharadraoji Khadse Lata Sharadraoji Khadse 536 544/NAG./2025 ITA no.537,549/NAG./2025 was requested to show cause as to why the cost of acquisition of the said land as on 01/04/1981, should not be adopted @ Rs.5,000/– per acre for computation of long term capital gain. The assessee has filed submissions on 05/11/2019 and the A.O has called for additional information. Since there was no compliance by the assessee and there is no supporting evidence in support of cost of acquisition of land as on 01/04/1981, the Assessing Officer computed the long term capital gains adopting the cost of acquisition as on 01/04/1981 of Rs.5,000/– per acre. Finally, the A.O has computed the long term capital gains (sale consideratgion in assessee’s share) of Rs.6,01,397/– and similarly made addition of Rs.24,000/- and assessed the total income of Rs.6,25,400/- and passed the order u/sec143(3)r.w.s.147 dated 23/12/2019. Aggrieved by the order, the assessee has filed the appeal before the CIT(A).
In appellate proceedings, the CIT(A) has considered the grounds of appeal, statement of facts, findings of the Assessing Officer and issued notices of hearing and since there was no compliance to the notices by the assessee, the CIT(A) considering the information on record has confirmed the action of the Assessing Officer and dismissed the appeal of the assessee by passing ex–parte order. Aggrieved by the order of the CIT(A), the assessee has filed appeal before the Hon’ble Tribunal.
6. At the time of hearing, the Ld.AR of the assessee submitted that the CIT(A) has erred in sustaining action of the assessing officer overlooking
6 Pavan Sharadrao Khadse Alkesh Sharadraoji Khadse Lata Sharadraoji Khadse 536 544/NAG./2025 ITA no.537,549/NAG./2025 the submissions in the assessment proceedings. Further, the Ld.AR submitted that the assessee has a good case on merits and prayed for an opportunity to substantiate the claim with material evidences and information before the lower authorities. Per Contra, the Ld.DR relied on the order of the CIT(A).
Heard the rival submissions and perused the material available on record. The CIT(A) has dismissed the assessee’s appeal, as there was no compliance to the notices issued in the appellate proceedings on various dates dealt at Page 2 Para 2 of the order. Further the CIT(A) is of the opinion that the assessee is not interested in prosecuting its appeal and has confirmed the action of the Assessing Officer. Whereas, the learned A.R. in the course of hearing, submitted that the assessee has a good case on merits and shall substantiate with material evidences before the lower authorities. Whereas, the assessee has raised grounds of appeal challenging the action of the assessing officer. There could be various reasons for non–compliance by the assessee which cannot be ruled out. Hence, considering the facts, circumstances, submissions of the learned A.R and to meet the ends of justice, the assessee should be provided one more opportunity for hearing. Accordingly, the order of the CIT(A) is set aside and restore the disputed issues to the file of the CIT(A) to adjudicate issues afresh on merits based on the evidences subject to the assessee making payment of cost of Rs.2,000/– (Rupees Two Thousand
7 Pavan Sharadrao Khadse Alkesh Sharadraoji Khadse Lata Sharadraoji Khadse 536 544/NAG./2025 ITA no.537,549/NAG./2025 Only) to be deposited with the Income Tax Department within one month from the date of receipt of this order. And the assessee should be provided adequate opportunity of hearing and the assessee shall co– operate in submitting the information for early disposal of the appeal. And the grounds of appeal of the assessee are allowed for statistical purposes.
In the result, the appeal filed by the assessee in for the A.Y. 2014–15 is allowed for statistical purposes.
ITA No.534/NAG./2025, A.Y. 2015–16 A.Y. 2015–16 A.Y. 2015–16
As the facts and circumstances in this appeal is identical to ITA.No.544/NAG./2025 for the A.Y.2014-15 (except variances in figures) and the decision rendered in above paragraph 7 & 8 would apply mutatis mutandis for this appeal also. Accordingly, the grounds of appeal filed by the assessee in these three appeals are allowed for statistical purposes.
In the result, all the three appeals filed by the assessee are allowed for statistical purposes.
8 Pavan Sharadrao Khadse Alkesh Sharadraoji Khadse Lata Sharadraoji Khadse 536 544/NAG./2025 ITA no.537,549/NAG./2025 , A.Y. 2014–15 11. The facts and circumstances in this appeal is identical to ITA.No.544/NAG./2025 for the A.Y.2014-15 (except variances in figures) which has been already narrated above.
In the appellate proceedings, the CIT(A) found that there is a delay of in filing the appeal and the assessee could not explain the delay with sufficient cause and the CIT(A) has not condone the delay and dismissed the appeal filed by the assessee in limine/ not maintainable. The assessee being aggrieved by the CIT(A)order, has filed the appeal before the Hon’ble Tribunal.
At the time of hearing, the Ld. A.R. for the assessee submitted that the CIT(A) has erred in not condoning the delay. The Ld.A.R. mentioned that the delay is not due to the deliberate act. Further ld.AR submitted that the assessee has a good case on merits and prayed for granting of opportunity to substantiate the case with evidences and information before the lower authorities. Per–contra, the learned Departmental Representative relied on the order of CIT(A).
Heard the rival submissions and perused the material on record. Prima–facie, the sole grievance of the assessee that the learned CIT(A) has dismissed the appeal as not maintainable by overlooking the fact the assessee has a good case on merits. On a perusal of the CIT(A) order, the 9 Pavan Sharadrao Khadse Alkesh Sharadraoji Khadse Lata Sharadraoji Khadse 536 544/NAG./2025 ITA no.537,549/NAG./2025 appellate authority has provided opportunity to explain the sufficient cause for the delay in filing the appeal and the assessee in Form.No.35. column 15 made explained the reasons and Covid 19 period, which the CIT(A) has referred at Para4.6 of the order. Whereas the delay in filling the appeal before the CIT(A) by the assessee is supported with the sufficient cause and pragmatic approach should be considered for condonation of delay and accordingly the delay is condoned. Hence, considering the facts, circumstances, submissions of the Ld.AR and to meet the ends of justice, the assessee should be provided with one more opportunity for hearing. Accordingly, the order of the CIT(A) is set aside and restore the disputed issues to the file of the CIT(A) to adjudicate afresh on merits and the assessee should be provided adequate opportunity of hearing and the assessee should co–operate in submitting the information for early disposal of appeal. And the grounds of appeals of the assessee are allowed for statistical purposes.
In the result, appeal filed by the assessee is allowed for statistical purposes.
To sum up, all the five appeals filed by the assessee s are allowed for statistical purposes. Order pronounced on 17/10/2025 as per rule 34(5) of the ITAT Rules 1963