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Facts
The assessee entered into a joint development agreement for his land, receiving a refundable deposit and 50% of the constructed area. The Assessing Officer treated the value of the land surrendered as long-term capital gain and imposed tax. The assessee failed to appear before the CIT(Appeals) despite opportunities, leading to an ex-parte dismissal.
Held
The Tribunal acknowledged the assessee's failure to present the case before the CIT(Appeals) but, to ensure natural justice, set aside the CIT(Appeals)'s order. The matter was remitted back to the CIT(Appeals) to provide one more opportunity for the assessee to be heard.
Key Issues
Whether the assessee was denied natural justice by the ex-parte dismissal by CIT(Appeals) without providing a further opportunity to be heard.
Sections Cited
143(2), 142(1)
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Income Tax Appellate Tribunal, KOLKATA-PATNA ‘e-COURT’, KOLKATA
Before: Shri Duvvuru RL Reddy, Vice-(KZ) & Shri Sanjay Awasthi
Per Duvvuru RL Reddy, Vice-President (KZ):- The present appeal is directed at the instance of assessee against the order of ld. Addl./JCIT(Appeals)-3, Bengaluru dated 9th October, 2024 passed for Assessment Year 2011-12. 1
Brief facts of the case are that the assessee filed his return of income for A.Y. 2011-12 on 31.12.2017 showing an income of Rs.3,54,480/-. The case of the assessee was selected for scrutiny assessment and notices under section 143(2) and 142(1) were issued and served upon the assessee. On scrutiny of the accounts, it revealed to the Assessing Officer that the assessee along with his brother were the owner and in possession of 2 acres and 14 guntas of land comprised at Hobli, Bangalore. They entered into a joint development agreement on 09.08.2006 with developer. As per the agreement, the assessee and his brother jointly received refundable deposit of Rs. One crore for allowing the development on their land. The developer would construct a saleable area of 3 lakhs square feet at his own case, the assessee and his brother were entitled for 50% of the built-up area i.e. 1.50 lakh sq.ft. The assessee and his brother had given irrevocable license to the developer to enter and develop the property. The developer was authorized to avail the loans and financial facilities from the financial institutions. The ld. Assessing Officer was of the view that the assessee surrendered their rights to the extent of 50% in the land in lieu of 50% constructed area, i.e. 1.5 lakh sq.ft. whose cost was to be borne by the developer. The ld. Assessing Officer had adopted the consideration of the land at Rs.800/- per sq. ft. because this was the expenditure which the builder will incur for construction the area and computed the long-term capital gain in the case of assessee at Rs.5,95,23,974/-. The ld. Assessing Officer treated the amount of Rs.22,40,000/- as income of the assessee under long-term capital gain since the assessee concealed his (A.Y. 2011-2012) Shivendu Shekhar Singh income and treated the balance tax at Rs.9,32,109/- payable by the assessee. On being aggrieved, the assessee preferred an appeal before the ld. CIT(Appeals).
The ld. Addl./JCIT(Appeals) has given several opportunities to the assessee to substantiate his claim, but the appellant neither filed the written submission nor represented the case before the ld. CIT(Appeals). Thereafter the ld. CIT(Appeals) dismissed the appeal ex-parte on 9th October, 2024.
On being aggrieved, the assessee preferred an appeal before the ITAT.
At the time of hearing, ld. Counsel for the assessee prayed before the Bench that the impugned order be set aside and remitted back to the file of ld. Addl./JCIT(Appeals) for deciding it afresh.
At the outset, ld. D.R. brought to my notice that the assessee did not produce the relevant documents as asked by the ld. Assessing Officer during the assessment proceedings. Therefore, the ld. Assessing Officer passed the assessment order treating the amount of Rs.22,40,000/- as income of the assessee under long- term capital gain since the assessee concealed his income and treated the balance tax payable at Rs.9,32,109/- by the assessee. Thereafter the assessee preferred an appeal before the ld. CIT(Appeals). The ld. Addl./JCIT(Appeals) has given many opportunities to the assessee and the assessee neither filed written (A.Y. 2011-2012) Shivendu Shekhar Singh submission nor any evidence before the ld. Addl./JCIT(Appeals). He further submitted that before the ITAT, the assessee did not substantiate his claim. Therefore, he pleaded to uphold the order passed by the ld. Addl./JCIT(Appeals).
We have heard the rival contentions and perused the material available on record. Considering the facts and circumstances of the case, we are inclined to set aside the order passed by the ld. CIT(Appeals) in order to meet the principle of natural justice, and remit the matter back to the file of ld. CIT(Appeals) with a direction to provide one more opportunity of being heard to the assessee. At the same breath, we also hereby caution the assessee to promptly co-operate with the proceedings before the Ld. CIT(Appeals) failing which the Ld. CIT(Appeals) shall be at liberty to pass appropriate order in accordance with law and merits based on the materials available on the record. Thus, the grounds raised by the assessee are allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the Open Court on 04/06/2025.