Loading judgment…
Facts
The assessee's appeal was directed against the order of the National Faceless Appeal Centre (NFAC), which confirmed an assessment order passed by the Assessing Officer (AO) under section 147 r.w.s. 144B of the Income Tax Act, 1961. The assessee raised grounds related to the reopening of assessment, limitation, and the AO's actions regarding the cost of acquisition of inherited property.
Held
The Tribunal condoned the delay of 88 days in filing the appeal, citing the assessee's and her husband's senior citizen status and serious medical conditions. On merits, the Tribunal found that the lower authorities had not considered the materials submitted by the assessee regarding the cost of acquisition and indexation. Therefore, the order of the CIT(A) was set aside.
Key Issues
Whether the reopening of assessment was valid and whether the cost of acquisition and indexation were correctly disallowed, considering the evidence of co-owners' assessments and DVO reports.
Sections Cited
147, 144B, 151A, 55A, 254(1)
AI-generated summary — verify with the full judgment below
िनधा�रती की ओर से /Assessee by Shri Gautam N. Simedia, CA राज� की ओर से /Revenue by Shri Mukesh Jain– Sr-DR सुनवाई की तारीख/Date of hearing 13.01.2025 उद्घोषणा की तारीख/Date of 21.01.2025 pronouncement Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee is directed against the order of National Faceless Appeal Centre, Delhi [for short to as “NFAC/Ld.CIT(A)] dated 28.05.2024 for assessment year (AY) 2016-17, which in turn arises out of assessment order passed by Assessing Officer under section 147 r.w.s. 144B of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 30.05.2023. The assessee has raised following grounds of appeal:
1. On the facts and circumstances of the case as well as law on the subject, ld. AO erred in reopen the assessment when extraordinary conditions of reopening were not satisfied. 2.That notice issued u/s 148 as well as assessment order is barred by limitation and deserves to be quashed as such. 3.That notice u/s 148 issued by the jurisdictional Assessing Officer is contrary to section 151A.
4.On facts and circumstances of the case as well as law on subject, ld. CIT(A) erred in confirming action of AO in making addition of Rs.1,36,47,625/- being indexed cost of acquisition when no reference to DVO is made u/s 55A. 5.On facts and circumstances of the case as well as the law on the subject, ld. CIT(Aa) erred in passing ex-parte order. 6.It is therefore prayed that the assessment order be annulled or the addition be deleted. 7.Your appellant craves leave to ad/alter or amend any of the grounds till the appeal is finally herd and decided.”
Rival submissions of both the parties have been heard and record perused. At the outset of hearing, the learned Authorised Representative (ld. AR) of the assessee submits that there is delay of 88 days in filing appeal before the Tribunal. The impugned order was passed by Ld.CIT(A) on 28.05.2024, the assessee was required to file appeal on or before Tribunal on 27.07.2024. This appeal was filed on 23.10.2024. Thus, there is delay of 88 days in filing appeal before Tribunal. The ld. AR of the assessee submits that the delay in filing appeal is neither intentional nor deliberate but due to the situation beyond the control of assessee. The husband of assessee was seriously ill since couple of months and assessee also a senior citizen of more than 80 years. The assessee also suffered a brain stroke and was advised by medical practitioner not to take much stress. Due to serious medical condition, the assessee was required repeating hospitalization. Copy of various medical prescriptions of assessee as well as her husband are placed on record. The assessee came to know about the dismissal of first appeal only in first week of September, 2024 when she enquired from her tax consultant. The assessee immediately took necessary steps and filed present appeal before Tribunal. The Ld. AR of the assessee submits that assessee has filed her affidavit by stating that delay was neither 2 intentional nor deliberate. The assessee has good case on merit and likely succeeds if case is heard on merit. On merit of the case, Ld.AR of the assessee submits that during relevant period under consideration the assessee sold urban agricultural land situated in R.S. No.135, TP-5, FP-20, Vesu, Surat along with three other co-owners (siblings). The land was inherited by assessee alongwith her brothers. The Assessing Officer made addition of Rs.1.36 crore by disallowing cost of acquisition. The basis of addition is discussed by Assessing Officer in first para of page -3 of his order. The Ld. CIT(A) confirmed the action of Assessing Officer in ex parte order. The Ld. AR of the assessee submits that assessee is senior citizen and her husband both are suffering from various age old ailments. Due to want of submission cost of acquisition was not allowed by lower authorities. The Ld. AR of the assessee submits that case of other co- owners i.e. her two brothers namely, Ishwarbhai Balubhai Patel and Dilipbhai Ishwarbhai Patel were assessed by Assessing Officer of Ward—2(2)(1), Surat and ITO (Int. Tax.) Surat. Both the Assessing Officer considered fair market value @ Rs.153.00 per square meter as on 01.04.1981 and considered total cost fair market value at Rs.8,07,075/-. The share of one co-owner (brother) was 5,275 Square meter and by multiplying the rate of land @ Rs. 153/-, the indexation cost was worked out at Rs.87,24,480/-. The rate/fair market value as on 01.04.1981 was considered on the basis of report of District Valuation Officer in case of Shri Bhikhabhai D Patel, copy of assessment order in case of co-owners are also filed along with report of DVO. The Ld. AR of the assessee submits that since both the authorities have not given benefit of cost of acquisition and indexation. Therefore, matter may be restored back to the file of Ld.CIT(A) or Assessing Officer with the direction to allow fresh opportunities of being heard to assessee. The Ld. AR of the assessee submits that he has also filed copy of report of District Valuation Officer in case of Shri Bhikhubhai D Patel in respect of RS No.87/1+4, Block No.184, Moje-Bhartana- Vesu, Surat which is similar situated property and such report was considered in case of co-owners.
On the other hand, the learned Senior Departmental Representative (ld. Sr. DR) for the revenue, on the plea of condonation of delay that the Bench may take appropriate view in accordance with law. On the merit of case, Ld. Sr-DR for the Revenue submits that assessee was given ample opportunities by lower authorities. The assessee has not made any compliance. Now assessee has come with the plea that in case of co-owners, the Assessing Officer has considered fair market value @ Rs.153/- per square meter as on 01.04.1981 though assessee has not furnished such evidence. However, in case this Bench is of the view that assessee deserves any leniency the matter may be restored back to the file of Assessing Officer for further verification of fact and to pass a speaking order afresh in accordance with law.
We have considered the rival submission of both parties and have gone through the orders of lower authorities carefully. First we are considering the plea of assessee for condonation of delay in filing appeal. Before us, the ld AR of the assessee vehemently argued that the assessee as well as her husband are senior citizen and were was not well and that she also suffered a brain stroke and was advised by medical practitioner not to take much stress. Due to such medical condition, the assessee was required repeating hospitalization. In support of such contention the assessee has filed various medical prescriptions of assessee as well as her husband are placed on record. It is also plea of ld AR of the the assessee came to know about the dismissal of first appeal only in first week of September, 2024 when she enquired from her tax consultant. Considering the aforesaid facts and circumstances of the case, we find that the delay in filing appeal is not intentional rather due to medical treatment of assessee and her husband both are senior citizen persons. The delay in filing appeal is not inordinate and seems to be bona fide, therefore, in the interest of justice, the delay of 88 days in filing appeal before the Tribunal is condoned.
Now adverting to the merit of the case. We find that Assessing Officer made addition of Rs.1.36 crores in not allowing benefit of cost of acquisition. The Assessing Officer made such addition for the want of submission. We find that Ld.CIT(A) confirmed the action of Assessing Officer in ex parte order by taking view that 4/5 opportunities were given to assessee and assessee failed to furnish requisites submission. We find that assessee at the time of filing first appeal furnished copy of sale deed of ancestral property, valuation report of Government Approved Valuer along with various sale instances to substantiate the cost of acquisition. The assessee also furnished District Valuation Officer’s report of adjoining area. The Ld.CIT(A) has not considered such materials available before him. Therefore, considering the facts that lower authorities have not passed order on merit. Therefore, we set aside the order of Ld.CIT(A) and restore the matter back to the file of Assessing Officer to adjudicate the issues afresh in accordance with law. The Assessing Officer is also directed to consider the assessment order passed in case of co-owner namely, Amrutbhai Ishverbhai Patel (PAN BAHPP3372A) dated 30.05.2023 and Dilipbhai Ishverbhai Patel (PAN CTJPP4377F) dated 13.06.2023 and to consider the report of District Valuation Report, which was considered in case of co-owners (supra). Needless to direct Assessing Officer before passing the order afresh, the Assessing Officer shall give reasonable opportunity of being heard to assessee and to file requisite as required and explanation and evidence as and when called for. In the result, the grounds of appeal
raised by the assessee is allowed for statistical purposes.
6. In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced in the open court on 21/01/2025.