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Facts
The assessee, a UK citizen, did not file an income tax return for AY 2015-16. The AO reopened the assessment and added Rs.3,79,59,184/- as undisclosed long-term capital gain from the sale of an immovable property, applying Section 50C. The CIT(A) dismissed the assessee's appeal as non-maintainable due to a mismatch in PAN numbers, as the AO used a different temporary PAN in the assessment order, without adjudicating on the merits of the case.
Held
The ITAT condoned a 5-day delay in filing the appeal, finding it unintentional and bonafide. It observed that the CIT(A) erred in dismissing the appeal on technical grounds of PAN mismatch, especially since the AO had generated a different temporary PAN. Applying principles of natural justice, the ITAT set aside the CIT(A)'s order and remitted the case back to the AO for fresh adjudication on merits, directing the assessee to cooperate vigilantly.
Key Issues
1. Whether the CIT(A) was justified in dismissing the appeal as non-maintainable due to a PAN mismatch without adjudicating on the merits of the long-term capital gain addition. 2. Whether the addition of long-term capital gain on the sale of ancestral agricultural land, as determined by stamp duty value, was correctly made considering aspects like cost of acquisition and definition of capital asset.
Sections Cited
Section 250 of Income-tax Act, 1961, Section 45 of Income-tax Act, 1961, Section 50C of Income-tax Act, 1961, Section 2(14) of Income-tax Act, 1961, Section 55A of Income-tax Act, 1961, Section 144 of Income-tax Act, 1961, Section 147 of Income-tax Act, 1961, Section 148 of Income-tax Act, 1961, Section 271(1)(c) of Income-tax Act, 1961, Section 274 of Income-tax Act, 1961, Section 271F of Income-tax Act, 1961, Section 253(3) of Income-tax Act, 1961
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Before: SHRI PAWAN SINGH & SHRI BIJAYANANDA PRUSETH
आदेश / O R D E R
PER BIJAYANANDA PRUSETH, AM:
This appeal by the assessee emanates from the order passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’) dated 26.06.2024 by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short, ‘CIT(A)’] for the assessment year (AY) 2015-16.
The grounds of appeal
raised by the assessee are as under: “1. The learned AO has erred in making addition of Rs.3,79,59,184/- as long- term capital gain u/s 45 of the Act which is sale consideration and cost of acquisition is not been considered while calculating Long Term Capital Gain which is against settled law and injustice to the assessee hence required to be deleted.
2. On the facts and circumstances, the learned AO has grossly failed to determine the cost of acquisition of the agriculture ancestral property on the basis of valuation as on 01.04.2001 which is wrong, unlawful and require to be quashed.
/AY.2015-16 Kantilal Dayalbhai Rambhai 3. On the facts and circumstances, the learned AO has failed to invoke the provision of sec 55A whereby fair market value on the date of selling of agriculture ancestral property to be obtained in order to determine the taxability of long-term capital gain which is bad in law hence require to be deleted.
4. The learned AO has erred in making addition of Rs.3,79,59,184/- which is sale consideration against sale of ancestral agriculture land which is not covered under the definition of "Capital Asset" as define under sec 2(14) of the Act because it is situated outside the limit of local municipal corporation.
5. Learned CIT(A)/NFAC has erred in dismissed the appeal on the ground that present appeal is not maintainable as the same has been filed on different PAN No. then what has become infructuous and therefore the ground raised
therein need not to be adjudicated on merits. Therefore, the present appeal filed on 09.06.2022 in form no. 35 quoting PAN No/ BGGPR3080L is dismissed, as non-maintainable, without adjudicating various grounds raised therein on merits.
6. On the facts and circumstance of the case, in law the learned CIT(A)/NFAC has overlooked the reply submitted in compliance to notice issued U/s 250 of the Act vide DIN No. ITBA/APL/F/APL_1/2023-24/1060323184(1) dated 31.01.2024 and dismissed the appeal on the ground that in form no. 35 quoting PAN No/ BGGPR3080L is dismissed, as non-maintainable, without adjudicating various grounds raised therein on merits. Which is pervert in against the Principal of Natural Justices?
7. On the facts and circumstance of the case, in law the learned CIT(A)/NFAC dismissed the appeal without considering the materials / documents / evidences available on record which is against the settled position and in Justice to assessee.
8. The Appellant craved leave to add, alter, delete, amend or rescind any portion of the appeal as an, when necessary, with the permission of Office of CIT(A)/NFAC.”
3. The appeal filed by assessee is barred by 5 days in terms of provisions of section 253(3) of the Act. The learned Authorized Representative (ld. AR) submitted that the CIT(A) has passed order u/s 250 of the Act on 26.06.2024, but the assessee was UK citizen since more than 45 years, who did not receive physical copy of the order passed by CIT(A). The ld. AR submitted that assessee was not present in India on the date of order passed u/s 250 of the Act /AY.2015-16 Kantilal Dayalbhai Rambhai whereas his consultant, Shri Sujesh C. Suratwala is based out at Navsari. As the assessee resides in UK, the delay of 4 days has occurred in filing the appeal before ITAT. He submitted that the delay in filing the appeal is unintentional, bonafide and was not inordinate. Therefore, the ld. AR requested to condone the delay in the interest of justice.
On the other hand, learned Senior Departmental Representative (ld. Sr. DR) for the revenue submitted that the Bench may decide the matter as deemed proper.
We have heard both the parties on this preliminary issue of delay of 5 days. We find that assessee was neither negligent nor delay was deliberate. The delay was also not inordinate. Hence, we condone the delay of 5 days and admit the appeal for hearing.
Brief facts of the case are that the assessee had not filed her return of income for AY.2015-16. The Assessing Officer (in short, ‘AO’) had recorded the reason for re-opening the case of the assessee after getting prior approval from the competent authority. The AO had issued notice u/s 148 of the Act on 31.03.2021. Various notices were issued to the assessee, but the assessee had not filed any reply. The AO observed that the assessee sold out an immovable property (land) situated at R./S. No.249, Block No.309, Amroli, Palsana, Surat for total sale consideration of Rs.2,51,00,000/-, whereas the stamp (jantri) duty value of the property was calculated at Rs.3,79,59,184/- by the Sub- registrar. The difference between sale value and stamp (jantri) value of the /AY.2015-16 Kantilal Dayalbhai Rambhai immovable property (land) is at Rs.1,28,59,184/- [Rs.3,79,59,184 (-) Rs.2,51,00,000], which attracts the provisions of section 50C of the Act. The AO issued show cause notice on 02.03.2022, which is at page 3 to 4 of the assessment order. The AO found that the assessee had sold immovable property (land) along with four co-owners. The assessee has failed to disclose the long-term capital gain (LTCG) income and has not offered any income for taxation. The AO asked assessee to furnish documentary evidence, but she has not submitted any explanation or reply. The AO passed order u/s 144 r.w.s. 147 of the Act on the basis of materials available on record. As the assessee has failed to disclose the sale consideration for immovable property and did not offer any LTCG income for taxation, the AO made the addition of Rs.3,79,59,184/-being undisclosed LTCG. The AO also relied upon the various decisions in cases of CIT vs. Rayala Corporation (P.) Ltd., 215 ITR 883 (Mad.) and CIT vs. P. P. Khader Haji, 234 ITR 461 (Ker). The AO assessed the total income of Rs.3,79,59,180/- against the Nil returned income. Penalty proceedings also initiated by AO u/s 271(1)(c) r.w.s. 274, 271 (1)(c) r.w.s. 274 and 271F of the Act.
Aggrieved by the order of AO, the assessee filed appeal before the CIT(A). The findings of the CIT(A) are at pages 7 to 8 of the appellate order. The CIT(A) observed that the appellant had filed appeal in Form No.35 mentioning PAN as ‘BGGPR3080L’ (Kantilal D. Rambhai) whereas the AO had passed the impugned order of the PAN i.e., HRHPD8282G which belonged to Shri Kantilal /AY.2015-16 Kantilal Dayalbhai Rambhai Dayalbhai. The CIT(A) issued notice u/s 250 on 22.05.2024 and requested to submit details / documents / explanations and clarifications. The appellant had not submitted any clarification regarding mismatch in quoting PAN in Form No.
The CIT(A) held that the appeal was not maintainable as the same has been filed on a different PAN then what has been mentioned in the assessment order. Therefore, the appeal filed on 09.06.2022 in Form No.35 quoting PAN No. BGGPR3080L is dismissed as non-maintainable.
Aggrieved by the order of CIT(A), the assessee filed appeal before the Tribunal. The learned Authorised Representative (ld. AR) of the assessee has filed a paper book containing pages 1 to 42, including copy of sale deed, UK Citizen Passport and UK citizen driving license, copy of 7/12 agricultural land, copy of google MAP for distance from local municipal corporation, copy of valuation report of a Government Approved Valuer, copy of reply submitted against notice issued u/s 250 of the Act and copies of Acknowledgements 1016543811090224 etc. He submitted that all the paper and documents were also produced before CIT(A). The ld. AR submitted the AO passed an order u/s 144 r.w.s. 147 of the Act. He submitted that the AO mentioned a different PAN in his assessment order. The ld. AR submitted that CIT(A) issued two notices on 31.01.2024 and 08.02.2024 to verify the PAN details. The assessee filed his reply dated 09.02.2024 to state that he has a valid PAN bearing No. BGGPR3080L. The assessee stated that the AO (Int. Taxation, Surat) himself generated another PAN from the Income Tax System which is temporary in /AY.2015-16 Kantilal Dayalbhai Rambhai nature in order to complete the scrutiny proceedings and mentioned the same on the assessment proceeding. The ld. AR of the assessee submitted that order of CIT(A) may be set aside and remit the matter to the file of AO for fresh adjudication.
On the other hand, the learned Commissioner of Income-tax - Departmental Representative (ld. CIT-DR) of the revenue supported the order of CIT(A). He has no objection if the matter is remitted to the file of AO for adjudication.
We have heard both the parties and perused the materials available on record. It is an undisputed fact that the assessee had not filed her return of income for AY.21015-16. The ld. AR submitted that both orders are ex parte orders. All details were uploaded during appellate proceedings, which were not considered by CIT(A). He further submitted that AO has temporarily generated a PAN which was mentioned in the assessment order, which is different from the original PAN of the assessee. The ld. AR requested that another opportunity may be granted to the assessee to submit all the required details and explanations / clarifications and to plead her case on merit. Considering the peculiar facts of the case, we are of the view that principles of natural justice would call for giving another opportunity of hearing to the assessee. Accordingly, in the interests of justice, we set aside the order of CIT(A) and remit the matter to the file of AO for fresh assessment order. The assessee is directed to be more vigilant and diligent and to furnish all the /AY.2015-16 Kantilal Dayalbhai Rambhai details and explanations as needed by the AO by not seeking adjournment without valid reasons. With these directions, the grounds of appeal
raised by the assessee are allowed for statistical purposes.
11. In the result, appeal of the assessee is allowed for statistical purposes. Order is pronounced in the open court on 21/01/2025.