Loading judgment…
Facts
The assessee filed an appeal against the order of the CIT(A)-NFAC, Delhi, which confirmed the assessment order passed under section 143(3) r.w.s. 147 of the Income Tax Act. The assessee had entered into a land development agreement and did not file a return of income, leading to a reopening of the case and assessment of long-term capital gains. The CIT(A) dismissed the appeal due to non-compliance and lack of evidence from the assessee.
Held
The Tribunal noted that there was no proper compliance before the Assessing Officer and the CIT(A). In the interest of justice, the Tribunal set aside the orders of both the CIT(A) and the Assessing Officer. The matter was remitted back to the Assessing Officer for a fresh assessment (de novo).
Key Issues
Whether the assessment order and the subsequent CIT(A) order were sustainable, considering the alleged non-compliance and lack of opportunity for the assessee, and whether the capital gains were correctly computed.
Sections Cited
147, 143(3), 250, 133(6), 271(1)(c), 54F
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PATNA BENCH AT KOLKATA
Before: SHRI SONJOY SARMA & SHRI RAKESH MISHRA
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of the CIT(A)- NFAC, Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2016-17 dated 21.07.2023, which has been passed against the assessment order u/s 143(3) r.w.s. 147 of the Act, dated 10.12.2019. I.T.A. No.: 7/PAT/2025 Assessment Year: 2016-17 Pancham Pal.
The Registry has informed that the appeal filed by the assessee is barred by limitation by 465 days. An application seeking condonation of delay has been filed by the assessee. The content of the application is as follows: “I, Pancham Pal, S/o Late Ram Bhajan Bhagat, Resident of AT- Near Telegraph Colony. Near Khan Complex, South Mandiri, Patna - 800001 do hereby solemnly affirm and state as follow: -
That the CIT(A)- NFAC has passed order u/s 250 dated 21/07/2023 related to appeal filed for the AY 2016-17. 2. That there was no communication of uploading of this order either on the registered email or registered mobile no. of the appellant.
That it is only recently that I came to know about the impugned order of NFAC in the second week of December, 2024 when I logged on the income tax web portal and hence I approached my CA who has retrieved the impugned order from the e-portal under the drop box 'For your Information
That the orders and/or the demands are uploaded on the drop box "For your Action" followed by e-mail or message on registered mobile number. It appears that since the impugned order has been uploaded on drop box "For your Information" and, therefore, there was no communication through email or message on registered mobile number.
That this appeal is being filed which can be said to be a belated appeal, if limitation is counted from the date of its order. However, it is stated that the impugned order came to my knowledge recently in the second week of December, 2024 and therefore, the present appeal is not a belated appeal.
That however, without entering into controversy, it is respectfully submitted that delay, if any, may kindly be condoned and the appeal may kindly be heard on merits.
That the contents of this affidavit vide para 1 to 6 are true to the best of my knowledge.”
Considering the application for condonation of delay and the reasons stated therein, we are satisfied that the assessee had a reasonable and sufficient cause and was prevented from filing the instant appeal within statutory time limit. We, therefore, condone the delay and admit the appeal for adjudication. I.T.A. No.: 7/PAT/2025 Assessment Year: 2016-17 Pancham Pal.
The assessee is in appeal before the Tribunal raising the following grounds of appeal:
“1. For that the Ld. CIT(A) has erred in dismissing the appeal and upholding the order passed by the A.O.
For that the Ld. CIT(A) has erred in passing ex-parte order which is in violation of provisions of section 250(6) of the Income Tax Act.
For that the Ld. CIT(A) has erred in upholding the assessment order without affording proper and adequate opportunity of hearing to the appellant.
For that the Ld. CIT(A) has erred in upholding the assessment order passed in violation of Principle of Equity and Natural Justice.
For that the Ld. CIT(A) has erred in upholding the order passed by the Assessing Officer u/s 147 read with section 143(3).
For that the Ld. CIT(A), NFAC has erred in sending the notices on email although the notices were required to be sent on ITBA portal under the tab 'for your action' for enabling the appellant to make compliance through ITBA Portal.
For that the Ld. CIT(A), NFAC has erred in not uploading the notices on ITBA Portal under the tab 'For your action' and depriving any real time message on mobile number.
For that the Ld. CIT(A), NFAC has violated the mandatory provision of law by not uploading the notices on ITBA Portal and sending the notices through email and thereby alleging non-compliance on the part of the appellant
For that the appellant is prevented by sufficient and reasonable cause in not making compliance resulting into ex-parte appellate order.
For that the learned Commissioner of Income-tax (Appeals) has erred in not considering the fact that the reasons recorded by Assessing Officer has been erroneous and the assessment order passed is illegal, void ab initio and is fit to be quashed/ annulled.
For that the learned Commissioner of Income-tax (Appeals) has erred in not considering the fact that approval / sanction by the competent authority is mechanical and without application of mind.
For that the learned Commissioner of Income-tax (Appeals) has erred in not considering the fact that Assessing Officer has erred in initiating I.T.A. No.: 7/PAT/2025 Assessment Year: 2016-17 Pancham Pal. proceedings u/s 147/148 without existence of the condition precedent for such invocation.
For that the learned Commissioner of Income-tax (Appeals) has erred in not considering the fact that Assessing Officer has erred in invoking section 147 in the case of the appellant without appreciating that no income has escaped assessment.
For that the learned Commissioner of Income-tax (Appeals) has erred in not considering the fact that invocation of proceedings u/s 147/148 is ab initio void and without juri iction.
For that the learned Commissioner of Income-tax (Appeals) has erred in confirming the addition made by the Assessing Officer of Rs 4345,425/- made under long term capital gains.
For that the learned Commissioner of Income-tax (Appeals) has erred in sustaining the order of the Assessing Officer wherein LTCG has been determined at Rs. 4345,425/- as against the value of land at Rs. 1010,795/- as determined by the AO in the land development agreement.
For that the learned Commissioner of Income-tax (Appeals) has erred in sustaining the order of the Assessing Officer who has erred in making addition under Long term capital gains and not allowing deduction u/s 54F to the appellant.
For that the learned Commissioner of Income-tax (Appeals) has erred in sustaining the order of the Assessing Officer who has failed to consider that the capital gain pursuant to development agreement will arise in the year in which the possession of constructed portion is handed over by the developer and not in the year of execution of development agreement.
For that the learned Commissioner of Income-tax (Appeals) has erred in sustaining the order of the Assessing Officer who has erred in treating an amount of Rs. 4345,425/- as income under Long Term Capital Gain without considering the fact that the appellant has not received the constructed portion as stipulated in the Land development agreement and as a matter of fact, no construction has started in the year under consideration.
For that the learned Commissioner of Income-tax (Appeals) has erred in sustaining the order of the Assessing Officer who has failed to consider that there will be no capital gain in the hands of the appellant on the date of entering upon the land Development Agreement.
For that the learned Commissioner of Income-tax (Appeals) has erred in sustaining the order of the Assessing Officer who has failed to consider that the liability of capital gain in case of Development Agreement will arise in I.T.A. No.: 7/PAT/2025 Assessment Year: 2016-17 Pancham Pal. the year of exchange of the constructed portion falling to the share of the landlord and not as on the date of entering into the land Development Agreement.
For that the learned Commissioner of Income-tax (Appeals) has erred in sustaining the order of the Assessing Officer who has failed to allow the deduction of indexed cost of acquisition of land while computing long term capital gains.
For that the learned Commissioner of Income-tax (Appeals) has erred in sustaining the order of the Assessing Officer who has erred in considering and adopting higher value of consideration of property as compared to value of consideration of land as per LDA for purposes of computing LTCG.
For that the learned Commissioner of Income-tax (Appeals) has erred in sustaining the order of the Assessing Officer who has erred in relying on judicial decisions that too without confronting the appellant with the same and also without considering that the facts of the decision relied upon were starkly distinguishable from the facts of the appellant case.
For that learned Commissioner of Income-tax (Appeals) has erred in sustaining the order of the Assessing Officer who has charged interest under the provisions of the I.T. Act which is wrong, illegal and unjustified on the facts and in the circumstances of the appellant's case.
For that the order passed by the Ld. CIT(A) is wrong, illegal and unjustified in the facts and circumstances of the appellant's case.
For that the whole order is bad in fact and law of the case and is fit to be set aside/ quashed.
For that other grounds if any shall be urged at the time of hearing of the appeal”
Brief facts of the case are that on receipt of information u/s 133(6) of the Act from the office of the