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Facts
The assessee sold immovable property for Rs. 65 lakhs in AY 2018-19, did not file an income tax return, leading to reopening under Section 147 and assessment under Section 144, adding the full sale consideration. The CIT(A) dismissed the assessee's first appeal due to a 10-month delay in filing, finding no sufficient cause for condonation.
Held
The Tribunal ruled that the CIT(A) should have considered the case's merits despite the delay and that the entire addition of the sale consideration might not be justifiable without accounting for acquisition costs or inheritance. Consequently, the case was remanded to the Assessing Officer for fresh consideration, providing the assessee an opportunity to present their claims.
Key Issues
1. Whether the CIT(A) was justified in dismissing an appeal solely on grounds of delay without considering its merits. 2. Whether the entire sale consideration of an immovable property can be added to income without considering its cost of acquisition or inheritance.
Sections Cited
Section 250, Section 147, Section 144, Section 249(2)
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Income Tax Appellate Tribunal, : GAUHATI BENCH: GUWAHATI
Before: SHRI MANOMOHAN DAS, HON’BLE & SHRI SANJAY AWASTHI, HON’BLE
ORDER
PER MANOMOHAN DAS, JM
The assessee filed this set of 2 (two) appeals against the respective orders of the learned Commissioner of Income Tax (Appeals), Faceless Appeal Centre [NFAC], Delhi (hereinafter referred to as the (“CIT(A)” dated 27.12.2024 passed under Section 250 of the Income Tax Act, Page 1 of 4 -57 / GTY / 2025 Shauquat Alam -vs- The ACIT, Circle-2, Guwahati AY : 2018-19 1961 (hereinafter referred to as the ‘Act’) and pertains to the Assessment Year 2018-19.
The brief facts of the case are that, as per information available in multilayer NMS of AIIMS Portal of ITBA under the category of High Risk non-filer cases out of NMS, the assessee has sold immovable property for a consideration of Rs. 65,00,000/- during the financial year 2017-18 relevant to the AY 2018-19. No return of income was filed by the assessee. Therefore, the case was reopened under a reasonable belief that the income of the assessee has escaped assessment within the meaning of provisions of section 147 of the Act after recording of reasons. Statutory notices were issued to the assessee in respect of the reopening of the case including show cause notice. However, there was no response from the assessee’s side towards that notices. Therefore, the learned Assessing Officer completed the assessment under section 144 of the Act and has made addition of the entire Rs. 65,00,000/- to the total income of the assessee. Being aggrieved, the assessee filed 1st appeal before the earned 3. CIT(A). The ld. CIT(A) vide order dated 27.12.2024 dismissed the appeal of the assessee on the ground of delay in filing of the appeal.
Being aggrieved, the assessee filed the present appeal before the Tribunal.
The ld. CIT(A) observed that, the assessee filed the appeal on 12.01.2024 with the delay of 10 months, which implies the assessee’s attitude and deliberate action on the part of the assessee. The ld. CIT(A) further observed that, it is abundantly clear that, the appeal filed by the assessee is not in conformity with the provisions of section 249(2) of the Act, and there is no sufficient cause for condonation of delay in filing of the appeal.
We observe that, the assessment order was under section 144 of the Act and the ld. CIT(A) dismissed the appeal of the assessee due to Page 2 of 4 -57 / GTY / 2025 Shauquat Alam -vs- The ACIT, Circle-2, Guwahati AY : 2018-19 delay 10 months in filing of the appeal by the assessee. The ld. CIT(A) observed absence of sufficient cause from the side of the assessee for late filing of the appeal by him.
We may observe that, although the ld. CIT(A) dismissed the appeal of the assessee on account of non-sufficient cause for late filing of the appeal, it is our considered opinion that, the ld. CIT(A) could also consider the merit of the case while disposing of the appeal of the assessee. However, the ld. CIT(A) did not consider the merit of the case on the basis of the material available on the record.
Secondly, we may observe that, while making addition of the entire sale consideration amount of Rs. 65,00,000/- to the total income of the assessee, the ld. AO failed to consider as to whether, the assessee incurred any expenditure while acquiring that land or by his parent if the said land was inherited by the assessee. That, means, in our considered opinion, entire addition of the sale consideration of Rs. 65,00,000/- may not be justifiable. The assessee may be able to get proper relief as per the provisions of law. Therefore, it is our considered opinion that, the case of the assessee should be remanded to the file of the ld. AO for reconsideration. Accordingly, we set aside the order of the ld. CIT(A) dated 27.12.2024 as well as the assessment order dated 09.02.2023 and remand the case to the ld. AO for consideration afresh.
We direct the ld. AO to reconsider the case of the assessee after giving him an opportunity of being heard. At the same time, we direct the assessee to substantiate his claims before the ld. AO. The Ld. DR has no objection in remanding the case to the ld. AO for fresh consideration. Thus, we allow the appeals of the assessee for statistical purposes only.
As we have allowed the appeals of the assessee for statistical purposes, we set aside the penalty order dated 26.06.2023 passed by Page 3 of 4 -57 / GTY / 2025 Shauquat Alam -vs- The ACIT, Circle-2, Guwahati AY : 2018-19 the ld. AO till the completion of the reconsideration of the case of the assessee by the ld. AO.
In the result, the appeals of the assessee are allowed for statistical purposes only.