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Facts
The assessee sold immovable property for Rs.1,42,55,199/- in FY 2009-10, which was not disclosed, leading to an assessment u/s 144/147 by the AO based on AIR information. The assessee appealed, claiming the land was ancestral agricultural land, not a capital asset, and that proceeds were reinvested as per sections 54B and 54F, also alleging non-service of notice u/s 148.
Held
The Tribunal held that the CIT(A) erred in not admitting additional evidence and additional grounds, mistakenly relying on Goetze (India) Ltd. vs. CIT, as the powers of CIT(A) are co-terminus with the AO. The appeal was allowed for statistical purposes, directing the CIT(A) to admit the additional claim and evidence, and pass a fresh order after providing an opportunity of hearing to the appellant.
Key Issues
Admissibility of additional evidence before CIT(A); validity of reassessment proceedings due to alleged non-service of notice u/s 148; taxability of sale of ancestral agricultural land as capital gain; availability of exemptions under sections 54B and 54F.
Sections Cited
147, 148, 144, 151, 54B, 54F, 46A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘H’: NEW DELHI
Aggrieved by the order of the Assessing Officer, the appellant assessee preferred appeal before CIT(A) with the grounds that the assessment order was without complying with the mandatory conditions u/s 147 to 151 as envisaged under the Income Tax. The Income Tax Officer erred in facts and law in completing assessment u/s 144/147 of the I.T. Act while issuing notice u/ 148 which was never served on the assessee. Assessment Order was against law.
The Income Tax Officer erred in calculating entire sale consideration as short term capital gain on the sale of ancestral agricultural land without allowing statutory deductions/exemptions.
The appellant assessee preferred written submission dated 16/01/2019 and 23/09/2021 inter alia mentioning that Assessing Officer assumed jurisdiction u/s 147 and reopened assessment even though statutory conditions were not met. It was submitted by the appellant that he sold his ancestral agricultural land bearing Khata No.905, Khasra No.2623 measuring 0.6410 hectares at Village Dasna, Ghaziabad vide sale deed dated 23/02/2010 for sale consideration of Rs.1,10,00,000/- however the stamp duty value was 1,42,55,199/- (Page no.11-52 of the paper Book). The appellant submits that the sale proceeds of agricultural land was invested for purchase of agricultural land and residential house property. The appellant has purchased agricultural land of Rs.43,55,150/- through 5 registered purchase deeds and is thus entitled for exemption under section 54B of the Income Tax Act, 1961. The appellant has invested a sum of Rs.45,33,000/- for construction of new residential house located at house no.1288, ward no.12, village Bhoorgarhi, Dasna Ghaziabad and is entitled for exemption under section 54F of the Income Tax Act. The copy of report of approval valuer was enclosed. The appellant assessee prayed for admission of additional evidence and allowing the appeal as the agricultural sold was not capital asset within the meaning of section 54B and 54F of the Act. The appellant assessee filed application u/s 46A along with copy of sale deed and purchase deeds in respect of land and property.
On appreciating the order of the Ld. CIT(A) it comes up that the additional evidences which were filed by the assessee to establish the fact that agricultural land at the time of sale was not a capital assets and that otherwise the sale consideration was invested in accordance with provisions of section 54F was rejected for the reason that the same were not placed before the Assessing Officer. At the same time CIT(A) has directed the Assessing Officer to compute the capital gain after giving benefit of costs of acquisition/index costs of acquisition. We are of considered view that same certainly would require taking into consideration the evidences which were filed as additional evidences by invoking provisions of Rule 46A. We are of considered view, that CIT(A) has fallen in error in not admitting the additional evidence and the additional grounds by relying on the decision of the Hon’ble Supreme Court judgment in Goetze (India) Ltd. vs. CIT [1996] 284 ITR 323 (SC). There is no justification to deny the additional ground and additional evidences for mere failure to take the same before the Assessing Officer. The settled proposition of law being that powers of CIT(A) are co-terminus to Assessing Officer. There is no prohibition under law that as CIT(A) cannot accept additional claim without assessee revising the return. Accordingly, we considered it to be an appropriate case to allow the appeal for statistical purposes only.
Accordingly, the appeal is allowed for statistical purposes and CIT(A) is directed to admit the additional claim and additional evidences of the assessee and to pass an order afresh after giving an opportunity of hearing to the appellant.
In the result, the appeal filed by the assessee is allowed.
Order pronounced in the Open Court on 21/05/2024.