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Facts
The assessee filed an appeal challenging an ex parte order of the CIT(A) for AY 2012-13. The assessee also sought condonation for a delay of 254 days, which was granted. The AO reopened the case for a property purchase transaction where the consideration paid was significantly lower than the stamp duty value.
Held
The Tribunal observed that the assessee had been non-compliant throughout the appellate proceedings before the CIT(A). However, considering the principles of natural justice, the assessee was granted one more opportunity.
Key Issues
Whether the addition of Rs.91,24,050/- under Section 56(2)(vii)(b)(ii) was justified and whether the AO erred in not issuing a draft assessment order as per Section 144C.
Sections Cited
Section 56(2)(vii)(b)(ii), Section 144C, Section 147, Section 148, Section 143(3), Section 250
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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
Before: SHRI OM PRAKASH KANT, AM
O R D E R Per Kavitha Rajagopal, J M:
This appeal has been filed by the assessee, challenging the ex parte order of the learned Commissioner of Income Tax (Appeals) (‘ld.CIT(A) for short), National Faceless Appeal Centre (‘NFAC’ for short) passed u/s.250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2012-13.
The assessee has filed an application dated 22.08.2024 for condoning the delay of 254 days in filing the present appeal. On perusal of the same, we deem it fit to condone the said delay as there being a ‘sufficient cause’ for the delay in filing the appeal beyond the limitation period. Delay condoned.
The assessee has raised the following grounds of appeal:
(A.Y.2012-13) Dhanaji Mahadev Thakur vs. ITO a. Whether a sum of Rs.91,24,050/- deserves to be added in his hand under the provisions of sub clause (b)(ii) of sub section (vii) of sub section (2) of section 56 [56(2)(vii)(b)(ii) of the Income Tax Act, 1961 is applicable for the A.Y. 2012-13 and assessee ? b Whether the Assessing Officer erred by failing to issue a draft assessment order prior to the final assessment order, as mandated by the provisions of Section 144C, thereby rendering the final order null and void?
The brief facts are that the assessee is an individual and has filed his return of income for the year under consideration on 05.09.2012, declaring total income at Rs.7,07,547/- out of income from house property and business income.
The ld. Assessing Officer ('A.O.' for short) reopened the assessee’s case vide notice u/s. 148 of the Act dated 29.03.2019 on the ground that the assessee has entered into a financial transaction pertaining to purchase of property of Rs.2,74,13,000/-, along with other two co-owners which was for a total consideration of Rs.40,850/- as against the market value of the said property at Rs.2,74,13,000/- being the value adopted by the stamp duty authority. The ld. A.O. thereby had reasonable belief that income has escaped assessment within the meaning of provisions of section 147 of the Act. The ld. A.O. then passed the assessment order u/s. 143(3) r.w.s 147 of the Act on 09.12.2019, thereby determining the total income at Rs.98,31,597/-, after making an addition of Rs.91,24,050/- being the difference between the stamp duty value and consideration paid as per the purchase deed u/s. 56(2)(vii)(b) of the Act.
The assessee was in appeal before the first appellate authority, challenging the assessment order.
The ld. CIT(A) vide order dated 12.12.2023, upheld the order of the ld.A.O. for the reason that inspite of several opportunity the assessee has failed to substantiate his claim and has been non compliant throughout the appellate proceedings.
CIT(A).
We have heard the rival submissions and perused the materials available on record. It is observed that the assessee has challenged the additions made by the ld. A.O. before the first appellate authority but has been non compliant throughout the appellate proceeding.
The learned Authorised Representative ('ld. AR' for short) for the assessee contended that the assessee has got a good case on the merits and prayed that the assessee may be given one more opportunity to present his case before the ld. CIT(A).
The learned Departmental Representative ('ld.DR' for short) vehemently opposed to setting aside the issue to the file of the ld. CIT(A) for the reason that the assessee was given several opportunity by the ld. CIT(A) which was not availed by the assessee.
On the above factual matrix of the case, we are of the considered view that the assessee may be given one more opportunity to present his case before the first appellate authority by adhering to the principles of natural justice. We, therefore, remand all these issues back to the file of the ld. CIT(A) for de novo adjudication. The assessee is directed to comply with the proceedings without any undue delay on his side.
In the result, the appeal filed by the assessee is allowed for statistical purpose. Order pronounced in the open court on 29.10.2024