AMAR RAMKRISHNA GHARAT ,MUMBAI vs. ITO , WARD, -1(1) , THANE

Before the Commissioner of Income Tax (Appeals) (‘CIT(A)’ for short), the appellants contended that the Assessing Officer was in error in applying provisions of Section 50C of the Act to the transaction of relinquishment of occupancy rights. In short, it was contended that mere relinquishing of occupancy rights cannot invite provisions of Section 50C of the Act. It was also contended that the Assessing Officer could not have adopted the full value of consideration without allowing the benefit of cost of acquisition while calculating the Long Term Capital Gain. There were certain other grounds raised inter alia about non calling of report of the Departmental Valuation Officer (DVO).

The CIT(A) by orders dated 31.10.2023 and 29.01.2024 refused to accept either of the contentions raised by the assessees. However, the CIT(A) has found that it was incumbent upon the Assessing Officer to determine the indexed cost of acquisition of the capital asset from the concerned Revenue authorities by obtaining comparable transactions/registration rates in same area. Thus, while confirming the invocation of provisions of Section 50C of the Act, the CIT(A) has directed the Assessing Officer to allow deduction on account of indexed cost of acquisition of the capital asset under consideration. A perusal of the impugned orders show that the appellants had not submitted any written submission during the course of appellate proceedings and the appeals came to be decided ex parte.

We have heard the learned AR for the appellants and the learned DR. Perused record.

In this case there is a delay of 184 days in filing appeal by Shri Amar Gharat and 94 days in respect of Shri Ravi Gharat. It is submitted by the learned AR that the notices issued by the CIT(A) went to the spam folder and were not noticed by the assessees or their representatives. It is submitted that the delay is not on account of any deliberate inaction or negligence. The same ground is also pressed into service to contend that the ex parte orders passed by the CIT(A) need to be set aside.

The learned DR has submitted that sufficient opportunities were granted to the appellants both before the Assessing Officer as well as the CIT(A) and the appellants did not file reply before the Assessing Officer nor produced any relevant material before the CIT(A). It is submitted that the Assessing Officer was justified in invoking the provisions of Section 50C of the Act, which orders have been confirmed by the CIT(A) while granting the limited relief of indexed cost of acquisition.

We have considered the submissions made. It is necessary to note that normally the court/tribunal would prefer disposal of the matter on merits rather than on technicality. The issue would depend upon the facts and circumstances of each case. In the present case, the Assessing Officer has found that no reply was filed and even before the CIT(A), the appellants did not file any submissions on the ground that intimation/emails were not noticed as being lodged in the spam folder. Considering the overall circumstances, and in the interest of justice and fair disposal of the matter, we find that the appeals can be remitted back to the file of CIT(A).