SUNIL KUMAR SINGH,PATNA vs. ITO, WARD- 6 (1), PATNA

For that the Ld. CIT(A), NFAC has erred in upholding addition of Rs.2,05,609/-being the difference between cost of acquisition of the property as per Rol amounting to Rs. 14.42 lakhs vis-a-vis Rs. 12,36,730/- without appreciating the fact that the claim of Rs.12.36 lakhs as per circle rate of F.Y.2001-02 issued by Govt. of Bihar.

For that the Ld. CIT(A), NFAC has denying deduction u/s 54F and 54B amounting to Rs.2,89,07,000/- (Rs.1.58 crore u/s 54B+Rs.1.31 crore u/s 54F).

For that the Ld. CIT(A), NFAC has erred in drawing adverse inference on account of non-furnishing of approved building plan by local authority in support of the new construction by ignoring the municipal assessment and municipal tax receipt already on record which establishes the fact of construction of new residential house.

For that the Ld. CIT(A), NFAC has erred in not appreciating the fact that deduction of Rs.1.58 crore was claimed on account of purchase of agricultural land against sale of ancestral agricultural land u/s 54B and its claim u/s 54F in the Rol and in the petition dated 17/01/2021 u/s 54F was through inadvertence.

For that the Ld. CIT(A), NFAC has erred in making enhancement of Rs.1,31,00,000/- on account of investment in construction of new house u/s Sunil Kumar Singh 69C of the Income Tax Act although the same was sourced out of sale proceeds of Rs.3.12 crores.

For that the sustenance of additions/disallowance/denial of deduction u/s 54F and 54B amounting to Rs 2,05,000/-, Rs. 1,75,000/- and Rs.2.89 crores and enhancement of Rs.1.31 crores is wrong, illegal and unjustified on the facts and in the 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 modified and/or restored back to the file of the A.O. and/or the CIT(A) as neither the A.O. nor the CIT(A) has granted proper and adequate opportunity of being heard while making additions and its sustenance by the CIT(A) including resorting to enhancement of Rs.1.31 crores.

For that the appellant may not be treated as assessee in default in respect of the disputed demand including interest amounting to Rs. 1.01 crore.

For that the appellant reserves its right to furnish detailed written submission along with documents and evidences on or before date of hearing.

For that the appellant may be given opportunity of personal hearing physically/virtually at the time of hearing of the appeal.

For that the other grounds, if any, shall be urged at the time of hearing of the appeal.”

Briefly stated the facts of the case are that the assessee filed return of income on 03.10.2018 declaring total income of Rs. 1,61,778/- and the return was processed under Section 143(1)(a) of the Act and subsequently, the case was selected for limited scrutiny and notice u/s 143(2) was issued to the assessee on the reason that the capital gains deduction claimed thereafter, other statutory notices were issued to the assessee and the assessee submitted part in reply. on 15.04.2021 a issued show cause notice to the assessee as per the contents therein and time was granted to the assessee to submit reply by 18.04.2021 and assessment order was passed on 19.04.2021 assessing the income at Rs. 3,17,56,520/- disallowing deduction claimed under Section 54F of the Act for Rs. 3,02,11,651/- and three other additions were made as per section 143(1)(a) of the Act for Rs. 11,64,260/-, as per para 3.1.1, Rs. 1,75,000/- and as per para 3.3 of Rs. 2,05,609/-.

Aggrieved from the above order, the assessee filed appeal before the Ld. CIT(A), NFAC. During the appellate proceedings, the assessee filed

Aggrieved from the above order, the assessee filed before the ITAT.

The Ld. Counsel reiterated the submissions made before the lower authorities and submitted that both the authorities had not complied the provision for giving time to submit reply against the show cause notice they had not granted sufficient time which is a violation of the provision of the natural justice and requested that the assessee should have been allowed sufficient time to submit the documents as required by both the authorities.

On the other hand, the Ld. DR submitted that the assessee could not substantiate its claim made under Section 54F of the Act and during the appellate proceeding, the assessee could not furnish the documents towards cost of improvement as claimed in the income tax return and the assessee has given reply of the show cause notice issued by both the authorities below and he objected for giving one more chance to the assessee.

Considering the rival submissions and perusing the entire materials available on record and the order of authorities below and the submission made by the Ld. Counsel which is placed on record. The main issue raised by the Ld. Counsel that both the authorities below have violated the principal of natural justice for allowing time to reply of Sunil Kumar Singh the show cause notice issued by both the authorities below. It is clear from the above facts; we noted supra that both the authorities below have not granted sufficient time to submit the reply of show cause notices. Considering the facts of the case and in the interests of justice, we are remitting this issue back to the file of Assessing Officer for giving reasonable opportunity of being heard to the assessee and decided the issue as per law. The assessee is directed to substantiate his case with cogent documents in support of his claim and not to seek unnecessary adjournments for early disposal of the case. In case of failure, no second leniency shall be granted to the assessee.

In the result, appeal of the assessee is allowed for statistical purposes.