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Facts
The assessee filed an appeal against the order of the CIT(Appeals) for AY 2020-21. The appeal was filed with a delay of 116 days due to non-submission of documents by the previous tax practitioner. The assessee's return declared a total income of Rs. 87,23,170, but during assessment, the AO disallowed the indexed cost of acquisition and allowed deduction u/s 54C, resulting in a long-term capital gain of Rs. 12,37,54,011.
Held
The Tribunal condoned the delay in filing the appeal after considering the reasons provided by the assessee. The Tribunal noted that details regarding acquisition and sale deed were not submitted during assessment, leading to the disallowance of the cost of acquisition. The CIT(A) dismissed the appeal ex-parte due to a lack of documents.
Key Issues
Whether the delay in filing the appeal should be condoned, and if the matter should be remitted back to the AO for fresh consideration regarding the cost of acquisition and other related issues.
Sections Cited
Sec. 54, Sec. 54C, Sec. 55(2)(b), Sec. 55A, Sec. 234A, Sec. 234B, Sec. 234C, u/s. 226(3)
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Income Tax Appellate Tribunal, “C” BENCH : BANGALORE
Before: SHRI LAXMI PRASAD SAHU & SHRI PRAKASH CHAND YADAV
Per Laxmi Prasad Sahu, Accountant Member
This appeal is filed by the assessee against the order dated 29.11.2023 of the CIT(Appeals), National Faceless Appeal Centre, Delhi [NFAC], for the AY 2020-21 on the following grounds:-
Grounds of Appeal
Tax effect
1. The orders of the authorities below in so far as these are against the appellant is opposed to law, weight of evidence, natural justice, probabilities, facts and circumstances of the appellant's case.
2. The appellant denies himself liable to be assessed on a total income of Rs.13,24,77,181/- as against the returned income of Rs.87,23,170/- under the facts and circumstances of the case. 3. a) The learned authorities below erred in 35470065 disallowing the indexed cost of acquisition of Rs.11,52,67,650/- by holding that the appellant has not furnished any details or evidence for cost of acquisition under the facts and circumstances of the case. b) The authorities below failed to appreciate that the cost of acquisition of the property acquired prior to 01.04.2001 has to be adopted as per section 55(2)(b) of the Income Tax Act, 1961 (the Act) under the facts and circumstances of the case. c) Without prejudice, the learned assessing officer ought to have referred the matter to the Valuation Officer as contemplated under section 55A of the Act to arrive at the Fair Market Value as on 01.04.2001 under the facts and circumstances of the case.
4. The learned authorities below ought to have 2611416 allowed the transfer expenses amounting to Rs.84,86,361/- incurred by the appellant towards sale of property under the facts and circumstances of the case. 5. a) The appellant denies himself liable to be 13079878 levied interest under sections 234A, 234B and 234C of the Act, as the computation of interest was not provided to the appellant as regard to the rate, period and method of calculation of interest under the facts and circumstances of the case. The appellant expressly urges that the period of levy of interest is not in accordance with the provisions of the Act. b) Without prejudice, the interest under sections 234A, 234B & 234C is not leviable and ought to have been waived on the facts of the case.
6. The Appellant craves leave of your Honour to add, alter, delete or substitute any of the grounds urged above.
7. In view of the above and other grounds that may be urged at the time of the hearing of the appeal, the Appellant prays that the appeal may be allowed in the interest of justice and equity. Total Tax Effect Rs. 5.11.61.359
The appeal is filed with a delay of 116 days and in this regard the assessee has filed Affidavit stating that appeal was filed before the CIT(A) and all the details/documents were provided to the tax practitioner which were not furnished to the CIT(A). On receipt of notice u/s. 226(3) of the Act dated 16.03.2024 from the department, the assessee approached the Tax Practitioner to enquire about the status of appeal before CIT(A) and was surprised to know that the appeal was dismissed on 29.11.2023 for non-submission of details/documents. Consequently a new counsel was engaged to prefer appeal to the ITAT and due to the above reasons there was a delay of 116 days in filing appeal. Condonation of delay was requested by the ld. AR relying on the Supreme Court judgment in the case of Mst. Katiji, 167 ITR 471 (SC) and other judgments.
After hearing both the parties, it is observed that there are sufficient reasons for the delay and following the judgment of the Hon'ble Apex Court in the case of Collector, Land Acquisition Vs. MST. Katiji and Others (1987) 167 ITR 471, delay in filing the appeal before the Tribunal is condoned.
Briefly stated the facts of the case are that the assessee filed return of income on 11.02.2021 declaring total income of Rs.87,23,170. The case was selected for scrutiny and statutory notices issued to the assessee. During the course of assessment proceedings, the AO issued various notices and part reply was submitted by the assessee. The assessee was specifically asked to substantiate capital gain deduction u/s. 54 of the Act with documentary evidences, but the assessee did not submit any documents. It was noticed that the assessee had shown capital gain of Rs.6,49,95,989 as under;-
Full value of consideration 18,87,50,000/- received/receivable Value of Property as per stamp 1,24,48,203/- valuation authority Full value of consideration u/s 50C 18,87,50,000/- Deduction u/s 48 1,.Cost of acquisition with indexation 11,52,67,650/- 2. Expenditure on transfer 84,86,361/- 12,37,54,011/- Balance 6,49,95,989/- Deduction u/s 54C 6,49,95,989 - Long Term Capital Gain 0/-
The assessee failed to produce details/documents of purchase and sale deed of residential house sold in support of his claim. Accordingly for want of evidences, cost of acquisition of the capital asset was not allowed and deduction u/s. 54C towards deposit in the capital gain account of Rs.6,49,95,989 was granted to the assessee and long term capital gain was computed at Rs.12,37,54,011. Aggrieved, the assessee filed appeal before the First Appellate Authority (FAA).
The FAA also issued various notices to the assessee on different dates, but there was no compliance from the assessee’s side and there were two adjournment letters filed by the assessee. The FAA dismissed the appeal of the assessee. Aggrieved, the assessee is in appeal before the ITAT.
The ld. AR submitted that the appeal was filed before the FAA and the entire documents were handed over to the tax practitioner for compliance before FAA. However, for reasons best known to him, he did not file any of the documents. Accordingly appeal was filed before the ITAT. Therefore he requested that the matter may be sent back to the AO for fresh decision and the ld. AR undertook that if a chance is given, the assessee will respond to the notices and substantiate the case with evidence before the AO.
The ld. DR relied on the order of lower authorities and objected to sending back the matter to lower authorities. He submitted that sufficient opportunities were given to the assessee.
Considering the rival submissions we note that the details towards acquisition, sale deed, etc. were not submitted during the assessment proceedings. Accordingly the AO did not allow cost of acquisition. The assessee submitted that the documents were handed over to the tax practitioner for compliance of the appeal proceedings but there was no such evidence recorded by the FAA and he passed ex parte order for want of documents from the assessee side in regard to disputed issue. Considering the prayer of the assessee and in the interest of justice, we remit the issue back to the AO for fresh consideration and decision as per law, The assessee is also directed to update its email id, communication address and other details and file necessary documents that would be essential and required for substantiating his case and for proper adjudication by the revenue authorities. Needless to say that reasonable opportunity of being heard be given to the assessee. The assessee is directed to cooperate with the proceedings and in case of further default, the assessee shall not be entitled to any leniency.
In the result, the appeal by the assessee is allowed for statistical purposes.
Pronounced in the open court on this 19th day of July, 2024.