MAHENDRA SINGH,SIKAR vs. ITO WARD NEEM KA THANA, NEEM KA THANA

On the facts and circumstances of the case and in law also, Ld. CIT (A) grossly erred in passing appeal order without allowing proper opportunity of being heard to the appellant assessee, which is against to the principle of natural justice.

On the facts and circumstances of the case and in law also, Ld. CIT (A) grossly erred in not disposing off the self explanatory grounds including legal grounds of appeal S.No. 1,3,4,5 and 6 of form 35.

On the facts and circumstances of the case and in law, Assessing Officer grossly erred in treating the alleged transaction as transfer in terms of Section 2(47)(v) of the Income Tax Act, 1961 as on the given facts, no possession of property was ever transferred on to the buyer-assessee and the assessee has not Sh. Mahendra Singh vs.ITO undertaken any activity in furtherance of the alleged agreement and sellers assessee in their affidavit and statements before the Income Tax Authorities have categorically stated that the agreement is cancelled, no further payment has been made, and the sai advance has also been received back.

On the facts and circumstances of the case and in law, Assessing Officer grossly erred in passing the assessment order on the basis of an agreement to sell, which was cancelled later and nothing was done in furtherance of the alleged agreement to sell by any of the party.

On the facts and circumstances of the case and in law, Assessing Officer grossly erred in passing the assessment order and making the addition of Rs 5,90,55,000/- ignoring the fact that the said property was disputed one and later stay was also granted against the sellers by the competent court.

The brief facts of the case are that the assessee is an individual. The assessee has no source of income, hence, he has not filed any ROI for the year under consideration. The assessee entered into an 'Agreement to Sell with Surja Ram, Prabhata Ram, Hanuman, and Laxman to purchase their joint family's respective share in agricultural land situated at various Khasra No(s) at Village Reengus, District Sikar, Rajasthan on Sh. Mahendra Singh vs.ITO 29.11.2012. The alleged agreement was never registered with Sub Registrar, Govt of Rajasthan. There is a mention in regards to registration of a sale deed in para 4 of page 6 of the alleged Assessment Order, however, that is not in relation to the alleged agreement to sell. As per the terms of this agreement, an advance (Sai Pate) of Rs 11,00,000/- was paid by the assessee to all the co-owners. The balance amount was to be paid on a later date but was never paid by the Assessee. The possession of the above referred agricultural land was never received by the assessee. Moreover, there was an old dispute pending before the Court regarding the ownership and possession of the alleged agricultural land. Later, a stay order had also been passed against the sellers by the competent court. It is pertinent to note that, as a result, no action was taken by the assessee in furtherance of the alleged agreement to sell. No part of the agreed consideration except (Sai Pate) advance of Rs 11,00,000/- was paid by the assessee on the scheduled dates, making it crystal clear that the assessee has not performed any part of the contract. Later the alleged agreement to sell was also cancelled. Assessee received back the advance amount of Rs 11 lakhs. The Assessing Officer, simply based on unregistered and cancelled agreements, initiated the reassessment proceedings and made the huge addition amounting to Rs 5,90,55,000/- ignoring the fact that the alleged transaction is not a transfer in terms of Sh. Mahendra Singh vs.ITO section 2(47)(v) of the Income Tax Act. The Assessing Officer also ignored the fact that the assessee and the sellers in their respective statements/affidavits before the Income Tax Authorities have categorically stated that the agreement stood cancelled and the sellers had not received any further payments and the buyer had also not paid agreed amounts against the said agreement and lastly, the buyer had received back his (Sai Pate) advance of Rs 11,00,000/-.

Being aggrieved, from the said order of assessment the assessee has filed an appeal before the ld. CIT(A). The ld. CIT(A) after hearing the contention of the assessee dismissed the appeal of the assessee by giving following findings on the issue:-

The Hon'ble Income Tax Appellate Tribunal Kolkata in the case of Pradeep Kumar Jhawar, Kolkata vs. D.C..T., C.C.-XX) (15 March, 2016) (ITA Nos. 450/Kol/2013 for Asst. Year: 2006-07) dismissed the appeal of the Appellant for non-prosecution.

The Hon be Madhya Pradesh High Court in the case of Estate of Late Tukojirao Holkar vs. CWT (223 IIR 480) held as under: "If the party, at whose instance the reference is made, fails to appear at the hearing, or fails in taking steps for preparation of the paper books so as to enable hearing of the reference, the court is not bound to answer the reference."

Similarly, the Hon'ble Punjab & Haryana High Court in the case of New Diwan Oil Mills vs. CIT (2008) 296 IT 495) returned the reference unanswered since the assessee remained absent and there was no assistance from the assessee.

Their Lordships of Hon'ble Supreme Court in the case of CIT vs. B.Bhattacharjee & Another (118 IT 461 at page 477-478) held that appeal does not mean, mere filing of the memo of appeal but effectively pursuing the same. In the judgment, their Lordships averred as follows: “....... This turns on the meaning of the words "preferred an appeal". "Preferred" is a word of dual import. Its semantics depend on the scheme and the context; its import must help, not hamper, the object of the enactment even if liberty with language may be necessary. There is good ground to think that an appeal means an effective appeal. An appeal withdrawn is an appeal non est as judicial thinking suggests. Black's Law Dictionary gives the following meaning: 'PREFER: To bring before; to prosecute; to try to proceed with'. Thus, preferring an indictment signifies prosecuting or trying an indictment. It means to give advantage, priority, or privilege; to select for/first payment, as to prefer one creditor over others. Thus, it may mean prosecute or effectively pursue a proceeding or Sh. Mahendra Singh vs.ITO merely institute it. Purposefully interpreted, preferring an appeal means more than formally filing it but effectively pursuing it....." In view of the above, it is clear that the Appellant is not aggrieved with the reassessment order impugned herein and is not interested in pursuing the same. Accordingly, the additions/disallowance as challenged in the Grounds of Appeal and in the Appeal Memo are hereby confirmed. The Last ground of appeal is always reserved for adding/altering/amending and/or substituting any or all grounds of appeal before the taking place of actual hearing or even in course of the hearing , if the situation so warrants. Since the appellant has nothing to say on this, This ground of appeal is dismissed as "not pressed". In view of the appellant's total non-compliance during appeal proceedings, I find it extremely difficult to adjudicate on the appeal for want of adequate submission and clarification, counter-clarification. In the result, the appeal is dismissed.”

Copy of notice issued u/s 148 dated 29.06.2021 1-1 2. Copy of notice issued u/s 148A(b) dated 27.05.2022 2-5 3. Copy of order passed u/s 148A(d) and notice issued u/s 148 6-10 dated 23.07.2022 4. Copy of “agreement to sell” dated 29.11.2012 11-14 5. Copy of cancelled agreement dated 28.02.2017 15-16 6. Copy of affidavit filed by assessee dated 24.05.2023 17-18 7. Copy of reply filed by the assessee dated 25.05.2023 19-20 8. Copy of confirmation of filing of adjournment application 21-21 Sh. Mahendra Singh vs.ITO 6. During the course of hearing, the ld. AR for the assessee prayed that the Id. CIT(A) and the AO both have passed the order ex-parte order and the assessee was not provided adequate opportunity of being heard. The ld. AR for the assessee submitted that two notices were issued and served upon the assessee but for the second notice dated 24.01.2023, the assessee has requested for adjournment and filed adjournment application before the CIT(A) in response to the second notice dated 14.03.2024. But the ld. CIT(A) has not considered the adjournment application and passed the order ex-parte. Further, the ld. AR for the assessee has also submitted even in the assessment proceedings the AO has passed the order ex-parte. Therefore, looking, to this aspect of the matter the assessee may be provided one more opportunity to advance his arguments/submissions before the ld. AO on merits as the orders of the both the authority are ex- parte, and the assessee prayed to grant one chance provide the correct details in connection with the merits of her case.

Per contra, ld. DR objected to the prayer of the assessee and submitted that even the assessee did not represent case before the ld. AO and CIT(A) both stage and now there are praying for equity and justice. The ld. DR invited our attention in the assessment order at page 2 to 4 in paragraph 4, the relevant portion is extracted hereinbelow:-

We have heard both the parties and perused the materials available on record. The bench noted from the submission made by the ld. AR for the assessee that the assessee’s case is adjudicated as an ex-parte in both the proceeding before lower authorities. The Bench noted that the AO and the ld. CIT(A) have passed the ex-parte order after giving several opportunities and the assessee is deprived off to contest the case before the lower authorities. The ld. AR for the assessee fail to produce Sh. Mahendra Singh vs.ITO documentary evidence/submission in response to the appeal filed by the assessee hence, the order passed in both proceedings are ex-parte. We note from the evidence filed by the Ld. AR for the assessee that the assessee has placed an adjournment petition before the Ld. CIT(A) but the ld. CIT(A) never treated and had not discussed the adjournment. which is on record in paper book at page 21 .We further note that Ld. AR for the assessee has specifically mentioned above the denial of reasonable opportunity to the assessee inspite of five adjournment application. The ld. DR did not controvert the objection of the assessee. Looking to these aspect of the matter the Bench feels that the assessee could not advance their arguments / submissions to contest the case before the ld. CIT(A) and the ld. AR for the assessee also prayed to give one more opportunity to submit the evidences concerning the issue in question, with grounds so raised by the assessee, to decide it afresh by providing one more opportunity of hearing. Considering that aspect of the matter, we hold to remand back the matter to the file of the ld. AO as the order of assessment is also ex parte. Thus, the ld. AO will decide the issue based on evidence and submission of the assessee. However, the assessee will not seek any adjournment on frivolous ground and remain cooperative during the course of proceedings before the ld. AO.