IDRISH,MATAWAS vs. ITO, WARD-BHIWADI, INCOME TAX

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”A” JAIPUR Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa Jh jkBkSM +deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No. 818/JPR/2023 fu/kZkj.k o"kZ@Assessment Year : 2016-17 Sh. Idrish cuke ITO, Matawas Bhonkar, Tijara, Vs. Ward-Bhiwadi, Bhiwadi. Alwar. LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: AFHPI9498E vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assesseeby : Shri Deepak Sharma (Adv.) (Th.V.C.) jktLo dh vksjls@Revenue by: Shri A.S. Nehra(Addl.CIT) lquokbZ dh rkjh[k@Date of Hearing :29/05/2024 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 24/06/2024

vkns'k@ORDER

PER: DR. S. SEETHALAKSHMI, J.M.

This appeal is filed by the assessee against the order of the ld. CIT(A) dated 25.10.2023, National Faceless Appeal Centre, Delhi [herein after referred to as "CIT(A)/NFAC"] for the assessment year 2016-17, which in turn arise from the order dated 24.03.2022 passed under section 147 r.w.s. 144 of the Income Tax Act,1961 (hereinafter “Act”) by the ITO, Ward, Bhiwadi.

2 ITA No. 818/JPR/2023 Sh. Idrish vs. ITO 2.1 At the outset of hearing, the Bench observed that there is delay of 5 days in filing the appeal by the assessee for which the ld. AR submitted that to arrange all the papers concerning the issue in question, the delay took place which was not intentional and thus the delay of small 5 days may kindly be condoned. 2.2 During the course of hearing, the ld. DR fairly not objected to assessee’s application for condonation of delay and prayed that Court may decide the issue as deem fit in the interest of justice. 2.3 We have heard both the parties and perused the materials available on record. The Bench Noted that the assessee for condonation of delay of 05 days has merit and we concur with the submission of the assessee. Thus the delay of 05 days in filing the appeal by the assessee is condoned in view of the decision of Hon’ble Supreme Court in the case of Collector, land Acquisition vs. Mst. Katiji and Others, 167 ITR 471 (SC) as the assessee is prevented by sufficient cause.

"1. The impugned addition made in the order u/s 147/144 dated 24.03.2022 is bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence the same is kindly be deleted. 2. The very action taken u/s 147 r/w 148 is bad in law without jurisdiction and being void ab- initio, the same kindly be quashed. Consequently the impugned assessment framed u/s 147/144 dated 24.03.2022 also kindly be quashed. 3. The Id. CIT(A) erred in law as well as on the facts of the case in passing the impugned order without affording adequate and reasonable opportunity and

3 ITA No. 818/JPR/2023 Sh. Idrish vs. ITO even without complying with the mandatory statutory requirement of law. The impugned order having been framed in gross breach of natural justice, kindly be quashed or in the alternate be set-aside to him. 4.1 Rs.2,85,01,762/-: The Id. CIT(A) erred in law as well as on the facts of the case in confirming the addition made by the AO of Rs.2,85,01,762/-on account of long Term Capital Gain invoking S.50C on Agricultural lands which are not a Capital asset u/s 2(14) of the Act under the facts and circumstances of the case. The addition so made by the Id. AO and confirmed by the Id. CIT(A), is totally contrary to the provisions of law and facts on the record and hence the same kindly be deleted in full. 4.2 Alternatively and without prejudice to the above the Id. CIT(A) erred in law as well as on the facts of the case in confirming the addition made by the AO in respect of capital gain on sale of land without granting any benefit of the cost of acquisition/ cost of improvement of land. The addition so made without giving benefit of COA and COI by the Id. AO and confirmed by the Id. CIT(A), is totally contrary to the provisions of law and facts on the record and hence the same kindly be deleted in full. 5. The Id. AO further erred in law as well as on the facts of the case in charging interest u/s 234A & 234B of the Act. The appellant totally denies its liability of charging of any such interest. The interest so charged, being contrary to the provisions of law and facts, kindly be deleted in full. 6. The appellant prays your honour indulgences to add, amend or alter of or any of the grounds of the appeal on or before the date of hearing.”

4 ITA No. 818/JPR/2023 Sh. Idrish vs. ITO 1,15,15,805/- , Rs. 2,64,18,904/-, Rs. 39,29,460/- , Rs. 1,19,00,000/- and Rs. 44,32,750/- and made Ikrarnama (agreement) with various other parties wherein it has been stated that the four brothers will receive 2.5 times land of the sold land and Rs. 5,00,000/- in exchange of the said land. Thus the total sales consideration comes to Rs. 11,40,07,048/- wherein assessee’s share comes to Rs. 2,85,01,762/-. Further, it clarify that the assessee has sold property with his three brothers situated at Chavandi Khurd, Tehsil Tijara, Alwar. In view of section 50C of the Income Tax Act, the sales consideration needs to be treated as Rs.11,40,07048, wherein assessee's share comes to Rs.2,85,01,762/- During the inquiries conducted by the (I &CI) Wing of the Department, it was found that the sold land was 10 KM far from Tijar, however the property was sold to various developers, therefore, it can safely be said that the property is meant to be sold not as agricultural land but for developing the property and then reselling it as apartment, etc, in view of this, it was quite clear that the land does not cover by the definition of rural land and would be a capital asset. This view is taken in judgment of Smt. Sandabibi Mohammed Ibrahim vs. Commissioner of Income Tax (1153) 204 ITR 631 (SC).

4.1 The ld. AO noted that the assessee did not file his ITR for the relevant year. in the absence of ITR the assessee failed to disclose all material facts for determination of income and hence the income of Rs.28501762/-escaped

5 ITA No. 818/JPR/2023 Sh. Idrish vs. ITO assessment within the meaning of section 147 of the Income Tax Act, 1961.Accordingly, a notice u/s 148 dated 31.03.2021 was issued to the assessee by the Income-tax officer Ward-1(1), Alwar, after taking necessary approval from the competent authority, requiring the assessee to file his ITR, however, the said notice remained unresponded. Therefore, further notice u/s 142(1) dated 16.07.202 issued to the assessee, requiring him to file certain details documents. However, this notice too remained unresponded. On the introduction of faceless assessment proceedings, the case was moved to the faceless assessment proceedings, however, later on the proceedings were revered back to the Jurisdictional Assessing Officer. Another notice u/s 142(1) dated 09.02.2022 was issued to the assessee, requiring him to file certain details/documents. However, this notice too remained unresponded. Thereafter, due change of jurisdictional the case was transfer to the jurisdiction of the ITO, Bhiwadi to complete the pending proceedings. On change of incumbent and in these situations, a show-cause notice, together with notice u/s 142(1) dated 07.03.2022 was issued. It was clearly mentioned in the said notice that "In case you fail to submit an explanation, it would be presumed that you have nothing to say in this matter & assessment shall be completed ex parte, u/s 144 of the Income Tax Act, 1961, by treating the entire sales consideration in respect of sale of immovable property as your unexplained income". However, this notice remained unresponded. In view of the above discussed facts & circumstances of

6 ITA No. 818/JPR/2023 Sh. Idrish vs. ITO the case it is quite clear that he had sold immovable property for sales consideration of Rs 2,85,01,762/- as his share, therefore, the onus is upon the assessee to explain the capital gain/loss thereon. The assessee was given plenty of opportunities but he did not come forward to respond to notices issued to him and thus failed to fulfill its onus. Further, the assessee has not filed any ITR either under the provision of section 139 or in response to notice u/s 148.

4.2 The ld. AO further observed that the assessee had sold immovable property for sales consideration of Rs.2,85,01,762/ [assessee's share], whereas the assessee failed to explain the furnish the capital gain / loss details. In the absence of any details the cost of acquisition / improvement as well as deduction u/s 54 to 54H have been treated as zero, it can safely be said that the property is meant to be sold not as agricultural land but for developing the property and then reselling it as apartment, etc. in view of this, it is quite clear that the land does not cover by the definition of rural land and would be a capital asset in view of the judgment in the case of Smt. Santabib Mohammed Ibrahim vs. Commissioner of Income Tax, (1193) 204 ITR 631 (SC), Accordingly, an addition, under the head Long Term Capital Gain, of Rs.2,85,01,762/- was made.

7 ITA No. 818/JPR/2023 Sh. Idrish vs. ITO assessee requiring the assessee to file the details in support of grounds taken by the assessee. Since the assessee has not complied with the notices issued the ld. CIT(A) dismissed the appeal of the assessee ex-parte. The extract of the finding of the ld. CIT(A) is reproduced as under:-

“4. It is found from records that hearing notices were issued to the appellant as per the table below:-

Date of Date of hearing fixed Result Notice as per the notice 24.11.2022 09.12.2022 No details furnished nor any petition for adjournment was received. 04.07.2023 19.07.2023 No details furnished nor any petition for adjournment was received. 09.10.2023 13.10.2023 No details furnished nor any petition for adjournment was received. The conduct of the Appellant, as inferred from the aforesaid table, evidences that the Appellant is not interested in prosecuting the Appeal. 4.1. The law aids those who are vigilant, not those who sleep upon their rights. This principle is embodied in the well-known latin dictum, "VIGILANTIBUS ET NON DORMIENTIBUS JURA SUB VENIUNT". The conduct of the Appellant, as inferred from the aforesaid table, evidences that the Appellant fails on this principle of equity. Even the Hon'ble Courts, in various pronouncements, have frowned upon the Appellants who file appeals but thereafter do not take any further interest inprosecuting those appeals. 1. The Hon'ble Income Tax Appellate Tribunal Kolkata in the case of Pradeep Kumar Jhawar Kolkata vs. DCIT - CC - XXI (15 March, 2016) (ITA Nos. 450/Kol/2013 for Asstt. Year: 2006-07) dismissed the appeal of the Appellant for non-prosecution. 1. The Hon'ble Madhya Pradesh High Court in the case of Estate of Late Tukojirao Holkar vs. CWT (223 ITR 480) held as under:

8 ITA No. 818/JPR/2023 Sh. Idrish vs. ITO "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.” 1. Similarly, the Hon'ble Punjab & Haryana High Court in the case of New Diwan Oil Mills vs. CIT ((2008) 296 ITR 495] returned the reference unanswered since the assessee remained absent and there was no assistance from the assessee. 1. Their Lordships of Hon'ble Supreme Court in the case of CIT vs. B. Bhattacharjee & Another (118 ITR 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 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 assessment order impugned herein and is not interested in prosecuting the same Accordingly, the additions/disallowance as challenged in the Grounds of Appeal and in the Appeal Memo are hereby confirmed. 4.2. The Appeal deserves to be dismissed on merits as well. 4.2.1. Grounds 1 and 2 These Grounds being general in nature and more so, in absence of any specific reasons mentioned by the Appellant for the order to be treated as bad in law and further in absence of any submissions in this regard, these do not require any separate adjudication and hence, these are dismissed. 4.2.2. Vide Ground 3, the Appellant has challenged the order as being bad in law since reasonable opportunity of being heard was not provided and thus there is violation of

9 ITA No. 818/JPR/2023 Sh. Idrish vs. ITO principles of natural justice. In this regard, I find the facts otherwise. It is mentioned in the assessment order that the Appellant has not responded to notices issued u/s 148 and 142(1) of the Act, thus, compelling the AO to complete the assessment u/s 144 of the Act. These facts have not been controverted by the Appellant. Grounds are, therefore, dismissed being factually incorrect. 4.2.3. Grounds 4 and 5 Vide Ground 4 the Appellant has challenged the action of AO in making addition of Rs.2,85,01,762/- on account of Long Term Capital Gain (LTCG) by invoking Section50C of the Act on agricultural lands which are not Capital asset u/s 2(14) of the Act. Further, without prejudice to Ground 4, the Appellant has submitted that he should get the benefit of coast of acquisition/cost of improvement while computing LTCG. In this regard, I find from assessment order that the AOhas addressed both these issues and has clearly held therein that the land sold by the Appellant was not agriculture land and the same were sold to developers for construction of apartments. Thus, the land is capital asset and is covered u/s 2(14) of the Act and thus liable for capital gains tax u/s 45 of the Act. Furter, it is mentioned in the assessment order that the Appellant has not submitted any details pertaining to computation of capital gain including cost of acquisitions/cost of improvements and hence the computation of capital gain is done to the best of knowledge of the AO u/s 144 of the Act. In this regard, it would be appropriate to refer to relevant part of the assessment order.:-………………………………..” Thus, in view of the above findings of the AO, which remain uncontroverted by the Appellant, I uphold the addition of Rs.2,85,01,762/-as being in the nature of LTCG. Grounds are, thus, dismissed. 4.2.4. As regards Ground 6, since the Appellant has not added, amended or altered any of the grounds of the appeal on or before the date of hearing, the ground is dismissed as not pressed. The Appeal is, thus, dismissed on merits as well. 6. In the result, the Appeal is hereby dismissed.”

10 ITA No. 818/JPR/2023 Sh. Idrish vs. ITO provided adequate opportunity of being heard. Thus, 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 to provide the details in connection with the merits of his case. The additional evidence to support the contention will reduce the liability of tax substantially and therefore, in the interest of equity and natural justice the assessee praying for the one chance before the ld. AO to advance the argument on the merits of the case. 7. 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 he is praying for equity and justice. If at all, if the Bench feels the matter may be restored to the file of the Assessing Officer, then with fine may be sent back to the file of the ld. AO.

11 ITA No. 818/JPR/2023 Sh. Idrish vs. ITO documentary evidences from the documents specified in the attached annexure i.e. Form 35, the assessee could not furnish any documentary evidence, The ld. CIT(A) has upheld the addition of Rs. 2,85,01,762/- being in the nature of long term capital gain. We note that the Ld. CIT(A) inspite of three notices were issued to the assessee but the assesee had not submitted documents related to the claim. 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.

12 ITA No. 818/JPR/2023 Sh. Idrish vs. ITO no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the ld. AO independently in accordance with law.

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

Order pronounced in the open court on 24/06/2024. Sd/- Sd/- ¼jkBkSM +deys'k t;UrHkkbZ ½ ¼MkWa-,l-lhrky{eh½ (RATHOD KAMLESH JAYANTBHAI) (Dr. S. Seethalakshmi) ys[kk lnL; @Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 24/06/2024 *Santosh आदेश की प्रतिलिपिअग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू The Appellant- Sh. Idrish, Alwar. 1. 2. izR;FkhZ@ The Respondent- ITO, Ward- Bhiwadi, Bhiwadi. 3. vk;djvk;qDr@ The ld CIT 4. विभागीय प्रतिनिधि] आयकरअपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. xkMZQkbZy@ Guard File ITA No. 818/JPR/2023) vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेजज. त्महपेजतंत