A.S. CARRIERS PRIVATE LIMITED,CHENNAI vs. ACIT CORPORATE CIRCLE-1(1), CHENNAI

आदेश / O R D E R

PER ABY T. VARKEY, JM: This is an appeal preferred by the assessee against the order of the

Learned Commissioner of Income Tax (Appeals)/NFAC, Delhi, (hereinafter

‘the Ld.CIT(A)’), dated 28.10.2023 for the Assessment Year (hereinafter

‘AY’) 2016-17.

impugned order of the Ld.CIT(A) is an ex parte order passed without

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hearing the assessee on the legal issue as well as on merits of the

addition. According to the Ld.AR, impugned action of the Ld.CIT(A) is in

violation of natural justice and therefore, bad in law. Further, according to

him, even the AO did not give him proper opportunity to present the facts

of the case meaning the AO sought information regarding cost of acquisition of warehouse on 20th/21st March, 2022, [meaning only two

days time was given to assessee for furnishing information] and by the

time assessee collected the information called for by AO, the online portal

of the department got closed at 23:59 hrs. on 23.03.2022 and

consequently, the assessee was prevented from uploading/furnishing the

details sought by AO. According to the Ld.AR, therefore assessee

uploaded the information in the online portal of the Grievance Cell of the

department on 24.03.2022; However, the AO passed the Assessment

Order on 28.03.2022 for AY 2016-17 making addition of

Rs.12,02,38,910/- on account of LTCG without giving any adjustment of

construction/development/improvement made in the property mainly on

the reason that assessee failed to furnish/substantiate the index cost of

acquisition/improvement as claimed by the assesse. Therefore, according

to the Ld.AR, the assessee should be given an opportunity before the AO

to effectively place on record the relevant documents to substantiate their

claim; and moreover, according to the Ld.AR, the action of the AO is

unsustainable for the high pitched assessment, since the AO denied the

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indexation benefit on cost of construction of warehouse and pleaded for

one more opportunity before AO and cited the decision of the Hon’ble

Supreme Court in the case of TIN Box Company v. CIT reported in [2001]

249 ITR 216 (SC).

dismissing the appeal filed by the assesse submitted that against the

assessment order passed by the AO on 28.03.2022, the assessee filed

appeal on 16.04.2022 and requested for withdrawal of the appeal on

02.12.2022. Thereafter, the assessee moved another application again

before the Ld.CIT(A) on 14.12.2022 (within 12 days) requesting

restoration of appeal filed on 16.04.2022. Thereafter, notice u/s.250 of

the Act, was issued by the NFAC/CIT (A) on 05.09.2023 and assessee

participated in the proceedings before the NFAC by letter dated

06.09.2023. However, the Ld.CIT(A) noted that the assessee had

preferred a request for withdrawing the appeal on 02.12.2022 (supra)

and therefore, he dismissed the appeal of the assessee which action of

the Ld.CIT(A) has been challenged by the assessee before us. In this

regard, the Ld.DR draw our attention to the fact that assessee after

requesting Ld.CIT(A) to allow it to withdraw its appeal (by letter dated

02.12.2023), the assessee simultaneously had filed a revision petition

u/s.264 of the Act on 02.12.2022 before the Ld CCIT, Chennai, which was

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entrusted/received in the office of the Ld.PCIT on 19.01.2024 and the

Ld.PCIT inter alia noted that the assessee had filed a letter dated

22.02.2024 withdrawing the revision petition u/s.264 of the Act.

Therefore, the Ld.PCIT had treated the revision petition filed by the

assesse as withdrawn. Therefore, according to the Ld.DR, the assessee

could not have come before this Tribunal after having filed revision

petition before the Ld.PCIT u/s.264 of the Act. Therefore, he does not

want to us to interfere in the order of the Ld.PCIT dismissing the appeal

of the assesse. In his rejoinder, the Ld.AR submitted that though

assessee had initially withdrawn the statutory appeal preferred before

Ld.CIT(A) by letter dated 02.12.2022, it had withdrawn that request (for

withdrawing appeal u/s.246A of the Act i.e. before Ld.CIT(A) within 12

days on 24.12.20122); And participated before the Ld.CIT(A), who even

called for remand report from AO, thereafter, assessee didn’t participate

in the revisional proceedings before Ld.PCIT u/s.264 of the Act, and was

allowed to be withdrawn. Therefore, Ld.AR pleads that assessee has

pursued only the statutory appeal before the Ld.CIT(A) and it is only

challenging the impugned order of Ld.CIT(A).

on record. We note that the assessee had filed return of income for AY

2016-17 on 17.10.2016 declaring of total income of Rs.3,08,84,770/-.

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The AO noted that the assessee company had entered into sale

transaction of immovable property valuing more than Rs.30 lakhs.

Therefore, he issued notice u/s.148 of the Act, on 30.03.2021 and

pursuant to that assessee furnished requisite documents called for by AO

including the capital gain working chart of land & building sold at two

places in Bangalore (details given at Para No.3 of the Assessment Order);

and assessee objected to re-opening of assessment resorted to by AO

u/s.147 of the Act on various legal grounds. The AO noted in the

assessment order that the assessee had sold two properties for

Rs.63,47,03,981/- and Rs.18,25,00,000/- respectively and also furnished

computation of capital gains in which it claimed “index cost” as acquisition

cost considering the cost inflation index of the properties and the

assessee has also claimed cost of constructions,

development/improvement on said lands in different years and

accordingly, worked out the acquisition index cost considering the cost

inflation index according to the year of

construction/development/improvement of the concerned year. The AO

therefore asked assessee for some more details along with supporting

documents. The AO acknowledges that the assessee filed reply including

relevant documents viz copy of Purchase Deed/sale deed of lands which

was sold. However, according to AO, assessee has not furnished any

details for claiming construction/development/improvement made in the

ITA No.1564/Chny/2023 (AY 2016-17) A.S. Carriers Pvt. Ltd. :: 6 :: immovable property. The AO after verifying the Sale Deed dated 08th / 10th December, 2023 & 25.06.2007, noticed that transferred property had

some construction of industrial sheds, etc., so he accepted that the

assessee had made construction/development/improvement on the said

lands, but in the absence of any evidence, the period of

construction/development/improvement, according to the AO, cannot be

ascertained for the purpose of computing the cost of inflation of index for

computing the acquisition cost. In such circumstances, AO concluded that

the cost inflation index, acquisition cost as claimed by the assessee

cannot be allowed; and the actual cost of

construction/development/improvement as shown/claimed by the

assessee was considered by him as acquisition cost along with the cost of

lands after considering the cost inflation index (as the same was acquired

in the FY 2003-04), as appeared in the Sale Deed, and thereafter, AO

worked out the Long Term Capital Gains (LTCG) earned and computed it

at Rs.12,02,38,910/-; Aggrieved by the action of the AO, the assessee

first preferred an appeal before the Ld.CIT(A) on 16.04.2022 (hereinafter

the first appeal before the Ld.CIT(A)) which the assessee had withdrawn

by letter dated 02.12.2022 and simultaneously filed an application before

the Ld.CCIT/PCIT invoking their revisional jurisdiction u/s.264 of the Act

on 02.12.2022 which the Ld.PCIT finally treated as withdrawn u/s.264 of

the Act by order dated 22.02.2024. Meanwhile, the assessee by letter

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dated 14.12.2022 (within 12 days of withdrawing the appeal on

02.12.2022) found placed at Page Nos.9 of the Paper Book requested

Ld.CIT(A) praying restoration of statutory appeal and therefore, Ld.CIT(A)

has passed the impugned order on 28.10.2023, which is subject of

challenge before us. From the aforesaid discussion, we note that firstly

assessee had filed statutory appeal before the Ld.CIT(A) which was

requested to be withdrawn by letter dated 02.12.2022 (but no order was

passed on such request till assessee sought restoration of statutory

appeal within 12 days i.e. 14.12.2022) and thereafter, wanted to pursue

revisional jurisdiction before the Ld.PCIT u/s.264 of the Act, but again

abandoned the same; and pursuant to assessee’s request for restoration

of appeal dated 14.12.2022, the Ld.CIT(A)/NFAC after acknowledging

receipt of restoration application found placed at Page No.09 of Paper

Book, had issued notice to assessee on 05.09.2023 calling for information

from assessee before 12.09.2023; and pursuant to it, assessee uploaded

details called for on 06.09.2023 (found placed at Page No.23-25 of Paper

Book along with details of uploaded information about issues/grounds

raised in appeal). So, it is implied that Ld CIT(A) has restored the

assessee’s appeal and in such a back-drop, the First Appellate Authority

who is a quasi judicial authority, ought not to have dismissed the

statutory appeal of assessee [by resurrecting the stale request of

assessee to withdraw dated 02.12.2022], which impugned action of Ld

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CIT(A) cannot be countenanced. Further, as noted (supra), the assessee

has brought to our notice that it did not get proper opportunity before the

AO during the course of assessment proceedings and in order to buttress

its submissions has filed an affidavit, wherein, it has been shown that the AO had asked information regarding cost of acquisition on 20th / 21st

March, 2022 giving time only up to 23.03.2022 (only two days) and by

the time assessee collected the information sought by AO, the online

portal of the department was closed at 23:59 hrs. on 23.03.2022, [and

therefore assessee uploaded the information in the online portal of the

Grievance Cell of the department on 24.03.2022]. Thus, it is noted that

AO couldn’t consider relevant information sought by him; and non-

consideration of additional/relevant evidence could result in failure of

justice (refer State of Rajasthan v. Aharam JT 2023 (6) SC 314); and

resultantly, assessee did not get proper opportunity before the AO during

the course of assessment proceedings, therefore, relying on the decision

of the Hon’ble Supreme Court in the case of TIN Box Company (supra),

we set aside the impugned order of the Ld.CIT(A) and restore the

assessment back to the file of the AO for de novo assessment and the AO

is directed to give proper opportunity to the assesse regarding issue of

LTCG on sale of two properties mentioned in the Assessment Order dated

28.03.2022. The assessee is at liberty to file relevant documents to

ITA No.1564/Chny/2023 (AY 2016-17) A.S. Carriers Pvt. Ltd. :: 9 :: substantiate its claim and the AO to frame assessment in accordance to law after hearing the assessee.

Order pronounced on the 29th day of May, 2024, in Chennai.

Sd/- Sd/- (एस. आर. रघुनाथा) (एबी टी. वक�) (ABY T. VARKEY) (S.R.RAGHUNATHA) लेखा सद�य/ACCOUNTANT MEMBER �याियक सद�य/JUDICIAL MEMBER चे�ई/Chennai, �दनांक/Dated: 29th May, 2024. TLN, Sr.PS आदेश क� �ितिलिप अ�ेिषत/Copy to: 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु� (अपील)/CIT(A) 4. आयकरआयु�/CIT 5. िवभागीय�ितिनिध/DR 6. गाड�फाईल/GF