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Income Tax Appellate Tribunal, “B” BENCH, PUNE
Before: MS. ASTHA CHANDRA & SHREE G.D. PADMAHSHALI
The appeal filed by the assessee is directed against the order dated 22.03.2024 of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [“CIT(A)”] pertaining to Assessment Year (“AY”) 2015-16.
The assessee has filed this appeal with a delay of 59 days. The assessee has filed a sworn affidavit stating therein the reasons for delay in filing of the appeal. On perusal of the same, we are satisfied that the delay in filing of appeal is not intentional or deliberate but has occurred for the reasons mentioned in the affidavit. After hearing both the sides, we are of the view that the delay is attributable to the sufficient cause. We, therefore condone the delay and proceed to decide the appeal.
The assessee has raised the following grounds of appeal :-
1. On the facts and in the circumstances of the case and in law the Id. CIT(A) erred in not granting sufficient opportunities of hearing and dismissing the appeal exparte.
2. On the facts and in the circumstances of the case and in law the appellant prays before the Hon'ble Bench to kindly grant an opportunity to represent the matter before the Id CIT(A).
3. On the facts and in the circumstances of the case and in law the Assessment Order is invalid and bad in law.
4. On the facts and in the circumstances of the case and in law the Assessing Officer erred in assessing the total income of the appellant at Rs.1,78,38,250/-.
5. On the facts and in the circumstances of the case and without prejudice to the above grounds the appellant is eligible to claim exemption u/s 54B of the Income Tax Act, 1961.
6. The above grounds of appeal may kindly be allowed to be altered, amended, modified, deleted etc in the interest of natural justice.”
Briefly stated, the facts of the case are that the assessee is an individual. For the AY 2015-16 she filed her return of income on 31.12.2015 declaring total income of Rs.1,63,250/- and claiming Rs.1,76,75,000/- as exempt income. During the course of assessment proceedings in the case of Shri Pramod Namdeo Nimhan for AY 2015-16 it was found that the assessee as a consenting party along with Shri Pramod Namdeo Nimhan sold land at Mulshi, Dist.-Pune to Symbiosis Institute for a total consideration of Rs.35,35,00,000/- out of which the assessee received an amount of Rs.1,76,75,000/-. Consequently, the case of the assessee was reopened u/s 147 of the Income Tax Act, 1961 (the “Act”). Statutory notice(s) u/s 143(2) and 142(1) of the Act were issued and served upon the assessee which were duly responded to. The Ld. Assessing Officer (“AO”) was of the view that the land sold by the assessee is not an agricultural land and falls within the purview of the definition of ‘capital asset’ u/s 2(14) of the Act and hence liable for long term capital gain tax. The fact that the TDS of 1% i.e. Rs.1,76,750/- has been deducted by the purchaser, M/s. Symbiosis Institute indicates that the land in question is a capital asset as per the definition of section 2(14)(iii) of the Act and therefore liable for tax. He accordingly issued a show cause notice requesting the assessee to explain as to why the sale consideration of Rs.1,76,75,000/- should not be treated as long term capital gain and taxed in the hands of the assessee.
4.1 In response to above show cause notice, the assessee submitted her reply on 08.12.2018 claiming therein that the said land is a rural agricultural land not covered under the definition of capital asset and filed all the relevant documentary evidences in support thereof which included- (i) copy of sale deed dated 25.09.2014; (ii) copy of purchase deed dated 24.01.2005; (iii) 7/12 extracts evidencing the crop patterns and the fact that the land is an agricultural land; (iv) certificate of Talathi certifying that the population of the said village Lavale is 10000; and (v) certificate of Talathi certifying that the nearest approachable road distance from the outer limit of Pune Municipal Corporation is 10 Km i.e. more than 8 Km.
4.2 On examining the claim of the assessee and verifying the details/documents furnished, the Ld. AO observed that though all other conditions provided u/s 2(14)(iii)(b) of the Act have been fulfilled, the condition regarding distance is not satisfied as the distance worked out under amended provisions of section 2(14)(iii)(b) of the Act applying aerial method works out to be less than 8 Kms. The Ld. AO therefore concluded that the land in question is not an agricultural land. Rejecting the above contentions of the assessee and based on the submissions made and evidences produced during the course of assessment proceedings, the Ld. AO completed the assessment on total income of Rs.1,78,38,250/- by making an addition on account of long term capital gain of Rs.1,76,75,000/- to the income of Rs.1,63,250/- returned by the assessee vide order dated 26.12.2018 passed u/s 143(3) r.w.s. 147 of the Act.
Aggrieved, the assessee carried the matter before the Ld. CIT(A)/NFAC. Before the Ld. CIT(A)/NFAC, there was non-compliance of notice(s) of hearing. The Ld. CIT(A)/NFAC dismissed the appeal of the assessee for non-prosecution and endorsed the findings of the Ld. AO. The Ld. CIT(A) observed that the Ld. AO after making necessary verification from the competent authority i.e. Pune Metropolitan Development Pradhikaran found that the sold property was within 3100 metres from the Municipal limit and thus the same was considered as capital asset. The Ld. CIT(A) further observed that during the course of appellate proceedings, the assessee filed grounds agitating that the said property was agricultural land, however she failed to submit any evidence in support of her claim. The Ld. CIT(A) thus held that in the absence of any concrete evidence in support of the grounds raised by the assessee, the contention of the assessee cannot be considered as genuine and confirmed the addition on account of capital gain of Rs.1,76,75,000/- made by the Ld. AO.
Dissatisfied, the assessee is in appeal before the Tribunal and all the grounds of appeal relate thereto.
The Ld. AR submitted that there was no intentional non-compliance of the notice(s) of hearing issued by the Ld. CIT(A)/NFAC. Referring to the sworn affidavit of the assessee, he submitted that the assessee is not technically aware with the usage of e-mail communication and therefore she missed the notice of hearing issued on 30.01.2014 by the Ld. CIT(A)/NFAC. He submitted that all the notices were issued online via e- mail due to which they remained un-complied with. He contended that the assessee was not granted sufficient opportunity of hearing by the Ld. CIT(A)/NFAC before ex-parte dismissal of the appeal of the assessee. He submitted that given an opportunity the assessee is in a position to furnish all the requisite supporting documents/evidence to substantiate her case before the Ld. CIT(A)/NFAC. The Ld. AR, therefore, urged that the matter may be sent back to the file of Ld. CIT(A)/NFAC for adjudication afresh on merits.
The Ld. DR had no objection to the above proposition of the Ld. AR.
We have heard the Ld. Representatives of the parties and perused the records. The Ld. CIT(A)/NFAC issued two notice(s) dated 28.02.2020 and 23.12.2020 and thereafter another notice on 02.11.2022 intimating about enablement of communication window. Then on 23.01.2024 a notice was issued against which the assessee sought adjournment which was granted by the Ld. CIT(A)/NFAC. This was followed by the final notice issued on 30.01.2024 which remained uncomplied by the assessee. All the notice(s) were issued via e-mail. From the above we observe that the initial two notices were issued by the Ld. CIT(A)/NFAC in the year 2020 during which the Covid period started and once the communication window was enabled in November, 2022, only two notices were issued in January, 2024 in a short span of 7 days. The Ld. CIT(A)/NFAC vide ex-parte order dated 22.03.2024 dismissed the appeal of the assessee in limine for non- prosecution of the appeal. On merits, the Ld. CIT(A)/NFAC has confirmed the addition made by the Ld. AO for want of supporting documentary evidence during the appellate proceedings before him. Before us, the Ld. AR has pleaded that given an opportunity the assessee is in a position to file the supporting documentary evidence in support of her claim. In our considered view, the contention of the Ld. AR that the assessee was not granted sufficient opportunity of hearing by the Ld. CIT(A)/NFAC, is acceptable in view of the above facts and circumstances of the case.
The appellate order reveals that the Ld. CIT(A)/NFAC has applied the decision of ITAT Kolkata Benches in the case of Pradeep Kumar Jhawar Vs. DCIT in dated 15.03.2016, decision of the Hon’ble Madhya Pradesh High Court in the case of Estate of Late Tukojirao Holkar Vs. CWT, 223 ITR 480 and the decision of Hon’ble Punjab and Haryana High Court in the case of New Diwan Oil Mills Vs. CIT (2008) 296 ITR 495 and dismissed the appeal of the assessee for non-prosecution. No doubt, the Ld. CIT(A)/NFAC may decide the appeal ex-parte where the assessee does not prosecute his appeal in spite of several opportunities.
Nonetheless, he has to adhere to the legislative mandate enshrined in sub- section (6) of section 250 of the Act which requires him to state the points for determination, the decision thereof and the reasons for the decision. We observe that the Ld. CIT(A)/NFAC has passed the impugned order in concurrence of the order of Ld. AO without himself going into the merits of the case. Thus, in our view, his order is in violation of the provisions of section 250(6) of the Act.
On the facts and in the circumstances of the case, we deem it fit in the interest of justice and fair play to set aside the order of Ld. CIT(A)/NFAC and restore the matter back to his file for adjudication afresh on merits and pass speaking order on merit after allowing reasonable opportunity of being heard to the assessee who shall provide the requisite support in terms of submitting the relevant documents/evidence as may be required/called upon on the appointed date without seeking any adjournment under any pretext, failing which the Ld. CIT(A)/NFAC shall be at liberty to pass appropriate order as per fact and law. We order accordingly.
In the result, the appeal of assessee is allowed for statistical purpose.
Order pronounced in the open court on 18th October, 2024.