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Income Tax Appellate Tribunal, PUNE ‘B’ BENCH, PUNE
Before: HON’BLE SMT. ASTHA CHANDRA & SHRI G. D. PADMAHSHALI
द्वधरध / Appearances Assessee by : Mr Saurabh Patil [‘Ld. AR’] Revenue by : Mr Arvind Desai [‘Ld. DR’] सुनवाई की तारीख / Date of conclusive Hearing : 17/10/2024 घोषणा की तारीख / Date of Pronouncement : 17/10/2024 आदेश / ORDER Per G. D. Padmahshali, AM; Against the DIN & Order No. ITBA/NFAC/S/250/2024- 25/1065352849(1) dt. 03/06/2024 passed by National Faceless Appeal Centre, Delhi [‘NFAC’] u/s 250 of the Income Tax Act [‘the Act’] the assessee instituted the present appeal u/s 253(1) of the Act which in turn arisen out of the order of assessment framed u/s 147 r.w.s. 144B of the Act by the National Faceless e-Assessment Centre, Delhi. [‘Ld. AO’] ITAT-Pune Page 1 of 6 Ruhi Khalid Parwani. Vs ITO AY:2014-15 2. Tersely stated facts of the case are that; the assessee is an individual and the return of income [‘ITR’] filed by her 31/07/2014 u/s 139(1) of the Act was summarily proceed u/s 143(1) of the Act. Upon the receipt of information from ‘NON-PAN-AIR’ that, the assessee entered to certain immovable property transactions valuing ₹570.00Lakhs, the case of the assessee after recording reasons and obtaining prior approval from the competent authority was reopened by the Ld. AO u/s 148 of the Act.
After due consideration of nature of transactions, evidences, documents and other material placed on records by the assessee, the Ld. AO recomputed the capital grain arising out of such immovable property sale transactions entered/executed by the assessee and denying the exemption claimed thereagainst has assessed the total income of the assessee at ₹2,54,15,043/- as against the returned income on account of solitary addition made towards long term capital gain of ₹2,48,65,883/- and accordingly framed the assessment u/s 143(3) r.w.s. 147 r.w.s.144B of the Act.
The aforestated addition, denial of exemption claimed u/s 54 of the Act and assessment was unsuccessfully assailed by the assessee in an appeal before Ld. First Appellate Authority.
ITAT-Pune Page 2 of 6 Ruhi Khalid Parwani. Vs ITO AY:2014-15 5. Aggrieved by the action of the tax authorities below the assessee came in present appeal on the following grounds ;
1. On the facts and circumstances of the case learned AO has erred and learned CIT(A) in confirming, the addition to the income of the assessee under the head long term capital gain of Rs 2,48,65,883/-
2. On the facts and circumstance of the case learned CIT(A) has erred in stating that no documentary evidence has been submitted during the appellate proceedings.
3. The Appellant craves leave to add, alter or amend any of all ground of appeal.
6. During the course of physical hearing, adverting to ground no 2, the Ld. AR Mr Patil at the outset submitted that, in response to hearing notice & in support of grounds of appeal in first appeal before Ld. NFAC, a full documentary evidences accompanying written submissions was uploaded online on 17/05/2024. Adverting to the copy of reply it is also averred that, it on record that vide acknowledgement no 222954231170524 all the necessary documents called in support of appellant’s computation of income and claim for exemption u/s 54 of the Act were made available for the purpose of adjudication, however, turning blind eye to such online submissions, the Ld. NFAC completed the proceedings ex-parte noting blatant incorrect factual finding at para 6 of the impugned order. It is claimed that, owning to non-consideration of evidential material placed on records, the impugned proceedings and order turned out to be irregular, hence deserves to be set-aside for remand. Per contra, the Ld. DR Mr Desai could hardly displace the appellant’s contention and negate the factual position brought out on record during the course of hearing. ITAT-Pune Page 3 of 6 Ruhi Khalid Parwani. Vs ITO AY:2014-15
7. Without touching merits and ground no. 1 we have heard the rival submission and perused the material. In the clinching factual position that, in response to notice no 100079634712 dt. 14/05/2024 the written submission accompanying thereby ten documents viz; DVO report, SB account statement, purchase deed, share transfer certificate, agent payment voucher, legal fees receipt, PMC challan & receipt, capital gain computation etc., were uploaded on the Revenue’s web portal on 17/05/2024, this pivotal submission however inadvertently lost the sight of the Ld. NFAC who proceeded ex-parte on the basis of balance records and dismissed the appeal of the appellant by confirming the addition & countenancing the denial of exemption claimed u/s 54 of the Act.
The assessing officer and first appellate authority are quasi-judicial authorities and respective proceedings they undertake are quasi-judicial proceedings. The section 136 of the Act however relishes that ‘Proceedings before Income-tax Authorities to be judicial proceedings’. As per the said provision, the proceedings before the Income-tax Authorities are deemed to be judicial proceedings for the purposes of section 196 of Indian Penal Code as laid in ‘Chickanna Silk House Vs State of Madras’ [1974, 95 ITR 422 (Mad.)]. Now the term ‘proceedings’, in stricter sense signifies a set of actions undertaken in relation to subject. Accordingly, the proceedings relate to the methods in which they are conducted and concluded judicially in accordance with statute/law, thus proceedings are prescribed course of ITAT-Pune Page 4 of 6 Ruhi Khalid Parwani. Vs ITO AY:2014-15 action and sum of all the steps taken by either party for the enforcement of their respective legal rights & obligations. The proceedings under the Act includes proceedings at original assessment, re-assessment stage, appellate stages and/or such other stages till the matter attains finality under provisions of the Act. In nutshell under the Act the proceedings thus represents either the steps taken by taxpayer assessee or the acts of Income- tax Authorities. Any action/step of Income Tax Authorities which creates obligation on the part of taxpayer assessee needs to be validated from its contents. The action/step of Revenue if taken without cognizance of taxpayer’s step/action i.e. reply or submission, would in effect render the formers action as unlawful.
The Hon’ble Jurisdictional High Court in ‘Pankaj Vs Ne-AC’ [2022, 286 Taxman 228 (Bom)] in similar circumstances annulled the order passed by the Revenue which blatantly ignored the reply filed by the assessee. While adjudicating the issue their lordship held that, the validity of the order would have to be judged from its contents, therefore any order passed without considering the reply filed or submission made by the assessee in response to notices is bad in law and deserves to be set-aside. The matter in result remanded back to the file of assessing officer for fresh consideration. On a similar line the Hon’ble Madras High Court in ‘Chennai Silk VS Asstt Commissioner (ST-FAC) [2023, 157 Taxmann.com 65 (Mad)] occasioned to considered the validity of assessment where the ITAT-Pune Page 5 of 6 Ruhi Khalid Parwani. Vs ITO AY:2014-15 Revenue failed to considered the reply or submission of the assessee. Their Hon’ble Lordship therein categorically held that, failure on the part of the Assessing Officer to address any reply file by the assessee by a speaking order would vitiate impugned proceedings. A similar ratio can be squinted in ‘Bhagyam Exports Vs AC-ST’ [2024, 160 Taxmaan.com 521 (Mad)], ‘PBL Transport Corp. Pvt. Ltd. Vs AC-ST’ [2024, TaxPub(GST) 210 (AP)].
In the instant case the impugned proceedings admittedly were culminated without considering/addressing the submissions of the appellant assessee which was filed online on 17/05/2024. The impugned proceedings thus suffered from judicial process and hence cannot be sustained in view of the former judicial precedents. In absence of anything contrary brought to our notice, without offering any comments on merits of the case, in the light of judicial precedents (supra), we therefore deem it fit to set-aside the impugned order and remit the matter back to the Ld. NFAC for de-novo adjudication in accordance with law on the basis of material already placed on records by the appellant. Ordered accordingly.
In result, the appeal is ALLOWED FOR STATISTICAL PURPOSE. U/r 34 of ITAT Rules, the order is pronounced in the open court on the day of conclusive hearing.