MR SANJAY RUPACHAND TATHED,AHMEDNAGAR vs. ITO WARD 2, AHMEDNAGAR

There is a delay of 213 days in filing of this appeal before the Tribunal, for which the assessee has filed a condonation application along with an affidavit explaining the reasons for such delay. After considering the contents of the condonation application filed along with the affidavit and after hearing the Ld. DR, the delay in filing of the appeal is condoned and the appeal is admitted for adjudication.

Facts of the case, in brief, are that the assessee is an individual and has not filed his return of income for the impugned assessment year. Information was received from the ACIT, Ahmednagar that the assessee has sold an immovable property at S.No.38/1/1A, admeasuring 78 R situated at Burhanagar, Ahmednagar for Rs.67,50,000/-. The market value of the said property was Rs.91,03,000/- attracting the provisions of section 50C of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). Since the assessee has not filed his return of income and the capital gains / profits arrived on sale of such property was not disclosed by the assessee, the Assessing Officer, after recording reasons, reopened the assessment u/s 147 of the Act. Accordingly, notice u/s 148 of the Act was issued to the assessee on 21.04.2020 which was duly served on the assessee. However, the assessee did not file his return in response to the said notice u/s 148 of the Act. Subsequently, notice u/s 142(1) of the Act was also issued. Despite four opportunities granted by the Assessing Officer, there was no compliance from the side of the assessee. In view of the above, the Assessing Officer, invoking the provisions of section 50C of the Act, determined the short term capital gain of Rs.91,03,000/- in the hands of the assessee.

Since the assessee did not appear before the CIT(A) / NFAC despite three opportunities granted, the Ld. CIT(A) / NFAC in the ex-parte order passed by him upheld the order of the Assessing Officer.

Aggrieved with such order of CIT(A) / NFAC, the assessee is in appeal before the Tribunal.

The Ld. Counsel for the assessee submitted that the Assessing Officer had issued four notices during the period from 25.02.2021 to 23.02.2022 which were during the Covid period and he passed the order on 23.03.2022. He submitted that the CIT(A) / NFAC has issued 3 notices on 06.09.2023, 19.09.2023 and 29.09.2023, respectively and due to non appearance, passed the ex-parte order sustaining the addition made by the Assessing Officer. He submitted that the CIT(A) / NFAC has not adjudicated the issue on merit. He requested that in the interest of justice, the matter may be restored to the file of the Assessing Officer with a direction to give one more opportunity to the assessee to substantiate his case by filing the relevant details and decide the issue as per fact and law.

The Ld. DR on the other hand heavily relied on the orders of the Assessing Officer and the CIT(A) / NFAC.

We have heard the rival arguments made by both the sides and perused the orders of the Assessing Officer and Ld. CIT(A) / NFAC. It is an admitted fact that due to non-compliance to the statutory notices issued by the Assessing Officer, he passed the ex-parte order determining short term capital gain in the hands of the assessee at Rs.91,03,000/-. We find due to non-compliance to the notices issued by the office of the CIT(A) / NFAC, he upheld the order of the Assessing Officer. A perusal of the assessment order shows that the assessee has sold an immovable property along with two other persons for a consideration of Rs.67,50,000/- and the market value of the said property was Rs.91,03,000/-. We find the Assessing Officer by invoking the provisions of section 50C of the Act determined the entire short term capital gains in the hands of the assessee at Rs.91,03,000/- which has been upheld by the CIT(A) / NFAC. Even though the order passed by the CIT(A) / NFAC is an ex-parte order, he forgot to note that the property was sold by three persons and not by the assessee himself. It is the submission of the Ld. Counsel for the assessee that given an opportunity, the assessee is in a position to substantiate his case before the Assessing Officer by filing the requisite details. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Assessing Officer with a direction to grant one more opportunity to the assessee to substantiate his case by filing the requisite details before the Assessing Officer and participate in the assessment proceedings. The Assessing Officer shall decide the issue as per fact and law after giving due opportunity of being heard to the assessee. The assessee is also hereby directed to appear before the Assessing Officer on the appointed date and file the requisite details without seeking any adjournment under any pretext, failing which the Assessing Officer is at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.

In the result, the appeal filed by the assessee is allowed for statistical purposes.