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Income Tax Appellate Tribunal, AHMEDABAD “SMC” BENCH, AHMEDABAD
Before: Ms. SUCHITRA KAMBLE
This appeal is filed by the assessee against order dated 09.01.2024 passed by the CIT(A), National Faceless Appeal Centre (NFAC), Delhi for the Assessment Year 2012-13.
The assessee has raised the following grounds of appeal :-
1.1 The order passed by U/s.250 on 09-01-2024 by NFAC [(CIT(A)], Delhi (for short NFAC) for AY 2012-13 dismissing the appeal as not maintainable for non-payment of advance tax and thereby confirming the addition of Rs.37,33,030/- made by A.O. is wholly illegal, unlawful and against the principles of natural justice.
21 The Id. NFAC has grievously erred in law and or on facts in dismissing the appeal by invoking sec. 249(4)(b) as not maintainable for alleged non-payment of admitted tax.
2.2 That the in the facts and circumstances of the Id. NFAC ought not to have dismissing the appeal by invoking sec. 249(4)(b) as not maintainable for alleged non-payment of admitted tax.
3.1. The ld. NFAC has grievously erred in law and or on facts in holding that the appellant was required to pay admitted tax as per Sec.
Assessment Year: 2012-13 Page 2 of 4 249(4)(b). The ld. NFAC has failed to appreciate that the appellant had not filed his ITR for AY 2012-13 In view of no taxable income so that he was not liable to pay even advance tax therefore, there was no liability to pay the amount equal to advance tax as per sec.249(4)(b).
3.2. That in the facts and circumstances of the case, the NFAC ought to have submitted the appeal on account of there being good and sufficient reasons for the same. The NFAC ought to have allowed further opportunity to the appellant to furnish additional explanation in this regard.
4.1 The ld. NFAC ought to have decided the appeal on merits of the case because the appellant was not liable to capital gain tax on account of sale of a non-urban agriculture land as per Sec.2(14)(iii) and new asset being agriculture land purchased by him which entitled him to exemption u/s.548.
4.2 That the in the facts and circumstances of the Id. NFAC ought not to have appreciated that the provision of sec.50C were not applicable in view of registered Banakhat executed on 17.01.2011 and the new jantri rates came into force from 18.04.2021 or in the alternative, the AO ought to have referred the fair market value on the date of execution of banakhat to DVO as per Sec. 50C(2).
It is, therefore, prayed that the appeal filed by the appellant before NFAC (CIT(A) should be held maintainable and the addition of Rs.37,33,030/- should be deleted.”
The assessee did not file its return of income for the Assessment Year 2012-13. The case of the assessee was reopened under Section 147 of the Income Tax Act, 1961 on the basis of financial transaction undertaken by the assessee and in view of non-filing of return of income. Notice under Section 148 of the Act was issued on 26.03.2019. The Assessing Officer observed that the assessee sold immovable property amounting to Rs.17,00,000/- during the year under consideration but the assessee did not file the return of income. The statutory notices were issued to the assessee but the same was not responded and, therefore, the Assessing Officer proceeded on the basis of Section 144 of the Act. The Assessing Officer observed that the assessee received amount of Rs.5,66,666/- as his share in respect of selling of immovable property wherein the assessee has a share that of one third in total sale value. The market value of the sold property was Rs.1,11,99,078/- and the assessee received total consideration of Rs.17,00,000/-. The Assessing Officer, therefore, made addition of Assessment Year: 2012-13 Page 3 of 4 Rs.37,33,026/- in respect of capital gain as per provisions of Section 50C of the Act.
Being aggrieved by the Assessment Order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.
The Ld. AR submitted that the CIT(A) while invoking the provisions of Section 248(4) held that the appeal shall not be admitted unless the assessee paid amount equal to the amount of advance tax which was payable by him if no return was filed. The Ld. AR submitted that but in the present case, the assessee is not required to file return of income as the assessee’s income is exempt income as he has earned his share for selling the agricultural properties. The Ld. AR also relied upon the co owner’s case in case of Ashvinsinh Ishvarsinh Vaghela wherein the Department has taken altogether a different stand thereby the CIT(A) in the said assessee’s case held that the claim of the assessee that the land sold is an agricultural land and the same was accepted by the Assessing Officer after verification in the remand report and thus the same cannot be capital asset and, therefore, there arises no capital gains either under Section 2(29B) or 2(42B) of the Act on transfer of the same. The CIT(A) therein has deleted the addition made by the Assessing Officer.
Ld. DR submitted that the stand taken by the CIT(A) in co-owner’s case cannot be equated with the present assessee’s case as in the present assessee’s case the appeal before the CIT(A) was dismissed on the ground that the assessee has not paid the advance tax. The Ld. DR relied upon the Assessing Officer and the order of the CIT(A).
Heard both the parties and perused all the relevant material available on record. It is pertinent to note that nowhere in the Assessment Order the Assessing Officer disputes that the assessee was not required to file the return of income as to the fact that land sold was agricultural land. The Assessing Officer has simply made addition without looking into co-owner’s deposit for the said land. Besides this, the CIT(A) has also totally ignored the fact that the assessee is exempted from filing return of income and, therefore, dismissing the appeal on the Assessment Year: 2012-13 Page 4 of 4 ground that the assessee failed to pay the equivalent amount to the amount of advance tax appears to be not applicable or incorrect in the present assessee’s case. Besides this, the selling of land in co-owner’s case the Department has taken a stand that the same is agricultural land and that was just accepted by the CIT(A) but also that of Assessing Officer in the co-owner‘s case. Thus, the said land was not capital asset and, therefore, capital gain cannot be equated in the present assessee’s case as well. Thus, the contention taken by the assessee appears to be justifiable and the Assessing Officer as well as the CIT(A) totally ignored this aspect. Appeal of the assessee is thus allowed.
In the result, appeal of the assessee is allowed.
Order pronounced in the open Court on this 19th June, 2024.