ANUJ KUMAR SINGH,MEERUT vs. ITO, WARD 1(1)(1), MEERUT

ORDER PER SAKTIJIT DEY, VP: This is an appeal filed by the assessee against the order of National Faceless Appeal Centre (NFAC), Delhi [“Ld. CIT(A)”, for short], dated 10/03/2023 for Assessment Year 2011-12.

“1. The Ld. CIT (Appeals) has erred in not accepting and admitting the additional evidences filed in appeal proceedings with the remarks that the same have not been produced before the A.O, by ignoring the facts that the statutory notices were not served upon the assessee during the course of assessment proceedings, resulting in an ex-parte assessment and the appellant was prevented by sufficient cause for producing evidence before the A.O.. Therefore, the action of the Ld. CIT (A) is arbitrary and unjust.

2. The Ld. CIT (A) neither verified the services of statutory notices nor sent the documents relating to additional evidences to the Assessing Officer for verifying at his end. Thus, order passed by Ld. CIT (A) behind the back of A.O./I.T.O for not admitting such evidences is the violation of principle of natural justice and also violation of condition of Rule 46A(3) of the I.T Rules.

5. That the Ld. CIT(A) in not considering the written submission filed on 10/03/2023 and also not admitting the cogent and essential material evidences viz. Purchase Deed and details of investment into construction of new residential house etc. which are relevant for calculating the Long Term Capital Gain on sale of residential house and ascertain the tax liability by the appellant.

6. The assessee may crave to add, delete or modify any grounds of appeal during the course of appeal proceedings.”

PRAYER

In the light of the aforesaid Grounds of appeal, it is humbly prayed that the additional evidence as mentioned in Ground No.5 and also filed before the Ld. CIT(A) in appeal proceedings may kindly be admitted and restore the matter back to the file of Assessing Officer.

3. At the outset, learned Counsel for the assessee, on instructions did not press grounds No.2 & 4; accordingly, these two grounds are dismissed as not pressed.

4. Qua grounds No.1, 3 & 5, learned Counsel appearing for the assessee submitted that based on AIR information indicating that the assessee has sold immovable property during the year under consideration, the Assessing Officer reopened the assessment under section 147 of the Act. He submitted due to compelling circumstances the assessee could not participate in the assessment proceedings. As a result of which, the Assessing Officer proceeded to complete the assessment ex parte to the best of his judgment under section 144 r.w.s.147 of the Act. He submitted, the assessee is one of the co-owners of the property sold. He submitted, the property was purchased on 30/05/2006, whereas, it was sold on 16/03/2011. He submitted, though the property sold was a long term capital asset, however, the Assessing Officer has taxed the profit derived from sale of the property as short term capital gain since, assessee could not produce the purchase deed in course of assessment proceedings. He submitted, though, before the First Appellate Authority the assessee produced the purchase deed, however, the First Appellate Authority declined to accept the purchase deed as an additional evidence and confirmed the addition made by the Assessing Officer. He submitted, since the addition on account of short term capital gain was made only due to non furnishing of purchase deed, the issue may be restored back to the file of Assessing Officer for deciding afresh, so that the assessee would be in a position to furnish the purchase deed for examination of the Assessing Officer.

Since, the Assessing Officer did not have any evidence relating to the date of purchase of the property sold, he treated the gain derived from sale of property as short term capital gain. It is evident, before the First Appellate Authority, the assessee did furnish a copy of the purchase deed. However, he refused to take cognizance of the purchase deed on a purely technical reason that assessee had not filed any application under Rule-46A seeking admission of additional evidence. Thus, it is patent and obvious that the subject addition on account of short term capital gain is only for the reason that the purchase deed was not available before the Departmental Authorities.

Order pronounced in the Open Court on 27th December, 2023.