Case Law Details
Karur Jayaprakash Vs DCIT (ITAT Bangalore)
We notice that the CIT(A) in his order has admitted the fact that the assessee’s representative for the first time produced various details on 21.06.2010 (page 4 of CIT(A)’s order). The CIT (A) has infact verified these evidences but had rejected the same merely on the ground that these details should have been available with the assessee during the assessment proceedings itself and should have been produced before the AO. In our view the decision of CIT(A) on a presumptive basis is incorrect and the CIT(A) has disposed off the appeal without considering the merits of the evidences submitted. The assessee’s submission that the consultant handled the assessment proceedings in an unprofessional manner also warrants consideration.
Under these facts as discussed above and in the interest of justice, we feel it proper to restore back this matter to the file of AO for fresh decision after admitting the evidences which the assessee may like to bring on record. We order accordingly. We set aside the order of CIT(A) and restore the matter back to the AO for fresh decision after allowing sufficient opportunity to the assessee.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
This appeal is directed against the order of the CIT(A), Kalaburagi dated 31/08/2015 for the asst. year 2007-08.
2. The assessee raised the following grounds before us.
1. Order of the CIT(A) not served on the Appellant till date
The [earned CIT(A) grossly erred in law by not serving the order under section 250 of’ the Income Tax Act, 1961 (‘the Act’) on the Appellant. The Appellant was unaware of the order passed by the CIT(A) until recovery proceedings were initiated against him and the bank accounts were frozen on 31 December 2020.
2. Recovery Proceedings initiated without serving the order under section 250 of the Act on the Appellant
The learned ITO erred in law by initiating the recovery proceedings on the Appellant without the Appellant being served the order from the CIT(A)’s office.
3. Natural justice denied to the Appellant
The learned CIT(A) has erred in law by passing an order without giving the Appellant the opportunity of being heard, thereby, denying natural justice to the Appellant.
4. Erred in attaching the bank accounts
The learned DCIT erred in attaching the bank accounts of the assessee without serving a notice of demand to the aseessee.
5. Long Term Capital Gain on sale of shares
The learned CIT(A) erred in facts and in law by upholding the denial of exemption under section 54F of the Act without considering the submissions made by the Appellant and giving an opportunity of being heard. Further, the learned CIT(A) disregarded the valuation report submitted by the assessee.
6. Interest levied under section 234B of the Act
The learned CIT(A) erred in upholding the levy of interest under section 234B of the Act.
7. Interest levied under section 234D of the Act
The learned CIT(A) erred in upholding the levy of interest under section 234D of the Act.
8. Initiation of penalty proceedings tinder section 271(1)(c) of the Act
The learned CIT(A) erred in law and facts in upholding initiation of penalty proceedings by the Assessing Officer under section 271(1)(c) read with section 274 of the Act.
9. Relief
The Appellant prays that directions be given to grant all such relief arising from the preceding grounds as
also all reliefs consequential thereto.
The Appellant craves leave to add to or alter, by deletion, substitution or otherwise, any or all of the above grounds of appeal, at any time before or during the hearing of the appeal.
- The brief facts of the case
The assessee is an individual engaged in the business of trading iron ore. The assesse filed the return of income for the asst. year 200708 on 31/10/2007 declaring a total income of Rs.7,31,480/-. The assessee in the return of income had offered capital gains from the sale of shares and claimed exemption u/s 54F for an amount of Rs.67,05,625/-. The DCIT, Circular-1, Bellary (AO) initiated asst. proceedings u/s 143(2) of the Income-tax Act (the Act) and assessed the income of the assessee at Rs.76,82,705/- by disallowing the exemption claimed by the assessee u/s 54F. Aggrieved by the order of the AO, the assessee filed an appeal before the CIT(A), who confirmed the disallowance made by the AO. However the assessee did not receive the order of the CIT(A) and after several attempts managed to get the copy of the CIT(A)’s order from the AO.
4. Aggrieved by the order of the CIT(A), the assessee is in appeal before the Tribunal. There is a considerable delay in filing the appeal before the Tribunal and we will first decide on the assessee’s request for condonation of delay in filing the appeal.
5. The ld.AR submitted that the assessee was unaware of the order passed by the CIT(A) until recovery proceedings were initiated against him and that bank account was freezed. The ld.AR also submitted assessee had under an impression that the CIT(A) has decided the appeal in favour of the assessee as no order was served on him. During the asst. proceedings in asst. year 2017-18, the assessee noticed that there is a demand appearing online for asst. year 2007-08. The assessee then wrote a letter to CIT(A) on 04/01/2020 enquiring the status of appeal and also asking for a copy of the order. The Ld AR further submitted that the assessee did not receive any reply from the CIT(A) inspite of several steps taken to obtain the copy of the order from the CIT(A) by sending mails and personally visiting the office of the CIT(A). The evidences supporting the efforts of the assessee to obtain the copy of the order is placed before the Tribunal. The Ld AR also submitted that assessee wrote a letter to the AO in the meantime from whom he received the copy of the order of the CIT(A) on 27th January 2021. The ld.AR, therefore, prayed that the delay in filing the appeal before the Tribunal was not due to any failure on the part of the assessee and hence the delay may be condoned.
6. The ld.DR vehemently submitted that the delay should not be condoned.
7. We have heard rival submissions and perused the materials on record. We notice that the assessee had genuinely made several attempts to get a copy of the CIT(A) order and the evidences submitted by the assessee before us supports the claim of the assessee. It is also noticed that the assessee was not aware of the outcome of the decision of the CIT(A) until the recovery proceedings were initiated against him and the bank accounts are frozen We have considered the submissions and found no hatches attributable to the intention of the assessee and there is reasonable cause in not filing this appeal on time. Hence, we condone the delay and admit the appeal for adjudication on merits.
8. We will now proceed to adjudicate the appeal on merits. During the previous year relevant to asst. year 2007-08, the assessee sold 35000 shares of Benaka Sponge Iron Pvt. Ltd for the consideration of Rs.1,04,90,000/-. After considering the indexation, the assessee arrived at long term capital gain at Rs.67,05,675/-. The assessee claimed exemption of the entire capital gain u/s 54F of the Act on the ground that the entire amount is invested in the purchase of residential house. The AO during the course of asst. called for full details of these transactions to confirm that the investment made is eligible for exemption u/s 54F. However, the assessee failed to produce any evidence to substantiate the claim and hence the exemption was disallowed by the AO.
9. Before the CIT(A), the assessee filed various details including valuation report of the building. The CIT(A) however, did not peruse any of the details submitted by the assessee and confirmed the disallowance stating that
(i) the assessee ought to have produced the said details before the AO.
(ii) the fact that the assessee did not produce these details before the AO itself proves the fact that the assessee did not purchase any land or building to claim exemption u/s 54F of the Act.
10. The ld.AR submitted that the assessee trusted the consultant engaged until the asst. proceedings, who did not handle the proceedings in the professional manner. The ld.AR submitted that the sound professional advice was not given by the consultant and hence the details could not be submitted before the AO. The ld.AR further submitted that all the details including the invoices for the monies spent for construction and sale deed for the purchase of property and the valuation report was submitted before the CIT(A) who ignored the details and went on to confirm the details made by the AO.
11. The ld.DR supported the decision of the lower authorities.
12. We have heard rival submissions and perused the material on record. We notice that the CIT(A) in his order has admitted the fact that the assessee’s representative for the first time produced various details on 21.06.2010 (page 4 of CIT(A)’s order). The CIT (A) has infact verified these evidences but had rejected the same merely on the ground that these details should have been available with the assessee during the assessment proceedings itself and should have been produced before the AO. In our view the decision of CIT(A) on a presumptive basis is incorrect and the CIT(A) has disposed off the appeal without considering the merits of the evidences submitted. The assessee’s submission that the consultant handled the assessment proceedings in an unprofessional manner also warrants consideration.
13. Under these facts as discussed above and in the interest of justice, we feel it proper to restore back this matter to the file of AO for fresh decision after admitting the evidences which the assessee may like to bring on record. We order accordingly. We set aside the order of CIT(A) and restore the matter back to the AO for fresh decision after allowing sufficient opportunity to the assessee. In view of this decision, we do not make any comment on the merit of the issue.
14. In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in court on 7th March, 2022
