Case Law Details
Ashutosh Das Vs ACIT (ITAT Kolkata)
ITAT Kolkata held that imposition of penalty under section 271(1)(b) of the Income Tax Act justified as no plausible explanation was given by the assessee for non-compliance of notices served by AO.
Facts- The assessee along with three other family members owned a property at Mouza-Khantpukur, Plot No.145 in the territory of Durgapur Municipality, West Bengal. This property was inherited by all these family members after the death of their father. He entered into a Joint Development Agreement vide Registered Deed dated 27.0 1.2015 with M/s. Samridhi Housing Pvt. Limited. AO has observed that fair market value of the said property as on the date of execution of Joint Development Agreement was Rs.2,61,82,546/-. He made the addition of 1/4th of the above value in the hands of assessee under the head “Capital Gain”. Penalty u/s. 271(1)(b) of the Income Tax Act was also imposed.
CIT(A) dismissed the appeal. Being aggrieved, the present appeal is filed.
Conclusion- Held that respectfully following the order of the Coordinate Bench in the case of other co-sharers, we deem it appropriate to set aside both the impugned orders and restore this issue to the file of ld. Assessing Officer, who will re-adjudicate the issue.
Held that the assessee is an employee of Indian Oil Corporation. He is well aware about responsibility to file return etc. He has filed his return declaring total income of Rs. 13,57,830/-. He should have responded to the notices served upon by the ld. Assessing Officer. There is no plausible explanation given by the assessee for his noncompliance. Therefore, penalty imposed under section 271(1) (b) is hereby confirmed.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
This appeal by the assessee is directed against the order of ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 5th August, 2024 passed for Assessment Year 20 15-16.
2. The assessee has taken five grounds of appeal. However, his grievances revolve around two-fold of issues, namely-
(a) that ld. CIT(Appeals) has erred in upholding the reopening of the assessment;
(b) the ld. CIT(Appeals) has erred in confirming the additions made by the ld. Assessing Officer by holding that right under the Joint Development Agreement is to be construed as transfer of a capital asset within the meaning of section 2(47) of the Income Tax Act.
3. With the assistance of ld. Representatives, we have gone through the record carefully. It emerges out from the record that the assessee along with three other family members owned a property at Mouza-Khantpukur, Plot No.145 in the territory of Durgapur Municipality, West Bengal. This property was inherited by all these family members after the death of their father. He entered into a Joint Development Agreement vide Registered Deed dated 27.0 1.2015 with M/s. Samridhi Housing Pvt. Limited. The ld. Assessing Officer has observed that fair market value of the said property as on the date of execution of Joint Development Agreement was Rs.2,61,82,546/-. He made the addition of 1/4th of the above value in the hands of assessee under the head “Capital Gain”.
4. Appeal to the ld. CIT(Appeals) did not bring any relief to the assessee.
5. It has been submitted before us that in the case of other co-owner namely Dhirendra Nath Das, ITAT decided the appeal bearing ITA No. 491 /KOL/2024 for A.Y. 2015-16. The Tribunal has set aside this order to the file of ld. Assessing Officer for re-adjudication after giving due opportunity of hearing to the assessee. The finding of this order reads as under:-
“The present appeal has been preferred by the assessee against the order dated 22.01.2024 of the National Faceless Appeal Centre [hereinafter referred to as ‘CIT(A)’] passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’).
2. The assessee in this appeal has taken the following grounds of appeal:
“1. The Ld. CIT(A) erred in law as well as on fact in dismissing the appeal when he ought to consider that Jurisdictional Assessing Officer has wrongly assumed the jurisdiction u/s 147 of the Act hence the assessment order passed there on is null and void ab-initio.
2. The Ld. CIT(A) NFAC erred in law as well as on fact to upheld the assessment order of the JAO treating Agreement of development as Transfer’ u/s 2(47) of the Act, whereas none of the condition thereof are applicable on the fact.
3. The Ld. CIT(A) NFAC erred in law as well as on facts to dismiss the appeal of the appellant without considering that the agreement for development did not materialized and was non est at the time of assessment.
4. That the appellate craves leave to add, modify or amend the ground of appeal and to adduce additional evidence in support of ground of appeal at the time of hearing of the case.”
3. At the outset, the ld. Counsel for the assessee has submitted that the Assessing Officer has made the impugned addition of Rs.65,45,637/- on accrual basis treating the Joint Development Agreement executed by the assessee as transfer u/s 2(47) of the Act. The ld. Counsel for the assessee has submitted that though the assessee had executed a JDA, however, never handed over the possession of the land to the developer. That there was a condition that the land will be handed over for development after getting it vacated from the tenants. That since the land could not be vacated from the tenants, therefore, the same could not be handed over to the developer. That due to this, the JDA did not mature and hence neither income was received nor accrued to the assessee for the year under consideration.
4. The ld. DR, on the other hand, has submitted that the above details/submissions were not produced before the Assessing Officer.
5. The ld. AR of the assessee however has submitted that there was no proper representation before the Assessing Officer by the concerned AR resulting into passing of the ex parte assessment order u/s 147 r.w.s 144 of the Act. He, therefore, has submitted that the assessee may be given an opportunity to furnish the true and actual facts before the Assessing Officer.
6. Considering the above submissions of the assessee, we are of the view that the interests of justice will be well-served if the assessee is given an opportunity to present his case before the Assessing Officer. In view of this, the impugned order of the Assessing Officer is set aside and the matter is restored to the file of the Assessing Officer for de novo assessment. Needless to say that the Assessing Officer will give proper opportunity to the assessee to present his case.
4. In the result, the appeal of the assessee is treated as allowed for statistical purposes.
| Kolkata, the 2nd August, 2024. | |
| [Rajesh Kumar]
Accountant Member Dated: 02.08.2024”. |
[Sanjay Garg]
Judicial Member |
6. Respectfully following the order of the Coordinate Bench in the case of other co-sharers, we deem it appropriate to set aside both the impugned orders and restore this issue to the file of ld. Assessing Officer, who will re-adjudicate the issue.
7. In the result, the appeal of the assessee is allowed for statistical purposes.
8. Now we take ITA No. 1954/KOL/2024.
This appeal is also directed at the instance of assessee against the order of ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 5th August, 2024 passed for Assessment Year 20 15-16.
9. The grievance of the assessee is that ld. CIT(Appeals) has erred in upholding the levy of penalty under section 271(1)(b) of the Income Tax Act. We find that ld. Assessing Officer has issued a notice under section 142(1), but the assessee neither appeared before the ld. Assessing Officer nor replied those questionnaires. The ld. Assessing Officer, therefore, visited the assessee with penalty for non-compliance of the notice dated 21.02.2023 and imposed penalty of Rs.10,000/-.
10. The appeal to the ld. CIT(Appeals) did not bring any relief to the assessee.
11. Before us, ld. Counsel for the assessee has contended that the assessee has challenged reopening of assessment and the quantum has been set aside to the file of ld. Assessing Officer. Therefore, penalty ought not to be levied against the assessee. Alternatively, he contended that notice had not duly been served upon the assessee, rather uploaded on the portal.
12. On due consideration of the facts and circumstances, we find that the assessee is an employee of Indian Oil Corporation. He is well aware about responsibility to file return etc. He has filed his return declaring total income of Rs. 13,57,830/-. He should have responded to the notices served upon by the ld. Assessing Officer. There is no plausible explanation given by the assessee for his noncompliance. Therefore, penalty imposed under section 271(1) (b) is hereby confirmed.
13. In the result, this appeal of the assessee is dismissed.
14. To sum up, the appeal of the assessee bearing ITA No. 1942/KOL/2024 is allowed for statistical purposes. The appeal of the assessee bearing ITA No. 1954/KOL/2024 is dismissed.
Order pronounced in the open Court on 18/11/2024.
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