2024 (2) TMI 1389 - AT - Income Tax

Ex-parte order passed on the assessee u/s 147 r.w.s. 144 - HELD THAT - Assessee is a senior citizen aged 65. Considering the age and education background as well as the procedure under the faceless regime coupled with the fact that notice issued during the course of assessment proceedings were not served as per the prescribed mode, we are of the view that the ex-parte order passed on the assessee under section 147 r.w.s. 144 of the Act is to be condoned. Dismissal of appeal due to non-payment of advance tax u/s 249(4)(b) - AR submitted that assessee s total income is only Rs.13,296/- and therefore there is no question of payment of admitted tax , hence, section 249 of the Act cannot be invoked - Assessee submitted that he is not liable for long-term capital gains since the property sold was agricultural land. Assessee has also placed on record the computation of statement of total income - HELD THAT - On perusal of the same, it is seen that the total income for the relevant Assessment Year of assessee is Rs.13,296/-. Therefore, there is no question of payment of admitted tax. In view of the above, section 249(4) of the Act cannot be invoked to dismiss the appeal of the assessee. We also place reliance on the Order of the Tribunal in the case of Annapoorneshwari Investment 2019 (8) TMI 921 - ITAT BANGALORE wherein it has been held that in terms of section 249(4)(a) of the Act, stipulation as to payment of tax ante filing of first appeal is only directory and not mandatory, where appeal is filed without payment of tax but subsequently required amount of tax is paid, appeal shall be admitted on making payment of tax and taken up for hearing on merits. In the present case, as mentioned earlier, we find assessee had not declared any admitted tax. On the facts of the instant case, assessee had claimed the receipt is for sale of agricultural land and not liable for capital gains. Since assessment has been completed under section 147 r.w.s. 144 of the Act, we are of the view that the matter needs to be examined afresh by the AO. Accordingly, the issues raised in this appeal are restored to the files of the AO. Assessee is directed to cooperate with the Revenue and shall not seek unnecessary adjournment in the matter. The AO is directed to afford reasonable opportunity of hearing to the assessee. Appeal filed by the assessee is allowed for statistical purposes.

Summary

Issues Involved:
The issues involved in this case include the applicability of sections 250, 249(4), and 144 of the Income Tax Act, 1961, regarding the assessment of long-term capital gains on the sale of agricultural land, procedural irregularities in the assessment process, invocation of natural justice principles, and the correctness of the order passed by the authorities.

Applicability of Section 250:
The appeal was directed against the CIT(A)'s order under section 250 of the Income Tax Act, 1961, for the Assessment Year 2018-19. The grounds raised by the appellant challenged the justification of the impugned order, alleging errors in law and facts, including non-compliance with the provisions of sections 249(4) and 250(4)/(6) of the Act. The appellant also contended that the order was passed without jurisdiction and against the principles of natural justice.

Assessment of Long-Term Capital Gains:
The appellant disputed the addition of Rs. 52,99,000 as long-term capital gains, arguing that the property sold was agricultural land not liable for tax under section 2(14) of the Income Tax Act. The appellant contended that the reassessment proceedings initiated under section 148 were based on an incorrect assumption regarding the nature of the land sold, which was outside the purview of the Act as it did not qualify as a "Capital Asset."

Procedural Irregularities and Natural Justice:
The appellant raised concerns about the procedural irregularities in the assessment process, including improper service of notices/orders and the incorrect levy of interest under sections 234A/B of the Act. The appellant also argued that the actions of the authorities were arbitrary, contrary to the provisions of the Act, and lacked proper application of mind. Additionally, the appellant contended that the impugned reassessment order was invalid due to non-compliance with the principles of natural justice.

Judicial Review and Tribunal Decision:
The Tribunal considered the submissions of the appellant, noting the appellant's age, limited education, and difficulties in participating effectively in income tax proceedings. The Tribunal found that the ex-parte order passed under section 147 r.w.s. 144 of the Act should be condoned due to procedural deficiencies. The Tribunal also observed that the dismissal of the appeal by the CIT(A) under section 249(4) was not justified, as the appellant's total income was minimal, and the requirement of payment of admitted tax was not applicable in this case.

Tribunal's Decision and Directions:
The Tribunal allowed the appeal for statistical purposes, directing that the issues raised be examined afresh by the Assessing Officer (AO). The Tribunal instructed the appellant to cooperate with the Revenue and not seek unnecessary adjournments. The AO was directed to provide a reasonable opportunity of hearing to the appellant, and the matter was restored to the AO's files for re-examination.