2023 (3) TMI 985 - AT - Income Tax

Reopening of assessment u/s 147 - information of ITD data that assessee sold certain piece of land in Daman and has not shown Capital gain in his return of income - addition was confirmed by Ld. CIT(A) by taking view that assessee was provided reasonable opportunities but assessee failed to avail such opportunities - HELD THAT - CIT(A) dismissed the appeal of assessee in ex parte proceedings. Therefore, keeping in view the principle of natural justice we are inclined to give one more opportunity to the assessee to contest his case on merit. Thus, the appeal is restored back to the file of Ld. CIT(A) to decide the issue afresh. The grounds of appeal by assessee are allowed for statistical purpose.

Issues involved:
The issues involved in this case include the confirmation of re-opening of assessment u/s 147, initiation of reassessment proceedings u/s 148, referral to DVO for land valuation, consideration of land value for LTCG computation, recalculation of long term capital gain, initiation of penalty proceedings u/s 271(1)(c), and lack of ample opportunities provided by the CIT(A).

Re-opening of assessment u/s 147:
The appeals were directed against separate orders of the ld. Commissioner of Income Tax (Appeals) confirming the action of the Assessing Officer in re-opening the assessment u/s 147 of the Income Tax Act, 1961. The Tribunal found that the case of the assessee was reopened based on information that the assessee sold land in Daman without showing capital gain in the return of income. The assessing officer made an addition of long term capital gain, which was confirmed by the CIT(A). However, the Tribunal decided to give the assessee one more opportunity to contest the case on merit, considering the principle of natural justice. The appeal was restored back to the file of the CIT(A) for a fresh decision.

Initiation of reassessment proceedings u/s 148:
The CIT(A) erred in confirming the action of the Assessing Officer in initiating reassessment proceedings u/s 148 of the Income Tax Act, 1961. The Tribunal found that the assessing officer had made a reference for the valuation of land, but the valuer's report was not received before finalizing the assessment order. The assessing officer also declined the exemption under section 54/54F and made additional additions under section 69A. The Tribunal deemed it appropriate to restore the matter to the file of the assessing officer for further consideration.

Referral to DVO for land valuation:
The CIT(A) confirmed the action of the Assessing Officer to refer the valuation of land to the DVO. The Tribunal directed the CIT(A) to provide reasonable opportunities to the assessee before passing any order. The assessee was also instructed to be more vigilant in providing complete details and sources of cash deposits in the bank account without seeking adjournments without valid reasons.

Consideration of land value for LTCG computation:
The CIT(A) confirmed the action of the Assessing Officer in considering the value of land and directed the re-calculation of LTCG based on the FMV of land as per the DVO's report. The Tribunal allowed the grounds of appeal by the assessee for statistical purposes.

Recalculation of long term capital gain:
The CIT(A) confirmed the action of the Assessing Officer and directed the AO to recalculate the addition of Rs. 8,25,575/- on account of long term capital gain. The Tribunal granted the assessee one more opportunity to contest the case on merit and directed the CIT(A) to provide reasonable opportunities before passing any order.

Initiation of penalty proceedings u/s 271(1)(c):
The CIT(A) confirmed the action of the Assessing Officer in initiating penalty proceedings u/s 271(1)(c) of the Income Tax Act, 1961. The Tribunal allowed the appeals of the different assessees for statistical purposes, directing both parties to be more vigilant in future compliance and providing complete details promptly.

Lack of ample opportunities provided by the CIT(A):
The CIT(A) was criticized for not providing ample opportunities to hear the case, leading to the decision being set aside. The Tribunal directed the CIT(A) to provide reasonable opportunities to the assessee and to be more vigilant in future proceedings. Both appeals were allowed for statistical purposes.

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