2024 (12) TMI 458 - AT - Income Tax

Reopening of assessment - 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) - HELD THAT - As in the case of other co-owner namely Dhirendra Nath Das, ITAT decided the appeal bearing 2024 (8) TMI 1495 - ITAT KOLKATA for A.Y. 2015-16. The Tribunal has set aside this order to the file of ld. Assessing Officer for read-judication after giving due opportunity of hearing to the assessee. 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. Penalty u/s 271(1)(b) - non-compliance of notice u/s 142(1) - 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 AO. There is no plausible explanation given by the assessee for his non-compliance. Therefore, penalty imposed under section 271(1)(b) is hereby confirmed. Decided against assessee.

Summary

Issues:
1. Reopening of assessment
2. Addition made under the Joint Development Agreement
3. Levy of penalty under section 271(1)(b) of the Income Tax Act

Analysis:

Reopening of Assessment:
The appeal challenged the order of the ld. Commissioner of Income Tax (Appeals) regarding the reopening of the assessment for the Assessment Year 2015-16. The ld. Assessing Officer had made an addition under the head "Capital Gain" based on the fair market value of a property owned by the assessee as per a Joint Development Agreement. The Tribunal noted that the assessee, along with other family members, had inherited the property and entered into the agreement with a developer. The Tribunal decided to set aside the order and restore the issue to the Assessing Officer for de novo assessment, giving the assessee an opportunity to present their case properly.

Addition under the Joint Development Agreement:
The ld. Assessing Officer had treated the Joint Development Agreement as a transfer under section 2(47) of the Income Tax Act, resulting in an addition of a specific amount in the hands of the assessee. The Tribunal observed that the assessee had not handed over possession of the land to the developer due to certain conditions not being met, leading to the agreement not maturing. The Tribunal found that the proper representation was lacking before the Assessing Officer, which led to an ex parte assessment order. Consequently, the Tribunal set aside the Assessing Officer's order and restored the matter for re-adjudication, emphasizing the importance of providing the assessee with an opportunity to present their case.

Levy of Penalty under Section 271(1)(b):
The appeal in this instance pertained to the levy of a penalty under section 271(1)(b) of the Income Tax Act. The ld. Assessing Officer had imposed a penalty on the assessee for non-compliance with a notice under section 142(1). The Tribunal noted that the assessee, an employee of Indian Oil Corporation, had not responded to the notices served by the Assessing Officer, leading to the imposition of the penalty. Despite contentions regarding the reopening of assessment and the quantum being set aside, the Tribunal confirmed the penalty, citing the lack of a plausible explanation for the non-compliance.

In conclusion, the Tribunal allowed the appeal of the assessee in ITA No. 1942/KOL/2024 for statistical purposes and dismissed the appeal in ITA No. 1954/KOL/2024. The Tribunal emphasized the importance of proper representation and giving the assessee an opportunity to present their case before making significant decisions in tax matters.