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2020 (9) TMI 723 - AT - Income TaxCondonation of the delay of 489 days - HELD THAT - The assessee was diligent and has sought advice from his Counsels from time to time and was not guilty of negligence on his part and it cannot be said that the delay was due to the negligence and inaction on the part of the assessee, which could have been avoided by the assessee if he had exercised due care and attention. There is no culpable negligence or malafide on the part of the assessee in delayed filing of the present appeal and he does not stand to benefit by resorting to such delay. There exists sufficient and reasonable cause for condoning the delay of 489 days in filing the present appeal where substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserved to be preferred. Therefore, in exercise of powers under section 253(5) of the Act, we hereby condone the delay of 489 days in filing the present appeal as we are satisfied that there was sufficient cause for not presenting the appeal within the prescribed time and the appeal is hereby admitted for adjudication on merits. Reopening of assessment u/s 147 - HELD THAT - No contentions were raised challenging the jurisdiction of the AO u/s 147 and hence, in absence of the same and considering the facts and circumstances of the case, we donot see any infirmity in the action of the AO in acquiring jurisdiction u/s 147 where the assessee has sold his agriculture land and which has not been reported to the tax department in absence of any return of income filed by the assessee. AO was in possession of tangible information that the assessee has sold his agriculture land and thus, basis such tangible information, where he forms an opinion that the income has escaped taxation, we donot see any infirmity in issue of notice u/s 148 and acquisition of jurisdiction u/s 147 by the Assessing officer - As far as first part of the ground of appeal is concerned, where the assessee has challenged the jurisdiction of the AO u/s 147, the same is hereby dismissed. Action of the AO in passing the order u/s 144 without providing adequate opportunity to the assessee and without due application of mind and the said action being confirmed by the ld CIT(A) - It is not the case of the assessee that these notices were not served on him. Therefore, as far as passing of the order u/s 144 ex-parte qua the assessee is concerned, we donot see any infirmity in the action of the AO in view of non-filing of the return of income and noncompliance to various notices issued during the course of assessment proceedings. Where the AO decide to pass the best judgment order u/s 144 and where such order is confirmed by the ld CIT(A), the order so passed must have a reasonable nexus to the available material and the facts and the circumstance of the case. In this regard, we refer to the contention of the assessee regarding non-application of mind by the AO while passing the assessment order where the value as determined by the stamp duty authority has been brought to tax instead of actual sale consideration and that too, without even allowing deduction for cost of acquisition and cost of improvement. Determination of Capital Gain - Application of section 50C - Deduction u/s 54B - Given the facts of the present case where the assessee didn t file his return of income or attended to the assessment proceedings, the AO may not have the precise and exact details of year of acquisition and related costs, however, the fact remains that the AO, having access to the copy of the sale agreement/Registry pursuant to which the matter was reopened and notice was issued u/s 148 which will have a reference to ownership details of such property, he could have possibly determined the year of acquisition of such property and could have estimated the cost of acquisition. No such efforts were made by the AO as there is nothing to this effect recorded in the assessment order or brought to our notice during the course of hearing and no benefit of cost of acquisition/improvement has thus been given to the assessee. Where the assessee pleaded that due to his ill-health, he couldn t attend to the assessment proceedings and wanted to submit the additional evidence in support of his claim of cost of acquisition/improvement, expense in connection with transfer and investment by way of purchase of agriculture land in name of his wife, the additional evidence were admitted by the ld CIT(A) and there is no dispute in this regard. There is no finding given by the ld CIT(A) regarding the cost of acquisition and the contention of the assessee that being an ancestral land acquired prior to 1.4.1981, the estimated cost as on 1.04.1981 may be allowed to him has not been disposed off. Similar, no finding has been given regarding development expenditure and amount given to assessee s sister to avoid litigation which the assessee claims to be a cost in connection with transfer. Further, the assessee has contended that under compelling circumstances, he has sold the ancestral agriculture land and in this regard, the ld CIT(A) has held that the land apparently is an urban land and the valuation adopted by the stamp duty authority appears to be reasonable and justified, however, the basis of such reasonableness is not borne out of records. Determination of fair market value of land which is claimed to be sold under compelling circumstances by the assessee as per declared sale consideration and where the Revenue intends substituting stamp duty value for actual sale consideration, the right course of action would have been to refer the matter to the DVO, however, no such action was taken by the ld CIT(A). Regarding investment by way of purchase of agriculture land in the name of assessee s wife, we find that the ld CIT(A) has apparently not considered in case of Sh. Mahadev Balai vs. ITO ( 2017 (11) TMI 1622 - RAJASTHAN HIGH COURT, JAIPUR wherein in the context of section 54B, it was held that where the investment is made in the name of the wife, the assessee shall be eligible for claim of deduction u/s 54B of the Act. We therefore find that it would be in fitness of things that all these critical aspects of the matter require a fresh examination and the matter is accordingly set-aside to the file of the AO to examine the same afresh as per law after providing reasonable opportunity to the assessee. The ground is thus partly allowed for statistical purposes.
Issues Involved:
1. Condonation of delay in filing the appeal. 2. Validity of the assessment order passed under Section 144 read with Section 147. 3. Application of Section 50C and determination of the sale consideration. 4. Denial of expenses and deductions claimed by the assessee. 5. Charging of interest under Sections 234A and 234B. Detailed Analysis: 1. Condonation of Delay in Filing the Appeal: The assessee's appeal was delayed by 486 days. The delay was attributed to the assessee being an illiterate farmer who relied on his tax consultant's advice to file a revision application under Section 264, which was rejected. Upon realizing the mistake, the appeal was filed. The Tribunal noted that the assessee acted diligently based on the advice from his counsel and was not negligent. The Tribunal cited several judicial pronouncements, including the Supreme Court's decision in Collector Land Acquisition vs. M. Katiji & Others, which emphasized a liberal approach towards condonation of delay to serve the ends of justice. The Tribunal found sufficient cause for the delay and condoned it, admitting the appeal for adjudication on merits. 2. Validity of the Assessment Order Passed Under Section 144 Read with Section 147: The assessee challenged the jurisdiction of the AO under Section 147 and the ex-parte assessment under Section 144. The Tribunal upheld the AO's jurisdiction, noting the AO had tangible information about the sale of agricultural land not reported in any return of income. The Tribunal found no infirmity in the issuance of notice under Section 148 and the acquisition of jurisdiction under Section 147. However, the Tribunal noted that the AO should have made efforts to determine the cost of acquisition and improvement, which was not done. The Tribunal found that the AO's assessment lacked application of mind and was not a true best judgment assessment. 3. Application of Section 50C and Determination of the Sale Consideration: The AO brought to tax the value determined by the stamp duty authority instead of the actual sale consideration without issuing a show-cause notice to the assessee. The Tribunal noted that the AO should have issued a show-cause notice and considered the cost of acquisition and improvement. The Tribunal found that the AO's assessment was not in accordance with the provisions of law and lacked a reasonable nexus to the available material. 4. Denial of Expenses and Deductions Claimed by the Assessee: The assessee claimed expenses for litigation and development of land, and deductions under Section 54F, which were denied by the CIT(A). The Tribunal noted that the CIT(A) admitted additional evidence regarding the assessee's medical condition but did not provide a categorical finding on the merits of the additional evidence. The Tribunal found that the CIT(A) should have examined the cost of acquisition, development expenses, and the claim under Section 54F in light of the additional evidence and the relevant judicial pronouncements. 5. Charging of Interest Under Sections 234A and 234B: The assessee contested the charging of interest under Sections 234A and 234B. The Tribunal set aside the matter to the AO for fresh examination, noting that the AO should consider the assessee's contentions and the additional evidence submitted. Conclusion: The Tribunal condoned the delay of 489 days in filing the appeal and admitted it for adjudication on merits. The Tribunal upheld the AO's jurisdiction under Section 147 but found the assessment order under Section 144 lacked application of mind and was not a true best judgment assessment. The Tribunal set aside the assessment order and remanded the matter to the AO for a fresh examination of the cost of acquisition, development expenses, and the claim under Section 54F. The Tribunal directed the AO to provide reasonable opportunity to the assessee and decide the matter afresh as per law. The appeals were disposed of in light of these directions.
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