2022 (12) TMI 386 - AT - Income Tax

Deduction u/s 54 - assessees could not furnish proper materials and could not make proper representation before ld. PCIT - HELD THAT - Since the issues contested in these appeals relate to factual aspects and since the ld. AR submits that the assessees would be in a position to place all availabile records to prove their claim for deduction u/s 54 of the Act before Ld PCIT, in the interest of natural justice, we are of the view that these assessees may be provided with one more opportunity to present their case before ld. PCIT. Accordingly we set aside the orders passed by ld. PCIT in the hands of these assessees and restore all the issues to his file for examining them afresh. We also direct the assessees to furnish all information and explanations relating to the issues examined by ld. PCIT. Appeals filed by the assessees are treated as allowed for statistical purposes.

Summary

Issues:
Appeals against revision orders, delay in filing appeals, condonation of delay, deduction claimed under section 54 of the Act.

Analysis:
The judgment by the Appellate Tribunal ITAT Jodhpur involved appeals filed against revision orders passed by the ld. PCIT, Bikaner for the Assessment Year 2013-14. The appeals were heard together as they were based on identical facts for the sake of convenience. One of the assessees, Smt. Kanta Devi Chandak, had passed away, and her appeal was filed by Sh. Mohan Lal Chandak as her legal heir. Both appeals were found to be barred by limitation by 1390 days, and the assessees requested the Bench to condone the delay in filing the appeals before the Hon'ble ITAT.

The reasons presented for the delay in filing the appeals included the advanced age and medical conditions of Sh. Mohan Lal Chandak, who had undergone heart surgery and was dealing with other health issues, leading to his inability to focus on income tax matters. The Bench considered these reasons and agreed that there was a reasonable cause for the delay. Consequently, the delay in filing the appeals was condoned, and the appeals were admitted for hearing.

Regarding the merits of the case, the issue pertained to the deduction claimed by the assessees under section 54 of the Act. While the AO had allowed the deduction in the original assessment, the ld. PCIT had raised concerns and directed a reexamination of the claim. The assessees contended that they had invested in the construction of a residential house, not a commercial building as alleged by the tax authorities. They sought another opportunity to present their case properly before the ld. PCIT with additional records to support their claim.

After hearing both parties and examining the records, the Tribunal decided that the assessees should be given another chance to present their case before the ld. PCIT. The orders passed by the ld. PCIT were set aside, and all issues were restored to his file for fresh examination. The assessees were directed to provide all necessary information and explanations related to the matters examined by the ld. PCIT. As a result, both appeals filed by the assessees were treated as allowed for statistical purposes, providing them with an opportunity to address the issues raised effectively.