The Bangalore bench of the Income Tax Appellate Tribunal ( ITAT ) has deleted the addition of Rs. 52.9 lakhs as there is no Long Term Capital Gain ( LTCG ) liability, given that the property sold was agricultural land, and the computation of total income has been submitted as evidence. The Assessment Year 2018-19, assessee did not file return of income.
As per the information received by the Department, assessee had sold an immovable property for Rs.53 lakhs. Based on this information, proceedings under section 148A of the Act was initiated and show cause notice under Section 148A (b) of the Act was issued.
As there was no response to the show cause notice issued, Order under Section 148A (d) of the Act was passed treating it as a fit case for issue of notice under Section 148 of the Income Tax Act. Notice under Section 148 of the Income Tax Act was issued on 31.03.2022. Since there was no response to the several notices issued, since there was no response to the same, assessment was completed under Section 147 r.w.s. 144 r.w.s. 144B of the Act vide order dated 21.03.2023. In the said Assessment Order, long-term capital gain was determined on sale of property. Accordingly, a demand was issued for a sum of Rs.24, 58,377/-.
The assessee has filed a Paper Book enclosing therein written submissions filed before the CIT(A), the case laws relied on, statement of the total income, etc. Mr. Siddesh Nagaraj representing the assessee submitted that the assessee was a senior citizen. It was submitted that due to assessee’s health issues and limited education, he faced difficulty in understanding and effectively participating in income tax proceedings. Therefore, it was submitted that assessment was passed under Section 147 r.w.s. 144 of the Income Tax Act. Further submitted that assessee’s total income is only Rs.13,296/- and therefore there was no question of payment of “admitted tax”, hence, section 249 of the Income Tax Act cannot be invoked to dismiss the appeal of the assessee on technical ground.
The bench also placed reliance on the Order of the Tribunal in the case of Annapoorneshwari Investment Vs. DCIT, wherein it has been held that in terms of section 249(4)(a) of the Income Tax Act, stipulation as to payment of tax ante filing of first appeal is only directory and not mandatory, where appeal was 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.
The two member bench of the tribunal comprising Chandra Poojari (Accountant member) and George George K (Vice President) found the 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 Income Tax Act, ITAT viewed 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 was directed to cooperate with the Revenue and shall not seek unnecessary adjournment in the matter. The AO was directed to afford reasonable opportunity of hearing to the assessee. Appeal filed by the assessee was allowed