Income Tax Appellate Tribunal - Bangalore
Smt Shivamma , Mysore vs The Income Tax Officer Ward-1(2), ... on 1 June, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
"SMC - C" BENCH : BANGALORE
BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER
ITA NOs. A.Y. APPELLANTS V. RESPONDENT
1419/Bang/2018 2007-08 Smt. Kempamma
D/o. Late Sri
Motisiddegowda
PAN: ECNPK 8634R
1420/Bang/2018 2007-08 Smt. Sakamma
D/o. Late Sri
Motisiddegowda
PAN: GKHPS 8976Q The Income Tax
1421/Bang/2018 2007-08 Late Smt. Madamma Officer,
L/R by Sri Mahadevu Ward 1(2),
PAN: CZION 5889C Mysuru.
1422/Bang/2018 2007-08 Smt. Shivamma,
D/o. Late Sri
Motisiddegowda
PAN: GNGPS 6289Q
1423/Bang/2018 2007-08 Sri Mahadevu,
S/o. Late Sri
Motisiddegowda,
PAN: BLAPM 9307C
1424/Bang/2018 2007-08 Smt. Ningamma,
D/o. Late Sri
Motisiddegowda
PAN: AZNPN 5717F
Dadadahalli, Jayapura
Hobli. Mysore TQ.
Appellant by : Shri Narendra Sharma, Advocate
Respondent by : Shri Inder Salanik, Jt.CIT(DR)(ITAT), Bengaluru.
Date of hearing : 28.05.2018
Date of Pronouncement : 01.06.2018
ITA Nos.1419 to 1424/Bang/2018
Page 2 of 7
ORDER
These appeals by six different assessees are against six different orders passed by the CIT(Appeals), Mysore, all dated 31.10.2017 which relate to assessment year 2008-09. All these appeals arise under identical facts and circumstances and involve identical issues. They were heard together. I deem it convenient to pass a consolidated order.
2. The facts in all these cases are that the assessees owned land in the outskirts of city of Mysore. According to the assessees, lands owned by them were agricultural land. All these assessees entered into agreement dated 14.06.2007 for sale of their land with one Shri R. Veeresh, S/o. R.S. Rajashekar, # 4, K. Lingaiah Colony, Nazarbad, Mysore [hereinafter referred to as "the developer"] for a sale consideration of Rs.8,12,429 each.
3. According to the AO, the lands in question were situated within 8 kms. from the corporation limits of Mysore and were capital assets as per section 2(14)(iii) of the Income-Tax Act, 1961 ["the Act"] and therefore the capital gain on such sale was liable to tax under the Act. Since the agreement dated 14.06.2007 was entered into in the previous year relevant to AY 2008-09, the AO was of the view that the long term capital gain on sale of property had to be brought to tax. Accordingly, notice u/s. 148 of the Act dated 10.03.2014 was issued by the AO in the case of each of the assessees. The assessees did not file any returns of income in response to such notices. The AO proceeded to frame assessments u/s. 144 of the Act to the best of his judgment. The AO in the order of assessment has extracted the terms & conditions of the agreement between the owners of the property and the developer which is pari materia the same in the case of all the assessees. The AO has thereafter concluded that the assessees have delivered possession of the property in part performance of the ITA Nos.1419 to 1424/Bang/2018 Page 3 of 7 agreement for sale and therefore there is a transfer of capital asset during the previous year in terms of section 2(47)(v) of the Act. I have perused the various clauses of agreement extracted in the order of Assessment by the AO and find that none of the clauses say that possession of the property has been handed over by the owners (Assessees) to the developer. Be that as it may, the AO thereafter has computed the long term capital gain by verifying the date of acquisition of the property and after giving due deduction for cost of acquisition from the full value of consideration received on transfer. The AO has computed the long term capital gain in the case of each of the assessees as follows:-
"Sale consideration - as discussed above Rs.812429 Less: Indexed cost of the property - as discussed above Rs. 9711
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Long Term Taxable Capital Gains Rs.802718
Less: Basic exemption u/s. 112(1) Rs.100000
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Total Income Rs.702718"
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4. Aggrieved by the orders of the AO, each of the assessees preferred appeals before the CIT(Appeals). There was a delay in filing of the appeals before the CIT(Appeals) which is as follows:-
ITA NOs. No. of days of delay in filing the
appeal before CIT(A)
1419/Bang/2018 12 days
1420/Bang/2018 41 days
1421/Bang/2018 41 days
1422/Bang/2018 41 days
1423/Bang/2018 09 days
1424/Bang/2018 12 days
5. None of the assessees had filed application for condonation of delay in filing the appeal before the CIT(A). The CIT(A) was of the view that since the appeals were filed belatedly and since no application for ITA Nos.1419 to 1424/Bang/2018 Page 4 of 7 condonation of delay in filing appeals were filed, the appeals were liable to be dismissed as unadmitted. Besides the above, in the cases of Smt. Sakamma, Smt. Madamma by L/R Mahadevu & Smt. Shivamma, the CIT(Appeals) was of the view that these assessees had not stated their PAN in Form 35 which is a prescribed form for filing appeal before the CIT(A) in terms of Rule 46 of the Income-tax Rules, 1962 ["the Rules"]. It was also noticed by the CIT(Appeals) that in terms of section 249(4)(v) of the Act, these 3 assessees were liable to pay advance tax and had not paid advance tax and therefore the appeals filed by these Assessees were inadmissible. These two grounds viz., not specifying PAN no and not paying Advance tax, were additional grounds for dismissing the appeals of the aforesaid 3 assessees. The common ground on which all the appeals of all the assessees were dismissed was that there is a delay in filing the appeal before the CIT(Appeals) and no application for condoning the delay has been filed by the assessee. Further, despite service of notice, none appeared on behalf of the assessees before the CIT(A) on the date fixed for hearing. The CIT(Appeals) dismissed the appeals of all the assessees as unadmitted.
6. Aggrieved by the orders of CIT(Appeals), the assessees have filed the present appeals before the Tribunal.
7. At the time of hearing, the ld. Counsel for the assessees brought to our notice that Smt. Sakamma, Smt. Madamma & Smt. Shivamma, the assessees in ITA Nos.1420 to 1422/Bang/2018 have obtained PAN and a copy of the PAN card was filed before us and the same are also placed on record. The ld. Counsel for the assessee filed before me an order of ITAT rendered in identical circumstances, where the Tribunal set aside the order of CIT(Appeals) and directed the CIT(A) to consider the appeals of assessee as admitted and decide it on merits. The order dated 04.05.2018 in ITA Nos.1050, 1053 to 1055/Bang/2018 in the case of Shri Nagaraju & Ors. v. ITO was filed before me. In that case, the Tribunal on the objection ITA Nos.1419 to 1424/Bang/2018 Page 5 of 7 of the CIT(Appeals) on the absence of PAN card and not paying advance tax held as follows:-
"4. I have considered the rival submissions. I find that as per the order of CIT(A), he has held that the assessee has not obtained and furnished the PAN in Form No. 35. Regarding this objection of CIT(A), I find that now the assessee has obtained PAN and therefore, this objection of ld. CIT(A) does not survive anymore and hence, in the interest of justice, the appeal of the assessee should be admitted and decided on merit.
5. The second objection of ld. CIT(A) is this that the assessee has failed to make payment of advance tax which was payable by assessee as required under clause (b) of sub-section (4) of Section 249 of IT Act. In this regard, I find that even as per the assessment order, there is no other income of the assessee except profit on sale of agricultural land. As per the statement of facts available on record, it is seen that it is the stand of the assessee that the agreement between the assessee and developer was made on 25.04.2006 and as per the assessee, in fact, no possession was given. Without handing over of possession and without registration of the JDA, no income can be brought to tax on this account but this is not the mandate of the law that for deciding this aspect on merit after hearing both sides, the assessee should be asked to pay advance tax first on such transaction and then file the appeal on this aspect and then the CIT (A) will decide this issue. In my considered opinion, in the facts of the present case, there is no violation of section 249(4)(b) of IT Act because it has not been established that the assessee was liable to pay advance tax because the only income brought to tax by the AO is in respect of sale alleged of agricultural land and the assessee claims that no possession was handed over and the JDA was not registered. Hence I feel it proper to restore the matter back to the file of CIT (A) for decision on merit after admitting the appeal of the assessee. In view of this, no adjudication is called for regarding the merit of the case at the present stage and I do not make any comment on the merit of the case and my decision regarding this aspect that advance tax was not payable by assessee should not be considered as a comment on merit of the case. This decision is only on the limited aspect of admission of appeal by rejecting the alleged violation of section 249(4)(b) of IT Act."
ITA Nos.1419 to 1424/Bang/2018 Page 6 of 7
8. With regard to not filing application for condonation of delay, the ld. Counsel for the assessee has pleaded that all the assessees are illiterate people and were not guided properly and the assessees should be afforded an opportunity of being heard by the CIT(Appeals) and allowed to explain the reasons for delay in filing the appeal. In this regard, I find from the record that only one date of hearing was fixed before the CIT(Appeals) and on that date the CIT(Appeals) found that there was a delay in filing the appeal and without confronting the assessee and calling upon the assessee to show cause as to why the appeals should not treated as not properly filed and dismissed as unadmitted for want of application for condonation of delay in filing the appeal, the CIT(Appeals) has proceeded to pass the impugned orders. Keeping in view all the facts and circumstances in mind and taking into consideration the submission of the ld. Counsel for the assessee, I am of the view that the impugned orders of the CIT(Appeals) should be set aside.
9. The objection for not obtaining the PAN has since been rectified. So also the objection with regard to non-payment of advance tax is held to be without any basis as held by the Tribunal in the decision cited by the ld. Counsel for the assessees. There is no violation of section 249(4)(b) of IT Act in the case of each of the Assessees in these appeals also because it has not been established that the assessees were liable to pay advance tax because the only income brought to tax by the AO is in respect of sale of alleged agricultural land and the assessee claims that no possession was handed over and the JDA was not registered. With regard to non-filing of application for condonation of delay, I am of the view that the assessees should be afforded opportunity of explaining the delay in filing the appeals before the CIT(Appeals) and the CIT(Appeals) should be directed to consider such application on merits and decide the same, after affording the assessees opportunity of being heard. I hold and direct accordingly.
ITA Nos.1419 to 1424/Bang/2018 Page 7 of 7 Consequently, all the impugned orders of the CIT(Appeals) are set aside to be decided afresh as indicated in this order.
10. For statistical purposes, the appeals of the assessees are treated as allowed.
Pronounced in the open court on this 1st day of June, 2018.
Sd/-
( N.V. VASUDEVAN ) Judicial Member Bangalore, Dated, the 1st June, 2018.
/ Desai Smurthy / Copy to:
1. Appellants
2. Respondent
3. CIT
4. CIT(A)
5. DR, ITAT, Bangalore.
6. Guard file By order Senior Private Secretary ITAT, Bangalore.