65-year-old senior citizen's appeal allowed for fresh examination of agricultural land capital gains claim

ITAT Bangalore allowed the appeal of a 65-year-old senior citizen assessee for statistical purposes. The tribunal condoned the ex-parte order passed under section 147 r.w.s. 144 due to the assessee's age, education background, and improper service of notices under the faceless regime. The tribunal rejected the revenue's attempt to dismiss the appeal under section 249(4)(b) for non-payment of advance tax, finding the assessee's total income was only Rs.13,296 with no admitted tax liability. The matter was restored to the AO for fresh examination regarding the assessee's claim that the property sold was agricultural land not liable for capital gains tax.

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Issues Involved:
The issues involved in this case include the applicability of sections 250, 249(4), and 144 of the Income Tax Act, 1961, regarding the assessment of long-term capital gains on the sale of agricultural land, procedural irregularities in the assessment process, invocation of natural justice principles, and the correctness of the order passed by the authorities.

Applicability of Section 250:
The appeal was directed against the CIT(A)'s order under section 250 of the Income Tax Act, 1961, for the Assessment Year 2018-19. The grounds raised by the appellant challenged the justification of the impugned order, alleging errors in law and facts, including non-compliance with the provisions of sections 249(4) and 250(4)/(6) of the Act. The appellant also contended that the order was passed without jurisdiction and against the principles of natural justice.

Assessment of Long-Term Capital Gains:
The appellant disputed the addition of Rs. 52,99,000 as long-term capital gains, arguing that the property sold was agricultural land not liable for tax under section 2(14) of the Income Tax Act. The appellant contended that the reassessment proceedings initiated under section 148 were based on an incorrect assumption regarding the nature of the land sold, which was outside the purview of the Act as it did not qualify as a "Capital Asset."

Procedural Irregularities and Natural Justice:
The appellant raised concerns about the procedural irregularities in the assessment process, including improper service of notices/orders and the incorrect levy of interest under sections 234A/B of the Act. The appellant also argued that the actions of the authorities were arbitrary, contrary to the provisions of the Act, and lacked proper application of mind. Additionally, the appellant contended that the impugned reassessment order was invalid due to non-compliance with the principles of natural justice.

Judicial Review and Tribunal Decision:
The Tribunal considered the submissions of the appellant, noting the appellant's age, limited education, and difficulties in participating effectively in income tax proceedings. The Tribunal found that the ex-parte order passed under section 147 r.w.s. 144 of the Act should be condoned due to procedural deficiencies. The Tribunal also observed that the dismissal of the appeal by the CIT(A) under section 249(4) was not justified, as the appellant's total income was minimal, and the requirement of payment of admitted tax was not applicable in this case.

Tribunal's Decision and Directions:
The Tribunal allowed the appeal for statistical purposes, directing that the issues raised be examined afresh by the Assessing Officer (AO). The Tribunal instructed the appellant to cooperate with the Revenue and not seek unnecessary adjournments. The AO was directed to provide a reasonable opportunity of hearing to the appellant, and the matter was restored to the AO's files for re-examination.

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