2025 (3) TMI 90 - AT - Income Tax

Assessee gets final opportunity to substantiate Section 54B exemption claim after appeal restored for statistical purposes

Popatrao Dashrathrao Suryawanshi Versus ITO, Ward 7 (3), Pune

ITAT Pune allowed the assessee's appeal for statistical purposes regarding disallowance of exemption under section 54B. The CIT(A)/NFAC had dismissed the ... Disallowance of exemption u/s 54B - non submission of any details before the Ld. CIT(A) / NFAC - HELD THAT:- We find due to non submission of any details before the Ld. CIT(A) / NFAC despite number of opportunities granted, the Ld. CIT(A) / NFAC dismissed the appeal for want of prosecution. It is the submission of assessee that the notices sent by the office of the Ld. CIT(A) / NFAC were delivered in the e-mail of the Chartered Accountant who did not inform the assessee for which all these unfortunate events happened. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Ld. CIT(A) / NFAC with a direction to grant one final opportunity to the assessee to substantiate his case by filing the requisite details and decide the issue as per fact and law. The assessee is also hereby directed to make his submission, if any, before the Ld. CIT(A) / NFAC on the appointed date. Appeals filed by the assessee are allowed for statistical purposes The issues presented and considered in the legal judgment are as follows:1. Whether the assessee is entitled to claim deduction/exemption under Section 54B of the Income Tax Act for the assessment years 2014-15 and 2015-16.2. Whether the Ld. CIT(A) / NFAC erred in dismissing the appellant's appeal without considering the facts of the case or adjudicating the appeal on merits.Issue-wise detailed analysis:Issue 1: Claim of deduction/exemption under Section 54B- Relevant legal framework: Section 54B of the Income Tax Act provides for exemption on capital gains arising from the transfer of agricultural land if the taxpayer purchases another agricultural land within a specified period.- Court's interpretation and reasoning: The Assessing Officer disallowed the claim of exemption under Section 54B as the assessee failed to provide documentary evidence to support the claim. The Ld. CIT(A) / NFAC dismissed the appeal for want of prosecution without deciding on the merit.- Key evidence and findings: The joint venture agreement dated 20.01.2011 showed that the assessee transferred land to developers and claimed exemption under Section 54B. However, the purchase of agricultural land was made beyond the stipulated period.- Application of law to facts: The court found that the assessee did not provide sufficient evidence to support the claim of exemption under Section 54B.- Conclusions: The court directed the issue to be restored to the file of the Ld. CIT(A) / NFAC for the assessee to substantiate the case with requisite details. The assessee was given one final opportunity to make submissions.Issue 2: Dismissal of the appellant's appeal by Ld. CIT(A) / NFAC- Relevant legal framework: Section 250(6) of the Income Tax Act requires the CIT(A) to decide appeals on merit.- Court's interpretation and reasoning: The Ld. CIT(A) / NFAC dismissed the appellant's appeal without considering the facts or providing proper reasoning.- Key evidence and findings: The appellant claimed that the notices were sent to the Chartered Accountant's email, leading to non-receipt by the assessee.- Application of law to facts: The court found that proper notices were not served, and the appellant was not given a fair opportunity to present the case.- Conclusions: The court allowed the appeals for statistical purposes and directed the Ld. CIT(A) / NFAC to provide the assessee with an opportunity to substantiate the case and decide on merit.Significant holdings:- The court held that the assessee should be given a fair opportunity to present the case and substantiate the claim of exemption under Section 54B.- The court directed the restoration of the issue to the Ld. CIT(A) / NFAC for a fresh decision based on facts and law.Overall, the court allowed the appeals for statistical purposes and emphasized the importance of providing the assessee with a fair opportunity to present their case and have their appeals adjudicated on merit.