TaxTMI 
TaxTMI 
2026 (1) TMI 809
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....er, there was advent of Covid-2019 pandemic outbreak and assessee could not file the appeal due to covid pandemic. The assessee was subsequently advised that the additions made by the Assessing Officer u/sec.50C of the Income Tax Act [in short "the Act"], 1961 in the absence of any incriminating material in the proceedings u/sec.153A of the Act is not sustainable in law. Therefore, the assessee decided to file the present appeal and the delay in filing the appeal is neither wilful nor deliberate as the assessee could not achieve any ulterior purpose of either avoiding tax liability or any other advantage. The learned Authorised Representative of the Assessee has submitted that the assessee already paid the entire tax on the assessed income. However, when the assessment itself is not valid for want of any incriminating material and the assessment order under consideration was not pending as on the date of search i.e., 21.09.2012, the addition made by the Assessing Officer u/sec.50C of the Act is not sustainable and liable to be deleted. He has submitted that when the assessee has raised various grounds before the learned CIT(A), though the learned CIT(A) deleted one of the additions....
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....wever, the addition is not based on the said sale deed which clearly shows that the transaction was between the original land owners and the buyer M/s. V.K. Projects Pvt. Ltd., the assessee signed the sale deed as a consenting party. Thus, he has contended that when the entire income on account of short term capital gain itself is wrongly assessed in the hands of the assessee, then, the addition u/sec.50C is absolutely illegal and unsustainable. The Assessing Officer has made the addition which is contrary to the sale deed dated 31.03.2007 itself. Thus, the learned Authorised Representative of the Assessee submitted that if the appeal of the assessee is not admitted for adjudication on merits, it will result gross injustice to the assessee without any real income in the hands of the assessee. Thus, he has contended that when there is no real income in the hands of the assessee, then, the assessment of capital gain as well as the addition made by the Assessing Officer u/sec.50C of the Act is absolutely not tenable and liable to be deleted. In support of his contention, he has relied upon the Judgment of Hon'ble Bombay High Court in the case of Vijay Vishin Meghani vs., DCIT Circle-2....
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....ffered the same to tax in the return of income, then, the question of incriminating material during the course of search does not arise. Since the assessee has admitted transfer of land in question, therefore, the Assessing Officer has rightly applied the provisions of sec.50C while framing the assessment u/sec.153A of the Act. The learned Authorised Representative of the Assessee has further submitted that the assessee once accepted this income and offered the same to tax, then, not filing further appeal before the Tribunal can lead to only one conclusion that assessee accepted the impugned order of the learned CIT(A) and decided not to challenge the same. The learned DR has further pointed-out that initially the assessee did not pay the self-assessed tax, but, later on when the prosecution was initiated against the assessee, the assessee has paid the same as well as the tax on the assessed income. Therefore, once the assessee has accepted the transaction and also admitted the income arising from these transactions which were offered to tax in the return of income, the assessee cannot take a different stand at this level. The prosecution was initiated against the assessee because ....
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....we have a good case on merits and that I can file appeal seeking condonation of delay. 4. Accordingly, the present appeal is being filed with delay of 868 days. It is submitted that the delay in filing the appeal is not willful but is on account of the aforesaid reason. It is submitted that I have absolute case on merits and I am sure to succeed. It is submitted that I should not suffer loss on account of the ill-advise of the counsel who appeared for me before the Commissioner (Appeals). It is submitted that the appeal has huge financial implication and I should not be compelled to pay the huge unjustified taxes and interest for no fault of mine. In the above circumstances, it is prayed that the Hon'ble Tribunal my be pleased to condone the delay of 868 days in filing the appeal and admit the same. Solemnly affirmed and signed before me on this the 15 day of March, 2021. sd/- Pusa Nanda Kumar Deponent" 4.1. In addition to the affidavit, the learned Authorised Representative of the Assessee has explained the cause of delay that his Counsel Sri C. Ramachandram, CA who appeared on behalf of the assessee in the appeals did n....
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.... Therefore, I request that the Sale consideration to be treated as Rs. 4.5 Crores only." The assessee's reasoning for selling the property at a lower value is not acceptable. As per the provisions of Sec. 50C (2), since the assessee has not been able to substantiate how the value adopted by the stamp valuation authority can be said to exceed the fair market value of the property, the stamp authority value is deemed to be the full value of consideration received as a result of such transfer as per the provisions of Sec. 50C(1). The capital gain is worked out as under : Sale of land to M/s V K Projects Pvt. Ltd., [Value as per Sec. 50C(1)] Rs. 5,67,50,000/- Less Cost of acquisition Rs. 4,17,38,300/- Short Term Capital Gain Rs. 1,50,11,700/- Less Short Term Capital Gain declared by assessee Rs. 32,61,700/- Balance Short Term Capital Gain to be added. Rs. 1,17,50,000/- 4.2. The sale deed dated 31.03.2007 is a matter of record, however, the transaction of transfer of land vide sale deed dated 31.03.2007 is between 42 vendors/land owners along with one M/s. Pusala Projects Pvt. Ltd., as a consenting party in favour of M/s. V.K. Projects P....
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....de by the Assessing Officer of Rs. 1,17,50,000/- u/sec.50C in the proceedings u/sec.153A in the absence of any incriminating material when the assessment was not pending as on the date of search is absolutely against the law and not sustainable. Even otherwise, the addition on the basis of the statement without corroborative evidence is not sustainable and at the most the income cannot be assessed more than the surrender of income in the statement of the assessee. Therefore, the assessee had a prima facie good case before the learned CIT(A) on this issue, but, the learned CIT(A) has confirmed the addition made by the Assessing Officer in Para-6.2 as under : "6.2) I have considered the assessment order and the submissions of the assessee. The provisions of section 50C are mandatory and the assessee has not objected the market value adopted either before the Registration authorities or the AO. The explanation/submission made during the appellate proceedings is vague and is not backed by any evidence. In view of the above, it is held that provisions of section 50C are applicable to the facts of the case and the AO has rightly made the addition. This ground is dismissed." 4....
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.... application with an affidavit of one Chandrashekhar, son of S.A. Yogeshwar, a practicing Chartered Accountant and Managing Partner of M/s. Rajesh Rajeev & Associates. The affidavit of the said Chandrashekhar confirmed that the assessee indeed was a client of this Chartered Accountancy firm from 1997 to 2006. From paragraphs 3 to 6 of the affidavit dated 22-8-2013, filed by this Chartered Accountant, it is confirmed that the advice as aforesaid was given and professionally to the assessee. The assessee acting on the same did not file the appeal but the rectification application. It is that endorsement from the assessee's then Chartered Accountants which, according to the assessee, enabled him to seek condonation of delay. Every single aspect of the matter was highlighted, including the legal principles. The Tribunal, curiously, in its order, unmindful of these legal principles and which enable a liberal view to be taken of the lapse on the part of the litigant like the assessee, proceeded to pass a 20-page order. In that 20 page order, what we find is that there is a reference made to several decisions of the Hon'ble Supreme Court brought to its notice by the assessee's....
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....ant case, the Tribunal found that the Revenue officials, assuming that they are lax, have not opposed the condonation of delay. They have not filed any counter affidavit denying any factual statements made by either the assessee or the Chartered Accountant. They have not denied the fact that there was a rectification application filed and preceding the rectification application indeed some time was consumed in serving the orders of the Department on the assessee. It is not that the rectification application was not disposed of with promptitude but after the assessee was compelled to move an application under the Right to Information Act, it is finally on 14-5-2010 that the application came to be disposed of. 17. In the circumstances and a perusal of the whole order does not indicate that the Tribunal terms the conduct of the assessee to be the sole factor responsible for the delay. The conduct is not termed as negligent, callous and lacking in bona fides either. In para 12 of the order under challenge, we find that the Tribunal holds that the assessee failed to show that there was sufficient cause. How that cause is not sufficient has been explained by the Tribunal in the ....
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....nclusion was couched in these words: "The Assistant Divisional Manager of the Company-appellant is not an illiterate or so ignorant person who could not calculate the period of limitation. Such like appeals are filed by such companies daily. The facts of this case clearly show, as observed earlier, that the mistake is not bona fide and the appellant has failed to show sufficient cause to condone the delay." 6. We are not able to agree with this reasoning. A company relies on its Legal Adviser and the Manager's expertise is in company management and not in law. There is no particular reason why when a company or other person retains a lawyer to advise it or him on legal affairs reliance should not be placed on such counsel. Of course, if there is gross delay too patent even for layman or if there is incomprehensible indifference the shield of legal opinion may still be vulnerable. The correct legal position has been explained with reference to the Supreme Court decision in a judgment of one of us in AIR 1971 Ker. 211 (at p. 215): "The law is settled that mistake of counsel may in certain circumstances be taken into account in condoning delay although t....
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....he above sums up the approach of a Court rendering justice according to law. 21. We find from paragraph 13 of the order, but for this relevant factors and tests, everything else has been brought into the adjudication by the Tribunal. The Tribunal though aware of these principles but possibly carried away by the fact that the delay of 2984 days is incapable of condonation. That is not how a matter of this nature should be approached. In the process the Tribunal went about blaming the assessee and the professionals and equally the Department. To our mind, therefore, the Tribunal's order does not meet the requirement set out in law. The Tribunal has completely misdirected itself and has taken into account factors, tests and considerations which have no bearing or nexus with the issue at hand. The Tribunal, therefore, has erred in law and on facts in refusing to condone the delay. The explanation placed on affidavit was not contested nor we find that from such explanation can we arrive at the conclusion that the assessee was at fault, he intentionally and deliberately delayed the matter and has no bona fide or reasonable explanation for the delay in filing the proceedings.....
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....roperty in question. 3. The Id. Commissioner (Appeals) erred in upholding the action of the AO in considering the additional income of Rs. 12,96,06,030 admitted by the Appellant in his return failing to appreciate that the same was made without knowing the implication and further the said additional income does not correspond to any seized material for making part of the search assessment. (Tax effect- Rs. 4,36,79,013) For these and other grounds that may be urged, it is prayed that the Hon'ble Tribunal may be pleased to allow the appeal." 7. The assessee has raised the following additional ground in the appeal : "4. The Hon. ITAT is requested to kindly admit the grounds which are taken for the first time before them, as per the ratio laid down by the Hon. Supreme court of India in the case of National Thermal Power Corporation Limited vs. CIT [1998] 229 ITR 383 (SC). 5. The Ld. CIT(A) ought have appreciated the fact that the AO erred in completing the Assessment u/s 143(3) r.w.s 153A without accepting and considering the affidavit filed for withdrawal of declaration made u/s 132(4). 6. The Ld. CIT(A) ought to have taken into acce....