The Chennai Bench of Income Tax Appellate Tribunal (ITAT) set aside the appellate order and remitted the matter back to the file of the Commissioner of Income Tax (Appeals) [CIT (A)] for consideration and to decide the issues afresh in accordance with law after considering the explanations of the assessee and directed the assessee to furnish complete details with material evidences and convincing explanations before the CIT (A).
The assessee Salma Ahmed filed her return of income belatedly for the assessment year 2016-17 under Section 139(4) of the Income Tax Act, 1961 declaring a total income of Rs.71,09,420/- after claiming deduction under Section 54F of the Income Tax Act to the extent of Rs.1,25,00,000/- from capital gains computed under Section 45 of the Income Tax Act.
The return filed by the assessee was processed under Section 143(1) of the Income Tax Act and selected for limited under CASS (Computer Aided Scrutiny Selection ) for the specific purpose of examining “deduction/exemption from capital gains” claimed by the assessee under Section 54F of the Income Tax Act.
The Assessing Officer has completed the assessment under Section 143(3) of the Income Tax determining the total income of the assessee at Rs.2,39,48,340/- while recalculating capital gains on sale of property at Rs.2,35,23,462/- by denying assessee’s claim of exemption under Section 54F of the Income Tax Act to the extent of Rs.1,25,00,000/- and also restricting the assessee’s claim of cost of improvement of Rs.1,50,000/- and assessed a sum of Rs.4,00,000/- as undisclosed income under the head income from other sources.
Aggrieved by the order the assessee filed an appeal before the CIT (A), which dismissed the appeal of the assessee exparte after considering the submissions made by the assessee in the form of rounds of appeal and statement of facts.
Further aggrieved the assessee filed an appeal before the Tribunal. The Authorised Representative of the assessee K. Prasanna, submitted that the assessee has deposited a portion of net consideration in capital gains deposit scheme before the due date under Section 139(4) of the Income Tax Act, which was disallowed by the Assessing Officer.
The AR further stated that the decision of AO was confirmed by the CIT (A) and he argued that exemption under Section 54F of the Income Tax Act must not be denied as long as the deposit is made on or before the due date of filing return of income either under section 139(1) or section 139(4) of the Act.
He stated that the assessee was not able to respond to the notices issued by the CIT(A) during pre and post Covid-19 pandemic and to substantiate her claim of exemption and other expenses claimed by the assessee and prayed for one more opportunity of being heard to substantiate her claim before the CIT(A).
D. Hema Bhupal appeared as Departmental Representative (DR).
The Bench comprising of V. Durga Rao, Judicial Member & Manoj Kumar Aggarwal, Accountant Member observed that to meet the ends of natural justices, the assessee shall be given one more opportunity of being heard. Accordingly, set aside the appellate order and remit the matter back to the file of the CIT(A) to decide the issues afresh in accordance with law after considering the explanations of the assessee.
The Tribunal further directed the assessee to furnish complete details with material evidences and convincing explanations before the CIT (A) for consideration. Thus the appeal filed by the assessee is allowed for statistical purposes.
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