S.54G Exemption: ITAT Restores Matter as CIT(A) Failed to Admit Additional Evidence u/r 46A [Read Order]

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) restored the matter related to the disallowance of exemption claimed under Section 54G of the Income Tax Act, 1961, as the Commissioner of Income Tax (Appeals) [CIT(A)] failed to admit additional evidence filed under Rule 46A of the Income Tax Rules, 1962.

Rajeshri Omprakash Malviya (assessee) filed an Income Tax return declaring a total income of Rs. 2,89,963. The Assessing Officer (AO)observed that had declared a Long-Term Capital Gain (LTCG) of Rs. 1,27,21,724 on the sale of land at Ratanpur.

The assessee claimed exemption under Section 54G for the sale of land. The Assessing Officer (AO) disallowed the claim of exemption due to non-compliance with notices and made an addition of Rs. 1,27,21,724.

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Aggrieved by the AO’s order, the assessee filed an appeal before the CIT(A). The assessee submitted additional evidence, including a notification dated 15.03.2012 and a certificate from the Talati of Ratanpur Village certifying the agricultural use of the land, along with a copy of the Sale Deed.

The CIT(A) dismissed the appeal without considering the additional evidence, stating that the assessee had failed to provide a satisfactory explanation for filing the additional documents at the appellate stage.

Aggrieved by the order of the CIT(A), the assessee filed an appeal before the ITAT. The counsel submitted that the matter should be restored for proper verification and consideration of the additional evidence.

On the other hand, the counsel for the revenue relied on the orders of the AO and CIT(A).

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The two-member bench comprising Dr. BRR Kumar (Vice President) and Ms. Suchitra Kamble (Judicial Member) observed that the CIT(A) failed to consider the application filed under Rule 46A, which mandated the admission of additional evidence under valid circumstances.

The tribunal directed the CIT(A) to consider the additional evidence and decide the matter afresh after verifying the same.

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The tribunal also directed that the assessee be given a reasonable opportunity of being heard in accordance with the principles of natural justice. The appeal of the assessee was partly allowed for statistical purposes.

To Read the full text of the Order CLICK HERE

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