ITAT Remands Case for De Novo Assessment due to Non-Compliance and Dispute Over Sale Consideration u/s 69A of Income Tax Act [Read Order]

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) remanded the case for de novo assessment due to his failure to comply with earlier proceedings and a dispute over the sale consideration of ancestral land under Section 69A of the Income Tax Act,1961.

Jasvant Baraiya,appellant-assessee,was an agriculturist operating on his ancestral land near Ahmedabad. He had no other income and did not file a return for the relevant year. During the year, he sold his 1/4th share of ancestral land for Rs. 1,21,50,000/- out of a total sale amount of Rs. 4,86,00,000/-. The assessee did not report the Long Term Capital Gain (LTCG) from the sale, believing that no tax applied to ancestral land for agriculturists.

Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here

The assessee failed to attend hearings on 11/12/2021, 10/01/2022, 24/01/2022, and 28/02/2022 before the Assessing Officer(AO). This resulted in an order on 23/03/2022, adding the full amount of Rs. 4,86,00,000/- under section 69A of the Act. The assessee also failed to respond to notices from the Commissioner of Income Tax(Appeals)[CIT(A)], leading to the rejection of the appeal in an ex-parte order.

Aggrieved  by the CIT(A) order the assessee appealed before the tribunal.

The assessee’s grounds of appeal were: The CIT(A) passed an order against law and justice, erred in upholding the validity of the AO's order, and incorrectly upheld the addition of Rs. 4,86,00,000/- under section 69A, considering the assessee's share was only 1/4th.

Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here

The two member bench comprising Dr. BRR Kumar(Vice President) and Suchitra Kamble(Judicial Member)  considered the arguments of both parties and examined the available records. The assessee counsel stated that, if given an opportunity, the necessary compliance would be made before the AO to address the initial default.It also agreed to pay Rs. 5,000/- as cost, to be deposited in the Prime Minister’s National Relief Fund, with proof provided to the AO. The AO was directed to issue a notice to the assessee and pass a fresh assessment order.

In short, the appeal filed by the assessee were allowed for statistical purposes.

To Read the full text of the Order CLICK HERE

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