ITAT restores appeal to CIT(A) over property valuation, Citing assessee's inability to access Notice Through emails [Read Order]

The ITAT Cuttack Bench of the Income Tax Appellate Tribunal (ITAT) restored an assessee’s appeal to the CIT(A) over property valuation. This was due to the assessee’s lack of knowledge in accessing emails or income tax portals leading to unawareness of notices and the failure to respond or appear during the initial appeal proceedings.

In this case, the appeal was filed by Sandeep Rout, the assessee who derived income from business. He had filed an appeal against the dismissal of his first appeal by the Additional /Joint Commissioner of Income Tax ( Addl/JCIT).

The income tax return for the assessment year 2014-15 was filed on 31 march 2014 disclosing the total income of Rs.2,27,040. Subsequently, the return was reopened by the issuance of a notice under section 148 of the Income TaxAct on 29 March 2019. In response to the notice , the assessee filed his return of income of Rs.2,27,040.

During the course of assessment proceedings the Assessing Officer discovered that the assessee had purchased immovable property at Sahadevkunta and SDV was Rs.21,33,000 and the actual sale consideration as per sale deed was Rs.12,00,000. The AO required the assessee to explain the source of investment and the differentiated amount of Rs.9,33,000 between SDV amount and actual sale consideration. The assessee stated that the difference of purchase and fair market value depends on a lot of factors such as location and nature of land. AO rejected the explanation provided by the assessee and the differential value of Rs.9,33,000 was added to the total income of the assessee.

The first appeal filed by the assessee was dismissed by ADDI/JCIT(A) due to non - representation by the assessee. The assessee stated that he did not know to operate the email id or the department portal. ADDI/JCIT had sent all the notices through email id. The assessee requested for one more opportunity to explain the differentiated amount regarding the purchase value and SDV value of the property.

The income tax department had no objection in restoring the matter to CIT(A). After considering the submissions the tribunal observed that the assessee did not know about operating the email id or the department portal which failed to receive notices and the proceeding dates. Therefore the Income Tax Department stated that they will cooperate if the matter remitted back to the file of CIT(A) for fresh adjudication.

The assessing officer (AO) observed a significant difference between Stamp Duty Valuation (SDV) of a purchase of an immovable property and its declared sale consideration . The AO added the differential amount to the assess’s income.

The single bench of Duvvuru Rl Reddy (Vice President) held that the issues regarding this appeal would be restored to CIT(A) for readjudication and provide a reasonable opportunity of hearing to the assessee. The bench also cautioned the assessee to cooperate with the proceedings before CIT(A) and if the assessee failed to cooperate , the CIT(A) would be at liberty to pass an appropriate order in accordance with the law and on the basis of the merits based on the materials available on the record.

The tribunal allowed the appeal for statistical purposes.

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