The Tax Publishers2019 TaxPub(DT) 3951 (Bang-Trib)

INCOME TAX ACT, 1961

Section 251

As all the notices issued by the AO were sent to the last known address of the assessee, residential property situated wherein had already been sold almost 8 years earlier, the fact that the assessee did not appear before the AO in the course of assessment proceedings in response to notices issued was due to sufficient and reasonable cause. Thus, there existed sufficient cause as stipulated in rule 46A for admission of additional evidence put forth by the assessee before CIT(A).

Appeal [CIT (A)] - Powers - Admission of additional evidence - Reasonable cause

Assessee had sold a residential property but had not filed a return of income for impugned assessment year. Therefore, AO initiated reassessment proceedings by issuing notice under section 148, but no response was received from the assessee. Thus, the AO served notice by affixture at the last known address of the assessee but in respect of such notice also no response was received. Hence, AO completed the assessment ex-parte under section 144 taxing the entire sale consideration as income from capital gains. Assessee tendered additional evidence before CIT(A) to show that the entire capital gains were reinvested in the purchase of a new residential house entitling him to claim exemption under section 54. She contended that there was sufficient cause for the admission of additional evidence because all the notices were sent by the AO to her last known address that had already been sold almost 8 years earlier. However, CIT(A) refused to admit such evidence in terms of rule 46A and confirmed the addition made by AO. Held: Since all the notices issued by the AO were sent to the last known address of the assessee, residential property situated wherein had already been sold almost 8 years earlier, therefore, the fact that the assessee did not appear before the AO in the course of assessment proceedings in response to notices issued was due to sufficient and reasonable cause. Further, in the instant case there was also delay in filing the appeal before CIT(A) but the same was admitted by it on the ground of reasonable cause. Therefore, the approach of CIT(A) in refusing to admit additional evidence was incongruous and did not stand the test of reason, when it was factually clear that the assessee was not put on notice about assessment proceedings for impugned assessment year as the notices issued after almost 8 years were served on the last known address of the assessee. Thus, there existed sufficient cause as stipulated in rule 46A for admission of additional evidence put forth by the assessee.

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2009-10

INCOME TAX ACT, 1961

Section 54

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