THIS INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 04/06/2020 PASSED IN ITA NO. 1253/BANG/2019, FOR THE ASSESSMENT YEAR 2007-2008. PRAYING THIS HON'BLE COURT TO (A) FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE (B) ALLOW THE APPEAL AND SET-ASIDE THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL DATED 04/06/2020 (ANNEXURE-A), BEARING ITA NO. 1253/BANG/2019 FOR THE ASSESSMENT YEAR 2007-2008 AND ETC.

THIS APPEAL, COMING ON FOR FINAL HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

CORAM: HON'BLE MR. JUSTICE S.G.PANDIT

and

HON'BLE DR. JUSTICE K.MANMADHA RAO

ORAL JUDGMENT

(PER: HON'BLE DR. JUSTICE K.MANMADHA RAO)

The appellant-assessee has filed the present appeal under Section 260A of the Income Tax Act, 1961 calling in question the order dated 04.06.2020 passed by the Income Tax Appellate Tribunal, Bengaluru Bench 'C', Bengaluru, in ITA No.1253/Bang/2019 relating to the Assessment Year 2007-08. The appeal was admitted on 10.02.2022 to examine the following questions of law:-

(i) Whether the Id. ITAT correct in not considering the fact that the delay in filing the appeal before the CIT(A) was only 34 days not 8 years since the revision petition was files before the CIT only against the notice u/s.245 of the Act and the intimation u/s.143(1) received only on 20.01.2017.

(ii) Whether the Id. ITAT ought of have allowed the exemption claimed u/s. 10(38) of the Act in respect of capital gain on sale of shares and refrained from confirming the addition of Rs.2,58,60,190/- in the total income of the appellant for the taxation.

2. The appellant herein is the assessee and the respondent herein is the Revenue before the Authority below.

3. Heard learned counsel appearing for the appellant as well as the respondent.

4. The brief facts of the case are that:- The appellant filed his return of income on 31.07.2007 declaring a total income of Rs.2,59,44,190/-. The return included long-term capital gains of Rs.2,58,60,190/- arising from sale of shares. According to the appellant, the said capital gains were exempt under Section 10(38) of the Income Tax Act,1961 (‘the Act’ for short). Though the appellant disclosed the said amount as exempt income in Schedule EI of the return, the exemption was not reflected in Part-B relating to computation of total income.

5. The return was processed under Section 143(1) of the Act on 20.03.2009 and the exemption claimed under Section 10(38) of the Act was not granted, resulting in a demand of Rs.74,10,326/-. According to the appellant, the intimation under Section 143(1) of the Act was not served on him and he became aware of the demand only upon receipt of a communication dated 06.11.2014 issued under Section 245 of the Act proposing adjustment of refund against the outstanding demand for the Assessment Year 2007-08.

6. Thereafter, the appellant filed a revision petition under Section 264 of the Act on 14.07.2015 seeking cancellation of the demand. The said revision petition came to be dismissed on 27.02.2017 on the ground of limitation. The appellant contends that a copy of the intimation under Section 143(1) of the Act was furnished to him only on 20.01.2017. Subsequently, he filed an application under Section 154 of the Act on 22.03.2017 and also preferred an appeal before the Commissioner of Income Tax (Appeals) on 25.03.2017 challenging the intimation dated 20.03.2009.

7. The Commissioner of Income Tax (Appeals), by order dated 28.03.2019, declined to condone the delay and held that the appeal was not maintainable in view of the appellant having already invoked the revisional jurisdiction under Section 264 of the Act and further held against the appellant on merits. Aggrieved thereby, the appellant preferred an appeal before the Tribunal. The Tribunal, by the impugned order, affirmed the decision of the Commissioner of Income Tax (Appeals) and dismissed the appeal. Aggrieved by the same, the present appeal is filed.

8. The learned couns