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Assessee by Shri Mehul Shah – CA Revenue by Ms. AnupamaSingla – Sr.DR Date of hearing 09.09.2021 Date of pronouncement 09.09.2021 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee is directed against the orders of ld. Commissioner of Income tax (Appeals)-1, Surat dated 27.09.2018, which in turn arises from the assessment order passed under section 144 read with section 147 of the Income-tax Act, for the assessment year (AY) 2011-12.The assessee raised the following grounds of appeal: “1. On the facts and in circumstances of the case as well as law on the subject, the learned CIT(A) has erred in passing ex-parte order without giving proper opportunity of being heard.
2. On the facts and circumstances of the case as well as law on the subject, the learned CIT(Appeals) has erred in confirming the addition without passing any speaking order.
3. On the facts and in circumstance of the case as well as law on the subject, the learned assessing officer has erred in making addition of Rs.41,36,916/- on account of long term capital gain without allowing deduction of cost of acquisition of building.
HetalArt Silk Processors P. Ltd.,(AY 2011-12)
It is therefore prayed that addition made by assessing officer and confirmed by Commissioner of Income-tax (Appeals) mayplease be deleted or matter may be please set a side to the assessing officer for deciding a fresh.
Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.” 2. Brief facts of the case are that for assessment year under consideration no return of income was filed by the assessee. The assessing officer (AO) received information that during the year under consideration, the assessee with three co-owners has sold an immovable property out of Survey No.160, Block No.122, Mota Borsar, Tal. Mangrol Dist. Surat for Rs.40,00,000/-. Therefore, on the basis of information the case was reopened under section 147 of the Act. Notice under section 148 of the Act dated 30.03.2017 issued and duly served upon the assessee through speed post. The AO further noted that even in response to notice under section 148, the assessee has not filed its return of income for the year under consideration. Consequent upon, a notice under section 142(1) of the Act dated 10.10.2017 in the form of show cause notice was issued upon the assessee. No response was made by the assessee. The AO proceeded for assessment. During the assessment the AO noted that though the assessee with his co-owner has shown sale consideration of Rs. 40.00 lakhs, however, stamp duty of Rs. 8,41,500/- was paid on the transaction of sale, on the basis of which the stamp value of the value of property comes to Rs. 171,73,470/-. The assessee was having ¼ share in 2 HetalArt Silk Processors P. Ltd.,(AY 2011-12) the property, thus, the assessee’s share is Rs. 42,93470/-. The AO invoked the provisions of section 50C of the Act and issued show cause notice as to why the capital gain of Rs.42,93,370/- arisen on the sale of the property should not be added on the basis taking the stamp duty value of (1/4th share of Rs.1,71,73,470/-). In response to show cause, the assessee filed its reply dated 16.10.2017 in which he stated that “so far as notice under section 148 dated 30/03/2017 is concerned, we were not ever served with any such notice”. It was also stated that the assessee company has already been dissolved and the name of the company has been strike out from the Register of Registrar of the Company, Ahmedabad. The AO not accepted the contentions of the assessee. The AO after allowing the cost of expenses and indexation cost worked out long term capital gain (LTCG) and after made addition Rs.41,36,916/- of LTCG.
On appeal before ld. CIT(A) the action of the Assessing Officer was affirmed. The ld.CIT(A) confirmed the order of assessing officer in ex- parte order by taking view that despite granting a number of opportunities to the assessee is not interested in filing any details during the appellate proceedings and habitual non-compliant and had not regards for the statutory proceedings. Further aggrieved, the assessee has filed present appeal before this Tribunal.
4. We have heard the submission of Ld. Authorised Representative (AR) of the assessee and ld.Senior Departmental Representative (Sr.DR) for the 3 HetalArt Silk Processors P. Ltd.,(AY 2011-12) Revenue. The ld AR for the assessee submits that the ld. CIT(A) passed the order ex-party, without providing fair and proper opportunity to the assessee. He further prayed that the assessee has good case on merit and is likely to succeed if one more opportunity of hearing is granted to him to explain the facts before ld. CIT(A). The ld. AR for the assessee further submits that the ld. CIT(A) has not considered the legal issues raised by the assessee. The ld.AR for the assessee prayed that the assessee may be given one more opportunity to represent his case before the ld. CIT(A).The ld.AR for the assessee again submits that the ld.CIT(A) passed the ex-parte order without discussing the merits of the case. The ld AR for the assessee undertook to be vigilant in attending the hearing before first appellate authority.
5. On the other hand, the Sr.DR for the Revenue submits that the assessee was given ample opportunity as recorded in page 2 of para 4 of the order passed by the ld.CIT(A). The assessee failed to comply with the notice issued by the ld. CIT(A). The ld. CIT(A) left with no option, except to proceed to decide the issue and in absence of any evidence or explanation affirm the action of AO. In alternative submission, the ld.Sr.DR for the Revenue submits that in case the Hon’ble Tribunal is deem appropriate, the assessee be directed to be vigilant and not to default in attending the proceedings and to waste the time of public authorities/ld.CIT(A).
HetalArt Silk Processors P. Ltd.,(AY 2011-12) 6. We have considered the rival submission of both the parties and have gone through the orders of Lower Authorities.We find that the Assessing Officer while passing the assessment order made addition on long term capital gain of Rs.41,36,916/-. The ld.CIT(A) confirmed the action of AO by taking view that there is non-compliance on the part of the assessee. Before, us the ld. AR for the assessee undertook to be vigilant and to appeal before the ld. CIT(A). We, instead of going into controversy, whether the assessee defaulted in attending the proceedings before the ld.CIT(A). We find that the order of the ld.CIT(A) is not in accordance with mandate of section 250(6) of the Income Tax Act. Section 250(6) of the Act mandates that the Ld. CIT(A) while deciding the appeal is required to pass order on various grounds of appeal
(points of determination), decision therein on and reasons for such decision. Therefore, considering the facts and circumstances of the case, the appeal of the assessee is restored back to the file of the ld.CIT(A) to decide all the grounds of appeal on merit in accordance with law. The assessee is directed to appear before the ld.CIT(A) as and when the date of hearing is fixed and to provide all necessary evidence and information without any further delay and not to seek the adjournment without any valid reasons. Accordingly the ground of appeal by assessee is allowed for statistical purpose.
7. In the result, appeal of the assessee is allowed for statistical purpose. 5 HetalArt Silk Processors P. Ltd.,(AY 2011-12) Order announced on 9th September, 2021 at the time of hearing in virtual court hearing.