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Income Tax Appellate Tribunal, DELHI BENCH : SMC-2 : NEW DELHI
Before: SHRI C.M. GARG
BEFORE SHRI C.M. GARG, JUDICIAL MEMBER Assessment Year: 2008-09 Kamal Agarwal, Vs. ITO, H.No.63, Rail Vihar, Ward-2(1), Noida, Noida. Uttar Pradesh. PAN: ADDPA8383Q (Appellant) (Respondent) Assessee by : Shri Prabhat Kumar, CA Revenue by : Shri Om Prakash, Sr. DR Date of Hearing : 05.05.2022 Date of Pronouncement : 18.05.2022 ORDER
This appeal filed by the assessee is directed against the order dated 31.01.2018 of the CIT(A)-I, Noida, relating to Assessment Year 2008-09.
Case of the AO is that the assessee sold the property for an amount of Rs.30,36,000/- by way of a registered sale deed. He issued notice u/s 148 of the Act to the assessee on 28.03.2015. Notice u/s 142(1) was issued on 26.10.2015 and 19.02.2016 for compliance on 06.11.2015 and 29.02.2016.
The main grievance of the assessee is that the ld. CIT(A) dismissed the appeal without providing any opportunity of hearing to the assessee which is against the principles of natural justice. The AO invoked the provisions of section 147/148 of the Act on the information that the assessee has sold the property. The AO passed an ex parte order u/s 144 of the Act by calculating capital gain at Rs.23,47,250/- on wrong and incorrect facts and premise. Actually the assessee purchased the property paying the sale consideration of Rs.30,36,000/- vide registered sale deed dated 15.06.2007. Therefore, the addition based on wrong and incorrect facts may be deleted. The CIT(A) has not granted justice to the assessee by dismissing the appeal of the assessee. He totally ignored the entire facts and circumstances of the case and dismissed the appeal ex parte qua the assessee which is against the principles of natural justice.
The ld. DR, on the other hand, opposed the above submissions and vehemently supported the order of the AO and the first appellate authority.
On a careful consideration of the above, I am of the view that the AO passed an ex parte order u/s 144 of the Act and ld. CIT(A) also passed an ex parte order dismissing the appeal of the assessee. Hence, the assessee was not provided due opportunity of hearing before the authorities below. However, the copy of the letter dated 04.01.2013 filed by the assessee in response to the letter of the AO dated 14.12.2012 clearly reveals that at the very first instance the assessee had informed the AO that he did not sell the property but, in fact, 2
purchased the property. However, without considering the same, the AO proceeded to initiate reassessment proceedings u/s 147 of the Act and issued notice u/s 148 of the Act without applying his mind to the information on record. Even during the first appellate proceedings, the CIT(A) was not right in proceeding to dismiss the appeal in absence of assessee but, he was duty bound to consider the material on record. But, without giving any attention to the same, dismissed the appeal on account of non-prosecution by the assessee. In my humble view, the ld.CIT(A) is not empowered to dismiss the appeal on account of non-prosecution. In the situation the assessee is not appearing despite service of notice, then, the CIT(A) is duty-bound to adjudicate all grounds of assessee appearing in the Form No.35, but, the ld.CIT(A) has not decided the appeal on grounds of assessee.
In view of the foregoing discussion, I am of the considered opinion that in the present case the AO proceeded to invoke the provisions of section 147 of the Act for initiation of reassessment proceedings and to issue notice u/s 148 of the Act on completely wrong and incorrect facts which is apparent from the copy of sale deed dated 15.06.2007. It is also very clear that the assessee at the first instance, in response to letter of the AO dated 14.12.2012, through reply dated 04.01.2013 along with relevant documentary evidence, i.e., copy of sale deed, informed that he had not sold any property but actually purchased a property. This was submitted by the ld. AR at the bar and was not controverted by the ld.
Sr. DR in any manner. Although the ld. Sr. DR submitted that the matter be restored to the file of the AO or CIT(A), but, it is an open and shut case where the entire exercise undertaken by the AO for initiating reassessment proceedings is not only wrong but perverse and misconceived. Thus sending the matter back will be a fruitless and harassing exercise for the assessee which is also not the purpose of this august institution. Thus, I reach to a logical conclusion that the AO proceeded to initiate reassessment proceedings on the incorrect fact that the assessee had sold a property and calculated the long-term capital gain ignoring the letter of objection dated 04.01.2013 that he had never sold any property for a consideration of Rs.30,36,000/- but, had actually purchased a property during relevant period. But, the AO, without examining the reply dated 04.01.2013 and copy of purchase deed dated 15.06.2007 which clearly reveals that the assessee had purchased a property, the AO proceeded to make addition on account of capital gain. The basis on which reassessment proceedings have been initiated is not only incorrect and wrong but also perverse, and, hence, the addition made by the AO and confirmed by the ld.CIT(A) cannot be held as sustainable. Thus, we allow the grievance of the assessee and direct the AO to delete the addition.