SUNIL GANGADHAR KARVE ,MUMBAI vs. DY CIT CIRCLE 16(3), MUMBAI

The brief facts of the case are that, the assessee is an individual, filed his return of income for the year under consideration in which a house property loss of Rs 24,23,938/- was shown. The house property loss of Rs. 2,00,000/- was claimed in current year and a loss of Rs.22,23,938/- was carried forward in the return of income which was filed alongwith audit report. An intimation u/s 143(1) dated 31.03.2022 wherein loss of current year mentioned in Row no.19, to be carried forward as NIL instead of Rs. 22,23,938/- as claimed by assessee in his return of income. It is stated that as per the provisions of Section 71B of the Act, assessee was eligible to carry forward this loss.

Aggrieved by the intimation order passed by AO, assessee preferred the appeal before the Ld. CIT(A) and taken 2 grounds stating that i) Ld. ADIT erred in not allowingcarry forward of loss of Rs. 22,23,938 incurred under the head "Income from house property" for set off against the income of subsequent assessment years without assigning any reasons and ii) Ld. ADIT erred in not allowing carry forward of loss incurred under the head "Income from house property" though the said adjustment is not covered

Ld. CIT(A) observed that despite several opportunities provided to the assessee, the assessee utterly failed to adduce any clinching documentary evidences in support of his contention i.e the copy of sale/purchase deed alongwith documentary evidence with respect to maintenance of the immovable property (if any) for verification of cost of acquisition of the said property against which the loss was carried forward. Thus, Ld.CIT(A) held that the intimation order passed by AO has no infirmity and need not to be interfered with and accordingly dismissed the appeal of the assessee.

Aggrieved with the order of Ld. CIT(A) assessee preferred the present appeal before us by raising the following grounds as under:

We have heard Ld. AR and Ld. DR and examined the record. At the outset, Ld. AR submitted that the documents filed in the paper book before the Tribunal and the documents from index item no. 12 to 20 were not filed before the lower authorities. It is submitted that ground no. 3 and 4 pertains to the legal infirmity relating to intimation and since the said grounds were not taken before the Ld. CIT(A), therefore prayed for disposal of Ground no. 1 and 2 only. Ld. AR argued that Ld. AO as well as Ld. CIT(A) has applied the provision of section 23 and 24 of the Act which pertains to the determination of the annual value of the „income from house property‟ alongwith deduction from the „income from house property‟. Ld. AR further submitted that Ld CIT(A) has passed the order without giving sufficient opportunity to the assessee to submit the documents and confirmed the Sunil Gangadhar Karve intimation order without following the provision of section 143(1) of the Act as adjustment has been made without intimating of the said adjustment, hence adjustment is not legally sustainable in the eyes of law. Therefore, Ld. AR stated that the documents furnished before the Tribunal may be considered and impugned order be set aside. In support of his arguments, Ld. AR relied on the following case laws:-

On the other hand, Ld. DR supported the order of lower authorities and submitted that assessee himself failed to file the necessary documents before the lower authorities and even has not sought permission to file additional evidence before the Tribunal and additional ground no. 3 and 4 cannot be taken as regular ground with regard to intimation u/s 143(1) of the Act being contrary to the provisions and as such there is no illegality in

We have considered the rival submissions made by the parties and perused the material placed on record. We have noticed that the findings returned by the Ld. CIT(A) in its impugned order in para 7 is relevant and the same is extracted below:-

It is evident from the above findings that Ld. CIT(A) proceeded to dismiss the appeal of the assessee on the ground that assessee failed to produce despite several opportunities to file the documentary evidences including the copy of sale/purchase deed alongwith documentary evidence with respect to maintenance of the immovable property (if any) for verification of cost of acquisition of the said property against which the loss was carried forward. The documents mentioned by the Ld. CIT(A) which the assessee had not furnished despite several opportunities were given and the said documents have been filed in the form of paper book before us mentioned in index as item no. 12 to 20. However, there is nothing Sunil Gangadhar Karve mentioned in the impugned order toshow that any statutory notices were ever issued by the AO asking to the assessee to file necessary documents. Under these circumstances, we are of the considered opinion that dismissing the appeal in absence of necessary documents and without affording opportunity of effective hearing to the assessee by the Ld. CIT(A) as well as Ld. AO, has resulted into miscarriage of justice.

For the above reasons, the impugned order is not sustainable and is accordingly set aside and the matter is restored to the file of Ld. AO for deciding the matter afresh after considering the documents filed in the paper book and assessee shall represent its case before the Ld. AO within 60 days of this order.

In the result, appeal filed by the assessee is allowed for statistical purposesin above terms.