ISMAIL ILAHI,MARAKANAM vs. ITO, WARD-1, VILLUPURAM

Brief facts of the case are that the assessee is an individual and did not file his return of income for AY 2012-13. As per the information available with the department, the AO found that the assessee had sold immovable property valued at Rs.32,40,000/- and registered with the District Registrar, Pondicherry. The case was re-opened u/s.147 of the Act, accordingly, a notice u/s.148 of the Act, dated 26.03.2019 and statutory notices were issued to the assessee and by calling for details. However, the assessee chose to be silent and did not respond to any of the notices. Hence, the AO completed the assessment by passing an exparte order u/s.144 r.w.s 147 of the Act dated 21.11.2019 by making an addition of Rs.32,40,000/- as long term capital gain and by arriving total income of Rs.32,40,000/-.

Aggrieved by the order of the AO, the assessee preferred an appeal before the ld.CIT(A) on 13.02.2020.

At the outset, we observed that ld.CIT(A) has provided three opportunities for the assessee to appear for hearings as detailed in paragraph 4 of the ld.CIT(A) order to support the appeal of the assessee. However, the

The ld.AR submitted that the assessee was under medical observation due to prolonged illness and he could not respond to or look into any hearing notices issued during appeal proceedings. The assessee became aware of the impugned order passed by the first appellate authority only after receipt of notice for recovery proceedings and hence, he could not participate in the appeal proceedings. In view of the above, the ld.AR prayed that the Tribunal may be pleased to set aside the order of ld.CIT(A) and remit the issues to the file of AO as the assessment order passed without having the complete details of the source. Further, ld.AR assured the bench that the ld.AR will represent on behalf of the assessee before the authorities to complete the proceedings effectively.

Per contra, the ld.DR submitted that both the AO and the ld.CIT(A) provided sufficient opportunity to appear before them. However, the assessee has been negligent in responding to the statutory notices and hence, prayed for confirming the order of the ld.CIT(A).

We have heard the rival parties and perused the material available on record and gone through the orders of the lower authorities. We note that the AO has passed an exparte order by considering the information available with the department and on appeal the same has been confirmed by the ld.CIT(A), NFAC due to non-participation of the assessee. Since the assessee has failed to participate before the ld.CIT(A) and also did not furnish the entire details called for during the assessment proceedings, we levy cost of Rs.10,000/- to be paid to State Legal Aid Authority, Hon’ble High Court of Madras within 30

In view of the above and to meet the ends of justice, we set aside the order of the ld.CIT(A) and remit the matter back to the file to ld.CIT(A) to adjudicate the matter afresh on merits in accordance with law, after providing reasonable opportunity to the assessee and also obtain the remand report from AO, in case any of the additional evidence provided during the proceedings. Needless to say, assessee to be diligent and file written submissions and relevant documents if advised so.

In the result, appeal filed by the assessee is allowed for statistical purposes.