SRINIVASAN CHITRA,KRISHNAGIRI vs. ITO, WARD-1,, KRISHNAGIRI

The Assessee raised the following grounds of appeal : “1. The order of the learned CIT(A) is contrary to law, facts, and circumstances of the case and is liable to be set aside.

The learned CIT(A) erred in dismissing the appeal ex-parte without providing adequate opportunity of being heard, thereby violating principles of natural justice.

The learned Assessing Officer erred in assessing capital gains of Rs.49,04,700 in the hands of the appellant, despite the fact that:

The authorities below failed to appreciate that upon execution of a valid gift deed, ownership stood transferred to the donee, and any subsequent transfer can only be taxed in the hands of the donee and not the donor.

The addition results in double taxation, as the same transaction has already been offered to tax by the appellant's daughter, who has discharged tax liability on the stamp duty value.

The initiation of proceedings under Section 147/148 is bad in law as:

The Assessing Officer erred in adopting salary income at Rs. 17,49,446 without any basis, disregarding Form 16 and documentary evidence.

The failure to provide a copy of the sworn statement recorded during investigation vitiates the assessment proceedings.

The appellant acted under a bona fide belief and has fully disclosed all material facts relating to her income. No adverse inference ought to have been drawn.

The appellant craves leave to add, alter, amend, or withdraw any of the above rounds at the time of hearing.”

Briefly, the facts of the case are that the appellant is an Individual. No regular Return of Income under the provisions of section 139(1) of the Act was filed for the Assessment Year 2020-21. However, based on the information that the appellant sold immovable property for a consideration of Rs.49,04,700/- and the appellant incurred expenditure on salaries. The Assessing Officer formed an opinion that income got escaped assessment from tax, accordingly, a notice u/s.148 of the Act was issued 31.03.2024 after duly complying with the procedure laid down u/s.148A of the Act. The appellant neither complied with the notice issued u/s.148 of the Act nor the notice u/s.142(1) of the Act. In the circumstances, e-Assessment Unit of the Department(Assessing Officer) had proceeded with framing best judgment assessment vide order dated 20.01.2025 passed u/s.147 r.w.s 144 read with section 144B of the Act at a total income of Rs.66,54,146/-. While doing so, the Assessing Officer made addition under Capital Gains of Rs.49,04,700/- addition under head “Salary Income” of Rs.7,90,516/-.

Being aggrieved by the above assessment order, the appellant preferred an appeal before ld.CIT(A), who vide impugned order dismissed the appeal for non- prosecution without entering into the merits of the case.

Being aggrieved by the order of ld.CIT(A), the appellant is in appeal before us in the present appeal.

We have heard rival submissions and perused the material available on record. We find that the ld.CIT(A) dismissed the appeal of the appellant for non- prosecution without entering into the merits of the addition. The CIT(A) without dealing with the contentions of the appellant merely dismissed the appeal in limine for non-prosecution. As contemplated u/s. 250(6) of the Act the CIT(A) is required to frame points of determination followed by a detailed discussion thereupon before passing the order. It is the settled position of law that the CIT(A), even while disposing of the appeal ex-parte, he is duty bound to dispose of the appeal on merits. Reliance in this regard can be placed on the decision of the Hon'ble Bombay High Court in the case of PCIT vs. Premkumar Arjundas Luthra 279 CTR 614. The Hon’ble Bombay High Court has held in the case of Pr.CIT(Central) Vs. Premkumar Arjundas Luthra (HUF) (Bombay)/[2017] 297 CTR 614 (Bombay) as under : Quote, “8.From the aforesaid provisions, it is very clear once an appeal is preferred before the CIT(A), then in disposing of the appeal, he is obliged to make such further inquiry that he thinks fit or direct the Assessing Officer to make further inquiry and report the result of the same to him as found in Section 250(4) of the Act.

Therefore, in the light of the above legal position, we are of the considered view that the matter requires to be remanded to the file of the CIT(A) with the direction to dispose of the appeal de novo on merits after affording reasonable opportunity of hearing to the assessee. All the contentions raised by the appellant are left open for consideration before the ld.CIT(Appeals).

In the result, the appeal filed by the assessee stands partly allowed for statistical purposes. Order pronounced in the open Court on 29th June, 2026.