RAJENDRAN SELVARANI,CHENNAI vs. INCOME TAX OFFICER, NON-CORPORATE WARD 19(3), CHENNAI, TAMIL NADU

At the very outset, we notice that the order passed by the First Appellate Authority (FAA) is ex-parte, since there was no compliance from the assessee to the four notices issued from the office of the First Appellate Authority.

The Ld. AR submitted that the assessee could not respond to the notices issued by the FAA and, consequently, the appeal was disposed of ex parte. It was further submitted that even before the Assessing Officer, the assessee had only furnished written submissions and could not substantiate the claims with supporting documentary evidence. The Ld. AR submitted that the assessee had sold an immovable property for a consideration of Rs.10,75,400/- and had claimed deduction towards cost of improvement as well as investment made in the construction of the first floor of a building. However, the requisite evidences in support of these claims could not be furnished before the lower authorities, except for certain bills. It was therefore pleaded that, in the interest of justice, one more opportunity may be granted to the assessee to furnish the necessary documents and substantiate the claims before the First Appellate Authority, and the matter may be restored to its file for fresh adjudication.

The Ld.DR supported the orders of the AO & FAA.

We have heard the rival submissions and perused the material available on record. It is an admitted fact that the appeal before the FAA was also disposed of ex-parte due to non-compliance on the part of the assessee and even before the AO the assessee has not substantiated her claim with supporting evidences. We further notice that the assessee had claimed deduction towards cost of improvement and investment in construction of the first floor of a building in respect of the property sold during the relevant assessment year. However, the said claims were not substantiated before the lower authorities with adequate documentary evidence. Before us, the Ld. AR submitted that the assessee is now in possession of the relevant documents and is willing to furnish the same for verification. Considering the facts and circumstances of the case and in the interest of substantial justice, we are of the view that the assessee deserves one final opportunity to substantiate her claims before the AO. Accordingly, we set aside the impugned order of the FAA and restore the matter to the file of the AO for fresh adjudication. The AO shall examine the evidences that may be furnished by the assessee and decide the issue afresh

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