VIMAL PROMOTERS & DEVELOPERS PVT LTD,BELAGAVI, KARNATAKA vs. INCOME TAX OFFICER, WARD-2, BELAGAVI, KARNATAKA

The brief facts of the case are that, the assessee is a private limited company and is engaged in the business of real estate development and the assessee has not filed return of income for the A.Y. 2020-21. The Assessing Officer (A.O) has received information from the ITBA Data that assessee has received sale consideration of Rs. 1,34,40,000/- on sale of an immovable property and TDS was deducted u/sec 1941A of the Act and the assessee has reported sales of Rs.3,34,87,000/- during the F.Y. 2019-20. Therefore, the AO has reason to believe that income has escaped assessment and issued notice u/sec 148A(b) of the Act and the assessee has not filed the return of income but in compliance to the notice, the assessee has filed the copy of profit & loss account and balance sheet. whereas on the perusal of the financial statements, the A.O found that the assessee has not substantiated the claim of expenses with evidences and therefore considering the information available on record, the A.O has passed the order u/sec 148A(d) of the Act dated 19.03.2024. Subsequently, the A.O has issued notice under Section 142(1) of the Act calling for the details of sales and the deposits made in the bank accounts and there was no compliance by the assessee. Finally, the A.O has invoked the provisions of Section 144 of the Act and made addition (i) estimated income @8% on total sales which works out to Rs. 26,78,960/- and (ii) unaccounted sales aggregating to Rs.1,34,40,000/- and assessed the total income of Rs. 1,61,18,960/-and passed the order u/sec 147 r.w.s. 144B of the Act dated 06.03.2025.

Aggrieved by the order, the assessee has filed an appeal with the CIT(A). Whereas the CIT(A) has considered the grounds of appeal, statements of facts and finding of the AO and issued notice of hearings and since there was no compliance by the assessee to the notices, therefore, CIT(A) considering information on record has confirmed the action of the AO and dismissed the appeal. Aggrieved by the order of the CIT(A), the assessee has filed appeal before the Hon'ble Tribunal.

At the time of hearing, the Ld. AR submitted that CIT(A) has erred in not considering the information of assessment proceedings Further, the Ld.AR mentioned that non-compliance of notices before the CIT(A) is not a wanton act and the assessee has a good case of merits and shall substantiate with material evidences and prayed for an opportunity before the Lower authorities. Per contra, the Ld.DR supported the order of CIT(A). 5. We heard the rival submissions and perused the material on record. Prima facie CIT(A) has passed the order considering the facts that there is no compliance in spite of providing adequate opportunity of hearing and notices were issued. Therefore, CIT(A) was of the opinion that the assessee is not interested in prosecuting the appeal and dismiss the appeal ex-parte confirming the action of the Assessing Officer. Whereas the CIT(A) has issued notices on various dates referred at Para 4 of the order but there was no response. Whereas the assessee has raised grounds of appeal challenging the additions made by the A.O and there could be various reasons for non- appearance/ non-compliance which cannot be overruled. Therefore, considering the facts, circumstances, submissions and principles of natural justice, we shall provide with one more opportunity of hearing to the assessee to substantiate the case with evidences and information. Accordingly, we set aside the order of the CIT (A) and remit the disputed issue to the file of the CIT(A) to adjudicate afresh and the assessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information for early disposal of appeal. And the grounds of appeal of the assessee are allowed for statistical purposes.

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