SUDHIR RAWAT ,JABALPUR vs. INCOME TAX OFFICER WARD-1(3), JABALPUR

ITA 250/JAB/2025Status: DisposedITAT Agra30 September 2026AY 2011-127 pages
AI SummaryAllowed

What were the facts?

The assessee, Sudhir Rawat, filed an appeal against the order of the Addl/Joint Commissioner of Income-tax (Appeals)-12, Delhi, dated 24.03.2025, for Assessment Year 2011-12. The appeal before the Tribunal was filed 90 days after the expiry of the limitation period, with the assessee seeking condonation of delay due to changes in his registered email ID and mobile number on the Income Tax Portal. The Assessing Officer had issued a notice u/s 148 on 20.05.2013, followed by notices u/s 142(1) which were not effectively served or complied with. The AO made additions of Rs. 1,00,000/- towards alleged unverifiable expenditure and Rs. 9,30,000/- on account of capital gains under Section 50C, increasing the total income. The CIT(A) dismissed the assessee's appeal ex-parte.

What did the Tribunal hold?

The Tribunal held that the appeal before the Ld. CIT(A) was dismissed ex-parte, and the assessee contended that notices were not received, preventing effective representation. The Tribunal acknowledged that appellate proceedings should ordinarily be decided after providing a reasonable and effective opportunity of hearing, and the right of appeal is a substantive legal right. Depriving an assessee of this right solely due to non-appearance, especially when there's an explanation for non-receipt of notices, is not permissible. The issues raised by the assessee, concerning the Rs. 1,00,000/- expenditure addition and the Rs. 9,30,000/- addition under Section 50C (including the opportunity under Section 50C(2)), require examination on merits. Since the Ld. CIT(A) had not decided the matter on merits, the Tribunal, to sub-serve the principles of natural justice, set aside the impugned order. The grounds were restored to the file of the Ld. CIT(A) for a fresh decision on merits after providing an opportunity to the assessee to present its case and furnish relevant evidence. The appeal was allowed for statistical purposes.

What were the issues?

1. Whether the Ld. CIT(A) erred in passing an ex-parte order without duly appreciating that the appellant did not receive the notices and thus was not aware of the proceedings, violating principles of natural justice? 2. Whether the Ld. CIT(A) was justified in dismissing the appeal without appreciating that the notice under Section 143(2) was issued after assessment proceedings commenced and were nearing closure? 3. Whether the Ld. CIT(A) was justified in confirming the addition of Rs. 1,00,000/- made by the AO without identifying specific unverifiable expenditure or demonstrating its non-relation to professional activities, especially when the assessee offered a high net profit of approximately 60%? 4. Whether the Ld. CIT(A) was justified in confirming the addition of Rs. 9,30,000/- made by the AO without affording the assessee the statutory right under Section 50C(2) to request a reference to the Valuation Officer, and without considering the market value at the time of purchase for consistency? Assessee's Contentions: The Ld. Counsel for the assessee argued that the CIT(A) order was ex-parte as notices were not received, preventing effective representation. The addition of Rs. 1,00,000/- was ad hoc and estimated without identifying specific unverifiable expenses, and the net profit offered was already high. The addition of Rs. 9,30,000/- under Section 50C was made without providing the opportunity under Section 50C(2). The assessee sought setting aside the ex-parte order and a fresh assessment. Revenue's Contentions: The Ld. DR supported the orders below, stating that multiple opportunities were granted but the assessee failed to respond, indicating negligence.

Which sections of the Income-tax Act were involved?

Section 143(2),Section 148,Section 148(2),Section 142(1),Section 147,Section 143(3),Section 50C,Section 50C(2)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JABALPUR BENCH “SMC”, JABALPUR

Before: SHRI KUL BHARAT

For Appellant: Shri Sapan Usrethe, Advocate
For Respondent: Shri Rahul Padha, JC-2

PER KUL BHARAT, VICE PRESIDENT.:

This appeal, by the assessee, is directed against the order of the Learned Addl/Joint Commissioner of Income-tax (Appeals)- 12, Delhi [Addl/JCIT(A)] dated 24.03.2025 pertaining to the assessment year 2011-12. The assessee has raised the following grounds of appeal: -

“1. The learned Commissioner of Income Tax (Appeals) erred in passing an ex-parte order on the grounds that the appellant did not bother to pursue the appeal, without duly appreciating that appellant was not aware of the notice as he have not received any notices

2.

The learned Commissioner of Income tax (Appeal) was not justified in dismissing the appeal without appreciating that notice under section 143(2) of the

The order continues below.

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