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Facts
The assessee failed to file his return of income and the case was taken up for reassessment under sections 147 & 148 based on information related to the assessee's mother. The Assessing Officer made an addition of Rs. 7,25,54,608/- on account of long-term capital gains. The assessee appealed to the CIT(A) but failed to appear for multiple hearings, resulting in an ex-parte order dismissing the appeal.
Held
The Tribunal found it appropriate, in the interest of justice, to remit the matter back to the CIT(A) for denovo adjudication. The assessee was directed to be diligent in attending hearings and making necessary compliance.
Key Issues
Whether the reassessment proceedings initiated on information pertaining to the assessee's mother were valid, and whether the CIT(A) erred in dismissing the appeal ex-parte due to non-compliance.
Sections Cited
147, 148, 144, 142(1), 271(1)(b), 271F, 139, 148A(b), 148A(d), 234A, 234B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “D” BENCH MUMBAI
Before: SHRI SANDEEP GOSAIN & SHRI GIRISH AGRAWAL
O R D E R
PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of National Faceless Appeal Centre (NFAC), Delhi passed by ld. CIT(A), vide order no. ITBA/NFAC/S/250/2024-25/1072709463(1) dated 30.01.2025, against assessment order passed by ITO, Ward 22(3)(1), Mumbai passed u/s. 144 r.w.s. 147 of the Income-tax Act, 1961 (hereinafter referred to as the “Act”), dated 29.05.2023 for Assessment Year 2013-14.
Grounds taken by the Assessee are reproduced as under:
“1. That the Ld. CIT(A) erred in dismissing the appeal without appreciating the submissions made by the appellant and without granting adequate opportunity of being heard.
2. That the Ld. CIT(A) failed to appreciate that the proceedings initiated under section 147 were based on information pertaining to Late Usha S. Dharap and not the appellant.
That the Ld. CIT(A) erred in upholding the reassessment order which was passed without jurisdiction as the Assessing Officer did not have territorial jurisdiction over the appellant at the time of initiation of proceedings.
4. That the Ld. CIT(A) erred in confirming the reassessment proceedings without considering that the Assessing Officer did not conduct any independent inquiry before issuing notice under section 148A(b) of the Income Tax Act, 1961.
5. That the Ld. CIT(A) erred in upholding the order under section 148A(d) without considering the appellant's submissions in a judicious manner. 6. That the approval granted by the Principal Chief Commissioner of Income Tax, Mumbai, was mechanical in nature and did not consider the fact that the underlying information related to Late Usha S. Dharap and not the appellant. 7. That the Ld. CIT(A) erred in upholding the assessment order which is bad in law as the reassessment was initiated based on "borrowed satisfaction" without applying an independent mind. 8. That the Ld. CIT(A) erred in confirming the addition of Rs. 7,25,54,608/- as long-term capital gains without appreciating that the information used to make this addition pertained to Late Usha S. Dharap and not the appellant. 9. That the Ld. CIT(A) failed to consider that the reassessment proceedings in the case of Late Usha S. Dharap were dropped, yet the same addition was made in the hands of the appellant without justification. 10. That the Ld. CIT(A) erred in upholding the levy of interest under sections 234A and 234B despite the fact that the addition itself is unjustified. 11. The Appellant craves leave to add to, amend, alter or delete all or any of the foregoing grounds of appeal
.”
3. Brief facts of the case are that assessee did not file his return of income u/s.
Case of the assessee was taken up by invoking the provisions u/s. 147 r.w.s.
Assessee filed a return on 13.10.2021 pursuant to notice issued u/s. 148 dated 30.06.2021, wherein business income of Rs. 8,81,610/- and income from other source of Rs. 6,742/- was reported. After claiming deduction under chapter IV-A of Rs. 1,11,742/-, total income was reported at Rs. 7,76,610/-. Ld. AO has issued series of notices u/s. 142(1) which were duly served upon the assessee through registered e-mail on the income tax portal. However, assessee did not file his reply with supporting documents in compliance to these notices. Penalty proceedings u/s. 271(1)(b) was also initiated for non-compliance of notices issued u/s. 142(1). The only reply submitted by the assessee in the course of assessment proceedings is dated 26.05.2023, whereby the assertion made is that income which has been alleged to have escaped assessment under the impugned proceedings cannot be taxed in his hands, since the assessment was reopened on the basis of information which was relevant to Smt. Usha S Dharap i.e his mother. As no further details along with documents were placed on record, ld. AO completed the assessment u/s. 144 r.w.s 147 of the Act by making an addition of Rs. 7,25,54,608/- on account of long-term capital gain. Penalty proceedings u/s. 271F were also initiated for failure to furnish return of income before the end of the relevant assessment year. 3.1 Aggrieved, assessee went in appeal before the Ld. CIT(A).
In the course of appellate proceedings, case was fixed for hearing on multiple occasions. However, assessee sought adjournment which was granted. Despite several opportunities, assessee failed to comply with the dates of hearing fixed by the ld. CIT(A), who was forced to pass an ex-parte order by dismissing the appeal of the assessee.
Aggrieved, assessee is in appeal before the Tribunal, whereby ld. Counsel for the assessee prayed for restoring the matter back to the file of ld. CIT(A) for denovo adjudication on the grounds raised at the first appellate stage by giving an assurance that necessary compliance shall be made with due diligence.
In the interest of justice and fair play and considering the facts and circumstances of the case, we find it appropriate to remit the matter back to the file of ld. CIT(A) for denovo adjudication of the grounds raised at the first appellate stage by the assessee, after considering submissions of the assessee for which necessary opportunities may be given. We also direct the assessee to be diligent in attending the hearing fixed for adjudication of the appeal and make necessary compliance as required to substantiate the claim so made. Assessee should not seek adjournment unless warranted by compelling reasons. Accordingly, grounds raised by the assessee are allowed for statistical purposes.