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Income Tax Appellate Tribunal, DELHI BENCH “E” DELHI
Before: SHRI KUL BHARAT & SHRI PRADIP KUMAR KEDIA
PER PRADIP KUMAR KEDIA, A.M.: The captioned appeal has been filed at the instance of the assessee against the order of the Commissioner of Income Tax (Appeals)-I, Noida [‘CIT(A)’ in short], dated 28.09.2018 arising in the assessment order dated 19.12.2017 passed by the Assessing Officer (AO) under Section 143(3) of the Income Tax Act, 1961 (the Act) concerning AY 2015-16.
The grounds of appeal raised by the assessee read as under:
“That on the facts and in the circumstances of the appellant’s case, the Ld CIT(A), erred in facts & law in disposing the appeal without providing reasonable opportunity to the appellant to furnish written submission / details / documents / evidences. Hence, opportunity of being heard should be given to the appellant
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for the sake of natural justice.
Without prejudice to ground of appeal No. 1
That on the facts and in the circumstances of the appellant’s case, the Ld CIT(A), erred in facts & law in arbitrarily confirming the assessment order wherein the Ld. AO treated the “Short term capital gain” of Rs 19,23,491/- as ‘Business Income’, instead of ‘Short Term Capital Gain’ as declared by the appellant, on sale of shares held as investment.”
The assessee is an individual engaged in the business of trading in equity and commodity shares. The assessee filed return of income declaring total income at Rs.1,39,63,650/- for Assessment Year 2015-16 in question. The case of the assessee was subjected to scrutiny assessment under Section 143(3) of the Act wherein income of Rs.19,23,491/- included and shown under the head “Short Term Capital Gain” from purchase and sale of shares were treated as business income by the Assessing Officer.
Aggrieved by the aforesaid action, the assessee preferred appeal before the CIT(A). The CIT(A) however passed cryptic order wherein the appeal was not admitted alleging non compliance with the requirement of Section 249(1)(a) of the Act and held that appeal of the assessee is not maintainable.
Further aggrieved, the assessee preferred appeal before the Tribunal.
Ld. Counsel for the assessee submitted that no opportunity whatsoever was given to the assessee to support its appeal on law and on facts. It was pointed out that the assessee filed a letter on 19.09.2018 stating that the paper book and written submissions were under preparation, and therefore, the case should be adjourned.
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However, the CIT(A) did not pay any heed to such request and passed the order on 28.09.2018 without giving any effective opportunity. The case of the assessee was neither discussed on merit nor the principles of natural justice has been followed. The non compliance of requirement of Section 249(1)(a) was alleged without verifying the relevant fact. It was thus contended that the disposal of the appeal by the CIT(A) was in infringement of principles of natural justice and thus requires to be set aside for fresh adjudication in accordance with law.
On behalf of the Department, an adjournment was pressed for defending the action of the CIT(A).
We have carefully considered the submissions and the order of the CIT(A) as well as the assessment order. On the face of it, the CIT(A) has adopted a laidback approach and dismissed the appeal of the assessee in limine by way of a cryptic order alleging non compliance of Section 249(1)(a). It appears that first appellate order has been passed in undue haste which runs counter to the purpose inbuilt for fair opportunity. The action of the CIT(A) prima facie impinges upon principles of natural justice and thus cannot be countenanced in law. We thus accordingly set aside the action of the CIT(A) and restore the matter back to the file of the CIT(A) for denovo adjudication of the first appeal in accordance with law after ascertaining the compliance with the requirement of Section 249(1)(a) of the Act. Needless to say, proper and effective opportunity shall be given to the assessee while adjudicating the appeal. It shall be open to the assessee to demonstrate the compliance of Section 249(1)(a) of the Act. The assessee however is also cautioned to dutifully comply with the hearings before the CIT(A) for disposal of the appeal. With this direction, we set aside
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the matter back to the file of the CIT(A) without going into the substantive grounds of appeal.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 09/02/2022.
Sd/- Sd/- [KUL BHARAT] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 09/02/2022 Prabhat