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Facts
The Assessing Officer (AO) made disallowances on account of indexation cost and a deduction claimed under Section 54, citing the assessee's failure to provide evidence for improvement costs and the property purchase deed. The CIT(A) dismissed the assessee's appeal due to non-compliance.
Held
The Tribunal held that the assessment order was ex-parte and allowed the assessee to raise additional grounds, including challenges to the notice and sanction. The case was remanded to the AO for a fresh decision, with directions for the assessee to comply with notices and provide submissions.
Key Issues
Whether the disallowances made by the AO were justified and whether the CIT(A) erred in dismissing the appeal without considering the merits, especially when additional grounds challenging the notice and sanction were raised by the assessee.
Sections Cited
250, 147, 144, 144B, 54, 151, 148
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, BANGALORE BENCH “A”, BANGALORE
Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI WASEEM AHMED
Per : Narender Kumar Choudhry, Judicial Member:
This appeal has been preferred by the Assessee against the order dated 31.01.2025, impugned herein, passed by the National Faceless Appeal Center (NFAC)/ Ld. Commissioner of Income Tax (Appeals) (in short Ld. Commissioner) u/s 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2016-17.
In the instant case, the Assessing Officer (AO) vide assessment order dated 12.03.2024 u/s 147 r.w.s 144 r.w.s 144B of the Act has made the disallowances of Rs.1,49,39,158/- and Rs.10,57,496/- respectively on account of indexation cost and deduction claimed u/s 54 of the Act, as the Assessee failed to submit any evidence for the payment of Rs.2,16,97,020/- being payment on account of cost of improvement and the purchase deed of the property.
The Assessee, being aggrieved, challenged the said disallowances before the Ld. Commissioner, however, despite of affording various opportunities, eventually made no compliance and therefore in the constrained circumstances, the Ld. Commissioner dismissed the appeal of the Assessee in limine and/or by way of a cryptic order and/or without considering the merits of the case in the context of the assessment order. We further observe as demonstrated by the parties that more or less the assessment order is also an ex-parte and the Assessee has also raised some additional grounds of appeal such as sanction accorded by the competent authority as per section 151 of the Act and therefore the Assessee has prayed that in the interest of justice the case may be remanded to the file of the AO for decision afresh.
On the contrary, the Ld. D.R. refuted the claim of the Assessee but not the request of the Ld. Counsel for the Assessee for remanding the case to the file of the AO.
Considering the peculiar fact that the Assessee has made a prayer for admission of additional grounds of appeal including challenging the notice u/s 148 of the Act as well as sanction granted u/s 151 of the Act and therefore grounds raised by the Assessee goes to the roots of the case and thus considering the peculiar facts and circumstances in totality, for just and proper decision of the case, equitable relief, fair play and substantial justice, we are inclined to remand the instant case to the file of the AO being an exception case, for decision afresh, suffice to say by affording an reasonable opportunity to the Assessee to raise legal grounds as raised before us and of being heard.
We also deem it appropriate to direct the Assessee to comply with the notices to be issued by the AO and file the relevant submissions and documents as would be essentially required for proper and just decision of the case. We also clarify that in case of subsequent default, the Assessee shall not be entitled for any leniency. Thus, the case is remanded to the file of the AO for decision afresh accordingly.
In the result, the Assessee’s appeal is allowed in the said terms for statistical purposes. Order pronounced in the open Court on 13.08.2025.