SRI VELURI MADHUKAR,RAJAHMUNDRY vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1(1), RAJAHMUNDRY

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ITA 321/VIZ/2018Status: DisposedITAT Visakhapatnam22 March 2019AY 2008-20095 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that while the CIT(A) had given opportunities, the appeal should have been decided on merits even if ex-parte. Therefore, the matter was remitted back to the CIT(A) for adjudication on merits.

What were the facts?

The Assessing Officer (AO) determined capital gains based on a higher property valuation than admitted by the assessee, after referring the valuation to the DVO. The assessee's appeal before the CIT(A) was dismissed for non-prosecution due to non-representation.

What were the issues?

Whether the CIT(A) should decide an appeal on merits even when dismissed for non-prosecution, and if the property valuation for capital gains was correctly determined.

Which sections of the Income-tax Act were involved?

Section 50C

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Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM

Before: SHRI V. DURGA RAO& SHRI D.S. SUNDER SINGH

Pronounced: 22.03.2019

PER D.S. SUNDER SINGH, Accountant Member: This appeal is filed by the assessee against the order of the Commissioner of Income Tax (Appeals) [CIT(A)]-12, Hyderabad vide Appeal No. 10290/2017-18 dated 21.03.2018 for the Assessment Year (A.Y.) 2008-09.

2 I.T.A. No.321/Viz/2018 Sri Veluri Madhukar, Rajahmundry

2.

All the grounds of appeal are related to the valuation of property for the purpose of section 50C of the Income Tax Act, 1961 (‘Act’ in short).

3.

Brief facts of the case are that the assessee filed the return of income declaring total income of Rs.6,95,250/- and the assessment was completed on total income of Rs.11,03,450/- and the Assessing Officer(AO) raised the demand of Rs.2,03,990/-.During the assessment proceedings, the AO found that there was a difference in valuation of property adopted by SRO and the sale consideration admitted by the assessee. Against the market value of Rs.43,80,750/-, the sale consideration admitted was Rs.25,00,000/-. Therefore, the AO referred the valuation to the valuation cell, wherein the DVO had valued the property at Rs.37,23,600/-. The AO called for objections of the assessee and after considering the objections filed by the assessee in respect of the valuation of the property, the AO rejected the objections and adopted the value as determined by the DVO at Rs.37,23,600/- and taxed 1/3rd share of Rs.37,23,600/- at Rs.12,41,200/- for the purpose of capital gains.

5.

Against the order of the AO, the assessee went on appeal before the CIT(A) and the Ld.CIT(A) issued notice to the assessee on 4 occasions on

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20.11.2017, 01.02.2018, 23.02.2018 and 15.03.2018. However, none represented on behalf of the assessee. Therefore, the Ld.CIT(A) dismissed the appeal for non-prosecution.

6.

Against the order of the Ld.CIT(A), the assessee filed appeal before this Tribunal. During the appeal hearing, the Ld.AR argued that the Ld.CIT(A) dismissed the appeal of the assessee without going into the merits inspite of raising various grounds, therefore requested to remit the matter back to the file of the Ld.CIT(A) for adjudication of appeal on merits.

7.

On the other hand, the Ld.DR supported the orders of the lower authorities.

8.

We have heard both the parties and perused the material placed on record. We observed from the Ld.CIT(A) order that the Ld.CIT(A) has given sufficient opportunity to the assessee before disposal of appeal and the assessee did not respond to the notices given by the Ld.CIT(A). We cannot appreciate the attitude of the assessee for not responding to the notices issued by the Ld.CIT(A). However, though the Ld.CIT(A) permitted to pass the order ex-parte, she has to examine the case on merits and decide the

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appeal ground-wise on merits. This view is supported by the decision of Hon’ble Bombay High Court in the case of Commissioner of Income Tax (Central), Nagpur Vs. Premkumar Arjundas Luthra (HUF), 69 taxmann.com 407. Therefore, we are of the considered opinion that the issue needs to be remitted back to the file of the Ld.CIT(A).Accordingly, we remit the matter back to the file of the CIT(A) and direct the Ld.CIT(A) to decided the appeal on merits after giving opportunity of being heard to the assessee.

9.

In the result, the appeal of the assessee is allowed for statistical purpose.

Order pronounced in the open court on 22nd March, 2019.

Sd/- Sd/- (िी.दुगाा राि) (धड.एस. सुन्दर धसंह) (V. DURGA RAO) (D.S. SUNDER SINGH) न्याधयक सदस्य/JUDICIAL MEMBER लेखा सदस्य/ACCOUNTANT MEMBER नवशधखधपटणम /Visakhapatnam नििधंक /Dated :22.03.2019 L.Rama, SPS

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आदेश की प्रतितिति अग्रेतिि/Copy of the order forwarded to:- 1. निर्धाऩरती/ The Assessee- Sri Veluri Madhukar, S/o Smt.Surya Prakasam D.No.80-32-7, Sarada Nagar, A.V.Apparao Road, Rajahmundry 2. रधजस्व/ The Revenue – Asst.Commissioner of Income Tax, Circle-1(1) Rajahmundry 3. The Pr.Commissioner of Income Tax, Rajahmundry 4. Commissioner of Income-Tax (Appeals)-12, Hyderabad 5. तिभागीय प्रतितिति, आयकर अिीिीय अतिकरण, तिशाखािटणम /DR, ITAT, Visakhapatnam 6.गार्डफ़ाईि / Guard file आदेशािुसार / BY ORDER // True Copy //

Sr. Private Secretary ITAT, Visakhapatnam

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