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Facts
The assessee claimed deduction under Section 54 of the Income Tax Act on sale of a property. The Assessing Officer disallowed the deduction and the cost of improvement, and the CIT(A) confirmed this disallowance in an ex-parte order.
Held
The Tribunal noted that the CIT(A) passed an ex-parte order without proper opportunity to the assessee. Therefore, the matter was restored to the CIT(A) for fresh adjudication.
Key Issues
Whether the CIT(A) erred in passing an ex-parte order without granting a proper opportunity to the assessee to present their case.
Sections Cited
54, 147, 144, 144B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘D’ BENCH: CHENNAI
Before: SHRI SS VISWANETHRA RAVI & SHRI JAGADISH
आदेश / O R D E R
PER JAGADISH, A.M : Aforesaid appeal filed by the assessee for Assessment Year (AY) 2016-17 arises out of the order of Learned Commissioner of Income Tax, Appeal (NFAC), Delhi [hereinafter “CIT(A)”] dated 17.01.2025 in the matter of assessment framed by Ld. Assessing Officer [AO] u/s. 147 r.w.s 144 r.w.s 144B of the Income-tax Act, 1961 (hereinafter “the Act”) dated 28.03.2022.
The effective ground of appeal in this appeal of the assessee is against the disallowance of deduction claimed u/s. 54 of the Act of Rs. 1,37,00,000/- and cost of improvement of Rs. 22,29,881/-.
3. The assessee along with other six co-owners, sold a property at Survey No.52, Nemilchery, then Tambaram taluka now Alandur Taluka, Kancheepuram District, Tamil Nadu for sales consideration of Rs.14,50,00,000/ and claimed deduction u/s. 54 of the Act of Rs.1,37,00,000/- and cost of improvement of Rs.22,29,881/-. The A.O has disallowed the claim of deduction u/s. 54 of the Act on the ground that the assessee had deposited the capital gains beyond the prescribed time limit. The A.O has also disallowed the claim for the cost of improvement for lack of supporting documentary evidence. On appeal, the Ld. CIT(A) passed an ex parte order confirming the disallowance, stating that the assessee had failed to furnish any substantial evidence in support of the appeal. The Ld. CIT(A) also noted that no written submissions or documentary evidence were submitted.
4. At the outset, the Ld. Authorized Representative has submitted that the Ld. A.O/Ld. CIT(A) have passed the orders ex-parte without any discussion on merits, therefore one more opportunity be granted to the assessee to substantiate his case before the Ld. CIT(A).
On the other hand, the Ld. Departmental Representative (DR), relied on the orders of lower authorities.
We have heard the rival submissions, and perused the materials available on record. It is noted that the Ld. CIT(A) has passed ex parte order without adjudicating the issues involved and without affording proper opportunity to the assessee. We, therefore, restore the matter back to the file of Ld. CIT(A) to adjudicate the appeal afresh, subject to payment of costs of Rs.5,000/-. The same shall be paid by the assessee to Tamil Nadu State Legal Services Authority at Hon’ble High Court of Madras within a period of one month from the date of receipt of this order and produce the receipt before the Ld.
CIT(A). The Ld. CIT(A) shall pass a reasoned order after providing due opportunity of hearing to the assessee, in accordance with law.
We also direct the assessee to co-operate with the proceedings and appear before the Ld. CIT(A) on the date of hearing without fail. In view of the above, the appeal filed by the assessee is allowed for statistical purposes only.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced on 08th May, 2025.