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Facts
The assessee filed a return of income declaring Rs. 5,71,430/-. The assessee claimed a deduction of Rs. 18,20,472/- towards the cost of improvement while computing Long Term Capital Gains on sale of property. The AO disallowed this claim in an ex-parte assessment order under Section 147. The CIT(A) also dismissed the assessee's appeal ex-parte for failing to submit documentary evidence.
Held
The Tribunal found that both the AO and CIT(A) had passed ex-parte orders. In the interest of justice, the Tribunal decided to give the assessee another opportunity to substantiate their claim before the AO.
Key Issues
Whether the assessee should be given another opportunity to present documentary evidence for the cost of improvement claim, when the AO and CIT(A) passed ex-parte orders.
Sections Cited
147, 144B, 144B
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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) 2018-19 arises out of the order of Learned Commissioner of Income Tax (NFAC), Delhi [hereinafter “CIT(A)”] dated 26.12.2024 in the matter of assessment framed by the Assessing Officer [AO] u/s. 147 r.w.s 144B of the Income-tax Act,1961 (hereinafter “the Act”) dated 25.03.2023.
When the appeal was taken up for hearing, none appeared on behalf of the assessee. Accordingly, the hearing was proceeded with the able assistance of Ld. D.R, Mr. M.P. Guruprasad, Addl. CIT.
The assessee has filed return of income declaring total income of Rs. 5,71,430/-. The assessee in the return of income originally filled had shown consideration on sale of property at Rs. 23 Lakhs and claimed deduction of Rs.18,20,472/- towards the cost of improvement while computing Long Term Capital Gains. The A.O in the ex-parte assessment order passed u/s. 147 of the Act, has disallowed the claim of cost of improvement and added Rs.18,20,472/- to the long-term capital gain. On appeal, Ld. CIT(A) has dismissed the appeal ex-parte, stating that the assessee failed to submit any documentary evidence in support of the claimed cost of improvement of Rs.18,20,472/-.
We find that the A.O and Ld. CIT(A) have passed orders ex- parte by disallowing the claim of cost of improvement of Rs.18,20,472/-. We are of opinion that assessee should be given with another opportunity of hearing to substantiate his claim before the A.O in support of the claim of cost of improvement in the interest of justice.
Accordingly, we set aside the orders passed by the A.O as well as Ld.
CIT(A) and remit the matter to the file of A.O to decide the issue denovo, after affording the assessee due opportunity of being heard, in accordance with law. We also direct the assessee to appear before the A.O 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 30th April, 2025.