ELANGO ENGINEERING PVT. LTD.,COIMBATORE vs. DCIT, CORPORATE CIRCLE-1,, COIMBATORE

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ITA 314/CHNY/2025Status: DisposedITAT Chennai28 April 2025AY 2012-13Bench: SHRI MANU KUMAR GIRI (Judicial Member), SHRI S.R.RAGHUNATHA (Accountant Member)3 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal restored the appeal to the CIT(A) for fresh adjudication, citing principles of natural justice and the assessee's claim of not receiving a hearing notice. The assessee was directed to deposit Rs. 10,000 as costs and substantiate its case with evidence.

What were the facts?

The assessee sold an immovable property for Rs. 8.52 crores, which was not disclosed in the return of income. The Assessing Officer (AO) computed long-term capital gains, but the Principal Commissioner of Income Tax (PCIT) set aside the assessment to re-examine the claim for deduction under Section 54G.

What were the issues?

Whether the CIT(A) erred in passing an ex-parte order without providing sufficient opportunity of being heard to the assessee, and whether the assessee is entitled to a deduction under Section 54G.

Which sections of the Income-tax Act were involved?

Section 54G,Section 133,Section 147,Section 148,Section 143(3),Section 263

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI

Before: SHRI MANU KUMAR GIRI & SHRI S.R.RAGHUNATHA

Hearing: 24.04.2025Pronounced: 28.04.2025
1.

The captioned appeal filed by the assessee is directed against the order of the Ld. Ld. Commissioner of Income Tax (Appeals) (NFAC) Delhi [CIT(A)] dated 12.11.2024 for Assessment Year 2012- 13.

2.

Brief facts are as follows:

The assessee (Formerly known as M/s. IRIS Engineering Industries Ltd. and Ravilla Aerospace Industries Ltd) now known as Elango Engineering Private Ltd., had sold its immovable property to M/s.Lakhshmi Machine Works Ltd. for a consideration of Rs.8.52 crores, which was not disclosed in return of income. During the course of survey u/s.133 of the Act based on the material impounded, the case was reopened u/s.147 of the Act by issuing notice u/s.148 of the Act on the ground that there is an escapement of income chargeable to tax in respect of land sold by the assessee to M/s.Lakshmi Machine Works Ltd. During the course of assessment proceedings, it was noted by the AO that assessee company has received Rs.8.52 crores as sale consideration from M/s.Lakshmi Machine Works Ltd. and computed the long term capital gain at Rs.98,92,494/-. However, the PCIT-1, Coimbatore vide order dated 27.03.2018 u/s.263 of the Act upon review of the case set aside the assessment order to examine the claim of section 54G afresh. Consequently, the AO vide order passed u/s.143(3) r.w.s. 263 of the Act dated 31.12.2018 disallowed the deduction claimed u/s.54G of the Act, as the assessee had ceased its business and there was no continuity in business.

3.

Aggrieved, the assessee challenged order of assessment passed u/s.143(3) r.w.s 263 of the Act before the CIT(A). However, the CIT(A) dismissed the appeal ex-parte filed by the assessee. Thus, the assessee is now in appeal before us.

4.

We have heard both the parties and perused records. Before us, the ld. Counsel for assessee submitted that assessee has not received notice of hearing and also the CIT(A) has passed an ex- parte order without providing sufficient opportunity of being heard. Therefore, he pleaded that the assessee may be provided an adequate and proper representation time to file evidence and documents, if any, to substantiate his case before the CIT(A). The ld.DR stated that the assessee is habitual defaulter in appearing before the appellate authority hence, no lenient view is to be taken in this case and prayed for dismissal of the appeal.

5.

Though, we concur with the submissions of Ld. Sr. DR however, keeping in mind the principle of natural justice and grant another opportunity of hearing to the assessee. We also find that assessee has not represented before the ld.CIT(A) despite notices for the reasons stated above. Therefore, the impugned order is set aside and the appeal is restored back to the file of CIT(A) for fresh adjudication, after affording proper opportunity of hearing to the assessee, subject to cost of Rs.10,000/- which shall be deposited by the assessee within 30 days from the date of receipt of the order to ‘Tamil Nadu State Legal Services Authority’ at Hon’ble High Court of Madras. The proof of the cost deposit will be furnished by the Assessee before CIT(A). The assessee is directed to substantiate its case with all evidence and documents, if any, forthwith without any fail, failing which ld. CIT(A) shall be at liberty to proceed with proceedings on merits as per law. The ld. counsel, who appeared also assured the bench that he will ensure that the assessee will prosecute the case diligently.

6.

In the result, the appeal filed by the assessee is allowed for statistical purpose. Order pronounced in the open court on 28th April, 2025

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