SHRI. NAGARAJ VINAY,CHIKKABALLAPUR vs. INCOME TAX OFFICER, WARD- 1, CHIKKABALLAPUR

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ITA 497/BANG/2020Status: DisposedITAT Bangalore01 December 2021AY 2014-155 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) should have decided the appeal on merits ex-parte, rather than dismissing it for non-prosecution. The case was remitted back to the CIT(A) for a decision on merits after providing adequate opportunity of hearing to the assessee.

What were the facts?

The assessee's appeal before the CIT(A) was dismissed for want of prosecution. The assessee had raised several grounds challenging additions made by the AO, including those related to unexplained investment, property purchase below stamp duty value, gifts received, insufficient drawings, and disallowance of depreciation and interest on a car.

What were the issues?

Whether the CIT(A) was justified in dismissing the appeal for want of prosecution instead of deciding it ex-parte on merits. Whether the additions made by the AO under various sections were valid.

Which sections of the Income-tax Act were involved?

Section 69,Section 56(2)(vii)(b),Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH : BANGALORE

Before: SHRI CHANDRA POOJARI & SHRI GEORGE GEORGE K

For Appellant: Shri L Bharath, C.A
For Respondent: Shri Chetan R, Addl. CIT (DR), Shri L Bharath, C.A
Hearing: 01.12.2021Pronounced: 01.12.2021

O R D E R Per Chandra Poojari, Accountant Member This appeal by the assessee is directed against the order of the CIT(A)-13 dated 24/1/2020.

2.

The assesse raised the following grounds:- “1. The order of the Learned Assessing Officer ('LAO') and Learned Appellate Authority ('LAA') is bad in law to the extent it is prejudicial to the Appellant.

2. The LAA erred in concluding the appeal proceedings ex parte without:

a. providing proper final opportunity of being heard to the Appellant; and b. without adjudicating the grounds of appeal preferred by the Appellant on merits and on the basis of the substantive submissions with evidences placed before the LAO.

Without prejudice to above grounds 1 and 2 , the following grounds are urged before the Hon Bench:

3. The LAO erred in making an addition under section 69 of the Act of Rs.1,31,79,172/- on the basis that the sources for the investment in the residential property at Residency Road was not satisfactorily explained by the Appellant. The LAO ignored the substantial submissions along with evidence of proper explainable sources placed before him during the assessment proceedings. The LAA erred in confirming the said order of the LAO without considering that these facts and evidences made before the LAO;

4. The LAO erred in making an addition under section 56(2)(vii)(b) of the Act of Rs.1,11,08,571 on the basis that the residential property at Residency Road has been purchased at a price less than the stamp duty value of the property. The LAA erred in confirming the said order of the LAO without considering that the stamp duty discharged was higher than that applicable and that the stamp duty value was in fact lower than that computed by the LAO.

5. The LAO erred in treating a sum of Rs.63,47,393/- being gifts received during marriage of the Appellant as unexplained income under section 68 of the Act without. Here the LAO erred in not giving weightage to the details filed by the Appellant in relation to the identity of the persons who gave the gifts to the Appellant. The LAA erred in confirming the order of the LAO.

6. The LAO erred in arbitrarily making addition towards insufficient drawings. The LAO erred in not noticing that the total drawings of the family of Rs.6,15,219/-. The LAO failed to consider the fact the Appellant was staying with the family. The LAA erred in casually confirming the addition without verifying the details on record.

7. The LAO erred in disallowing arbitrarily a sum equivalent of 50% of the depreciation on motor car of Rs.5,10,671/- on the basis that the car has been partially used by the Appellant for personally purposes. The LAA erred in confirming the action of the LAO.

8.

The LAO erred in disallowing arbitrarily a sum equivalent of 50% of the interest on loan on car of Rs.2,92,730/- on the basis that the car has been partially used by the Appellant for personally purposes. The LAA erred in confirming the action of the LAO.”

3.

The facts of the case are that the assessee being an individual filed his return of income for the asst. year 2014-15 on 4/11/2014 declaring a total income of Rs.55,75,900/- and agricultural income of Rs.14,97,019/. The AO concluded the assessment after making addition/disallowance to the tune of Rs.3,22,39,536/- and assessed the income at Rs.3,78,15,430/-.

4.

Against this, the assessee went in appeal before the CIT(A) who has given various notices to assessee, which is as follows:-

Date of Notice Date of hearing Remarks 25.03.2019 Filed Adjournment letter seeking hearing in May 2091. Case adjourned to 01.05.2019 &then to 06.06.2019 15.3.2019 06.06.2019 None appeared. Adjournment letter filed. Case adjourned to 24.6.2019 24.06.2019 None appeared. Adjournment letter filed. Case adjourned to 19.7.2019 23.07.2019 Adjournment letter filed. 16.10.2019 Filed Adjournment letter. 24.09.2019 05.12.2019 Filed Adjournment letter seeking 26.11.2019 hearing in fourth week of December 2019. Case adjourned to 26.12.2019 27.12.2019 Filed Adjournment letter. Case adjourned to 21.01.2020 21.01.2020 Filed Adjournment letter requesting for Feb 2020

5.

According to the CIT(A), the assessee’s counsel not interested to prosecute the appeal and accordingly, he dismissed the appeal for want of prosecution. Against this, the assessee is in appeal before us.

6.

We have heard both the parties and perused the materials on record. In the present case, the CIT(A) dismissed the appeal inlimine for want of prosecution. In our opinion, the CIT(A) ought to have decided the appeal on merit on ex-parte without dismissing the appeal for non prosecution, as he has the right to enhance the assessment. Accordingly, we remit the issue in dispute to the file of the CIT(A) to decide the appeal on merit after giving adequate opportunity of hearing to the assessee.

7.

In the result, the appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the open court on 1st December, 2021.

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