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Facts
The assessee, a land and building developer, filed its return for AY 2014-15. During scrutiny assessment, the Assessing Officer treated Rs.35,93,276/- received as factory shed/flat rent as "house property income" due to the assessee's unsatisfactory explanation, adding it to total income. The assessee's subsequent appeal to the CIT(A) was dismissed ex-parte as no submissions were filed.
Held
The ITAT set aside the ex-parte order of the Ld. CIT(Appeals) and remitted the matter back to the CIT(A) for re-adjudication. It directed the CIT(A) to provide one more opportunity of being heard to the assessee, cautioning the assessee to cooperate with the proceedings, failing which the CIT(A) could pass an appropriate order based on available records.
Key Issues
Whether rental income should be treated as "house property income" and whether the assessee should be granted another opportunity to present its case before the CIT(A), given the dismissal of the appeal ex-parte.
Sections Cited
143(2), 142(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘SMC’ BENCH, KOLKATA
Before: Shri Duvvuru RL Reddy, Vice-(KZ)
Assessment Year: 2014-2015 Chatterjee Resource Developers Pvt. Limited,……………………………………….Appellant C/o. S.N. Ghosh & Associates, Advocates, 2, Garstin Place, 2nd Floor, Suite No. 203, Off. Hare Street, Kolkata-700001 [PAN:AAECC2797F] -Vs.- Income Tax Officer,…………………………...Respondent Ward-11(1), Kolkata, Aayakar Bhawan, 6th Floor, P-7, Chowringhee Square, Kolkata-700069 Appearances by: Shri Somnath Ghosh, Advocate, appeared on behalf of the assessee Ms. Madhumita Das, Addl. CIT, appeared on behalf of the Revenue Date of concluding the hearing: January 09, 2025 Date of pronouncing the order: January 31, 2025 O R D E R
The present appeal is directed at the instance of assessee against the order of ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 16th February, 2023 passed for Assessment Year 2014-15.
Brief facts of the case are that the assessee is land and building developer, which filed its return of income electronically for the assessment year 2014-15 on 10th September, 2014 declaring total income of Rs.2,83,600/-. The case was selected for scrutiny through CASS and on the basis of AIR information, notice under section 143(2) of the Act dated 28.08.2015 was issued and served upon the assessee. Subsequently notice under section 142(1) of the Act was issued on 18.05.2016 and served on the assessee on 31.05.2016 calling for certain details. In response of the notice, the ld. A.R. on behalf of assessee appeared and produced the relevant details and the same were examined and test checked by the ld. Assessing Officer. Thereafter a show-cause notice was issued to the assessee on 16.09.2016 asking the assessee to explain the source of revenue of Rs.35.93.276/- received from factory shed/flat rent and also explain why the income received from rent should not be treated as house property income. Since there was no satisfactory explanation from the side of assessee, the ld. Assessing Officer treated the rental income as house property income and added the same to the total income of the assessee and assessed taxable income at Rs.25,15,290/-. On being aggrieved, the assessee preferred an appeal before the ld. CIT(Appeals).
The ld. CIT(Appeals) has given several opportunities to the assessee to substantiate his claim, but the appellant did not file the written submissions and did not represent the case before the
On being aggrieved, the assessee preferred an appeal before the ITAT.
At the time of hearing, it was the submission of the ld. Counsel for the assessee that ld. CIT(Appeals) passed an ex-parte order by upholding the order passed by the ld. Assessing Officer. Therefore, he pleaded to delete the addition made by the ld. Assessing Officer as confirmed by the ld. CIT(Appeals).
At the outset, ld. D.R. brought to my notice that the assessee did not produce the relevant documents as asked by the ld. Assessing Officer during the assessment proceedings. Therefore, the ld. Assessing Officer passed the assessment order assessing the taxable income at Rs.25,15,290/-. Thereafter the assessee preferred an appeal before the ld. CIT(Appeals). The ld. CIT(Appeals) has given many opportunities to the assessee and the assessee neither filed written submission nor any evidence before the ld. CIT(Appeals). He further submitted that before the ITAT, the assessee did not substantiate its claim. Therefore, he pleaded to uphold the orders passed by the revenue authorities.
I have heard the rival submissions and perused the material available on record. Considering the facts and circumstances of the case, I am inclined to set aside the order passed by the ld. CIT(Appeals) in order to meet the principle of natural justice, and (A.Y. 2014-2015) Chatterjee Resource Developers Pvt. Limited remit the matter back to the file of ld. CIT(Appeals) with a direction to provide one more opportunity of being heard to the assessee. At the same breath, we also hereby caution the assessee to promptly co-operate with the proceedings before the Ld. CIT(Appeals) failing which the Ld. CIT(Appeals) shall be at liberty to pass appropriate order in accordance with law and merits based on the materials available on the record. Thus, the grounds raised by the assessee are allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 31/01/2025.