GAVINI GIRIDHARA MURARI,TIRUPATI vs. ITO., WARD-1(1), TIRUPATI

The assessee has raised the following grounds of appeal:

The facts of the case, in brief, are that the assessee is an individual. The case of the assessee was reopened for the assessment year 2016-17 under section 147 of the Income Tax Act, 1961 (“the Act”) and accordingly notice under section 148 of the Act was issued on 20.03.2023 by the Learned Assessing Officer (“Ld. AO”). However, in response to the said notice, the assessee did not file any return of income. The assessee also failed to respond to the subsequent statutory notices issued by the Ld. AO. From the information available on record, the Ld. AO noticed that during the year under consideration the assessee had transferred a capital asset for a consideration of Rs.3,18,000/- and had also sold two immovable properties for a total consideration of Rs.58,83,000/-.

Aggrieved by the order of the Ld. AO, the assessee filed an appeal before the Ld. CIT(A). However, even before the Ld. CIT(A), the assessee did not respond to the notices issued. Accordingly, the Ld. CIT(A) dismissed the appeal of the assessee ex parte.

Aggrieved by the order of the Ld. CIT(A), the assessee is now in appeal before this Tribunal. On the date of hearing before us, none appeared on behalf of the assessee. Therefore, after hearing the Learned Departmental Representative (“Ld. DR”), we proceed to adjudicate the appeal on the basis of material available on record.

The Ld. DR submitted that the assessee has consistently failed to respond to the notices issued at all stages i.e., before the Ld. AO, before the Ld. CIT(A), and even before this Tribunal. He therefore prayed that the appeal of the assessee may be dismissed for non-appearance and for lack of prosecution.

We have carefully considered the submissions of the Ld. DR and gone through the assessment order as well as the order of the Ld. CIT(A). It is noted that the assessment has been framed ex parte by Ld. AO due to non-prosecution by the assessee. On a perusal of the assessment order, we find that the Ld. AO has added the entire sale proceeds of the capital asset amounting to Rs.3,18,000/- as well as the entire sale consideration of immovable properties amounting to Rs.58,83,000/-as income in the hands of the assessee without allowing any deduction on account of cost of acquisition or examining whether any capital gains actually arose. The assessment, therefore, lacks proper computation of income in accordance with the provisions of the Act. In our considered view, even though the assessee did not cooperate before the lower authorities or before us, the assessment requires proper verification of the factual position and examination of the cost of acquisition and other relevant details which go to the root of the computation of income. We are of the considered view that in the interest of substantial justice, one more opportunity ought to be provided to the assessee so that the correct tax liability can be determined. Dismissal of the appeal for non-appearance, in circumstances where the assessment itself requires re-examination on merits, may result in undue hardship. Accordingly, we deem it appropriate to set aside the orders of the lower authorities and restore the matter to the file of the Ld. AO for de novo adjudication. The Ld. AO shall verify the details of the capital asset and immovable properties sold, examine the cost of acquisition and other relevant material, and Page 4 of 5 compute the income strictly in accordance with law. The assessee shall be afforded a fair and adequate opportunity of being heard and shall cooperate in the proceedings. Failure to do so may entitle the Ld. AO to proceed in accordance with law.

In the result, the appeal of the assessee is allowed for statistical purposes.