DURGA PRASADA RAO VATTEM,HYDERABAD vs. INCOME TAX OFFICER, WARD-13(3), HYDERABAD

Brief facts of the case are that assessee has filed the return of income for the AY 2016-17 on 06/07/2016 admi�ng a total income of Rs. 3,98,110/- which includes the income from ‘salary’ and ‘income from other sources’. As per the informa�on available with the Department, the learned Assessing Officer observed that during the Assessment Year under considera�on, the assessee made certain transac�ons in a scrip namely Stampede Capital Ltd, which was iden�fied as penny scrip and has booked fic��ous profit of Rs. 28,87,708/-.

Therea�er, the case was re-opened U/s. 147 of the Act and the in reply to the statutory no�ces, the assessee furnished the informa�on as called for by the learned Assessing Officer from �me to �me. A�er considering the submissions of the assessee, the learned Assessing Officer observed that though the assessee states that he has purchased the share through demat account, the assessee has not provided proof of purchase of the share and assessee claimed exemp�on on Long Term Capital Gain (“LTCG”) U/s. 10(38) of the Act on which Security Transac�on Tax (“STT”) was paid.

Thus, the learned Assessing Officer was of the opinion that the whole scheme is just a set up to bring unaccounted income in the books by taking the share of tax free LTCG on shares which is not admi�ed in the return of income. Thus, learned Assessing Officer assessed the income of the assessee at Rs. 35,85,818/- and passed the assessment order U/s. 147 read with sec�on 144B of the Act, dated 30/03/2022. While passing the assessment order, the learned AO also ini�ated the penalty proceedings. Aggrieved, assessee preferred an appeal before the learned CIT(A). 5. In appeal, learned CIT(A) passed ex-parte order and dismissed the appeal of the assessee by holding that the assessee is not interested to Page 2 of 5 prosecu�ng the appeal. Aggrieved by the order of the learned CIT(A), the assessee is in appeal before the Tribunal.

When the ma�er is called, neither the assessee nor any authorised representa�ve entered appearance. It could be seen from the record that the no�ces were issued to the address given in Form No.

If the assessee is available in such address, such no�ce should have been served on the assessee. If for any reason, the assessee is not available there, it is for the assessee to make arrangements for service of such no�ce by furnishing the address where the assessee would be available, or to deliver it to some authorised person, or by making request to the postal department to detain the mail �ll the assessee claims the same. Non-service of no�ce in this case is solely a�ributable to the conduct of the assessee and except the address given in the Form 36, we do not find any other orders to serve the no�ce. There is no point in issuing no�ce a�er no�ce to the same address. In these circumstances, we find no op�on but to proceed to hear the counsel for Revenue and decide the ma�er on merits basing on the material available on record.

At the outset, Learned DR brought it to our no�ce that the assessee failed to appear before the learned CIT(A) to get the ma�er disposed of on merits and therefore, the learned CIT(A) had to proceed exparte and dispose of the appeal.

On a perusal of record, we find that the learned CIT(A), looking at the absence of the assessee dismissed the appeal in limine without adver�ng to the facts of the case or the points for considera�on nor the reasons for reaching the conclusion to dismiss the appeal.

Requirement of law under sec�on 250 (6) of the Act is that the order of the Commissioner (Appeals) disposing of the appeal shall be in wri�ng and shall state the points for determina�on, the decision thereon and the reason for the decision. Even in the absence of the assessee, it is always open for the learned CIT(A) to deal with the ma�er on merits instead of dismissing the same in limine. In the instant case also, the Page 3 of 5 learned CIT(A) could have adverted to the points for determina�on and decided the same by assigning cogent reasons. Impugned order is conspicuous for its absence.

Having regard to the facts and circumstances of the case, we are of the considered opinion that the impugned orders do not comply with the requirement of Sec�on 250(6) of the Act and cannot be sustained.

With this view of the ma�er, we set aside the impugned order and restore the issue to the file of the learned CIT(A) to decide the issue afresh. We direct the assessee to co-operate with the learned CIT(A) in ge�ng the ma�er disposed of on merits, without seeking any adjournments and the learned CIT(A) to take a fresh look at the ma�er, a�er affording a reasonable opportunity of being heard to the assessee. Grounds are accordingly treated as allowed for sta�s�cal purposes.