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Income Tax Appellate Tribunal, “A” BENCH, PUNE
Before: SHRI R.K. PANDA & MS. ASTHA CHANDRA
आदेश / ORDER
PER ASTHA CHANDRA, JM :
The appeal filed by the assessee is directed against the order dated 21.08.2024 of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [“CIT(A)”] pertaining to Assessment Year (“AY”) 2014-15.
The assessee has raised the following grounds of appeal :
1. The order of the learned Commissioner of Income tax (Appeals) [CIT(A)] confirming the order of the learned assessing authority (AU) denying the exemption under section 54 of Rs. 37,72,987 is incorrect.
2. In the order passed by the learned CIT(A), the only reason stated is that the appellant has not furnished written submissions or evidence. The grounds of appeal furnished were not examined.
3. During the reassessment proceedings, the AU had reproduced the timeline of property transactions entered by the appellant. It is evident that the AU has systematically examined the claim of the appellant. This is not a fresh claim of deduction raised before the learned CIT(A). It is humbly reiterated that the facts and the section 54 claim of Rs. 37,72,987 was never under dispute. The only issue was that deduction under section 54 was not claimed in the return of income.
4. The appellant had relied upon the legal precedents and CBDT circular wherein it was held that the genuine exemption/deduction or credit for TDS not claimed by the assessee must be granted by the assessing authorities. However, the ratio of these binding legal precedents and CBDT circular were not considered while dismissing the appeal.
5. Prayer: The appellant humbly prays before the Hon'ble Income tax Appellate Tribunal that: (a) the order of the learned CIT (Appeals) be set aside based on the reliance of the circular and the legal precedents; (b)section 54 of the Act being the beneficial provision, it should be construed liberally to advance the object of giving the benefit to the Appellant; (c) without prejudice, merely because of the technical breach/ non- compliance in reporting the capital gains exemption in the return of income, the benefit due to the Appellant by the legislature cannot be denied particularly when substantive compliance was made and verified by the AU; (d) the ground on which the section 54 exemption was denied citing that the claim was not made in the return is against the principles of natural justice. This contention was not raised in the show cause notice and hence, the appellant did not have an opportunity to make any submission. (e) the Appellant further craves leave and reserves its right to vary. amend, alter and/or add to the grounds of appeal and to produce such oral and documentary evidence and file such compilation of documents as may be necessary at the time of hearing of the appeal. Considering the above factual and legal submissions, the appellant prays that the exemption under section 54 of the Act of Rs. 37,72,987 be allowed and the interest and penalty be dropped.”
3. Briefly stated, the facts of the case as carved out from the statement of fact filed by the assessee are that the assessee is an individual who is a non-resident since the year 2015 and has been employed with MNE’s based out of the USA and South Korea. For AY 2014-15, reassessment proceedings were initiated u/s 148 of the Income Tax Act, 1961 (the “Act”) and accordingly, statutory notice(s) were issued and served upon the assessee. Post filing the return of income and reply to the show cause notice and verification of submissions, the Assessment Unit, Income Tax Department (“AO”) completed the assessment vide order dated 27.05.2023 disallowing the claim of exemption u/s 54 of the Act amounting to Rs.37,72,987/- for the reason that the assessee had not made such claim by filing the return of income u/s 139(1) of the Act.
4. Aggrieved, the assessee filed appeal before the Ld. CIT(A)/NFAC. Before the Ld. CIT(A)/NFAC there was non-compliance of notice(s) of hearing and the Ld. CIT(A)/NFAC dismissed the appeal of the assessee for non-prosecution and endorsing the findings of the Ld. AO in the absence of any meaningful and worthwhile submissions/documentation furnished by the assessee.
Dissatisfied, the assessee is in appeal before the Tribunal and all the grounds of appeal relate thereto.
The Ld. AR submitted that the assessee’s non-compliance to the notice(s) issued by the Ld AO/CIT(A) was not intentional. He submitted that given an opportunity the assessee is in a position to substantiate its case before the Ld. CIT(A) by filing the requisite submissions/ documentary evidences in support of his various grounds of appeal raised before the Ld. CIT(A). He therefore prayed that the matter may be restored to the file of the Ld. CIT(A) to decide the impugned issues afresh on merits after affording an opportunity of being heard to the assessee.
The Ld. DR had no objection to the above request of the Ld. AR.
We have heard the Ld. Representatives of the parties and perused the material on records. The appellate order reveals that the Ld. CIT(A) has applied the decision in the case of CIT Vs. B.N. Bhattarcharjee and Another, 10 CTR 354 (SC) and various other cases cited therein and dismissed the appeal of the assessee for non-prosecution. No doubt, the Ld. CIT(A) may decide the appeal ex-parte where the assessee does not prosecute his appeal inspite of several opportunities. None-the-less, he has to adhere to the legislative mandate enshrined in sub-section (6) of section 250 of the Act which requires him to state the points for determination, the decision thereon and the reason for the decision. We observe that the Ld. CIT(A) has passed the order in concurrence of the order of the Ld. AO without himself going into the merits of the case. Thus, in our view, his order is in violation of the provisions of section 250(6) of the Act.
On the facts and in the circumstances of the case, we deem it fit, in the interest of justice and fair play, to set aside the order of the Ld. CIT(A)/NFAC, Delhi and restore the matter back to his file for adjudication afresh and pass speaking order on merits after allowing reasonable opportunity of being heard to the assessee who shall provide the requisite support in terms of submitting the relevant documents/evidence as may be required/called upon without seeking adjournment under any pretext unless for sufficient cause, failing which the Ld. CIT(A) shall be at liberty to pass appropriate order as per law. We order accordingly.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 30th April, 2025.