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Facts
The assessee's income from house property was enhanced by the CPC under section 143(1). The assessee had claimed a certain income based on their 25% share in a showroom and deducted interest expenses. The CIT(A) dismissed the appeal, stating that the assessee failed to submit complete details of the addition.
Held
The Tribunal held that the CIT(A) failed to properly examine the case on merits. The CIT(A) had access to the Income Tax Department's portal and could have verified the order under section 143(1) instead of dismissing the appeal due to non-submission of documents.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal without deciding on merits when the assessee had provided supporting documents and the department had access to the information.
Sections Cited
143(1), 250, 250(4)
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Income Tax Appellate Tribunal, PUNE BENCHES “SMC” :: PUNE
Before: MS.ASTHA CHANDRA & DR.DIPAK P. RIPOTE
Assessment Year: 2012-13 Yogita Manoj Tatooskar, V The Income Tax Officer, 504, Anandban, CHS, Ashok s Ward-12(1), Pune. Path, Maharashtra – 411004. PAN: ABOPT9276A Appellant/ Assessee Respondent / Revenue Assessee by Shri Nikhil S Pathak – AR Miss Indira R Adkil – Add.CIT(DR) Revenue by Date of hearing 27/01/2025 Date of pronouncement 28/01/2025 आदेश/ ORDER
PER DR. DIPAK P. RIPOTE, AM:
This appeal filed by the assessee against the order of ld.Commissioner of Income Tax(Appeals)[NFAC], under section 250 of the Income Tax Act, 1961 for the A.Y.2012-13; dated 28.10.2024; emanating from assessment order under section 143(1) of the Income Tax Act, 1961 dated 15.11.2013. The Assessee has raised the following grounds of appeal :
1. The learned CIT(A) erred in dismissing the appeal of the assessee on the ground that the appellant had failed to submit the cause of addition made in the order passed u/s 143(1) without appreciating that the addition of Rs.8,42,258/- was made by the learned CPC on account of the income under the head house property' and the assessee had given the details of the addition made and hence, there was no reason to dismiss the appeal of the assessee on the ground that the cause of addition made in the intimation order could not be arrived at.
3] The learned CIT(A) erred in not appreciating that the addition made of Rs.8,42,258/- in respect of income from house property was not justified at all and the same should have been deleted.
4] The learned CIT(A) failed to appreciate that the rental income of the other co-owners was wrongly added in the hands of the assessee and hence, the addition made was not justified and the same may kindly be deleted.
4] The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal.”
Submission of ld.AR : 2. The ld.Authorised Representative(ld.AR) for the Assessee submitted that Assessee had filed Return of Income for A.Y.2012- 13 on 08.08.2012 declaring total income at Rs.12,74,791/-. Subsequently, CPC made adjustment in the Income from House Property vide order under section 143(1) of the Act, dated 15.11.2013. Ld.AR invited our attention to order under section 143(1) of the Act, wherein Assessee had claimed Income from House Property of Rs.1,30,752/-, but CPC enhanced it to Rs.9,73,010/-. Aggrieved by the order under section 143(1), Assessee filed appeal before the ld.CIT(A). Ld.AR took us through the order passed by ld.CIT(A) to demonstrate the documents filed by Assessee before ld.CIT(A), which has been reproduced by the ld.CIT(A) in his order which is as under : “5. Assessee is an owner of Showroom No.1, Kapil Society, Karve Nagar, Pune- 411052 to the extent of 25% along with other co-owners 1. Archana Achalkar [PAN:ACPPA9975R] 2. Preeti Kamat 3. Komal Sharma [PAN: AKGPS2495D] These other 3 co-owners are also holding 25% ownership in this property. In this year they have jointly earned Rs.1604300 as rent of this property. After deducting 30% amount i.e. Rs.481290 assessee's share is Rs.280752 which she has shown correctly in her ITR. From this income Rs.280752 she has deducted Rs.150000 as interest paid on her another self-occupied house property situated at 504, Ashok Path, 55/4, Erandawane, Pune 411004. The resultant net income shown by her Rs.130752 is correct and the addition made incorrectly by the CPC of Rs.842258 being incorrect may please be deleted and oblige.
In support of assessee's claim she is enclosing herewith following documents:-
A. Copy of Showroom purchase agreement B. Copy of Rent agreement C. Copy of Ledger extract of rental income as appearing in asseessee's books of account.
D. Copy of Form No.26AS indicating TDS on rental income of Rs.46025 only on her 1/4th share of rent.”
2.1 Ld.AR further invited our attention to ld.CIT(A)’s para 7.1 and 7.2 wherein ld.CIT(A) confirmed the order under section 143(1) of the Act, stating that Assessee failed to file complete copy of order under section 143(1) of the Act. Ld.AR submitted that Assessee had submitted copy of order under section 143(1) of the Act. Ld.AR also submitted that ld.CIT(A) also have access to the e-Portal of the Income Tax Department and he could have very- well seen the order under section 143(1) of the Act. Therefore, ld.AR submitted that there is no merit in the addition made under section 143(1) of the Act and may be deleted.
Submission of ld.DR : 3. ld.DR relied on the order of ld.CIT(A). However, we specifically asked ld.DR to explain the findings given in paragraph 7.1 and 7.2 of the order. However, ld.DRcould not answer.Ld.DR accepted that ld.CIT(A) should have decided the case on merit.
Findings & Analysis :
We have heard both parties and perused the records. In this case, an order under section 143(1), for A.Y. 2012-13 was passed on 15.11.2013. In the order under section 143(1) of the Act, Income from House Property was enhanced from Rs.1,30,752/- to Rs.9,73,010/-. The Assessee claimed before ld.CIT(A) that Assessee is one of the owners of a showroom wherein Assessee’s share is 25%. They have received Rent of Rs.16,04,300/-. After deducting 30%, Assessee’s share comes to Rs.2,80,752/-. Assessee has claimed deduction of Rs.1,50,000/- as interest earned on borrowed fund and then shown Income from House Property at Rs.1,30,752/-. Assessee had filed copy of Rent Agreement, Copy of Form-26AS, Copy of Showroom Purchase Agreement before the ld.CIT(A). Assessee claimed that Assessee’s share is only 1/4th and accordingly, assessee had claimed only 1/4th of TDS also.
4.1 Ironically, ld.CIT(A) has not discussed any of the facts claimed by assessee in the order, though ld.CIT(A) has reproduced the entire submission of the Assessee. Ld.CIT(A) in Para 7.1 and 7.2 held as under : “7.1 The appellant submitted first 5 pages, out of total pages of 17, of the order u/s.143(1) dated 15/11/2013. Nowhere in these 5 pages the reasons for adjustment/addition were available. As the same was not furnished, the appellant was asked specifically to produce the details vide hearing notice dated 01/10/2024. However, the appellant failed to submit the details. In the hearing notice the appellant was also asked to produce income tax returns to imbibe the issue. However, the appellant did not produce the same.
7.2 In absence of complete and clinching evidence, the cause of addition made in the impugned order u/s.143(1) dated 15/11/2013 can not be arrived at. In view of the same, the ground of appeal is dismissed.”
4.2 Thus, ld.CIT(A) held that since assessee failed to submit entire copy of Order under section 143(1) of the Act, the cause of addition made under section 143(1) by CPC cannot be arrived at and hence dismiss the appeal of the assessee. The order under section 143(1) has been passed by Income Tax Department. Ld.CIT(A) is part of the Income Tax Department. Ld.CIT(A) had access to the e-Portal of the Income Tax Department to check the entire order under section 143(1), however, instead of verifying on the portal, the ld.CIT(A) erroneously chose to dismiss the appeal of the assessee. Ld.CIT(A) under section 250(4) of the Act also have power to call report from Assessing Officer or can also direct Assessing Officer to do the necessary verification. But, ld.CIT(A) failed to do so. In these facts and circumstances of the case, we set-aside the order of the ld.CIT(A) to ld.CIT(A) for denovo adjudication. Ld.CIT(A) shall obtain copy of order under section 143(1) from the CPC or the Assessing Officer. Ld.CIT(A) shall provide opportunity of hearing to the Assessee. The Assessee shall file all the necessary details before the ld.CIT(A). Accordingly, grounds of appeal raised by the assessee are allowed for statistical purpose.
In the result, appeal of the assessee is allowed for statistical purpose. Order pronounced in the open Court on 28th January, 2025.