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Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD
Before: MS. SUCHITRA KAMBLE & SHRI MAKARAND V. MAHADEOKAR
ORDER \nPER MAKARAND V. MAHADEOKAR, AM:\nThis appeal by the assessee is directed against the order passed by the\nCommissioner of Income Tax (Appeals), National Faceless Appeal Centre\n(NFAC), Delhi [hereinafter referred to as “CIT(A)”] dated 17.09.2024 under\nsection 250 of the Income-tax Act, 1961 [hereinafter referred to as “the Act”]\nfor the Assessment Year (AY) 2022-23, whereby the learned CIT(A)\ndismissed the appeal ex-parte and confirmed the addition of Rs.93,45,517/-\nmade by the Assessing Officer [hereinafter referred to as “AO"] vide his order\ndated 22.03.2024 passed under section 143(3) r.w.s.144B of the Act.\n2\nThe appeal has been filed with a delay of 23 days. During the course of\nhearing, the learned Authorized Representative submitted that the delay was\non account of the demise of the assessee's father. The learned Departmental\nRepresentative did not object to the condonation of delay, considering the\nshort span of delay and the reason stated.\n3.\nWe are satisfied that the cause for delay is reasonable and bona fide.\nAccordingly, the delay of 23 days in filing the appeal is hereby condoned.\nFacts of the Case:\n4.\nThe assessee is an individual engaged in the retail business of trading\nin gold and silver, and he maintains regular books of accounts. The assessee\nfiled the return of income for A.Y. 2022–23 on 21.12.2022 declaring total\nincome of Rs.3,40,020/-, which included Long-Term Capital Gain (LTCG) of\nRs.3,68,083/- on sale of property. The case was selected for scrutiny under\nCASS for verification of capital gains/income from sale of property. During\nthe assessment proceedings, various notices were issued by the AO,\nincluding show-cause notice dated 05.03.2024 requiring compliance by\n12.03.2024. On request, an adjournment was granted and further notice was\nissued on 13.03.2024, requiring the assessee to comply by 15.03.2024. The\nassessee, however, failed to respond due to insufficient time and intervening\nweekends. The AO completed the assessment ex parte under section 143(3)\nr.w.s.144B of the Act and disallowed the entire claim of indexed cost of\nimprovement amounting to Rs.93,45,517/-, thereby determining the total\nincome at Rs.96,85,537/-.\n5.\nAggrieved, the assessee filed an appeal before the learned CIT(A).\nHowever, the appeal was also dismissed ex parte. The notices during\nappellate proceedings were issued on 01.05.2024, 01.07.2024, 19.07.2024, and\nfinal notice dated 29.08.2024 directed the assessee to comply by 06.09.2024.\nThe assessee, however, failed to file any written submission.\n6.\nThe assessee has raised multiple grounds challenging the ex parte\ndismissal of the appeal which are as follows:\n1.1 The order passed u/s.250 on 17.09.2024 for A.Y.2022-23 by NFAC(CIT(A) Delhi\n(for short \"CIT(A)\") by dismissing the appeal on the ground of non-compliance to\nthe notices of hearing and thereby confirming the addition of Rs.93,45,517/- is\nwholly illegal, unlawful and against the principles of natural justice.\n1.2 The Ld. CIT(A) has grievously erred in law and or on facts in not allowing sufficient\nopportunity before upholding impugned disallowance so that there was gross\nviolation of principles of natural justice. The appellant was issued all the notices of\nhearing at mail_id_commonmail3@rediffmail.com, whereas primary registered\nmobile and email id as per IT Portal are 9824245654, darbarvishalbhai@gmail.com\nso that the appellant was not aware about the same.\n2.1 The Ld. CIT(A) has grievously erred in law and or on facts in dismissing the appeal\non the ground of non-compliance to the notices of hearing and thereby confirming\nthe disallowance of entire claim of indexed cost of improvement at Rs.93,45,517/-.\n2.2 That in the facts and circumstances of the case as well as in law, the Ld. CIT(A) has\ngrievously erred in dismissing the appeal on the ground of non-compliance to the\nnotices of hearing and thereby confirming the disallowance of entire claim of indexed\ncost of improvement at Rs.93,45,517/.\nIt is therefore prayed that the impugned disallowance of Rs.93,45,517/- made by the\nCIT(A) should be deleted.\n7.\nWe have considered the grounds of appeal along with statement of\nfacts and perused the material available on record. It is an admitted position\nthat both the orders – the assessment order as well as the appellate order\nhave been passed ex parte, without the assessee being afforded sufficient\nopportunity to present his case.\n7.
The assessee has specifically contended that the notices of hearing were\nnot served at the registered email address and mobile number as appearing\non the IT portal. This explanation has not been controverted by the Revenue.\nThe learned Departmental Representative fairly submitted that both the\norders have been passed ex-parte and had no objection if the matter is restored\nfor fresh adjudication.\n7.
In these facts and circumstances, we are of the considered view that the\nmatter requires fresh consideration in the interest of justice. The assessee\ndeserves a proper opportunity to submit his explanation and documentary\nevidence in support of the claim of indexed cost of improvement.\n7.
Accordingly, the impugned order passed by the CIT(A) is set aside.\nThe matter is restored to the file of the AO for deciding the issue afresh after\naffording due opportunity of hearing to the assessee. The assessee is also\ndirected to fully cooperate and file necessary details during the fresh\nproceedings.\n8.\nIn the result, appeal of the assessee is allowed for statistical purposes.\nOrder pronounced in the Open Court on 27th March, 2025 at Ahmedabad.\nSd/-\n(SUCHITRA KAMBLE)\nJUDICIAL MEMBER\nSd/-\n(MAKARAND V. MAHADEOKAR)\nACCOUNTANT MEMBER\nअहमदाबाद/Ahmedabad, दिनांक/Dated 27/03/2025\nटी.सी. नायर, व.नि. स. / T.C. NAIR, Sr. PS", "summary": { "facts": "The assessee, engaged in gold and silver trading, filed his return declaring income including LTCG. The case was selected for scrutiny. Despite notices, the assessee failed to respond due to insufficient time and intervening weekends, leading to an ex-parte assessment order confirming additions. The subsequent appeal to CIT(A) was also dismissed ex-parte.", "held": "The Tribunal noted that both the assessment and appellate orders were passed ex-parte without affording the assessee sufficient opportunity. The notices of hearing were allegedly not served at the correct email address. Therefore, the matter requires fresh consideration.", "result": "Allowed", "sections": [ "250", "143(3)", "144B" ], "issues": "Whether the ex-parte dismissal of the appeal by CIT(A) was illegal and in violation of natural justice due to non-service of notices." } }