V.KRISHNAMOORTHI & V.SHANMUGAPANDIAN L/R (LATE) SUBBIAH THEVAR VELLAPANDIAN,MADURAI vs. ITO NON CORPORATE WARD-3(5), MADURAI

This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals) 1, Madurai dated 31.01.2020 relevant to the assessment year 2013-14.

When the appeal was taken up for hearing, the ld. Counsel for the assessee has submitted that assessment under section 143(3) of the Income Tax Act, 1961 [“Act” in short] was completed on 31.03.2016 by disallowing the claim of deduction under section 54F of the Act as well as disallowance of agricultural income. The assessee preferred an appeal before the ld. CIT(A). It was the submission that without providing copy of the report of the Inspector, the assessment was hurriedly completed and without giving proper opportunity, the ld. CIT(A) has dismissed the appeal of the assessee, exparte. Thus, the ld. Counsel for the assessee prayed that one more opportunity may be given to the assessee to substantiate his claim before the ld. CIT(A).

On the other hand, the ld. DR has not raised any objection.

We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. We find at para 5 of the appellate order that the Assessing Officer deputed his Inspector attached with his ward to inspect the property and the Inspector has reported that the assessee owned more than one house at the said address. However, copy of the report of the inspector was not provided to the assessee for rebuttal. Upon the details gathered by the Assessing Officer as well as non-furnishing of the documentary evidence that the assessee had only one house at the time of sale of the property, the claim of exemption under section 54F of the Act was denied appears to be incorrect. In order to meet the ends of natural justice, we are of the opinion that one more opportunity should be afforded to the assessee to furnish his rebuttal against the report of the Inspector as well as substantiate his claim of deduction under section 54F of the Act before the ld. CIT(A).

The assessee also agitated against confirmation of addition of ₹.5,15,670/-. The assessee has claimed agricultural income of ₹.5,15,670/- in the return of income. For want of details of agricultural operation, ownership/lease of land, etc. the Assessing Officer disallowed the claim of the assessee, which was confirmed by the ld. CIT(A).

Accordingly, we set aside the exparte appellate order and remit the matter back to the file of the ld. CIT(A) to decide both the issues afresh in accordance with law after affording an opportunity of being heard to the assessee.

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