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Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI
Before: SHRI VIKAS AWASTHYShri Sunil A. Shah
These two appeals by two different assesses (related to each other) are directed against the order of Commissioner of Income Tax (Appeals)-58, Mumbai [hereinafter referred to as ‘the CIT(A)’] for the Assessment Year (AY) 2011-12 in their respective cases. The impugned orders in both these appeals are of even date i.e. 29.10.2019. Since, the issue involved in both the appeal is germinate from same set of facts and identical grounds have been raised in the appeals, these appeals are take up together for adjudication and are decided by this common order.
Shri Vimal Punmiya appearing on behalf of the assesses submitted that both these assesses are NRI and are not residing in India. The assesses could not appear before the Assessing Officer (AO) in assessment proceedings as the notices issued by the AO on the assesses address in India were never served on the assessees. It was only the final notice served by the AO through email that was served on the assessee. The assessees responded to that notice and furnished the details in respect of residential property sold in India, however, the AO failed to take notice of the documents furnished and passed the assessment order under section 144 read with section 147 of the Income Tax
आअसं. 7705/मुं/2019 (िन.व.2011-12) (A.Y.2011-12) आअसं. 7706/मुं/2019 (िन.व.2011-12) (A.Y.2011-12) Act, 1961 [hereinafter referred to as ‘the Act’]. Thereafter, the assesses filed appeal in their respective cases against the assessment order. Again in First Appellate proceedings, the notices issued by the CIT(A) were never received by the assesses as the assessees were not residing on the address in India on which the notices were being sent. The assesses responded to the notice received through email. However, the CIT(A) rejected the submissions made by assesses through email and passed the impugned order in the case of both the assesses without appreciating the facts and documents. The ld. AR prayed that if, an opportunity is granted to the assesses and the matter is restored to AO, the assessee would furnish all necessary documents in respect of residential property sold which was jointly owned by both the assesses. The assesses have offered capital gain on sale of residential flat as LTCG. The AO/CIT(A) have held the same to be STCG. The assesses have prima facie good case in their favour. The ld. AR submitted that all the relevant documents in respect of the property have been filed before the Tribunal in the form of Paper Book.
On the other hand, Shri Sanjay Sethi representing the Department vehemently defended the impugned order. The ld. DR submitted that the assessees neither appeared before the AO nor before the CIT(A), no documents were furnished by the assessee before the lower authorities to substantiate their claim, therefore on the basis of information available the AO and CIT(A) have rightly treated the gain on sale of flat as STCG as the flat was held by the assessees for a period less than 36 months.
आअसं. 7705/मुं/2019 (िन.व.2011-12) (A.Y.2011-12) आअसं. 7706/मुं/2019 (िन.व.2011-12) (A.Y.2011-12) 4. Both sides heard, orders of authorities below examined. I find that the assessment order and the order of CIT(A) has been passed in an ex-parte proceedings. The assessees are stated to be resident of USA. Ostensibly, repeated notices sent by the AO on the address of the assesses in India were never served/communicated to the assesses. Hence, the AO passed the assessment order after invoking the provisions of section 144 of the Act. During First Appellate proceedings, apparently the fate of notices sent by the CIT(A) to the assesses on address in India were same. However, in response to notice served through email, the assesses filed documents to support their claim. Purportedly, the CIT(A) refused to take note of the documents furnished by the assessee through mail. Taking into consideration the fact that the assessees could not plead their case before the AO and CIT(A) and were deprived of fair opportunity of hearing, without commenting on the merits of grounds raised in appeal, I deem it appropriate to restore both these appeals back to the file of AO for denovo adjudication. The AO shall consider documents filed by the assesses in Paper Book before the Tribunal and shall decide the issue afresh after affording reasonable opportunity of hearing to the assesses, in accordance with law.
Shri Vimal Punmiya undertakes to appear on behalf of the assessees before the AO on receipt of notice. The AO shall issue notice to the assessees on the address furnished in Form No. 36 before the Tribunal.
आअसं. 7705/मुं/2019 (िन.व.2011-12) (A.Y.2011-12) आअसं. 7706/मुं/2019 (िन.व.2011-12) (A.Y.2011-12) 6. In the result, impugned orders in the respective appeals are set-aside and the appeals are allowed for statistical purpose.
Order pronounced in the open court on Thursday, the 10th day of June, 2021. Sd/- (VIKAS AWASTHY) �याियक सद�य / JUDICIAL MEMBER मुंबई/Mumbai, 3दनांक/Dated: 10/06/2021 SK, PS *ितिल�प अ4े�षत *ितिल�प अ4े�षतCopy of the Order forwarded to : *ितिल�प अ4े�षत *ितिल�प अ4े�षत 1. अपीलाथ)/The Appellant , 2. *ितवाद,/ The Respondent. 3. आयकर आयु5(अ)/ The CIT(A)- 4. आयकर आयु5 CIT 5. �वभागीय *ितिनिध, आय.अपी.अिध., मुबंई/DR, ITAT, Mumbai 6. गाड9 फाइल/Guard file.