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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: SHRI V.DURGA RAO & SHRI G.MANJUNATHA
order of the learned CIT(A)-13, Chennai, dated 09.08.2018 and pertains to assessment year 2012-13.
2. The assessee has raised following grounds of appeal:-
“1. For that the order of the Commissioner of Income-tax (Appeals)-13, Chennai is contrary to law, facts and circumstances of the case and is opposed to the principles of natural justice.
For that the revision by the Principal CIT-8, Chennai upon the completion of the Assessment by the Ld. AO u/s. 143(3) duly considering the facts and evidences with full application of mind on the subject matter of claim made by the Appellant u/s. 54F, does not fall within the power of the Pr. CIT- 8.
3. For that on the facts and in the circumstances of the case, the Pr. CIT 8, Chennai erred in directing the Ld. AO to deny the exemption claimed by the appellant under section 54 F without appreciating the fact that the appellant was only a co-owner of two commercially let-out properties and one Commercial property.
For that on the facts and circumstances of the case, Ld. Assessing Officer failed to appreciate that preconditions of section 54F(1) owning more than one residential properties was not satisfied to deny the exemption.
For that the Ld AO had not concluded the assessment by way of speaking order as the properties referred in the order u/s. 263 of I.T Act, 1961, were jointly owned by appellant with his spouse and are commercially let out cannot be equated and distinguishable one.
For these grounds and such other ground that maybe adduced before or during the hearing of the appeal with the leave of this respectful authority, may be pleased to allow the claim under section 54F of the I.T Act, 1961 for a sum of Rs.1,94,63,328/-; OR pass such orders as this respectful authority may deem fit.”
Brief facts of the case are that the assessee is an individual, engaged in the business of trading in textile and fabrics filed his return of income for assessment year 2011-12 declaring total income of Rs.8,19,420/-, which includes capital gain after claiming u/s.54F of the Act for Rs.1,94,63,628/-.
There was an AIR information that large deduction has been claimed by the assessee u/s.54F of the Act. Therefore, case has been subsequently selected for scrutiny and notice u/s.143(2) was issued calling for various details. In response, the assessee has failed to produce necessary bills to prove his claim in respect of miscellaneous expenses and other expenses debited into profit & loss account. Therefore, assessment has been completed by the Assessing Officer u/s.143(3) of the Act dated 27.03.2015 making addition of Rs.96,216/- and thus, determined total income of Rs.9,15,636/-. Subsequently, case has been referred to Pr.CIT, Chennai for revision u/s.263 of the Act, insofar as the impugned order of assessment is prejudicial to the interests of the Revenue. The learned Pr.CIT, after careful consideration of written submissions filed by the assessee and impugned assessment order, passed order u/s.263 of the Act directing the Assessing Officer to revise assessment. Accordingly, the Assessing Officer passed order dated 30.07.2017 giving effect to the order of Pr.CIT disallowing Rs.1,94,63,328/- towards exemption claimed by the assessee u/s.54F of the Income Tax Act, 1961.
4. Aggrieved by the order, the assessee preferred an appeal before the CIT(A), but could not appear which is evident from page 3 of the learned CIT(A) order that despite number of opportunity of hearing was provided, the assessee neither appeared nor filed any details. Therefore, the CIT(A) disposed off appeal filed by the assessee ex-parte by following certain judicial precedents, including decision of the Hon’ble Delhi High Court in the case of CIT Vs. Multiplan (India) Pvt.Ltd. 38 ITD 320(Del). Aggrieved by the CIT(A) order, the assessee is in appeal before us.
5. The learned A.R for the assessee submitted that the learned CIT(A) has erred in dismissing appeal filed by the assessee without providing reasonable opportunity of hearing in violation of principles of natural justice. The learned CIT(A) ought to have disposed of appeal filed by the assessee on merits, but his order is vague and cryptic. Therefore, one more opportunity of hearing may be given to go back to learned CIT(A) and file necessary evidences to justify his case.
6. The learned DR, on the other hand, strongly supporting order of the learned CIT(A) submitted that the assessee neither appeared nor filed any details and thus, there is no reason to give one more opportunity of hearing to the assessee.
We have heard both the parties, perused material available on record and gone through orders of the authorities below. No doubt, appellate authority has no option, but to dispose off appeal filed by the assessee, in case appellant does not appear before the appellate authority, despite various opportunity of hearing was provided, but such appeal should be disposed off on merits on the basis of material available on record. But, before disposal of appeal, reasonable opportunity of hearing must be given to explain his case. In this case, the learned A.R submitted that the learned CIT(A) has not disposed off the appeal on merits by passing reasoned order.
Therefore, considering facts and circumstances of this case, we are of the considered view that issue needs to go back to the file of learned CIT(A) to give one more opportunity of hearing to the assessee to file necessary evidences and explain his case.
Hence, we set aside order of the learned CIT(A) and restore appeal to the file of learned CIT(A) and direct him to reconsider the issue, after providing reasonable opportunity of hearing to the assessee. Needless to say the assessee shall appear before the learned CIT(A) and furnish necessary details without seeking any adjournment, unless otherwise warranted.
In the result, appeal filed by the assessee is treated as allowed for statistical purposes.
Order pronounced in the open court on 3rd November, 2021