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Facts
The assessee's appeal was dismissed in limine by the CIT(A) due to non-compliance with notices, without addressing the merits of the additions made by the AO. The AO had made an addition of Rs. 21,98,591/- under Capital Gains, assessing total income at Rs. 31,89,377/- as against the returned income of Rs. 9,90,786/-.
Held
The Tribunal held that the CIT(A) erred by dismissing the appeal for want of prosecution without a speaking order on merits, and also that the AO did not provide a reasonable opportunity to the assessee. Therefore, the CIT(A)'s order was set aside, and the case was remanded to the AO for a denovo assessment.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal for want of prosecution without adjudicating on the merits, and whether the AO provided a reasonable opportunity to the assessee during the assessment.
Sections Cited
143(3), 250, 251(2), 50C, 50C(2), 54
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, LUCKNOW BENCH “SMC”, LUCKNOW
PER ANADEE NATH MISSHRA, A.M.: 1. The present appeal has been filed by the assessee against the impugned order dated 21.11.2024 passed by the learned Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), under section 250 of the Income Tax Act, 1961 (hereinafter referred as to “the Act”), for the assessment year 2017-18 wherein the assessee’s appeal has been dismissed in limine for the reason of non compliance. The grounds of appeal
of the assessee are as under: -
1. That on the facts and in the circumstances of the case, the learned CIT (A) NFAC. has erred in law and on facts by confirming the addition of Rs. 2198591/made the learned A.O. under the head Income from Capital Gain, ignoring the fact that Rs cost of new asset within the meaning of section 54 is Rs. 1.15,69,200/- hence such addition being arbitrary, erroneous, and against the provisions of law and therefore same is liable to be deleted.
1. 2. That on the facts and in the circumstances of the case, the learned CIT (A) NFAC. has erred in law and on facts by further restricting the exemption claimed u/s 54 of the Income Tax Act to Rs. 80,25,125/from Rs. 98,00,000/- allowed by the learned A.O., ignoring the fact that exemption u/s 54 is allowable on the basis of cost of new asset purchased after sale of asset sold, Rs pursuant to the conditions Page 2 of 5 specified in the section and cannot be restricted up to the amount of Capital gain declared in the ITR, ‘hence such further addition made by the learned CIT (A), being arbitrary, erroneous, too harsh and against the provisions of law and therefore same is liable to be deleted.
3. That on the facts and in the circumstances of the case, the learned CIT (A) NFAC. has erred in law and on facts by further restricting the exemption w/s 54 to Rs. 80,25,125/- from Rs. 98,00,000/- allowed by the learned A.O., thereby enhancing the assessed income by Rs. 1774875/-, in gross violation of provisions of section 251(2)of the Income Tax Act, hence such addition being against the provisions of law, arbitrary and erroneous therefore same is liable to be deleted.
4. That on the facts and in the circumstances of the case, the learned CIT (A) NFAC. has erred in law and on facts by confirming the addition of Rs, 2198591/made by the learned A.O., under the head income from Capital Gain, by invoking provisions of section SOC of the Income Tax Act, despite the fact that the Appellant made strong objection to her action of considering the Circle rate as full value of consideration without making reference to DVO pursuant to the provisions of section 50C(2) of the Act, hence such addition being against the provisions of law, arbitrary too harsh and erroneous and same is liable to be deleted.
5. That on the facts and in the circumstances of the case, the learned CIT (A) NFAC has erred in law and on facts by confirming the addition of Rs. 2198591/- made by the learned A.O., by invoking provisions of section 50C of the Income Tax Act, despite the fact that she herself directed the Appellant to furnish the Valuation Report of the Property by the Registered Valuation Officer and even after furnishing such Valuation Report by an approved Valuer, she herself declined to accept such technical report without making reference to DVO pursuant to the provisions of section 50C(2) of the Act, hence such addition being against the provisions of law, arbitrary and erroneous therefore same is liable to be deleted.
That Appellant craves leave to modify any of the ground of appeal mentioned herein above and/or to add any fresh ground as and when it is required to do so subject to however approval of your honour.” (2) In this case, assessment order dated 29/11/2019 was passed by the Assessing Officer (“AO”), under section 143(3) of the Act whereby the assessee’s total income was assessed at Rs.31,89,377/- (Rounded off to Rs.31,89,377/-), as against the returned income of Rs.9,90,786/- declared by the assessee. In the aforesaid assessment order, addition of Rs.21,98,591/- was made by the Assessing Officer. The assessee’s appeal against the aforesaid addition was dismissed by the Ld. CIT(A) vide impugned appellate order dated 21.11.2024.
Page 3 of 5 (2.1) At the time of hearing, learned Counsel for the assessee submitted that the Assessing Officer as well as the learned CIT(A), both passed their respective orders without providing reasonable opportunities to the assessee. He further submitted that the learned CIT(A) did not pass speaking order on merits of the additions made. He further submitted that the assessee’s appeal was dismissed in limine for want of prosecution without any discussion on the merits of the additions. The Ld. CIT(A) dismissed the assessee’s appeal in a summary manner, taking adverse view of non-compliance on the part of the assessee of the notices issued by the Ld. CIT(A). The Ld. Counsel for the assessee contended that the Ld. CIT(A) as well as the Assessing Officer failed to appreciate facts of the case in right perspective. The Ld. Counsel for the assessee prayed that the issue in dispute may be restored back to the Assessing Officer for giving adequate opportunity to the assessee in the interest of justice and fair play. The Ld. Departmental Representative (“DR”, for short) expressed no objection to restoration of the matter to the file of the Assessing Officer.
(3) Both sides have been heard. Materials on record have been perused. On perusal of the impugned appellate order dated 21.11.2024 of the Ld. CIT(A), it is found that the Ld. CIT(A) dismissed the assessee’s appeal for want of prosecution, taking adverse view of non-compliance with notices issued by the office of the Ld. CIT(A). However, the Ld. CIT(A) has statutory duty, prescribed u/s 250(6) of the Act to pass a speaking order on the merits of the case, whether or not there was any representation from the assessee’s side. The order of the Ld. CIT(A) in disposing of the assessee’s appeal, is required to be in writing, and the Page 4 of 5 order is further required to contain the point for determination, the decision thereon and the reasons for the decisions. Thus, it is the statutory duty of the Ld. CIT(A) to pass a speaking order on merits of the case. It can be readily inferred that dismissing the assessee’s appeal in limine, for want of prosecution, without going into the merits of the case was erroneous on the part of the Ld. CIT(A), having regard to provisions contained under section 250(6) of the Act. Further, on perusal of records, it is found that the Assessing Officer passed the assessment order without providing reasonable opportunity to the assessee. In view of the foregoing, and as representative of both sides are in agreement with this, in the specific facts and circumstances of the present case; the impugned order of the Ld. CIT(A) dated 21.11.2024 is hereby set aside and issues in dispute regarding addition made in the assessment order are restored back to the file of the Assessing Officer with the direction to pass denovo assessment order in accordance with law, after providing reasonable opportunity to the assessee. All grounds of appeal are treated as disposed of in accordance with the aforesaid directions.
In the result, the appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 06/03/2025.