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Facts
The assessee filed an appeal against the assessment order which included an addition of Rs. 54,31,180/- on account of Long Term Capital Gain. The CIT(A) dismissed the assessee's first appeal, holding that the assessee failed to prosecute the appeal effectively and did not provide necessary evidence. The assessee then filed a second appeal before the Tribunal.
Held
The Tribunal observed that the assessee did not effectively prosecute the appeal and failed to provide cogent evidence. However, noting that the case was similar to another case (Radha Bai) which was remanded, and considering that new evidence was submitted, the Tribunal set aside the impugned order and remanded the matter back to the Assessing Officer for fresh adjudication.
Key Issues
Whether the assessee's appeal can be dismissed for non-prosecution and lack of evidence, and whether the matter should be remanded for fresh consideration given new evidence and similarity to a previous case.
Sections Cited
253, 143, 147, 246A, 250, 282, 148, 54F, 54B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, INDORE BENCH, INDORE
the order bearing Number ITBA/NFAC/S/250/2024- 25/1072182527(1) dated 15.01.2025 passed by the Ld. CIT(A) u/s 250 of the Act which is hereinafter referred to as the “Impugned order”. The relevant Assessment Year is 2013-14
Page 1 of 10 - A.Y.2013-14 and the corresponding previous year period is from 01.04.2012 to 31.03.2013.
FACTUAL MATRIX 2.1 That as by way of an Assessment Order made u/s 143 r.w.s. 147 of the Act, the total income of the assessee was computed and assessed at Rs.54,62,690/- . Returned income was Rs.31,150/-. Addition of Rs.54,31,180/- was made on account of Long Term Capital Gain (Rs.31,510/- + Rs.54,31,180/-). That the aforesaid “impugned assessment order” is hereinafter referred to as the “impugned assessment order” and the same is dated 25.12.2019.
2.2 That the assessee being aggrieved by the aforesaid “impugned assessment order” prefers first appeal u/s 246A of the Act before the Ld. CIT(A) who by the “impugned order” has dismissed the 1st appeal of the assessee on grounds and reasons stated therein. The Ld. CIT(A) has held as under in the “impugned order”:-
“ 7.1 It is pertinent to state that to decide this appeal in a timely manner several notices u/s. 250 of the Act were issued to the appellant through ITBA portal, as noted in paragraph 6 above, which amounts to service of notice as provided u/s 282 of the Act. However, there has been no response from the appellant till date. There is no gain saying that once the appeal is filed by the appellant, it is obligatory on its part to pursue the same in a Page 2 of 10 - A.Y.2013-14 worthwhile manner, which the appellant has failed to do. Hence, in view of the aforesaid total non-compliance of the instant appeal on the part of the appellant, the Instant appeal is adjudicated and disposed of, as under, ex-parte and on the basis of documentation available on record.
7.2 Firstly, it is stated at the outset, that in the situation as obtaining in the instant case, as seen from the above, this appeal is liable to be dismissed in terms of the ratio of the judgements of the Hon'ble Apex Court and the various High Courts including the Hon'ble Apex Court which held in CIT v. B.N. Bhattarcharjee and Another (10 CTR 354) that an appeal means an effective appeal and that to "prefer an appeal" would mean effectively prosecuting an appeal purposefully and constructively. Therefore, preferring an appeal means more than formally filing it but effectively pursuing it and if a party retreats before the contest begins, it is as good as not having entered the fray.
7.3 It is relevant to add here that laws assist those who are vigilant and not those who sleep over their rights. This principle is embodied in the well-known maxim "Vigilantibus. non dormientibus jura subveniunt." It means equity comes to the aid of the vigilant and not the slumbering. In all actions, suits and other proceedings at law and in equity, the diligent and careful plaintiff is favoured and prejudicial of him who is careless. Viewed thus, it is presumed that the appellant has no further cogent reasoning or/and evidence to substantiate the grounds taken in this impugned appeal. It is trite that the onus is on person making the claim, and the primary onus for proving the claim made before the tax authorities (Assessing Officers/Appellate Authorities) lies with the assessee/appellant. In the present case, the appellant has not been able to even discharge the primary onus/burden statutorily and judicially cast upon it to substantiate the claims made in the grounds of appeal despite adequate time and opportunity given, as brought out in the foregoing paragraphs.
7.4 In this regard, the decision of the Hon'ble High Court of Mumbai in the case of M/s Chemipol v/s. Union of India (Central Excise Appeal No.62 of 2009] clearly states, that every court, judicial body or authority, which has a duty to decide a matter between two parties, inherently possesses the power to dismiss the case in default. For the sake of reference, the relevant extract of the judicial pronouncement rendered by the Hon'ble High Court of Mumbai quoting decision of Hon'ble Supreme Court
Page 3 of 10 - A.Y.2013-14 in case of Nandramdas Dwarkadas, AIR 1958 MP 260, is reproduced below: "Now the Act does not give any power of dismissal. But it is axiomatic that no court or tribunal is supposed to continue a proceeding before it when the party who has moved it has not appeared nor cared to remain present. The dismissal, therefore, is an inherent power which every tribunal possesses."
7.4.1 The principle that every court that is to decide on a matter of dispute, inherently possesses the power to dismiss the case for default, has been upheld by the Hon'ble Supreme Court in case of Dr. P. Nalla Thampy Vs. Shankar (1984 (Supp) SCC 63 and the case of New India Assurance vs. Srinivasan (2000) 3 SCC 242. In the latter case, the Apex Court has held as follows, "That every court or judicial body or authority, which has a duty to decide a list between two parties, inherently possesses the power to dismiss a case in default. Where a case is called up for hearing and the party is not present, the court or the judicial or quasi-judicial body is under no obligation to keep the matter pending before it or to pursue the matter on behalf of the complainant who had instituted the proceedings. That is not the function of the court or, for that matter of a judicial or quasi- judicial body. In the absence of the complainant, therefore, the court will be will without its jurisdiction to dismiss the complaint for non-prosecution. So also, it would have the inherent power and jurisdiction to restore the complaint on good cause being shown for the non-appearance of the complainant."
7.4.2 The Hon'ble Bombay High Court has also laid down the proposition that where the appellant in spite of notice is persistently absent and the Tribunal on facts of the case is of the view that the appellant is not interested in prosecuting the appeal, it can in exercise its inherent power to dismiss the appeal for non-prosecution.
7.4.3 The Hon'ble ITAT Delhi (ITR No.2006/Del/2011 dt.19.12.2001) in the case of Whirlpool of India Ltd. v. DCIT had dismissed appeal for non-attendance at hearings, inferring that appellant was not interested in prosecuting of appeal. Thereafter, in another decision, in the case of Chadha Finlease Ltd. V. ACIT (ITA No.3013/Del/2011 date of order 20.12.2011) the Hon'ble ITAT had dismissed the appeal for non-attendance at hearings.
Page 4 of 10 - A.Y.2013-14
7.4.4 In a decision in the case of CIT v. Gold Leaf Capital Corporation Ltd. on 02.09.2011 (ITA No.798 of 2009), the Hon'ble High Court of Delhi had held that a negligent appellant should not be given many opportunities just because that quantum of amount involved is high. Necessary course of action is to draw adverse inference; otherwise it would amount to give premium to the appellant for his negligence.
7.5 The appellant has not bothered to contradict the findings of the Assessing Officer through any submissions or material which would help its case. However, with regard to the merits of the case, the same are being discussed in the following paragraphs.
7.5.1 Grounds no. 1,2 and 3: The grounds taken are general in nature and the claim that the notice u/s 148 was not received in time seems like an afterthought, as there is no evidence with respect to the same. The assessment order clearly brings out the issue and service of notice as also the providing of reasons for issue of notice u/s 148 to the AR of the assessee. In view of the foregoing, these grounds are dismissed.
7.5.2 Ground no. 4: The appellant claims that he did not get an opportunity of being heard during assessment proceedings. However, this claim is not borne out by the assessment order as there were adequate opportunities provided to the appellant during the process. The ground is dismissed.
7.5.3 Grounds no. 5 to 10: The AO has clearly articulated the reasons for making the said additions in para 4 of the impugned order. It is seen that the assessee failed to produce documentary evidence with respect to the claim of cost of acquisition, cost of improvement, costs involved in the transfer of assets and the fact that the assessee produced only estimates of cost of construction in support of his claim u/s 54F. The assessee has not been able to rebut the evidence regarding the actual sales amount received in connection with the sales of its capital assets. In view of the foregoing these grounds are dismissed.
7.5.4 Ground no. 11 is general in nature and is not being adjudicated upon.
7:6 Before parting, it is trite that an appellate authority is essentially called upon to balance the two sides of an argument presented before him as held in Nirmal Singh and Others of the Page 5 of 10 - A.Y.2013-14
Hon'ble Punjab and Haryana High Court [Cr No. 3791 of 2013 (O & M) dated 01.05.2014] and in the absence of any reasonable, cogent and valid arguments/contentions advanced by the appellant in the instant appeal to counter the AO's decision as contained in the assessment order, as mentioned earlier, the addition made by the AO is sustained in terms of the observations herein-above.
In the result, the appeal is dismissed”.
2.3 That the assessee being aggrieved by the “impugned order” has preferred the instant second appeal before this Tribunal and has raised following grounds of appeal in Form No.36 against the “impugned order” which are as under:-
“Ground 1 That in the facts and circumstances of the case the very initiation of proceeding u/s 147 and issuance of notice u/s 148 are bad in law, invalid therefore, the assessment is liable to be annulled.
Ground 2. That in the facts and circumstances of the case the initiation of proceeding u/s 147/148, and completion of assessment order u/s 147 and appellate order under section 250 are bad in law as well as on facts and are liable to be annulled.
Ground 3. That in the facts and circumstances of the case the appellant did not get the opportunity of being heard and hence the order is against the natural justice of law. The Learned CIT Appeals upheld the ex parte order passed by the Ld. AO with addition of Rs. 54,31,180/- to the income of appellant which is bad in law and erroneous.
Ground 4. That in the facts and circumstances of the case the appellate and assessment orders are passed in haste without providing any opportunity to the appellant which is against the principles of natural justice.
Ground 5 That in the facts and circumstances of the case the addition of Rs. 54,31,180/- has been made in the hands of the appellant without any cogent evidence merely on the basis of surmises and conjectures.
Page 6 of 10 - A.Y.2013-14
Ground 6. That in the facts and circumstances of the case the Learned A.O. has erred in taking the consideration for sale of of land as Rs 91,90,500/- to arrive at capital gain of Rs 54,31,180/- , R ignoring the consideration shown in documents of transfer of land. Ground 7. That in the facts and circumstances of the case no cost of acquisition, cost of improvement and expenses relating to transfer of land has been considered which is bad in law and erroneous. Ground 8 That in the facts and circumstances of the case the entire amount of capital gain was exempt under section 54F 8. since the appellant had constructed residential house out of the F sale proceeds which is not considered by the CIT Appeals whilst passing the appellant order. Ground 9 That the appellant craves leave to add to amend alter modify substitute withdrawal delete or rescind all or any of the above grounds of appeal on or before the final hearing if necessary so arises”.
3. Record of Hearing 3.1 The hearing in the matter took place before this Tribunal on 31.07.2025 when the Ld. AR for and on behalf of the assessee has placed on record of this Tribunal a paper book containing pages from 1 to 168. It is stated that the documents from page 1 to 144 and 159 to 168 are being submitted first time before this Tribunal. However documents from pages 145 to 158 were filed before the Ld. A.O. A brief revised synopsis is too placed on record containing four pages. An application for additional evidence under Rule 29 of the Income Tax Appellate Tribunal Rules, 1963 containing 2 pages too is filed and placed on record.
Page 7 of 10 - A.Y.2013-14 The Ld. AR at the outset brought to our notice that this Tribunal in case of Radha Bai v/s ITO 5(1), Bhopal in & 843/Ind/2024 vide order dated 17.06.2025 whicSh pertains to same land transaction where there were 3 co-owners with the Radha Bai. Since Radha Bai case is remanded back to the Ld.
A.O similarly this case too should be remanded were the assessee too is one of the co-owner. It was therefore contended that the material issue is same as it pertains to same property. The Ld. DR appearing for the Revenue contended that he concurs with the view expressed by the Ld. AR that since Radha Bai case is similar hence this matter should also be send back to the Ld. A.O.
Observations,findings & conclusions.
4.1 We now have to decide the legality, validity and the proprietary of the “Impugned Order” basis records of the case and rival contentions canvassed before us.
4.2 We have carefully perused the records of the case.
4.3 We basis records of the case and after hearing and upon examining the contentions are of the considered opinion that since the case of Radha Bai (supra) where there are 3 co-owners
Page 8 of 10 - A.Y.2013-14 including the assessee herein, is remanded back to the file of Ld.
A.O by this Tribunal (supra) and so also in view of the declaration of the Ld. AR in paper book that documents at pages
1 to 144 & 159 to 168 are being submitted first time before this Tribunal and further the Ld. AR has filed and placed on record additional evidence forming part of paper book like sales deeds, copies of documentary evidence claimed u/s 54B of the Act, copies of documentary evidence of house construction claimed
U/s 54F of the Act. We therefore deem it and proper that the “impugned order” should be set aside and accordingly the same is set aside and the matter is remanded back to the file of Ld. A.O on denovo basis. The assessee would be at full and complete liberty to file the paper book papers, documents etc now filed before us be placed before the Ld. A.O so that he can determine the correct income exigible to tax according to law.
Order 5.1 In view of premises drawn up by us we set aside the “impugned order as and by way of remand to Ld. A.O on denovo basis.
Page 9 of 10 - A.Y.2013-14 5.2 In the result, the appeal of the assessee is allowed for statistical purpose.
Order pronounced in open court on 31.07.2025 immediately after conclusion of hearing and reduced in writing subsequently on the same day.