Loading judgment…
Facts
The assessee filed a return of income declaring Rs. 1,07,445/- and claimed exemption under section 10(37) of the Income Tax Act for enhanced compensation received on compulsory acquisition of agricultural land. The assessment was completed at a total income of Rs. 4,27,450/-. Subsequently, the PCIT opined that the assessment order was erroneous and prejudicial to the revenue and directed the AO to tax the interest component of the enhanced compensation.
Held
The CIT(A) dismissed the assessee's appeal ex-parte for non-prosecution. However, the Tribunal held that even while disposing of an appeal ex-parte, the CIT(A) is duty-bound to dispose of the appeal on merits. The Tribunal relied on the decision of the Bombay High Court in PCIT vs. Premkumar Arjundas Luthra.
Key Issues
Whether the CIT(A) is justified in dismissing the appeal for non-prosecution without deciding on merits, and whether the matter should be remanded to the CIT(A) for fresh consideration.
Sections Cited
10(37), 143(3), 263, 250(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI INTURI RAMA RAO, AM
This appeal filed by the assessee is directed against the order of the ADDL/JCIT(A)-3, Kolkata [CIT(A)] dated 20.03.2025 for Assessment Year (AY) 2011-12.
Brief facts of the case are that assessee is an individual. Return of income for the AY 2011-12 was filed on 30/07/2011 declaring income of Rs. 1,07,445/-. In the return of income, the assessee claimed exemption u/s. 10(37) of the Income Tax Act, Rejis Joseph 1961 (for short, 'the Act') for enhanced compensation received on compulsory acquisition of agricultural land of Rs. 52,63,811/-. Against the said return of income, the assessment was completed by the ITO, Ward-3, Aluva (for short, 'AO') vide order dated 30/08/2013 at a total income of Rs. 4,27,450/-.
Subsequently, the Principal Commissioner of Income-tax, Kochi-2 (for short, ‘PCIT’) on examination of the assessment record opined that assessment order is erroneous and prejudicial to the interest of the revenue and accordingly, set aside the assessment and directed the AO to bring the tax on receipt of interest on enhanced compensation. The AO passed a consequential order vide order dated 18/03/2016 passed u/s. 143(3) r.w.s. 263 of the Act by bringing the tax on interest compensation received @ 50% of the gross amount of interest of Rs. 23,22,680/-.
Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order dismissed the appeal exparte for non prosecution.
Being aggrieved, the assessee is in appeal before the Tribunal in the present appeal.
Rejis Joseph 6. It is submitted that hearing notices issued by National Faceless Appeal Centre (NFAC) were sent to wrong email ID and therefore, assessee could not appear before the NFAC. It is further submitted that the matter may be remanded back to the file of Ld. CIT(A), so that assessee can substantiate his claim.
On the other hand, ld. DR has no serious objection for remanding the matter to the Ld. CIT(A).
I find that the learned CIT(A) dismissed the appeal in limine for non prosecution. As contemplated u/s. 250(6) of the Act the CIT(A) is required to frame points of determination followed by a detailed discussion thereupon before passing the order. It is the settled position of law that the CIT(A), even while disposing of the appeal exparte, is duty bound to dispose of the appeal on merits. Reliance in this regard can be placed on the decision of the Hon'ble Bombay High Court in the case of PCIT vs. Premkumar Arjundas Luthra (279 CTR 614). Therefore, in the light of the above legal position I am of the considered view that the matter requires to be remanded to the file of the CIT(A) with a direction to dispose of the appeal de novo on merits after affording reasonable opportunity of hearing to the assessee.
Order pronounced in the open court on 31st July, 2025.