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Facts
The assessee did not file a return of income for AY 2016-17 but had sold immovable property for Rs. 7,43,82,750/- in FY 2015-16. After a notice, the assessee filed a return declaring Rs. 36,561/-, omitting the property transaction. The AO completed assessment under Section 144 read with Section 147, adding Rs. 4,75,31,640/- as long-term capital gains. The CIT(A) dismissed the assessee's appeal ex-parte for non-prosecution.
Held
The Tribunal held that the CIT(A) is duty-bound to dispose of an appeal on merits, even if ex-parte, relying on the decision of PCIT vs. Premkumar Arjundas Luthra. The matter was remanded back to the CIT(A) for a de novo disposal on merits, after providing the assessee a reasonable opportunity of hearing.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal ex-parte without considering its merits, and if the CIT(A) has a duty to dispose of an appeal on merits even in the absence of the assessee.
Sections Cited
144, 147, 250(6)
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Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI INTURI RAMA RAO, AM & SHRI KESHAV DUBEY, JM
O R D E R Per: Inturi Rama Rao, AM This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)], dated 12.02.2024 for Assessment Year (AY) 2016-17.
Brief facts of the case are that the appellant is an individual. The return of income for AY 2016-17 was not filed by the appellant. As pr the information available in AIMS module the appellant had sold immovable property for a total consideration of Rs. 7,43,82,750/- during FY 2015-16. Therefore, a notice was issued on Safeena Wahab 12.01.2018 requiring the appellant to furnish the return of income for AY 2016-17. In response to the notice, the assessee filed return of income on 25.01.2018 declaring total income of Rs. 36,561/-. The appellant had not declared any transaction of immovable property in the return. Against the said return of income, the assessment was completed by the Income Tax Officer, Ward-3, Aluva (hereinafter called "the AO") vide order dated 24.12.2019 passed u/s. 144 r.w.s. 147 of the Income Tax Act, 1961 (the Act) at a total income of Rs. 4,75,68,200/-. While doing so, the AO made addition of Rs. 4,75,31,640/- as long term capital gains.
Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order dismissed the appeal exparte for non prosecution placing on the decision of the Hon'ble Bombay High Court in the case of M/s. Chemipol vs. Union of India in Excise Appeal No. 62 of 2009 and a few other orders.
Being aggrieved, the assessee is in appeal before the Tribunal in the present appeal.
We have heard the rival contentions of both the parties and perused the material available on record. We find that the learned CIT(A) dismissed the appeal in limine without considering the information filed by the appellant. 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 Safeena Wahab 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 we are of the considered view that the matter requires to be remanded to the file of the CIT(A) with the direction to dispose of the appeal de novo on merits after affording reasonable opportunity of hearing to the assessee.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 18th March, 2025.