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Facts
The assessee filed an appeal against an order passed by the CIT(A) which confirmed additions made by the Assessing Officer (AO). The AO had made additions for disallowance of expenses, interest income, and long-term capital gains. The CIT(A) dismissed the assessee's appeal ex-parte, noting that the assessee had not presented arguments and the AO had not submitted a remand report.
Held
The Tribunal found that the assessee was not granted a proper opportunity of hearing by the CIT(A) and the CIT(A) passed the order without waiting for the remand report from the AO. Therefore, the Tribunal decided to set aside the order of the CIT(A) and remit the matter back for fresh adjudication.
Key Issues
Whether the assessee was denied a proper opportunity of hearing by the first appellate authority and if the appeal should be remanded for fresh adjudication.
Sections Cited
250 of the Income-tax Act, 1961, 143(3) of the Act, 23(4)(b) of the Act, 143(2) of the Act, 142(1) of the Act, 274 r.w.s. 271(1)(c) of the IT Act 1961
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Before: SHRI SANJAY GARG & SHRI BIJAYANANDA PRUSETH
आदेश / O R D E R
PER BIJAYANANDA PRUSETH, AM:
This appeal by the assessee emanates from order passed under section 250 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 05.02.2025 by the Commissioner of Income-tax Appeals, Addl/JCIT(A)-8, Mumbai [in short, “CIT(A)”] for assessment year (AY) 2012-13, which in turn assessment order passed by Assessing Officer (in short, “AO”) u/s 143(3) of the Act on 30.01.2015.
The ground of appeal raised by the assessee is as under:
1. The addition made on account of disallowance of expenses Rs.9,91,893/- 2. The addition made on account of interest income Rs.23,390/- A.Y 12-13 Pravinchandra K Shah 3. The addition made on account of LTCG by disallowing the brokerage paid from the purchase cost of property Rs.3,37,132/- 2) The appellant prays and appeals that:
1. 1. The addition made on account of disallowance of expenses of rs.9,91,893/- be quashed.
2. The addition made on account of interest income of Rs.23,390/- be deleted. 3.The addition made on account of LTCG of Rs.3,37,132/-be deleted.
4. The notice of demand of penalty u/s 274 r.w.s. 271(1)(c) of the IT Act 1961 be quashed. Without prejudice to the above assessee reserves its righto make any amendment to the grounds of appeal at the time of hearing.”
The facts of the case in brief are that assessee filed his return of income for AY 2012-13 on 25.02.2013 declaring total income of Rs.97,63,140/-. The case was selected for scrutiny under CASS by issuing notice u/s 143(2) of the Act on 23.09.2013. Subsequently, notice u/s 142(1) of the Act was issued on 19.11.2014 asking the assessee to file various details. After verifying the details, the AO made the following additions: (i) Rs.1,05,000/- u/s 23(4)(b) of the Act; (ii) disallowance of expenses: Rs.9,91,893/-; (iii) interest income of Rs.23,390/-; (iv) long-term capital gain: Rs.3,37,132/- and (v) income from other sources: Rs.11,915/-. The total income was determined at Rs.1,12,20,554/- as against returned income of Rs.97,67,140/-.
Aggrieved by the addition made by AO, assessee filed appeal before CIT(A). The CIT(A) issued 8 notices u/s 250 of the Act during the period 20.06.2019 to 14.01.2025, as detailed in para-3 of the appellate order. The assessee did not file any reply except request for adjournment once on A.Y 12-13 Pravinchandra K Shah 06.01.2021. Thereafter, CIT(A) reproduced the written submission filed by the assessee on 12.06.2018 at para-4 of the appellate order. He observed that the AO was also requested to submit remand report but no such report was submitted by the AO. Taking into consideration the above facts, the CIT(A) dismissed the appeal of assessee by observing that the assessee has not presented any arguments or submission in support of the claims made in the grounds of appeal
5. Aggrieved by the order of CIT(A), assessee filed appeal before the Tribunal. The Ld. AR has filed written submission and paper book. He submitted that the AR of the assessee attended before CIT(A) and filed submission which has not been considered by the CIT(A). He, however, admitted that no online submission was made to the Addl/JCIT(A)-8, Mumbai. He requested that the matter may be restored to the file of CIT(A) for fresh adjudication on merits of the case.
6. On the other hand, Ld.Sr-DR has not opposed the prayer made by Ld. AR to set aside the matter to the file of CIT(A).
7. We have considered the rival submission of both parties and perused the materials available on record. We find that the CIT(A) has passed ex parte order confirming all the additions made by the AO. He has also noted that remand report was not submitted by the AO. The Ld. AR requested that the order of CIT(A) may be set aside and the matter may be restored to his file for fresh adjudication. The Ld. Sr-DR has also not opposed the request of the A.Y 12-13 Pravinchandra K Shah Ld.AR. He has rather agreed that the matter may be restored back to the file of CIT(A). After considering the facts discussed above, we are of the considered view that assessee has not been granted proper opportunity of hearing by the first appellate authority. He has not waited for the remand report of ethe AO before passing the appellate order. Hence, we are of the considered view that the assessee deserves one more opportunity to contest his case on merit. Accordingly, we set aside the order of CIT(A) and remit the matter back to his file for fresh adjudication after granting adequate opportunity of hearing to assessee. The assessee is also directed to be vigilant and to furnish all details and explanation as needed by CIT(A) by not seeking adjournment without valid reason. With this direction, the grounds of appeal raised by the assessee is treated as allowed for statistical purposes
In the result, appeal of the assessee is allowed for statistical purposes.