SAJJADHUSEIN KADERBHAI KAPADIA,MUMBAI vs. INCOME TAX OFFICER 17(3)(2), MUMBAI

When the appeal was called for hearing, no one was present on behalf of the assessee to represent the case in spite of notice of hearing having been issued through registered post with A/D.

Brief facts are, the assessee is an individual. For the assessment year under dispute, the assessee filed his return of income on 22nd July 2013, declaring income of ` 5,74,654. In the course of assessment proceedings, the Assessing Officer noticed that during the year, the assessee had sold a godown at Vashi, Navi Mumbai, for a consideration of ` 1 crore. However, as per the stamp valuation authority, the value of the property was determined at ` 1,39,00,000. Therefore, considering the value determined by the stamp valuation authority as deemed sale consideration, the Assessing Officer computed net capital gain at ` 82,25,464, and added back to the income of the assessee. The assessee challenged the aforesaid addition by filing an appeal before the first appellate authority. However, learned Commissioner (Appeals) sustained the addition made by the Assessing Officer while disposing of assessee’s appeal ex–parte.

Heard the learned Departmental Representative and perused the material available on record. Undisputedly, the appeal filed by the assessee before learned Commissioner (Appeals) has been disposed of 3 Sujjadhusein Kaderbhai Kapadia ex–parte confirming the addition made by the Assessing Officer. As could be seen from the grounds raised, the dispute between the parties is with regard to the deduction claimed under section 54G of the Act. Without entering into the controversy whether ex–parte disposal of the appeal by learned Commissioner (Appeals) is justified or not, we are of the view, in the interest of justice assessee deserves an opportunity to establish its claim of deduction under section 54G of the Act before learned Commissioner (Appeals) with supporting evidence, which, he could not do since the appeal was decided ex– parte. Accordingly, we set aside the impugned order of learned Commissioner (Appeals) and restored the issue back to his file for de novo adjudication. Learned Commissioner (Appeals) is directed to provide adequate opportunity of being heard to the assessee before deciding the issue. Further, we also direct the assessee to respond to the hearing notices to be issued by learned Commissioner (Appeals) and represent his case in effective manner. Grounds are allowed for statistical purposes.

In the result, appeal is allowed for statistical purposes. Order pronounced in the open Court on 16.08.2019