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Facts
The assessee sold an immovable property for Rs. 85,00,000, but the stamp valuation authority computed the value at Rs. 97,40,500, leading to a difference of Rs. 12,40,500. The AO made an addition of this difference. The assessee filed an appeal before the CIT(A) but remained non-cooperative, leading to an ex-parte dismissal.
Held
The Tribunal found that the CIT(A) order was passed ex-parte due to the assessee's non-compliance and violation of natural justice. Although the assessee was negligent, the Tribunal, in the interest of justice, decided to give another opportunity for hearing.
Key Issues
Whether the CIT(A) erred in dismissing the appeal ex-parte without adjudicating on merits, and whether the addition made under Section 50C was justified.
Sections Cited
250, 50C, 55A, 143(3), 144B, 270A, 234B, 234C
AI-generated summary — verify with the full judgment below
Before: SHRI SIDDHARTHA NAUTIYAL & SHRI BIJAYANANDA PRUSETH
आदेश / O R D E R
PER BIJAYANANDA PRUSETH, AM:
This appeal by the assessee emanates from the order passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’), dated 13.11.2024, by the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi [in short ‘CIT(A)’] for the Assessment Year (AY) 2018-19.
Grounds of appeal
raised by the assessee are as under: “1. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in dismissing the appeal without adjudicating the grounds of appeal on merits.
2. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in confirming addition of Rs.12,40,500/- u/s 50C on account of difference between the sale value and stamp duty value of the house property sold.
3. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in confirming addition u/s 50C without considering the fact that the valuation was referred to DVO and report of DVO was pending as on the date of order.
/AY.2018-19 Jitendra Mehta 4. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in levying penalty u/s 270A of Income Tax Act, 1961.
5. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in charging interest u/s 234B & 234C of Income Tax Act, 1961.
Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.”
Brief facts of the case are that the assessee is an individual and filed his return of income on 29.09.2018, declaring total income of Rs.15,74,450/-. The assessee sold an immovable property at Flat No.104, 1st Floor, A Wing, Jai HariChs Ltd., Vasantrao Naik Marg, Mumbai for a consideration of Rs.85,00,000/-, but the stamp valuation authority computed the value of the property at Rs.97,40,500/-. Thus, there is a difference of Rs.12,40,500/-. The AO asked assessee to furnish details and explanation, in response to which the assessee stated that he sold the land at current market value to the buyer and he has not received any additional amount from buyer of the property. The assessee also requested AO to refer the matter to the DVO u/s 55A of the Act to ascertain actual value of property. The DVO started necessary proceedings but since the case was getting time barring, the AO issued a show cause notice on 23.09.2021. But, the assessee failed to do file any reply. In absence of any details/explanation, the AO passed the order u/s 143(3) r.w.s. 144B of the Act and made addition of Rs.12,40,500/-, being the difference between the value declared by the assessee and the long-term capital gain (LTCG) as per stamp valuation authority.
/AY.2018-19 Jitendra Mehta 4. Aggrieved by the order of AO, the assessee filed this appeal before the CIT(A). The CIT(A) issued 6 notices but apart from seeking adjournment once, assessee did not file any reply. Hence, the CIT(A) observed that the appellant was not interested in pursuing his appeal and he had no documentary evidence in support of his claim. The CIT(A) relied on the decisions in cases of M/s Chhabra Land & Housing Ltd., to 1027/Chd/2005 and B. N. Bhattacharjee & Ors., 118 ITR 461 (SC) and held that the appeal does not mean merely filing of the appeal but effectively pursuing the same. The CIT(A) further observed that the appellant was provided adequate opportunity of being heard; however, he had remained non-compliant. No material fact had been brought on record to rebut the findings of the AO. In absence of any documentary evidence, the CIT(A) dismissed the appeal.
5. Aggrieved by the order of CIT(A), the assessee filed appeal before the Tribunal. The learned Authorized Representative (ld. AR) of the assessee submitted that the CIT(A) passed an ex-parte order u/s 250 of the Act on 13.11.2024 without hearing the assessee in violation of the principles of natural justice. Hence, the order being an ex parte, stood vitiated on account of violation of principles of natural justice. The assessee could not appear before the CIT(A) due to circumstances beyond his control. Therefore, Id. AR requested that in the interest of justice, one more opportunity should be given to the assessee to plead his case before the CIT(A).
/AY.2018-19 Jitendra Mehta 6. On the other hand, learned Senior Departmental Representative (ld. Sr. DR) of the revenue submitted that the appellant was negligent and non- cooperative during the appellate proceedings. He submitted that appropriate cost should be imposed on the assessee, if the matter is remitted to the file of CIT(A).
We have heard both the parties and perused the material available on record. It is an undisputed fact that the assessee has been non-cooperative during the appellate proceedings. The CIT(A) had issued six notices which at para 4.1 of the appellate order, but apart from seeking adjournment once, the assessee did not comply to the notices issued by the CIT(A). Considering all these facts, we are of the view that the assessee was negligent and non- cooperative before the CIT(A). The Id. AR submitted that the non-compliance was neither deliberate nor intentional, but due to circumstances beyond control of assessee. He submitted that assessee is ready with all details and requested that another opportunity may be granted to the assessee to submit all the required explanations and details and plead his case on merit. We are of the view that the principles of natural justice would call for giving another opportunity of hearing to the assessee. Accordingly, in the interests of justice, the order of CIT(A) is set aside and the matter is restored to file of CIT(A) to re- adjudicate the entire issue afresh subject to payment of cost of Rs.10,000/- (Rupees ten thousand only) by the assessee to the credit of the "District Legal Services Authority, Surat" within 2 weeks from receipt of this order. The /AY.2018-19 Jitendra Mehta assessee should be granted adequate and reasonable opportunity of being heard by the CIT(A). The assessee is also directed to be more vigilant and diligent and to furnish all the details and explanations as needed by the CIT(A) by not seeking adjournment without valid reasons. With this direction, the appeal of the assessee is allowed for statistical purposes.
In the result, appeal of the assessee is allowed for statistical purposes. Order is pronounced under provision of Rule 34 of ITAT Rules, 1963 on 09/06/2025.