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Facts
The assessee's appeal was dismissed by the CIT(A) ex-parte. The Assessing Officer had made additions of Rs. 3,53,649/- on account of long-term capital gain from alleged penny stock and Rs. 7,073/- towards commission. The assessee claims that notices from CIT(A) were not received due to being a senior citizen not conversant with technology.
Held
The Tribunal noted that the CIT(A)'s order was ex-parte and the assessee, being a senior citizen, did not receive the hearing notices effectively. Considering the interest of justice, the matter was remitted back to the CIT(A) for de novo adjudication.
Key Issues
Whether the ex-parte order of the CIT(A) dismissing the appeal without granting sufficient opportunity was valid, and whether the additions made by the AO were justified.
Sections Cited
147, 143(3), 68, 69C, 234A, 234B, 234C, 271(1)(c)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “H (SMC
Before: SHRI SANDEEP SINGH KARHAIL & SHRI GIRISH AGRAWAL
O R D E R
PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of ADDL/JCIT (A)-2, Lucknow, vide order no. ITBA/APL/S/250/2025- 26/1081211974(1), dated 26.09.2025, passed against the assessment order by Income Tax Officer, Ward-19(2)(1), Mumbai, u/s. 147 r.w.s 143(3) of the Income-tax Act (hereinafter referred to as the “Act”), dated 26.12.2018 for Assessment Year 2011-12.
Grounds taken by assessee are reproduced as under: “1. The Ld. CIT(A) has erred in law and in facts in passing the order u/s. 250 of the Act dated 26.09.2025 dismissing the appeal filed by the appellant and confirming the order passed by the Ld. AO u/s 143(3) r.w.s 147 of the Act which is bad and invalid in the eyes of law. 2. The Ld. CIT(A) has erred in law and in facts in not appreciating that the assessment order passed is in violation of principles of natural justice.
Jagruti Bharat Shah Assessment Year 2011-12 3. The Ld. CIT(A) has erred in law and in facts in passing the appellate order in violation of principles of natural justice without granting sufficient opportunity to the appellant and without deciding the appeal on merits.
4. The Ld. CIT(A) has erred in law and in facts in not appreciating that the reopening of assessment by the Ld. AO is invalid and bad in the eyes of law.
5. The Ld. CIT(A) has erred in law and in facts in confirming the action of the Ld. AO in making addition of Rs. 3,53,649/- u/s. 68 of the Act on account of sale of shares of alleged penny stock company M/s. VAS Infrastructure Ltd. which is invalid and bad in the eyes of law.
The Ld. CIT(A) has erred in law and in facts in confirming the action of the Ld. AO in making addition of Rs. 7,073/- u/s. 69C of the Act on account of alleged commission on penny stock transactions which is invalid and bad in the eyes of law.
The Ld. CIT(A) has erred in law and in facts in confirming the action of Ld. AO in charging interest u/s. 234A, 234B and 234C of the Act which is invalid and bad in the eyes of law.
The Ld. CIT(A) has erred in law and in facts in confirming the action of Ld. AO in initiating penalty proceedings u/s. 271(1)(c) of the Act which is invalid and bad in the eyes of law.”
At the outset it was pointed out by the ld. Counsel of the assessee that order passed by ld. CIT(A) is an ex parte order whereby the appeal has been dismissed by observing in para-6.1 “In absence of any follow up and submission from the appellant, this office is not in a position to conclude the matter on merits. Therefore, the appeal is dismissed as not pressed”. The issue involved in the present appeal is in respect of addition made towards long term capital gain earned by the assessee on scrip alleged to be a penny stock, i.e., VAS Infrastructure ltd. Ld. Assessing Officer made the addition of Rs.3,53,649/- involved in the sale of shares of this company by taking recourse to section 68 of the Act. He also made an addition of Rs.7,073/- towards commission at the rate of 2% of Rs.3,53,649/- alleging that it was paid to entry provider, by applying section 69C. The impugned reassessment order is passed u/s. 143(3) r.w.s. 147 after taking into consideration, submissions and details filed by the assessee and considered by the ld. Assessing Officer.
3.1. Before the ld. CIT(A), assessee could not make effective representation as notices fixing the date of hearing could not be received
Jagruti Bharat Shah Assessment Year 2011-12 by the assessee since assessee is not conversant with the technology being a senior citizen. In the course of hearing before us, assessee has furnished the details of the transaction carried out which is extracted below: Name of Quantity Purchase details Sale details Profit Profit Annualised Scrip (Rs) % profit % (Approx) Date Rate Value Date Rate Value (Rs.) (Rs.) VAS 2,500 18.01.2007 111.89 2,79,736 10.11.2010 141.45 3.53.649 73,913 20.90% 5.57% Infrastructure Ltd.
Considering the overall factual matrix and the orders of the authorities below, we find it appropriate, in the interest of justice and fair play to remit the matter back to the file of ld. CIT(A) for de novo meritorious adjudication on the grounds raised at the first appellant stage. Needless to say, assessee be given reasonable opportunity of being heard and to make all the relevant submissions as required to substantiate the claim made by her.
In the result, appeal of the assessee is allowed for statistical purposes.