TAJMEET KAUR,NEW DELHI vs. ITO WARD 29(7), NEW DELHI

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ITA 420/DEL/2024Status: DisposedITAT Delhi20 February 2025AY 2012-13Bench: SHRI SHAMIM YAHYA (Accountant Member)3 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the assessee's appeal was dismissed by the CIT(A) for default without a proper opportunity to be heard. In the interest of justice, the case was remitted back to the AO for fresh consideration after giving the assessee an adequate opportunity to be heard.

What were the facts?

The assessee, a shareholder in VXL Realtors Private Limited, received a loan of Rs. 20,34,000/- from the company. The Assessing Officer (AO) treated this as a deemed dividend under Section 2(22)(e) as the assessee was a shareholder with over 10% holding. The assessee did not comply with the AO's notices.

What were the issues?

Whether the loan received by the assessee from the company was a deemed dividend under Section 2(22)(e) and whether the CIT(A) erred in dismissing the appeal without providing a reasonable opportunity of being heard.

Which sections of the Income-tax Act were involved?

Section 2(22)(e)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “SMC”, NEW DELHI

Before: SHRI SHAMIM YAHYA,

For Respondent: Shri Sanjay Kumar, Sr. DR
Hearing: 20.02.2025Pronounced: 20.02.2025

ORDER The Assessee has filed the instant Appeal against the Order of the Ld. NFAC, New Delhi dated 31.10.2023, relating to assessment year 2012-13 on the following grounds:- 1. That the order of the Ld. CIT(A), NFAC is defective in law. That the Ld. CIT(A),NFAC Delhi is not justified in dismissing the appeal of the appellant without giving a proper and reasonable opportunity of being heard and ignoring the statement of facts and grounds of appeal, which is against the principle of equity and natural justice.

2. That the Ld. CIT(A)/NFAC Delhi is not justified in upholding the order of the AO for the addition of Rs. 20,34,000/- on account of deemed divided under section 2(22)(e) of the Act as the assessee received the return of amount of loan from the company. This addition is not as per the provisions of law and your honour is prayed to delete the same.

2.

Brief facts of the case are that as per information available with the department it was found that the assessee was a shareholder in VXL Realtors Private Limited and was shareholder having a 13.65% shareholding with the said company. The case of the assessee was taken up for the scrutiny by issuance of notice u/s. 148 of the Act. During the course of assessment proceedings, it was found that the appellant had maintained her bank account no. 629101505363 with ICICI Bank ltd. and had various transactions with the above said company through it bank account no. 1388862 maintained with Royal bank of Scotland. Further, the above said company had given loan amounting to Rs. 20,34,000/- to the appellant who was promoter as well as share holder of more than 10% shareholding of the above said company during the year under consideration. The AO called for details of said loan vide notice u/s. 133(6) of the Act, but neither the appellant nor the above stated entity have any reply. Further, the appellant remained on non-compliance during the assessment proceedings. Considering the facts and circumstances of the case the AO found that provisions of section 2(22)(e) was squarely applicable to the appellant and therefore an amount of Rs. 20,34,000/- was added back to the income of the appellant as deemed divided u/s. 2(22)(e).

3. Upon assessee’s appeal, Ld. CIT(A) noted that assessee has not responded, hence, he proceeded to dismiss the appeal. 4. Against the aforesaid order, Assessee is in appeal before me

5.

I have heard the Ld. DR and perused the records. None appeared on behalf of the assessee, despite issue of notice, therefore, I am proceeding exaparte qua the assessee. I note that it was the prayer of the Assessee made in the grounds of appeal

that no proper and reasonable opportunity of being heard was given to the assessee. Moreover, Ld. CIT(A) has dismissed the appeal for default. In this view of the matter and in the interest of justice, the issues in dispute are remitted back to the file of the AO for fresh consideration, after giving adequate opportunity of being heard to the assessee for which the Ld. DR has no objection.

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