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Facts
The assessee did not file the return of income for AY 2020-21 despite selling immovable property. The case was reopened under section 147, and notices were issued. The assessee failed to respond, and the AO treated the cost of acquisition as Nil, treating the sale consideration as short-term capital gain.
Held
The CIT(A) dismissed the appeal ex-parte for non-prosecution. The Tribunal held that the CIT(A) erred in dismissing the appeal without adjudicating on merits, especially since the assessee claimed not to have received notices due to incorrect email communication.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal ex-parte for non-prosecution without deciding on merits, and if the notices were properly served on the assessee.
Sections Cited
147, 144, 148, 148A(b), 148A(d), 250
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Income Tax Appellate Tribunal, Hyderabad “A” Bench, Hyderabad
करदाता का प्रतततितित्व/ : Ms.Lakshita, C.A. Assessee Represented by राजस्व का प्रतततितित्व/ : Shri Sankar Pandi, Sr. A.R. Department Represented by सुिवाई समाप्त होिे की ततति/ : 29.01.2026 Date of Conclusion of Hearing घोर्णध की तधरीख/ : 30.01.2026 Date of Pronouncement O R D E R PER MANJUNATHA G., A.M : This appeal filed by the assessee is directed against the order of the learned Commissioner of Income Tax(Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 09.10.2025, arising out of order passed by the A.O. u/s 147 r.w.s. 144 of Income Tax Act, 1961 (for short “the Act”) and pertains to the assessment year 2020-21.
The grounds raised by the assessee read as under :
“1. The learned Principal Commissioner of income-tax, [CIT(A)] erred in law and facts of the case while passing the order under section 250.
2. The learned CIT(A) erred in dismissing the appeal for non-prosecution ignoring that CIT(A) has to adjudicate and dispose off the appeal on merits and has no power to dismiss the appeal in limine for want of prosecution.
3. The assessment made by learned A.O. and upheld by the CIT(A) is incorrect as the property on which the capital gain is brought to tax was held by appellant for a period more than 24 months before transfer making it a long term capital asset whereas the A.O. has treated the same as short term capital asset.
The assessment made by learned A.O. and upheld by the CIT(A) is incorrect as while computing capital gains indexed cost of acquisition has not been considered leading to excess assessment.
For these and other ground which may be raised during OR before the appeal is heard. It is prayed that the relief is granted.
The brief facts of the case are that, the assessee, an individual has not filed his return of income for the A.Y.2020-21, despite engaged in sale of immovable property worth Rs.55,38,000/- during the F.Y.2019-20. Consequently, the case was reopened u/s 148 of the Act and a notice u/s 148A(b) was issued. The assessee failed to respond to the notice, hence, the case was reopened after passing order u/s 148A(d) of the Act.
Subsequently, various statutory notices were issued to the registered email of the assessee, but the assessee did not respond to any of the notices. Therefore, in the absence of any reply or explanation on the taxability of sale consideration, the A.O. treated the cost of acquisition of the property at Nil and made addition of entire amount of sale consideration as short term capital gain, completed the assessment by making an addition of Rs.55,38,000/- and passed assessment order u/s 147 r.w.s. 144 of the Act dated 10.01.2025.
4. Aggrieved by the order of the A.O., the assessee preferred an appeal before the CIT(A) and the Ld.CIT(A) upheld the order of the A.O. and dismissed the appeal filed by the assessee ex-parte for non-prosecution.
Aggrieved by the order of the Ld.CIT(A), the assessee preferred an appeal before the Tribunal.
At the outset, the learned counsel for the assessee contended that the Ld.CIT(A) is not justified in upholding the order of the Ld.A.O., without appreciating the fact that the assessee remained completely unaware of the notices issued during the appellate proceedings until the CIT(A) order was received, as the notices were not sent to the email ID provided in Form 35, i.e., „premrandb@gmail.com‟, but instead sent to the email address of his accountant and the accountant failed to inform or update the assessee regarding any notices received on his email address. The learned Counsel for the assessee further contended that even otherwise, the Ld.CIT(A) ought to have decided the appeal on merits instead of dismissing the same ex- parte, against law. She, therefore, pleaded that an opportunity of hearing may be given to the assessee before the Ld.CIT(A) to substantiate his case with credible evidence.
7. Per contra, the learned Sr.AR for the Revenue relied on the order of the Ld.CIT(A) and submitted that the assessee was given multiple opportunities, but the assessee failed to comply with the notices to rebut the findings of the A.O. He, therefore, pleaded to uphold the order passed by the Ld.CIT(A) and dismiss the appeal filed by the assessee.
We have heard both the parties, perused the material available on record and gone through the orders of the authorities below.
The assessee has explained the reasons that the Ld.CIT(A) issued notice on the email ID provided in the ITBA portal, even though the assessee has provided a different ID in Form 35. Further, the e-mail ID in ITBA portal is of an accountant used for the purpose of filing return of income, however, for the purpose of sending notices during appellate proceedings, the assessee has provided his own e-mail ID. Although the assessee has provided his new e- mail ID, but the Ld.CIT(A) continued to serve notices to the old e- mail ID, which the assessee could not notice, because of which there was no compliance from the assessee before the Ld.CIT(A). However, said non-compliance is neither wilful nor it derived any benefit to the assessee. Further, we find that the assessee has provided email address as “premrandb@gmail.com” in Form 35. However, CIT(A) states that the notices were served on the email ID in the portal and further there is no information, on which e- mail ID he has sent all notices. The Ld.CIT(A) dismissed the appeal in limine for non-prosecution, however, not discussed the issues on merits by providing an opportunity, therefore, the order passed by the Ld.CIT(A) cannot be upheld. Therefore, we set aside the order passed by the Ld.CIT(A) and restore the issue to the file of the Ld.CIT(A) with a direction to reconsider the appeal filed by the assessee, after providing one more opportunity of hearing to the assessee to explain his case.
In the result, the appeal filed by the assessee is allowed for statistical purpose.