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Facts
The assessee did not file her return for AY 2018-19, leading to reopening of the case under section 147. Despite notices, the assessee failed to comply, and the AO made an ex-parte addition of Rs. 1,06,36,966/- for sale of property treated as short-term capital gains. The CIT(A) subsequently dismissed the assessee's appeal for non-prosecution, confirming the AO's findings.
Held
The Tribunal observed that both the AO and CIT(A) passed ex-parte orders. The Tribunal found the CIT(A)'s order to be in violation of section 250(6) of the Act as it confirmed the AO's addition without going into the merits. Therefore, the Tribunal set aside the CIT(A)'s order and remanded the matter back for de novo adjudication on merits, providing the assessee an opportunity to present supporting evidence.
Key Issues
1. Validity of ex-parte assessment and appellate orders due to non-compliance by the assessee. 2. Whether the CIT(A) erred in dismissing the appeal for non-prosecution and confirming the AO's addition without examining merits, violating Section 250(6) of the Income Tax Act.
Sections Cited
Income Tax Act, 1961, Section 147, Section 148, Section 142(1), Section 144, Section 144B, Section 250(6)
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Income Tax Appellate Tribunal, “B” BENCH, PUNE
Before: SHRI R.K. PANDA & MS. ASTHA CHANDRA
आदेश / ORDER
PER ASTHA CHANDRA, JM :
The appeal filed by the assessee is directed against the order dated 27.08.2025 of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [“CIT(A)/NFAC”] pertaining to Assessment Year (“AY”) 2018-19.
2. Briefly stated the facts are that the assessee is an individual. For the AY 2018-19, the assessee had not filed her original return of income. The case of the assessee was reopened u/s 147 of the Income Tax Act, 1961 (the “Act”) by issue of notice u/s 148 on 06.04.2022. The assessee failed to comply with the notices issued u/s 148 of the Act. The case was taken up for scrutiny. Notice(s) u/s 142(1) as well as show cause notice(s) issued u/s 144 and final show cause notice also remained un-complied with by the assessee. The Ld. Assessing Officer (“AO”) on the basis of alleged incriminating material made addition of Rs.1,06,36,966/- to the income of the assessee and assessed the income at Rs.1,06,36,966/- vide his order dated 15.02.2024 passed u/s 147 r.w.s. 144 r.w.s. 144B of the Act by observing as under :
“(1)Sale consideration of the properties- Rs 1,06,36,966/- During the year under consideration, as per the information available with the department, it is noticed that the assessee has entered into the transaction of Sale of property amounting to Rs.1,06,36,966/-. The assessee was asked to furnish details of sale of immovable properties. But, the assessee failed to furnish any documentary evidence in this regard. The assessee also did not comply with the aforementioned show cause notice and also failed to file the Return of Income in response to notice issued u/s 148 of the I.T. Act, 1961. Therefore, sale consideration of the property amounting to Rs.1,06,36,966/- (the transaction w.r.t. Sale of immovable properties) is treated as Short Term Capital Gains in terms of the Provisions of the Income Tax Act, 1961, since the Purchase consideration and date of purchase of the said Immovable property could not be ascertained as the assessee could not produce any cogent documentary evidences and is non-responsive throughout the scrutiny proceedings.”
3. Aggrieved, the assessee carried the matter before the Ld. CIT(A)/NFAC. Despite services of notice of hearing issued during the appellate proceedings from time to time there was non-compliance which resulted in an ex-parte decision by the Ld. CIT(A)/NFAC dismissing the appeal of the assessee for non-prosecution and endorsing the findings of the Ld. AO by observing as under :
“It can be seen that the AO has passed a detailed, reasoned and speaking order considering all the facts and the circumstances of the case. Reasonable opportunities of being heard were also allowed by the AO to the appellant. On the other hand, the appellant has though filed this appeal and raised certain grounds of appeal but nothing further has been submitted/adduced to substantiate the facts stated in Statement of facts or Grounds of Appeal. No details, documents or submissions have been provided to come to any conclusion other than those arrived at by the Assessing Officer in the order under appeal. The facts available on record such as facts mentioned in order under appeal, statement of facts, grounds of appeal etc. are neither adequate nor convincing to allow any of the grounds of appeal for want of supporting material/submissions on the part of the appellant. Each of the grounds of appeal has been duly considered in view of the facts available on record and on careful consideration, none of the grounds of appeal can be allowed merely relying on the facts available on record. Given so, no interference with the order of the AO is called for and all the grounds of appeal are dismissed.”
Dissatisfied, the assessee is in appeal before the Tribunal raising the following grounds of appeal :
“1. On the facts and in the circumstances of the case and in law the learned Assessing Officer erred in passing order under section 147 r.w.s 144 read with section 1448 dated 15/02/2024, the order is bad in law for the reason that the proceedings initiated under section 147 r.w.s 144 read with section 1448 are wrong additions Rs 1,06,36,966/- without appreciating the facts of the case, and therefore entire additions needs to be deleted.
The learned Assessing Officer has not considered Cost of Purchase Assets & Cost of Improvement.
On the facts and in the circumstances of the case and in law the learned Assessing Officer making addition of Rs.1,06,36,966/-in without appreciating the fact that, the transaction of sale of Building. On the facts and in the circumstances of the case and in law the learned Assessing Officer has wrongly compute tax liability Demand calculated by assessing officer is prejudicial and, if appeal is not allowed to be proceeded it amounting to against the law.
4. Your appellant craves for to add, alter, amend, modify, delete, any or all grounds of appeal before or during the course of hearing.”
We have heard the Ld. Representatives of the parties and perused the material available on record. Admittedly, there was non-compliance to the various notices issued by the Ld. CIT(A)/NFAC. The Ld. AR submitted that the non-compliance before the Ld. CIT(A)/NFAC was not intentional but due to health issues of family members of the assessee as well as the assessee’s unawareness regarding the proceedings before the Ld. CIT(A)/NFAC. The assessee completely relied on Tax Consultant, however, his Tax Consultant did not inform the assessee and failed to make the necessary compliance before the Ld. CIT(A)/NFAC. It is the submission of the Ld. Counsel for the assessee that the assessee has a strong case on merits and given an opportunity the assessee is in a position to explain and substantiate her case before the Ld. CIT(A)/NFAC by furnishing all the requisite supporting documents/evidence in support of claim. The Ld. AR, therefore, urged that the matter may be sent back to the file of the Ld. CIT(A)/NFAC for adjudication afresh on merits after affording an opportunity of hearing to the assessee. The Ld. DR had no objection to the said proposition of the Ld. AR.
We observe that both the Ld. AO as well as the Ld. CIT(A)/NFAC have passed their respective orders ex-parte qua the assessee as the notices issued by them remained un-complied with. We find that the Ld. CIT(A)/NFAC vide his impugned order dismissed the appeal of the assessee for non-prosecution of the appeal. On merits, the Ld. CIT(A)/NFAC has confirmed the addition made by the Ld. AO for failure on the part of the assessee to furnish the relevant supporting documentary evidences in support of her claim. Before us, the Ld. AR has submitted that the non- compliance before the Ld. CIT(A)/NFAC was not intentional but resulted on account of reasons stated above and pleaded that given an opportunity the assessee is in a position to explain and substantiate her case by filing all the requisite details/ documentary evidences in support of her claim before the Ld. CIT(A)/NFAC. Perusal of the impugned appellate order reveals that the Ld. CIT(A)/NFAC has applied the decision of the Hon’ble Supreme Court in CIT Vs. B.N. Bhattarcharjee and Another, 10 CTR 354 (SC) and also several other decisions of High Courts/ Tribunals stated therein and dismissed the appeal of the assessee for non-prosecution. No doubt, the Ld. CIT(A)/NFAC may decide the appeal ex-parte where the assessee does not prosecute his appeal in spite of several opportunities. Nonetheless, he has to adhere to the legislative mandate enshrined in sub-section (6) of section 250 of the Act which requires him to state the points for determination, the decision thereof and the reasons for the decision. We observe that the Ld. CIT(A)/NFAC has passed the impugned order in concurrence of the order of Ld. AO without himself going into the merits of the case. Thus, in our view, his order is in violation of the provisions of section 250(6) of the Act.
On the above facts and in the circumstances of the case, we deem it fit, in the interest of justice and fair play to set aside the order of Ld. CIT(A)/NFAC and restore the matter back to his file for denovo adjudication and pass speaking order on merits as per fact and law after allowing reasonable opportunity of being heard to the parties. Needless to say, the assessee shall provide the requisite support in terms of submitting the relevant documents/evidence as may be required/called upon on the appointed date without seeking any adjournment under any pretext, failing which the Ld. CIT(A)/NFAC shall be at liberty to pass appropriate order in accordance with law. The assessee is also hereby directed to provide his active and latest email id to the Department for receiving notice(s) of hearing and remain vigilant in accessing and responding to the notices. We direct and order accordingly. The grounds raised by the assessee are thus allowed for statistical purposes.
In the result, the appeal of assessee is treated as allowed for statistical purpose.
Order pronounced in the open court on 30th January, 2026.