VIMARSH PRAKASHBHAI VASAVADA,VADODARA, GUJARAT vs. INCOME TAX OFFICER WARD 1(2)(2), VADODARA, VADODARA, GUJARAT

Facts

The assessee filed an Income Tax Return for AY 2020-21, declaring income including Long Term Capital Gains from the transfer of shares and claiming a deduction under section 54F. The Assessing Officer (AO) treated the share sale consideration as unexplained money under section 69A and denied the section 54F deduction, leading to a significant addition. The CIT(A) upheld the AO's order, citing the assessee's consistent non-compliance and failure to provide evidence during the appellate proceedings.

Held

The ITAT noted the assessee's plea that the CIT(A)'s order was ex-parte due to notices being sent to an incorrect email ID. Acknowledging the assessee's non-compliance but also the substantial issues involved (capital gains, section 69A, section 54F, foreign tax credit), the ITAT set aside the CIT(A)'s order and remanded the case back for de-novo consideration on merits. The assessee was directed to cooperate fully and pay a cost of Rs. 10,000/- to the Prime Minister's Relief Fund.

Key Issues

Validity of assessment order (jurisdiction and procedure under section 144B); addition of sale consideration as unexplained money under section 69A; denial of deduction under section 54F; allowability of foreign tax credit; ex-parte order due to alleged invalid service of notice.