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Facts
The assessee did not file an income tax return for AY 2018-19. The Assessing Officer (AO) reopened the assessment under section 147 based on information of property sale. The AO completed the assessment under section 147 r.w.s. 144 at a total income of Rs. 51,50,000/-. The assessee's appeal before the CIT(A) was dismissed for non-compliance.
Held
The Tribunal found that the assessee was negligent in not complying with the CIT(A)'s proceedings, but on merits, considering the additional evidence filed, it was proper to set aside the matter to the AO. The Tribunal directed the AO to allow another opportunity to the assessee to explain the capital gain, subject to payment of cost.
Key Issues
Whether the assessment was justified under section 147 and whether the CIT(A) erred in passing an ex-parte order and confirming additions without proper appreciation of facts.
Sections Cited
147, 148, 144, 250, 234A, 234B, 234C, 234D, 272A, 270A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD
Before: SHRI TR SENTHIL KUMAR & SHRI NARENDRA PRASAD SINHA
PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER:
This appeal is filed by the assessee against the order of National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘CIT(A)’] dated 28.12.2023 for the Assessment Year (A.Y.) 2018-19 in the proceeding u/s 147 r.w.s. 144 of the Income Tax Act.
The brief facts of the case are that the assessee did not file return of income for A.Y. 2018-19. The AO had received an information that the assessee had sold an immovable property during the year for a consideration of Rs. 1.03 crores. On the basis of this information the case Trusha Vrajendra Sanghavi Vs ITO,AY- 2018-19 2 of the assessee was reopened u/s 148 of the Act, after passing an order u/s 148A(d) of the Act. In the course of assessment proceeding no compliance was made by the assessee. As the assessee was having only 50% share in the property, ½ of the sale consideration being Rs. 51.50 lakhs was considered as LTCG derived by the assessee. The assessment was completed under section 147 r.w.s. 144 of the Act on 29.01.2023 at total income of Rs. 51,50,000/-.
Aggrieved with the order of the AO, the assessee had filed an appeal before the first appellate authority, which was decided by the learned CIT(A) vide the impugned order and the appeal of the assessee was dismissed.
Now the assessee is in second appeal before us. The following grounds have been taken in this appeal:
1. The Ld. CIT(A) has erred, both in law and on facts, in passing ex-parte order and that too in gross violation of section 250(6) of the Act.
2. In the facts of the present case, Ld. AO was not justified in reopening the assessment under section 147 of the Act.
3. The Ld. CIT(A) has erred, both in law and on facts, in confirming the addition of Rs.51,50,000/- made by Ld. AO in respect of Long Term Capital Gain on sale of property.
4. Both, AO & CIT(A), have erred in passing the impugned orders without properly appreciating facts of the case, submissions of the assessee and documentary evidences available on record in the correct perspective. Such an act is in gross violation of the principles of natural justice.
The Ld. CIT(A) has erred in law and on facts of the case in confirming levy of interest u/s. 234A/B/C/D of the Act.
The Ld. CIT(A) has erred in confirming action of initiation of penalty proceedings under section 270A of the Act.
8. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal.
5. Shri. Parimalsinh B Parmar, the Ld. AR of the assessee submitted that the Ld. CIT(A) had dismissed the appeal of the assessee for the reason that no compliance was made before him. The assessee has filed an affidavit explaining the reason for non-compliance. It is submitted that the assessee is a non-resident and in Form No. 35 e-mail id of his brother Mithul Sanghvi was mentioned and no option was given regarding receipt of any communication on the e-mail address. The assessee did not receive any physical notice and the communication sent by the Ld. CIT(A) on the e-mail address of his brother mithulsanghvi@gmail.com was not communicated to her. As a result, the Ld. CIT(A) had dismissed the appeal of the assessee due to non-compliance before him. The Ld. AR submitted that the assessee may be allowed another opportunity to explain the LTCG derived by setting aside the matter to the file of the AO. The assessee had also made an application for filing additional evidences in support of the LTCG derived during the year.
Per contra, Shri Rajiv Garg, the Ld. Sr. DR had no objection if the matter was set aside to the AO for allowing another opportunity to the assessee.
Trusha Vrajendra Sanghavi Vs ITO,AY- 2018-19 4 7. We have considered the request of the assessee. We are not convinced with the explanation of the assessee regarding non-compliance before the Ld. CIT(A). When the appeal was filed by the assessee, she should have been careful enough to enquire about the status of the pending appeal before the Ld. CIT(A). It was the duty of the assessee to watch her affairs before the CIT(A). The assessee was aware of the pending appeal, still no care was exercised to enquire about the status of appeal and the assessee has only tried to shift the responsibility on her brother. The assessee was certainly negligent. We, therefore, deem it proper to impose a cost of Rs.10,000/- on the assessee which should be deposited to Prime Minister National Relief Fund within a period of 15 days from the date of receipt of this order.
On merits, it is found that the AO had treated the entire sale consideration of Rs.51,50,000/- as LTCG derived by the assessee. In the absence of any compliance, the cost of acquisition of the property was not available before the AO. The assessee has now filed additional evidence in the form of purchase deed dated 24.01.2008, as per which the property was purchased for a consideration of Rs. 31.25 lakhs. As per working of LTCG provided by the assessee, LTCG of Rs. 12,68,992/- only was derived by the assessee. In view of this fact, we deem it proper to set aside the matter to the file of jurisdictional AO with a direction to allow another opportunity to the assessee to explain the capital gain derived on sale of immovable property during the year, subject to payment of cost as directed above. The assessee will be free to file the additional evidences as brought on record before us or any other evidence as deemed fit. The assessee is also directed to make compliance before the Trusha Vrajendra Sanghavi Vs ITO,AY- 2018-19 5 AO in the course of set aside proceeding and furnish the details and clarification as required by the AO. In case the assessee does not make compliance in the course of set aside proceeding, the AO will have liberty to pass the order on merits, on the basis of the materials available on record.
In the result, the appeal of the assessee is allowed for statistical purpose.
Order pronounced in the Court on 05/02/2026 at Ahmedabad.
Sd/- Sd/- (TR SENTHIL KUMAR) (NARENDRA PRASAD SINHA) Judicial Member Accountant Member Dated – 05th February, 2026 Neelesh Kumar True Copy आदेश क� आदेश क� �ितिलिप �ितिलिप अ�ेिषत अ�ेिषत/Copy of the Order forwarded to : आदेश आदेश क� क� �ितिलिप �ितिलिप अ�ेिषत अ�ेिषत 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु�(अपील) / The CIT(A) 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण / DR, ITAT, 6. गाड� फाईल /Guard file.