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Facts
The assessee appealed against an ex-parte order by the CIT(A) which confirmed the denial of carry forward of Long Term Capital Loss of Rs. 16,62,905/- on the sale of shares. The CIT(A) dismissed the appeal as the assessee failed to furnish details despite multiple opportunities, leading the assessee to contend a lack of proper hearing and incorrect re-characterization of the transaction under Section 154.
Held
The Tribunal, acknowledging the assessee's non-compliance before the CIT(A), decided to set aside the CIT(A)'s order in the interest of justice. The case was remanded back to the Assessing Officer for a de novo assessment, with a condition that the assessee cooperates and furnishes all required documents.
Key Issues
Denial of carry forward of Long Term Capital Loss; validity of an ex-parte order by CIT(A) without proper hearing; re-characterization of share sale as buy-back under Section 154.
Sections Cited
Section 250, Section 154, Section 10(34A), Section 143(3)
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Income Tax Appellate Tribunal, “B” BENCH, AHMEDABAD
Before: DR. B.R.R. KUMAR, VICE-SHRI T.R. SENTHIL KUMAR
PER DR. B.R.R. KUMAR, VICE-PRESIDENT :
This appeal has been filed by the assessee against the order of the Ld. Addl/Jt. Commissioner of Income-tax (Appeals)-2, National Faceless Appeal Centre (NFAC), Gurugram (hereinafter referred to as "CIT(A)" for short) dated 25.06.2025, passed under Section 250 of the Income-tax Act, 1961 [hereinafter referred to as "the Act" for short], for Assessment Year (AY) 2015-16.
he assessee has raised the following grounds of appeal:-
“1. That the learned CIT(A) erred in law and on facts in passing an ex-parte order without considering appellant's adjournment request and without providing an effective opportunity of being heard, which is against principles of natural justice.
2. The learned CIT(A) has erred in confirming the order passed u/s 154 of the Act, even though the same was beyond the scope of "mistake apparent from record" and related to a debatable issue.
3. That the learned CIT(A) erred in confirming the denial of carry forward of Long Term Capital Loss of Rs. 16,62,905/- on sale of shares of a private limited company on the erroneous presumption that the transaction was a buy-back covered by Section 10(34A), whereas the appellant had submitted documentary evidence (bank statement) showing sale proceeds were received from third parties, not the company.
4. The learned CIT(A) has erred in law in not appreciating that during the original assessment u/s 143(3), the AO had duly examined the claim of capital loss and accepted the same; therefore, re-characterization of the transaction in proceedings u/s 154 was nothing but a review/change of opinion which is impermissible in law.
5. The Learned CIT(A) erred in law and on facts by failing to consider that the order u/s. 154 is bad in law as the Ld. AO failed to pass a speaking order and merely stated that the assessee's reply was "not found correct" without assigning reasons or dealing with the evidences submitted.”
On perusal of the records, it is observed that the assessee was afforded several opportunities to furnish details, clarifications, and explanations in support her claim; however, despite being granted multiple opportunities, the assessee remained non-compliant and failed to furnish the requisite details or explanations before the Ld. CIT(A). Consequently, the Ld. CIT(A), based on the material available on record, upheld the action of the Assessing Officer and dismissed the appeal ex parte. We also find that assessee even failed to submit substantial documents before the Assessing Officer.
Before us, the Ld. Counsel for the assessee prayed that, given an opportunity, all necessary details, clarifications, and explanations would be Mamta Madhavsharan Agrawal Vs. ACIT Asst. Year : 2015-16 - 3– furnished before the Revenue authorities. Hence, in the interest of justice, we set aside the order of the Ld. CIT(A) and restore the matter back to the file of the Assessing Officer for de novo assessment. The assessee shall submit all the relevant details / statement / submission / supporting documents before the Assessing Officer and comply with the notices issued by the revenue authorities without seeking any unnecessary adjournments.
In the result, the appeal of the assessee is allowed for statistical purposes.
The order is pronounced in the open Court on 07.01.2026