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Facts
The assessee filed an ITR for AY 2017-18, declaring income of Rs. 55,10,400/-. The case was selected for scrutiny regarding capital gains from immovable property, but the assessee failed to respond to statutory notices, leading the AO to frame a best judgment assessment u/s 144, adding Rs. 1,48,82,161/- as long-term capital gain. The CIT(A) subsequently dismissed the assessee's appeal ex-parte due to non-representation.
Held
The Tribunal acknowledged that lower authorities provided sufficient opportunity, yet the assessee claimed non-receipt of notices and a significant gap between the last notice and the impugned order. To ensure natural justice, the Tribunal set aside the CIT(A)'s ex-parte order and restored the assessment to the Assessing Officer for a fresh determination, with directions for the assessee to cooperate.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal ex-parte without providing proper opportunity of being heard, and the validity of the assessment made u/s 144 without considering the assessee's contentions regarding cost of acquisition and application of Section 50C.
Sections Cited
Section 251, Section 144, Section 143(3), Section 143(2), Section 142(1), Section 50C
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “F”: NEW DELHI
Before: SHRI KUL BHARAT & SHRI AVDHESH KUMAR MISHRA
O R D E R PER KUL BHARAT, JM:
This appeal, by the assessee, is directed against the order of the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated 19.02.2024, pertaining to the assessment year 2017-18. The assessee has raised following grounds of appeal:
“1. That Id CIT(A) NFAC without appreciating the correct facts of the case is not justified in law and facts and circumstances of the case in dismissing the appeal by way of ex-parte order for want of prosecution by the appellant assessee for which he was not empowered to do so in view of provision of section 251 of the Income Tax Act, 1961 and more particularly 16 months back and thus order so passed by Id CIT(A) needs to be set aside.
2. That Id CIT(A) NFAC without appreciating the correct facts of the case and without giving proper opportunity of being heard is not justified in law and facts and circumstances of the case in not deciding all the grounds of appeal taken by the appellant assessee which was independent to each other.
3. Without prejudice to ground of appeal no. 1 and 2. Even otherwise the Id CIT (A) NFAC without appreciating the correct facts of the case and without giving proper opportunity of being heard and ignoring the problem faced in e-assessment proceedings being first year of e-assessment in respect of knowledge/service of notices issued on e-portal without communication to the assessee by ways of SMS etc as in present days is not justified in law and facts and circumstances of the case in confirming the validity of assessment order passed under section 144 of the Income Tax Act without complying with the provision of said section and thus orders so passed deserves to be quashed.
4. Without prejudice to ground of appeal no. 1 to 3, the Id CIT(A) NFAC without appreciating the correct facts of the case and without giving proper opportunity of being heard is not justified in law and facts and circumstances of the case in confirming the action of Id assessing officer in taking the cost of acquisition of property sold at Rs. Nil against the cost of inflation index of Rs. 6882161/- declared by assessee, without bringing any contrary evidence on record and without appreciating the fact that cost of acquisition of property sold cannot be Nil under any circumstances.
5. That Id CIT (A) NFAC, without appreciating the correct facts of the case and without giving proper opportunity of being heard is not justified in law and facts and circumstances of the case and by ignoring the provision of section 50C of the Income Tax Act, in confirming the value of property sold taken at Rs. 18000000/- as per stamp valuation authority against the actual sale consideration/fair market value of property of Rs, 10000000/- received and declared by the assessee and accordingly making the addition of Rs. 14882161/- in the income of the assessee under the head income from capital gain.
6. That Id CIT (A) NFAC, without appreciating the correct facts of the case and without giving proper opportunity of being heard is not justified in law and facts and circumstances of the case in confirming the assessment order passed by Id assessing officer against the principal of natural justice and passed without following the provision of section 143(3)/144 as valid.
Facts giving rise to the present appeal are that in this case the assessee filed his return of income through electronic mode on 31.07.2017 declaring total income of Rs. 55,10,400/- under normal provisions of the Income-tax Act, 1961, hereinafter referred to as the “Act”. The case of the assessee was taken up for limited scrutiny for examination of the issue of capital gain/ loss on sale of immovable property. In response to statutory notices issued u/s 143(2) and 142(1) of the Act there was no response on behalf of the assessee. Therefore, the Assessing Officer proceeded to frame best judgment assessment u/s 144 of the Act in the absence of the assessee vide order dated 22.11.2019. Thereby the Assessing Officer made addition on account of long term capital gain of Rs. 1,48,82,161/-.
Thus, the AO assessed the total income at Rs. 2,03,92,561/- against the disclosed income of Rs. 55,10,400/-. Aggrieved against this assessee carried the matter to the learned CIT(Appeals). Before him also there was no representation on behalf of the assessee. Therefore, the learned CIT(A) dismissed the appeal ex parte to the assessee. Now the assessee is in appeal before this Tribunal.
At the outset learned counsel for the assessee submitted that the notice of hearing was not received by the assessee. He submitted that in the interest of file of AO.
On the other hand, learned DR opposed the submissions and submitted that the assessee was thoroughly negligent. He did not participate in the proceedings.
Even after filing the appeal there was no representation on behalf of the assessee.
Therefore, no lenient view should be adopted.
We have heard rival submissions and perused the material on record. We find that lower authorities have given sufficient opportunity by issuing the statutory notices to the assessee. There was no response on behalf of the assessee.
Therefore, the authorities below were left with no option but to proceed ex parte to the assessee. It is contended by the learned counsel for the assessee that notices were not received by the assessee. It is also contended by the assessee that there is a huge gap between the last notice issued by the learned First Appellate Authority and the impugned order. He submitted that looking to the facts of present case the assessee was not provided meaningful opportunity of being heard. Considering the submissions and the reasons for non-appearance before the lower authorities, we deem it proper, in order to sub-serve the interests of natural justice, that an opportunity be given to the assessee. We, therefore, set aside the impugned order and restore the assessment to the file of the Assessing Authority to frame it afresh.
The assessee is directed to cooperate in the assessment proceedings and furnish requisite information as and when called for by the Assessing Officer. The assessee is further directed that he would not seek any adjournment without any reasonable cause necessitated by any medical emergency. Grounds raised in this appeal are allowed for statistical purposes.
Appeal of the assessee is allowed for statistical purposes.
Order pronounced in open court on 12th September, 2024.