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Facts
The assessee's income tax return was filed declaring ₹4,99,570. A search action revealed she received ₹8,62,120 for her 1/10 share in an immovable property, which was not disclosed in her return. The AO initiated reassessment u/s 153C and framed an ex-parte assessment, taxing the amount as long-term capital gain, due to non-compliance; the CIT(A) subsequently dismissed the appeal ex-parte for non-prosecution.
Held
The Tribunal observed that both the AO and CIT(A) proceedings were ex-parte due to the appellant's failure to furnish evidence. The CIT(A) dismissed the appeal without adjudicating on its merits, which contravenes Section 250(6) of the Act. Therefore, the Tribunal set aside the impugned order and remanded the matter for de-novo adjudication, providing the appellant another opportunity to present her case on merits.
Key Issues
Whether the ex-parte assessment and subsequent ex-parte dismissal by CIT(A) for non-prosecution without adjudicating on merits, as required by Section 250(6), is valid.
Sections Cited
250, 153C, 144, 132, 251(1)(a)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PANAJI BENCH, PANAJI
Before: HON’BLE SHRI PAVAN KUMAR GADALE & SHRI G. D. PADMAHSHALI
Appearances Assessee by : Mr Jayant Volvoikar [‘Ld. AR’] Revenue by : Capt. Pradeep Arya [‘Ld. DR’] Date of conclusive Hearing : 02/04/2025 Date of Pronouncement : 03/04/2025 ORDER PER G. D. PADMAHSHALI; The captioned appeal of the assessee impugns DIN & Order 1071501808(1) dt. 23/12/2024 passed by the Commissioner of Income Tax Appeals-2, Panaji [‘Ld. CIT(A)’ hereinafter] u/s 250 of the Income-tax Act, 1961 [‘the Act’ hereinafter] which in turn arisen out of order of assessment dt. 28/12/2022 passed u/s 153C r.w.s. 144 of the Act by the Asstt. Commissioner of Income Tax, Central Circle, Panaji [‘Ld. AO’ hereinafter] anent to assessment year 2018-19 [‘AY’ hereinafter].
ITAT-Panaji Page 1 of 5
Alice Lourdes Martins Vs ACIT, Panaji AY: 2018-19 2. Tersely stated facts of the case are that; the assessee is an individual filed her return of income declaring total income of ₹4,99,570/-. A search action u/s 132 of the Act was carried in the case of ‘Mario Group’ on 31/01/2018 wherein certain incrementing material were seized which revealed that, the assessee was paid a consideration of ₹8,62,120/- towards her 1/10 share in the immovable property known as ‘Cumbeachem Xeta’ transferred to ‘Jaydyn Hospitality’. Upon satisfaction that, said transaction was not disclosed in the return of income filed by the assessee, the Ld. AO vide notice dt. 17/09/2021 initiated re- assessment proceedings u/s 153C of the Act. In the event of non-compliance and effective failure on the part of the assessee to (a) file return of income in response to aforestated notice (b) to offer satisfactory explanation about her share in the sale consideration arising on sale/transfer of immoveable property, the Ld. AO culminated the proceeding ex-parte to the best of his judgement by bringing to tax assessee’s share as long- ITAT-Panaji Page 2 of 5
Alice Lourdes Martins Vs ACIT, Panaji AY: 2018-19 term capital gain accrued her and framed consequential assessment u/s 153C r.w.s. 144 of the Act.
Aggrieved by the ex-parte assessment the assessee instituted an appeal thereagainst before Ld. CIT(A), which also came to be dismissed ex-parte owning to non- prosecution and in the absence of evidences. Dissatisfied by impugned ex-parte order, the assessee came in present appeal challenging the proceedings first as violative of nature justice later on its merits.
Without touching grounds and merits of the case; we have heard the rival parties on a limited issue of non- prosecution & resultant ex-parte dismissal of first appeals and subject to rule 18 of ITAT-Rules 1963 perused material placed on record, considered the facts in the light of settled legal position.
Admittedly, the appellant neither in the course of assessment proceedings represented her case with documentary evidences nor could she lay any cogent evidences in the course of first appellate proceedings to ITAT-Panaji Page 3 of 5
Alice Lourdes Martins Vs ACIT, Panaji AY: 2018-19 dismantle the alleged addition. Thus, both these proceedings before the tax authorities below indeed found culminated ex-parte without appellant’s assistance and in the complete absence of cogent & credible evidences. On the other hand, the appellant failed to make out her case before both the tax authorities below that; no income or gain had indeed arisen to her or accrued to her from such immovable property transaction. The impugned proceedings since ceased without effectively determining rights & liabilities of rival parties, therefore could hardly be continued to stand.
We note that, while exercising jurisdiction u/s 251(1)(a) of the Act, Ld. CIT(A) is required to state point of determination, decision thereon and reasons therefore in terms of section 250(6) of the Act. A plain reading of above section reveals that, it was incumbent upon Ld. CIT(A) to make necessary enquiries before passing an order and while doing so it necessitates to deal with each ITAT-Panaji Page 4 of 5
Alice Lourdes Martins Vs ACIT, Panaji AY: 2018-19 issue/ground on merits even in ex-parte proceedings. Per contra it is found in the instant case that, in the event of non-prosecution the Ld. CIT(A) dismissed the appeal simply placing reliance on judicial precedents but without adjudicating the appeal of merits in terms of s/s (6) of section 250 of the Act. The impugned adjudication since inconsonance with above provision (supra), therefore we find no reasons in not setting-aside the impugned order at the stage of its institution for de-novo adjudication in accordance with law. We order accordingly with a direction to accord one more opportunity to the appellant to prove her case on merits.
The appeal in result stands allowed for statistical purposes. In terms of rule 34 of ITAT Rules, 1963 the order pronounced in the open court on date mentioned herein before.