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Facts
The assessee, a property developer, filed a return for AY 2017-18 showing a loss. The AO initiated scrutiny, invoked Section 23 for unsold inventory, and made additions under Section 22 for house property income and disallowed expenses under Section 37(1). The CIT(A) subsequently dismissed the assessee's appeal ex-parte due to non-compliance with hearing notices.
Held
The Tribunal condoned the delay in filing the appeal. It set aside the ex-parte order passed by the CIT(A), stating that the assessee was not provided adequate opportunity of hearing, which violated principles of natural justice. The matter was remitted back to the CIT(A) for fresh adjudication of all disputed issues, with the assessee required to cooperate.
Key Issues
Condonation of delay in filing appeal; Validity of CIT(A)'s ex-parte dismissal due to non-compliance; Correctness of AO's additions under Section 22 and disallowances under Section 37(1) related to unsold inventory.
Sections Cited
22, 23, 37(1), 142(1), 143(2), 143(3), 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PANAJI BENCH
ORDER
PER PAVAN KUMAR GADALE, JM:
The appeal is filed by the assesse against the order of the Addl/ JCIT(A) Kanpur passed u/sec 143(3) and u/sec 250 of the Act.
At the time of hearing, it was found that there is a delay in filing the appeal before the Hon’ble Tribunal and the assesse has filed an affidavit for condonation of delay. Whereas, the facts mentioned in the affidavit are reasonable and sufficient cause was explained and the Ld. DR has no specific objections. Accordingly, we condone the delay and admit the appeal. The assessee has raised
The brief facts of the case are that, the assessee company is engaged in the business of property developers. The assessee has filed the return of income for the A.Y 2017-18 on 31.10.2017 disclosing a total loss of Rs.1,91,68,762/- Subsequently the case was selected for scrutiny under CASS and notice u/sec143(2) and u/sec 142(1) of the Act are issued calling for details in respect of claims and the information supporting the return of income filed. The assesse has filed the details and the Assessing Officer (A.O) has dealt on the submissions/details and was asked the assessee to provide detailed working of closing stock. The A.O found that the assessee has unsold inventory in completed projects and invoked provisions of section 23 of the Act. Further the A.O. was not satisfied with the explanations and dealt on the provisions and judicial decisions and made addition under income from house property of Rs.1,99,08,000/- and also disallowed the expenses u/sec37(1) of the Act of Rs.4,31,468/- and finally assessed the total income of Rs.11,70,706/- and passed the order u/sec 143(3) of the Act dated 25.12.2019.
Aggrieved by the order, the assesse has filed an appeal before the CIT(A), whereas the CIT(A) has considered the grounds of appeal, statement of facts and findings of the AO and has issued notices of hearing and since there was Emgee Housing Private Limited. no compliance by the assesse to notices. Therefore the CIT(A) considering the information on record has dismissed the appeal. Aggrieved by the order of the CIT(A), the assessee has filed an appeal before the Hon'ble Tribunal.
We heard the Ld.DR submissions and perused the material on record. Prima-facie the CIT(A) has passed the order considering the fact that there is no compliance nor appearance in spite of providing adequate opportunity of hearing and the notices were issued. Therefore, the CIT(A) was of the opinion that the assesse is not interested in prosecuting the appeal and passed the ex parte order. The CIT(A) has issued the notices of hearing on 26.02.2021,12.07.2021,12.12.2023 &21.06.2024 referred at Para 4 of the order and there was no response and thus the Ld.CIT(A) came to a conclusion that the assesse is not interested and decided the appeal based on the information available on record. Whereas the assesse has raised grounds of appeal challenging the additions made by the A.O and there could be various reasons for non appearance which cannot be overruled. Therefore, considering the facts and principles of natural justice, we shall provide with one more opportunity of hearing to the assessee to substantiate the case with evidences and information. Accordingly, we set aside the order of the CIT(A) and remit the entire disputed issues to the file of the CIT(A) to adjudicate afresh and the assesse should be provided adequate opportunity of hearing and shall cooperate in
In the result, the appeal filed by assessee is allowed for statistical purposes.
Order pronounced in the open court on 17.03.2025.