DARA SINGH,GURGAON vs. ITO,WARD-1(4), GURGAON

i. dismissing appeal against order passed u/s 144 of the I.T. Act, 1961 without providing due and adequate opportunity of hearing: ii. confirming following additions made to the returned income -

a. Rs. 4,19.71,070/-on account of interest u/s 28 of the land acquisition Act, received as part of enhanced compensation on compulsory acquisition of his agricultural land denying exemption due u/s 10(37) of the Act: b. without prejudice to the foregoing the act of charging to tax a sum of Rs. 4,19,71,070/- on account of interest u/s 28 of the land acquisition Act. received as part of enhanced compensation on compulsory acquisition of his agricultural land without allowing the relief due u/s 57 (iv) of the Act: c. Rs.1,50,000/- on account of deduction claimed under chapter-VIA;

The above actions being arbitrary, fallacious, unwarranted and illegal must be quashed with directions for appropriate relief.”

For the assessment year under dispute, the assessee had filed his

return of income on 16.03.2020 declaring taxable income of

Rs.12,40,347/- and exempt income of Rs.4,19,71,070/-. The

assessee also claimed refund of Rs.40,73,490/- out of the Tax 2 | P a g e

ITA No.3697 & 3696/Del/2023 AY: 2019-20

Deducted at Source (TDS). Assessee’s case was selected for

complete scrutiny to examine claim of refund coupled with

disclosure of substantially lower receipts in return, vis-à-vis,

26AS. It is alleged by the Assessing Officer that various statutory

notices issued to the assessee under sections 142(1), 143(2) and

144 of the Act were not complied with. Alleging failure on the part

of the assessee to respond to the statutory notices, the Assessing

Officer proceeded to complete the assessment ex parte to the best

of his judgment. While doing so, he added back the interest

received from Land Acquisition Officer, amounting to

Rs.4,19,71,070/-. Against the assessment order so passed, the

assessee preferred an appeal before the first appellate authority.

Alleging non-response of the assessee to the various hearing

notices stated to have been issued, the first appellate authority

proceeded to dispose of the appeal ex parte. While doing so, he

confirmed the addition made by the Assessing Officer.

submitted before us that neither in course of assessment

proceedings nor first appellate proceedings, the assessee had ever

received any of the notices alleged to have been issued to the

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assessee. Proceeding further, he submitted, since the notices were

sent to a wrong/invalid address, the assessee never received

them. Hence, he could not comply. Thus, he submitted, the

issues arising in the appeal may be restored back to the

Assessing Officer for fresh adjudication.

the observations of the Assessing Officer and the first appellate

authority, however, he did not object to restoration of issues to

the Assessing Officer for de novo adjudication.

both the assessment as well as the first appellate proceedings

were decided ex parte qua the assessee on the allegation that the

assessee never complied with the multiple notices issued to him.

However, from the submissions of learned counsel appearing for

the assessee, prima facie, it appears that notices were not sent to

proper address of the assessee. That could be the reason for non-

compliance from assessee’s side. Since, the assessee did not get a

proper opportunity to represent his case either at the assessment

stage or even at the first appellate stage, we are inclined to set

aside the impugned order of the first appellate authority and

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restore the issues arising in the appeal to the file of the Assessing

Officer for de novo adjudication, after proving adequate

opportunity of being heard to the assessee. Grounds are allowed

for statistical purposes.

ITA No.3696/Del/2023 (Penalty Appeal)

record. Based on the addition made in the assessment order,

which got subsequently confirmed by the first appellate authority,

the Assessing Officer initiated proceedings for imposition of

penalty under section 270A of the Act. Alleging non-compliance of

the assessee to the show-cause notices, the Assessing Officer

proceeded to impose penalty under section 270A of the Act, which

was confirmed by the first appellate authority.

before the Assessing Officer and the first appellate authority were

completed ex parte. The reason for non-appearance of the

assessee has already been dealt with by us, while deciding the

quantum appeal in the earlier part of the order. Since, we have

set aside the order of the first appellate authority in the quantum

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proceedings and restored the issues arising therein to the file of

the Assessing Officer for de novo adjudication; the addition made

by the Assessing Officer does not survive. Hence, the penalty

imposed, based on such addition, cannot survive.

impugned order of the first appellate authority and delete the

penalty imposed under section 270A of the Act. The Assessing

Officer, if warranted, may initiate the proceeding under section

270A of the Act afresh, depending upon the outcome of the

quantum proceedings.

and ITA No.3697/Del/2023 is allowed for statistical purposes.

Order pronounced in the open court on 5th July, 2024

Sd/- Sd/- (M. BALAGANESH) (SAKTIJIT DEY) ACCOUNTANT MEMBER VICE-PRESIDENT Dated: 5th July, 2024. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi

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