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Facts
The assessee's assessment for AY 2016-17 treated income from extinguishment of tenancy rights as 'income from other sources' and denied Section 54E exemption. The initial appeal to the National Faceless Appeal Centre (NFAC) was dismissed ex-parte due to non-prosecution, leading to the current appeal before the ITAT, for which a 135-day delay was condoned.
Held
The Tribunal held that the Ld. NFAC erred in dismissing the assessee's appeal ex-parte without making necessary enquiries or adjudicating on the merits, violating Section 250(6) of the Income-tax Act. Consequently, the impugned order was set aside, and the case was remanded to the Ld. NFAC for de-novo adjudication in accordance with the law.
Key Issues
The key issues were the legality of the ex-parte dismissal of the assessee's appeal by the NFAC without adjudication on merits as per Section 250(6), and the classification of income from extinguishment of tenancy rights and eligibility for Section 54E exemption.
Sections Cited
143(3), 250, 250(6), 251(1)(a), 54E
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
Assessment Year : 2016-17 Cheryl Savia Indira Lobo H.No. E-100, Pobha Vado, Calangute, Bardez, North Goa, Goa PAN : ACBPL9307J . . . . . . . Appellant V/s Asstt. Commissioner of Income Tax, Circle-2(1) Panaji, Goa. . . . . . . . Respondent Appearances Assessee by : Mr Vinod Totekar [‘Ld. AR’] Revenue by : Smt Nazeera Mohammad [‘Ld. DR’] सुनवाई की तारीख / Date of conclusive Hearing : 11/03/2025 घोषणा की तारीख / Date of Pronouncement : 12/03/2025 ORDER PER G. D. PADMAHSHALI; The captioned appeal of the assessee impugns DIN & Order ITBA/NFAC/S/250/2024-25/1064290058(1) dt. 23/04/2024 passed by the National Faceless Appeal Centre, Delhi [‘Ld. NFAC’ hereinafter] u/s 250 of the Income-tax Act, 1961 [‘the Act’ hereinafter] which in turn arisen out of order of assessment dt. 27/12/2018 passed u/s 143(3) of the Act by the Asstt. Commission of Income Tax Circle-2(1), Panaji Goa [‘Ld. AO’ hereinafter] anent to assessment year 2016-17 [‘AY’ hereinafter].
ITAT-Panaji Page 1 of 4
Cheryl Savia Indra Lobo Vs ACIT AY: 2016-17 2. After vouching the sufficiency of reasons explained, we are satisfied that the appellant was for sufficient cause prevented from filing present appeal against the impugned order and the case of the assessee falls within the parameter set by Hon’ble Courts in ‘Vijay Vishin Meghani Vs. DCIT & Anr’ [2017, 398 ITR 250 (Bom)] and ‘Collector, Land Acquisition, Anantnag and Anr. Vs Ms Katiji and Others’ [1987, 167 ITR 5 (SC)]. In view thereof the undeliberate delay of 135 days occurred in instituting present appeal after placing reliance on former judicial precedents, in the larger interest of justice we condone the delay and advanced for adjudication.
Tersely stated facts of the case are that; the assessee is an individual who for the year under consideration filed return on 14/10/2016 declaring total income of ₹25,08,240/-. The return of income was selected for scrutiny and the consequential assessment was completed by bringing to tax entire amount of consideration of ₹25.00Lakhs received against extinguishment of tenancy right as the income of the assessee under the head income of other sources as against the assessee claim for capital gain. The resultant exemption claimed by the assessee u/s 54E of the Act also turn down tenaciously. ITAT-Panaji Page 2 of 4
Aggrieved by the assessment the assessee instituted an appeal thereagainst before Ld. NFAC, which also came to be dismissed ex- parte owning to non-prosecution and in the absence of evidences.
Aggrieved by impugned ex-parte order, the assessee came in present appeals challenging the proceedings first on the ground of violation of principle of nature justice later on its merits.
Without touching grounds raised in appeal memo and merits of the case; we have heard the rival parties on the 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.
We note that, while exercising jurisdiction u/s 251(1)(a) of the Act, Ld. NFAC 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. NFAC to make necessary enquiries before passing an order and while doing so it necessitates to deal with each issue/ground on merits even in ex-parte proceedings. ITAT-Panaji Page 3 of 4
Per contra it is found in the instant case that, in the event of non- prosecution the Ld. NFAC dismissed the appeal simply by reiterating the findings of Ld. AO but without adjudicating 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 with a direction for de-novo adjudication in accordance with law and pass a speaking order. Ordered Accordingly.
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.
-S/d- -S/d- PAVAN KUMAR GADALE G. D. PADMAHSHALI JUDICIAL MEMBER ACCOUNTANT MEMBER Panaji/Dt: 12th March, 2025. Copy of the Order forwarded to :
1. 1. The Appellant.
2. The Respondent.