RADHESHYAM S. GUPTA,MUMBAI vs. INCOME TAX OFFICER, WD-25(3)(3), MUMBAI

The brief facts under appeal state that the assessee filed return of income for A.Y.2010-11. The case was reopened on the basis of information received in respect of cash deposit of Rs. 10,00,000/- in assessee’s SB A/c, purchase of immovable property worth Rs. 1,03,64,630/- and TDS return (26AS) showing Rs. 2,76,238/-. The notice u/s. 148 of the Act was issued and served upon the assessee but for no avail. Further notice u/s. 142(1) of the Act issued and served upon the assessee. The assessee did not respond to the notices. Learned AO completed the assessment u/s. 144 of the Act and made addition u/s. 68 of the Act at Rs. 19,74,500/- addition of unexplained cash credit of Rs. 1,03,64,630/- u/s. 69 of the Act, addition of long term capital gain of Rs. 7,94,99,151/- on sale of immovable property and addition of Rs. 14,86,591/- as unexplained expenditure u/s. 69C of the Act.

Aggrieved by the assessment order, assessee preferred an appeal before learned CIT(A), who disposed/dismissed the appeal in default of assessee.

Assessee filed this appeal on the ground that learned CIT(A) has erred in confirming the said additions made by Radheshyam S. Gupta AO and also erred in dismissing assessee's appeal ex-parte without affording an opportunity of hearing to the assessee.

In response to the notice issued by the tribunal, learned DR appeared and participated in the hearing.

We have perused the records and heard learned representatives for both the parties.

Learned AR has submitted that learned CIT(A) has erred in dismissing assessee’s appeal in default of assessee and in violation of the principles of natural justice. Prayed to set aside impugned order.

Learned DR has submitted that assessee was provided sufficient opportunity of hearing by issuance of notices on six occasions by learned CIT(A) but for no avail. Learned DR has supported impugned order passed by the first appellate authority.

Perusal of the impugned order shows that the assessee did not respond to the various notices issued by the first appellate authority. Learned CIT(A) observed that the appellant assessee did not file submissions in respect of any document or any other details, hence, was not interested to proceed with the appeal. Learned CIT (A), thus, dismissed assessee’s first appeal in default of assessee.

We notice that learned CIT(A) was expected to state the points for determination, the decision there on and the reasons for the decision as provided u/s. 250(6) of the Act while passing even ex-parte order in absence of assessee. We are conscious of the fact that the assessee has not Radheshyam S. Gupta turned up before the first appellate authority in response to the notices issued on various different occasions. However, in the interest of justice and fair play, we deem it appropriate to remit the matter back to the file of learned CIT(A) for denovo adjudication on merit. We further direct the assessee to be diligent and cooperative in attending the hearings and making submissions before the first appellate authority for the expeditious and effective disposal of the appeal. Assessee should refrain from seeking any adjournment but for compelling and unavoidable reasons. Needless to say that learned CIT(A) shall ensure the observance of the principles of natural justice. It is made clear that we have not made any observation on the merits of the case. The appeal is thus liable to be allowed.

In the result, the appeal is allowed. Impugned order dated 12.04.2024 is set aside. The case is restored back to the file of the learned CIT(A) for statistical purposes. Order pronounced on 08.08.2024.