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Facts
For AY 2014-15, assessment was finalized u/s 144 r.w.s 147 against Kurla Moonrock CHS which hadn't filed a return. The AO reopened assessment u/s 148 due to a Rs.4,71,62,400/- addition for immovable property sale, as the assessee failed to comply with notices. The CIT(A) dismissed the assessee's appeal in limine for failing to remove deficiencies, without addressing the merits of the case.
Held
The Tribunal observed that the CIT(A) had dismissed the appeal without adjudicating on merits. Considering the assessee's explanation for non-compliance (unserved notices and an aged, inexperienced counsel), the Tribunal found it appropriate to restore the case. The matter is remanded to the CIT(A) for a decision on merits, after providing the assessee an adequate opportunity of being heard under section 250(6) of the Act.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal in limine for non-compliance without adjudication on merits; and whether the assessee should be given a fresh opportunity of hearing before the CIT(A).
Sections Cited
249(4), 147, 148, 144, 50C, 142(1), 133(6), 250(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
आदेश / O R D E R Per Amarjit Singh (AM): This appeal filed by the assessee is directed against the order passed by the ld. CIT(A) NFAC for A.Y. 2014-15. The assessee has raised the following grounds before us: “1.1 The National Faceless Appeal Center, Delhi ['the NFAC'] erred in dismissing the appeal of the Appellant in limine as not having been admitted under section 249 (4) of the Income Tax Act, 1961 ('the Act"). 1.2 While doing so, the NFAC erred in not granting adequate, proper and effective opportunity of being heard to the Appellant. 1.3 It is submitted that, in the fact and circumstances of the case, and in law, the provisions of section 249(4) of the Act were not applicable in Appellant's case WITHOUT PREJUDICE TO THE ABOVE:
P a g e | Kurla Moonrock CHS Vs. ITO-14(2)(2)
2. REASSESSMENT: The learned Income tax Officer-14 (2) (2), Mumbai ('the Id. A.O.') erred in initiating reassessment proceedings and framed assessment of the Appellant by invoking the provisions of Section 147 read with section 148 of the Act. WITHOUT FURTHER PREJUDICE TO THE ABOVE: 3. BEST JUDGMENT ASSESSMENT U/S. 144 OF THE ACT: 3.1 The Id. A.O. erred in framing the best judgment assessment by invoking the provisions of section 144 of the Act. 3.2 While doing so, the ld. A.O. failed to appreciate that: a. the necessary conditions for invoking the provisions of section 144 of the Act were not fulfilled; b no sufficient and effective opportunity was provided to the Appellant at the assessment stage; and in any case, that the Appellant was prevented by the reasons beyond its control to represent its case properly and fully before the ld. A.O. WITHOUT FURTHER PREJUDICE TO THE ABOVE: 4. ADDITION OF Rs.4,71,62,400/-: 4.1 The Id. A.O. erred in making the addition of Rs. 4, 71, 62, 400/- invoking the provisions of section 50 C of the Act. 4.2 The Id. A.O. failed to appreciate that the income of Rs. 4,71,62,400/- was not assessable in the hands of the Appellant. 4.3 The Id. A.O. erred in assessing the Appellant as a Company not registered with the Registrar of Companies. While doing so, the Id A.O. failed to appreciate that the Appellant was a Cooperative Housing Society registered under the provisions of the Maharashtra Co-operative Societies Act, 1960. 4.4 It is submitted that in the facts and the circumstances of the case, and in law, no such addition was called for. 5. LIBERTY: The Appellant craves leave to add, alter, delete or modify all or any the above ground at the time of hearing.”
Fact in brief is that in this case assessment u/s 144 r.w.s 147 of the Act was finalised on 09.12.2019. In the assessment order the assessing officer reported that the assessee was mandatorily liable to file return of income electronically for assessment year 2014-15 and the P a g e | Kurla Moonrock CHS Vs. ITO-14(2)(2) name of the assessee company was appearing in the list of Non-filers Monitoring System (NMS) of the Department which revealed that assessee had not filed their return of income for the year under consideration. The assessing officer further noticed that assessee was having taxable income by way of sale of immovable property amounting to Rs.4,71,62,400/-. Therefore, case of the assessee was reopened by issuing of notice u/s 148 of the Act dated 26.03.2019. The assessing officer had also issued various notices u/s 142(1) of the Act but no compliance was made from the side of the assessee. Therefore, the AO has obtained information from the sub-registrar office Kurla, Mumbai showing that development agreement was entered between the assessee company and M/s Jaycee Homes Ltd. on 14.10.2019 and 11.11.2019. The assessing officer issued notice u/s 133(6) of the Act to M/s Jaycee Homes Ltd. but no response was received. The assessee has also not made any response to the show cause notice issued by the assessing officer asking the assessee to explain why the aforesaid amount of Rs.4,71,62,400/- not be added to the total income as unexplained income. Since, no compliance was made therefore, the AO has treated the whole amount of Rs.4,71,62,400/- of the sale of immovable property as unexplained income and added to the total income of the assessee.
The assessee filed the appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee holding that assessee failed to remove the deficiency in the appeal filed. 4. During the course of appellate proceedings before us the ld. Counsel submitted that notice u/s 148 of the Act was not served on the assessee and all the notices issued u/s 142(1) of the Act were also returned back by the postal authority including final show cause notice issued on 30.11.2019. The ld. Counsel submitted that since no notice was served on the assessee, there was no response on behalf of the assessee during the reassessment proceedings in response to the P a g e | Kurla Moonrock CHS Vs. ITO-14(2)(2)