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Facts
The assessee appealed against the ex-parte order of the CIT(A) for AY 2018-19, alleging violation of natural justice. The assessee claimed that the CIT(A) passed the order without considering submissions and documentary evidence, despite the AO's alleged error in treating agricultural income as long-term capital gain.
Held
The Tribunal found that the CIT(A) had decided the appeal ex-parte due to non-compliance with notices. However, Section 250(6) of the Income Tax Act requires a reasoned order. Therefore, the Tribunal set aside the CIT(A)'s order and restored the matter for fresh adjudication.
Key Issues
Whether the CIT(A) erred in passing an ex-parte order without considering the assessee's submissions and evidence, and whether agricultural income was wrongly treated as capital gains.
Sections Cited
250(6), 282, 10(1A)
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Income Tax Appellate Tribunal, MUMBAI BENCH “D” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI SANDEEP SINGH KARHAIL
Assessee by : Shri Dharan Gandhi, A.R. Revenue by : Smt. Mahita Nair, Sr. DR Date of Hearing : 19/02/2024 Date of pronouncement : 20/02/2024 ORDER
PER : OM PRAKASH KANT, AM
This appeal has been filed by the assessee against the order dated 17.08.2023 passed by the Ld. Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre, Delhi [In short the Ld. CIT(A)] for assessment year 2018-19, raising following grounds:-
“1. The Ld. AO has erred in passing the impugned order dated 25.01.2021, in gross violation of principles of natural justice without considering the submissions filed by the Assessee.
Mr. Dinaz Firdos Fanibanda Mr. Dinaz Firdos Fanibanda ITA No.3499/MUM/2023
The Ld. CIT(A) has erred in passing the impugned order dated The Ld. CIT(A) has erred in passing the impugned order dated The Ld. CIT(A) has erred in passing the impugned order dated 17.08.2023, in an 17.08.2023, in an ex-parte manner on the ground that the Appellant parte manner on the ground that the Appellant did not reply to two notices issued despite the fact, that the did not reply to two notices issued despite the fact, that the did not reply to two notices issued despite the fact, that the Appellant had already filed detailed submission and filed Appellant had already filed detailed submission and filed Appellant had already filed detailed submission and filed documentary evidences as well. documentary evidences as well.
3. The Ld. CIT(A) has erred in passing the impugned ord The Ld. CIT(A) has erred in passing the impugned ord The Ld. CIT(A) has erred in passing the impugned order dated 17.08.2023, in an ex 17.08.2023, in an ex-parte manner without issuing any notice of parte manner without issuing any notice of hearing either physically or in any other alternate manner as hearing either physically or in any other alternate manner as hearing either physically or in any other alternate manner as prescribed in Section 282 of the Act. prescribed in Section 282 of the Act. 4. The Ld. Commissioner of Income The Ld. Commissioner of Income-tax (Appeal), NFAC/ erred in tax (Appeal), NFAC/ erred in upholding the action upholding the action of the Ld. AO in adding a sum of Rs. of the Ld. AO in adding a sum of Rs. 51,85,000/- as Long Term Capital Gain, instead of Agricultural as Long Term Capital Gain, instead of Agricultural Income, being exempt under section 10(1A) of the Act. Income, being exempt under section 10(1A) of the Act. Income, being exempt under section 10(1A) of the Act. 5. The Appellant craves leave to add, to amend, alter/delete The Appellant craves leave to add, to amend, alter/delete The Appellant craves leave to add, to amend, alter/delete and/or modify the above grounds of appea and/or modify the above grounds of appeal
on or before the final l on or before the final hearing.”
2. At the outset the Ld. Counsel for the assessee referred to At the outset the Ld. Counsel for the assessee referred to At the outset the Ld. Counsel for the assessee referred to ground No.2 & 3 of the appeal and submitted that the ground No.2 & 3 of the appeal and submitted that the ground No.2 & 3 of the appeal and submitted that the impugned order has been passed order has been passed by the Ld. CIT(A) in the Ld. CIT(A) in ex-parte manner without taking into consideration subm manner without taking into consideration subm manner without taking into consideration submissions of the assessee and without giving any findings on the merits of the assessee and without giving any findings on the merits of the assessee and without giving any findings on the merits of the issue in dispute.
We have heard rival submissions of the parties and We have heard rival submissions of the parties and We have heard rival submissions of the parties and perused the relevant material on record. perused the relevant material on record. In paragraph 4 of In paragraph 4 of impugned order,the Ld. CIT(A) has mentioned that impugned order,the Ld. CIT(A) has mentioned that impugned order,the Ld. CIT(A) has mentioned that the assessee had not filed clear and legible copy of the deeds, so before us had not filed clear and legible copy of the deeds, so before us had not filed clear and legible copy of the deeds, so before us the ld Counsel submitted that part compliance was made before the ld Counsel submitted that part compliance was made before the ld Counsel submitted that part compliance was made before the ld CIT(A). But, w the ld CIT(A). But, we find that the Ld. CIT(A) has decided the appeal ex-parte in view of non compliance of the rte in view of non compliance of the rte in view of non compliance of the notices issued. However, under section However, under section 250(6) of the Income Tax Act, 1961 (in (6) of the Income Tax Act, 1961 (in short “the Act”), the Ld. CIT(A) is required to pass a reasoned the Ld. CIT(A) is required to pass a reasoned
Mr. Dinaz Firdos Fanibanda Mr. Dinaz Firdos Fanibanda ITA No.3499/MUM/2023 order on merits of the issue in dispute even without order on merits of the issue in dispute even without order on merits of the issue in dispute even without representation on behalf of the assessee. representation on behalf of the assessee. The The Ld. Counsel for the assessee submitted the assessee submitted before us that the order of Ld CIT(A) the order of Ld CIT(A) might be set-aside and matter might be restored back to him. aside and matter might be restored back to him. aside and matter might be restored back to him. He further submitted that He further submitted that the Ld. CIT(A) might be directed to the Ld. CIT(A) might be directed to serve the notice on the assessee on following email address serve the notice on the assessee on following email address serve the notice on the assessee on following email addresses which are provided in form No.36 re provided in form No.36: afanibanda@gmail.com afanibanda@gmail.com Mehernosh_kainaz@hotmail.com Mehernosh_kainaz@hotmail.com
In view of the facts and circumstances of the case and in In view of the facts and circumstances of the case and in In view of the facts and circumstances of the case and in the interest of the su the interest of the substantial justice, we feel it appropriate to feel it appropriate to set aside the order of the set aside the order of the Ld. CIT(A) and restore the matter back Ld. CIT(A) and restore the matter back to him for deciding afresh and pass a reasoned to him for deciding afresh and pass a reasoned to him for deciding afresh and pass a reasoned & speaking order after, providing adequate opportunity of being heard to providing adequate opportunity of being heard to providing adequate opportunity of being heard to the assessee. In view of the undertaking given by the Ld. the assessee. In view of the undertaking given by the Ld. the assessee. In view of the undertaking given by the Ld. Counsel for the assessee Counsel for the assessee, the Ld. CIT(A) may issue the notices the Ld. CIT(A) may issue the notices for hearing on the email addresses men for hearing on the email addresses mentioned above by the Ld. tioned above by the Ld. Counsel .
The Grounds No.2 & 3 of the appeal of the ass rounds No.2 & 3 of the appeal of the ass rounds No.2 & 3 of the appeal of the assessee are accordingly allowed. accordingly allowed. The grievances raised in grievances raised in remaining grounds are therefore grounds are therefore do not call for adjudication at this stage do not call for adjudication at this stage and same are also restored to the file of the Ld. CIT(A) for and same are also restored to the file of the Ld. CIT(A) for and same are also restored to the file of the Ld. CIT(A) for deciding in accordance w deciding in accordance with law.
Mr. Dinaz Firdos Fanibanda Mr. Dinaz Firdos Fanibanda ITA No.3499/MUM/2023
In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is allowed for statistical purposes. statistical purposes.
Order pronounced in the open Court on Order pronounced in the open Court on 20/ 20/02/2024.