SUBHAM DEVELOPERS,SALEM vs. ITO, WARD - 1(1), SALEM

Aggrieved, the assessee is in appeal before this Tribunal.

We have heard both the parties and perused the material available on record. From perusal of records, it is noted that the assessee Firm was formed on 07.10.2015 by thirteen (13) individuals/partners whose names and addresses are seen from the first page to last page of the Partnership Deed placed before us. The address of the partners are seen recorded in it from Page Nos. 1-4 of the ibid deed; it is further noted that this was the first year of business of real estate; and in this relevant year, the assessee-Firm purchased an immovable property [land] for consideration of Rs.2,12,60,000/- which was registered with Sub- Registrar, Suramangalam; and since the e-mail ID of the assessee was not functioning/glitches was there, the assessee was not aware of the assessment proceedings going on against it before the AO, because of which, it couldn't appear and participate in it. Further, it was also brought to our notice that all the thirteen (13) partners of assessee-Firm are regularly filing their respective returns and duly assessed to tax. According to the Ld.AR, the amount in question/investment [of Rs.2,12,60,000/- for purchase of land] was the capital contribution from the thirteen (13) partners and pleaded that if an opportunity is given, it would be able to file all the relevant documents as well as, if necessary, produce the partners before the AO. In this regard, we note that the AO has passed an ex parte order because assessee didn't respond to his notices and as noted it was because the assessee didn't receive any notice and on the very same reasoning the Ld.CIT(A) also dismissed the appeal of assessee. In the background of the discussion, on the peculiar facts noted supra, we are of the opinion that assessee should be granted one more opportunity before the AO to prove the nature and source of the investment made by the assessee. For that we rely on the decision of the Hon'ble Supreme Court in the case of TIN Box Co. v. CIT reported in [2001] 249 ITR 216 (SC); and set aside the impugned order of the Ld.CIT(A) and restore the assessment back to the file of the AO with a direction to de novo assesses the income of the assessee.

Needless to say, that assessee should be diligent and file written submissions/relevant documents to prove the source of investment to the tune of Rs.2,12,60,000/-. According to us, assessee should have been more vigilant and therefore, we levy a cost of Rs.5,000/- which the assessee should remit to the State Legal Aid Authority, Hon'ble Madras High Court, and produce the necessary proof of depositing of the same before the AO and thereafter, the AO to frame the de novo assessment after hearing the assessee in accordance to law.

In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced on the 31st day of December, 2024, in Chennai. (JAGADISH) JUDICIAL MEMBER लेखा सदस्य/ACCOUNTANT MEMBER न्यायिक सदस्य / UDICIAL MEMBER\चेन्नई/Chennai, दिनांक/Dated: 31st December, 2024. TLN, Sr.PS आदेश की प्रतिलिपि अग्रेषित / Copy to: 1. अपीलार्थी/Appellant 2. प्रत्यर्थी/Respondent 3. आयकर आयुक्त/CIT, Chennai/Madurai/Salem/ Coimbatore. 4. विभागीय प्रतिनिधि/DR 5. सी.पी./GF INCOME TAX APELATE TRIBUNAL RAJAJI BHAVAN, CHENNAI