SUNITA AGARWAL,DELHI vs. ACIT, CIRCLE-18(2), NEW DELHI

Date of hearing 15.07.2019 Date of pronouncement 31.07.2019 ORDER PER O.P. KANT, A.M.:

This appeal by the assessee is directed against order dated 17/07/2018 passed by the Ld. Commissioner of Income-tax (Appeals)-22, New Delhi [in short ‘the Ld. CIT(A)] for assessment year 2014-15 raising following grounds:

1. On the facts and circumstances of the case, the order passed by the learned CIT(A) is bad both in the eye of law and on facts.

2. On the facts and circumstances of the case the order passed by the learned CIT(A) is bad in law having been passed ex-parte without giving the assessee an appropriate and adequate opportunity of being heard in clear violation of the principles of natural justice. 3. On the facts and circumstance of the case the order passed by the learned CIT(A) is bad both in the eyes of law and on facts as the same has been passed without giving any finding on the merits of the case. 4. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition made by the AO treating the long term capital gain of Rs.3,76,01,907/- as unexplained cash credit u/s 68 of the Income tax Act. 5. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition made by AO holding the Long Term Capital gain declared by the assessee, to be not genuine. 6. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition despite the assessee bringing on record all evidences and material to prove the genuineness of the transaction. 7. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition despite the sale and purchase transactions having been done through proper banking channels and as per the rules and regulations of the Stock Exchange. 8. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition by misinterpreting the financials of the companies whose shares were sold by the assessee. 9. The facts and circumstances of the case the learned CIT(A) has erred both on the and in law in confirming the addition made by AO despite the fact that no enquiry was made by the AO from the alleged company to verify the transactions. 10. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the above addition despite the assessee declaring the total consideration on sale of shares as their income exempt under section 10(38) of the Act, the addition amounts to double taxation of the same income. 11. On the facts and circumstances of the case, the learned CIT(A) has grossly erred both on facts and in law in confirming the above addition by indulging in surmises without bringing on any direct evidence against the assessee, only on the basis of presumption and assumption. 12. On the facts and circumstances of the case, the learned CIT(A) has grossly erred both on facts and in law in confirming the above addition despite the fact that the addition is made by the AO relying on the report of the investigation wing without application of his own mind.

13. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the disallowance of exemption claimed by assessee u/s 10(38) of Rs.3,76,01,907/- made by AO and treating the same as undisclosed income without there being any basis for the same.

14. On the facts and circumstances of the case, the learned CIT(A) has grossly erred both on facts and in law in rejecting the contention of the assessee that the order has been passed by the AO without affording adequate opportunity of being heard to the assessee.

15. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition of Rs. 18,80,095/- made by the AO as unexplained expenditure u/s 69C on account of commission on the above alleged amount of LTCG.

2. Briefly stated facts of the case are that the assessee filed return of income on 21.11.2014 declaring total income of Rs.1,74,63,520/-. The case of the assessee was selected for scrutiny and statutory notices were issued to the assessee. The assessment under section 143(3) of the Income-tax Act (hereinafter referred to as ‘the Act’) was completed on 30/12/2016 after making addition under section 68 of the Act. On further appeal, the Ld. CIT(A) issued various notices to the assessee, however, the assessee sought adjournment and no compliance was made. The Ld. CIT(A) dismissed the appeal of the assessee ex parte without deciding the merit of the additions. Aggrieved, the assessee is before the Tribunal, raising the grounds as reproduced above.

3. In ground no. 2 the assessee has challenged this ex parte order claiming to be in violation of the principle of natural Justice.

3.1 We have heard the rival submission of the parties on the issue in dispute and perused the relevant material on record. We find that the Ld. CIT(A) fixed the appeal for the first time on 11/10/2017 but no compliance of the said notice was made by the assessee. The Ld. CIT(A) issued another notice on 20/11/2017 fixing the case on 29/11/2017 and on the request of the assessee matter was adjourned to 13/12/2017, however, on the said date none complied. The third notice for hearing dated 08/03/2018 was issued fixing the date of hearing on 14/03/2018 which was again adjourned on the request of the assessee to 21/03/2018 and thereafter again adjourned to 23/04/2018. Again, the assessee sought adjournment on the ground of authorised representative suffering from infections. Finally, the Ld. CIT(A) posted the case for 25/06/2018, however, again assessee sought adjournment and did not comply the hearing. In view of the non-compliance the Ld. CIT(A) dismissed the appeal, without deciding the merit of the additions made by the Assessing Officer. Before us, the Ld. counsel of the assessee has submitted that the Ld. CIT(A) was required to decide the issue on merit even after non-compliance by the assessee. As per the provision of Section 251(1)(a), the learned CIT(A) is required to either confirm, reduce, enhance or annul the assessment. On careful consideration of the facts of the case, we find Ld. CIT(A) was not justified in dismissing the appeal without referring to the merits or otherwise of the case. The assessment order was available before the Ld. CIT(A) he should have decided the grounds raised by the assessee in the light of the material on record. We, therefore are of the opinion if the assessee is non-cooperative in disposal of the appeal, the Ld. CIT(A) cannot keep the matter pending for unlimited period, however, he should have decided the appeal by giving cogent reasons and should have disposed the appeal on merits. The Ld. CIT(A) was not prevented in recording the reasons even in absence of the assessee. We, therefore, of the view that the impugned order dismissing the appeal without deciding on the merit cannot be sustained and is a fit case for remitting the matter to the file of the Ld. CIT(A) for disposing the appeal by giving cogent reasons. The assessee is directed to cooperate in proceedings before the Ld. CIT(A) and appear on 16.09.2019 to get the matter disposed off on merit and no further opportunity shall be provided to the assessee .

4. In the result, the appeal of the assessee is allowed for statistical purposes.

Order is pronounced in the open court on 31st July, 2019.