LAKSHMI DEEPTHI BOODLA,KHAMMAM vs. ITO., WARD-1, KHAMMAM

These two appeals filed by the Assessee are time barred by 14 days. The assessee filed a petition for condonation of delay and submitted that the Chartered Accountant of the assessee who looks after her income tax matters shifted his residence from Khammam to Hyderabad in connection with his High Court practice in the year 2023. The assessee submitted that she has no knowledge of viewing the Income Tax Portal and came to know of the order passed by the Ld.CIT(A) dismissing the appeal of the assessee, only when the office of the ITO Khammam reminded for payment of outstanding demand. The assessee further submitted that she could contact her Chartered Accountant only on 20.09.2024, appraise him of the appellate order and as advised by him, the assessee consulted an income tax advocate and got appeal prepared and filed before the Tribunal on 24.09.2024. The assessee submitted that the delay in filing the appeal with 14 days is due to the reasons submitted which are beyond the control of the assessee and not intentional. The assessee, therefore, pleaded to condone the delay and admit the appeal for hearing.

We have gone through the condonation petition filed by the assessee. In this case, the order of the Ld.CIT(A) was passed and served on the assessee on 12.07.2024 and the assessee ought to have filed appeal before the Tribunal on or before 10.09.2024 but the assessee could file appeal before the Tribunal on 24.09.2024 with the delay of 14 days. We find that there is a reasonable cause for the assessee to file the appeal belatedly, therefore, we

The brief facts of the case are that the assessee filed her return of income for the A.Y.2015-16 on 05.08.2016, declaring total income of Rs.2,19,280/-. In this case, on verification of the information received from NMS, it was noticed that the assessee sold her share of property for a consideration of Rs.22,00,000/- as per Sub Registrar information and copy of Development Agreement cum General Power of Attorney dated 03.11.2024, however, the assessee has not declared the transaction of capital gains in her return of income filed for the A.Y.2015-16. Therefore, the assessment has been reopened u/s 147 of the Income tax Act, 1961 (“the Act”) and notice u/s 148 dated 12.09.2016 was issued. Further, the assessment has been completed u/s 143(3) r.w.s. 147 of the Act on 20.06.2017, accepting the returned income of Rs.2,19,280/-. The case has been subsequently taken up for revision proceedings and the Ld.Principal Commissioner of Income Tax (Ld.PCIT), Hyderabad set aside the assessment order passed by the Assessing Officer u/s 143(3) r.w.s. 147 on the issue of computation of capital gains. Pursuant to the directions of the Ld.PCIT, the assessment has been taken up and the assessee was called upon to file necessary evidences in support of capital gains derived from sale of property. The assessee neither appeared nor filed any details. Therefore, the Assessing Officer passed ex-parte assessment order u/s 144 r.w.s.263 of the Act on 27.03.2022 and 4 determined total income at Rs.19,14,010/- by making addition of Rs.16,94,726/- under the head ‘Long Term Capital Gain’.

The assessee carried the matter in appeal before the first appellate authority. But, the assessee neither appeared nor filed any details, which is evident from para 4 of the order of the Ld.CIT(A), wherein, the Ld.CIT(A) had given number of opportunities to the assessee, but the assessee has not submitted any details. Therefore, the Ld.CIT(A) passed ex-parte appellate order and upheld the additions made by the Assessing Officer towards computation of long-term capital gains.

Aggrieved by the Ld.CIT(A) order, the assessee is in appeal before the Tribunal.

The learned Counsel for the assessee submitted that the assessment proceedings before the Assessing Officer are ex-parte and the appellate proceedings before the first appellate authorities are also ex-parte. The assessee could not submit relevant details before the authorities due to the circumstances beyond her control. Therefore, she submitted to give one more opportunity of hearing to the assessee, the matter may be remanded back to the file of the Assessing Officer.

The learned DR on the other hand, supporting the order of the Ld.CIT(A), submitted that the assessee is negligent throughout the proceedings, which is evident from ex-parte assessment order and ex-parte appellate order passed by the lower authorities.

5 Therefore, there is no reason to give another opportunity to the assessee and thus, the order of the Ld.CIT(A) should be upheld.

We have heard both the parties, perused the material on record and gone through the orders of the authorities below. Admittedly, the proceedings before the Assessing Officer are ex- parte. The assessee neither appeared nor furnished any details. Further, the appellant neither appeared nor submitted any details even though the first appellate authority had given sufficient opportunities of hearing to the assessee, which is evident from para 4 of the Ld.CIT(A) order. Therefore, we cannot find fault with the ex-parte order passed by the Ld.CIT(A). However, the fact remains that although the Ld.CIT(A) disposed off the appeal filed by the assessee for non-prosecution, but the appeal of the assessee has been dismissed on technical grounds without considering the issues on merits. It is a well-established principle of law by the decisions of various courts that even in a case of ex- parte proceedings, the appeals should be decided on merits, based on the material available on record. Since the Ld.CIT(A) dismissed the appeal filed by the assessee on technical grounds without considering the issues on merits and to give another opportunity of hearing to the assessee, the issue needs to be set aside to the file of the lower authorities. Since the proceedings before the Assessing Officer itself are ex-parte, in our considered view, the matter needs to go beck to the file of the Assessing Officer for reconsideration of the issue. Thus, we set aside the order of the learned CIT(A) and restore the issue back to the file of the Assessing Officer and direct the Assessing Officer to reconsider the issue ‘denovo’ in accordance with law.

The present appeal arises out of confirming the penalty levied by the Assessing Officer u/s 271(1)(c) of the Act in respect of addition made towards long term capital gains of Rs.16,94,726/-. The issue of addition towards long term capital gains has been set aside to the file of the Assessing Officer for denovo consideration and the quantum appeal filed by the assessee is remanded back to the file of the Assessing Officer for denovo consideration. Therefore, in our considered view, the penalty levied u/s 271(1)(c) on the same addition cannot survive under law. Hence, we are of the considered view that this issue also needs to go back to the file of the Assessing Officer for fresh consideration. Thus, we set aside the order of the Ld.CIT(A) and restore the issue of penalty levied u/s 271(1)(c) to the file of the Assessing Officer for fresh consideration. The Assessing Officer is directed to reconsider the issue after completion of assessment proceedings pursuant to proceedings u/s 263 of the Act.

In the result, appeal filed by the assessee is allowed for statistical purpose.

To sum up, both the appeals filed by the assessee for the assessment years 2015-16 are allowed for statistical purpose.