KUMAR SUNIL GANDE,NIRMAL vs. INCOME TAX OFFICER, WARD-1, NIRMAL

In response to the query as to why expenses on development are required even a�er sale of plot, assessee submi�ed that the sale is on the condi�on of developing the plot and therefore it is duty bound to incur the expenditure and develop the plot. Learned Assessing Officer took a view that such expenses are not required and disallowed Rs.12,60,000/-. On the aspect of the deposits in the bank, learned Assessing Officer considered the cash available based on sale proceeds a�er reducing the expenditure claimed. Assessment under sec�on 143(3) of the Income Tax Act, 1961 (for short “the Act”) was complete by order dated 30/12/2019 determining the income at Rs.30,74,030/- by disallowing expenses from real estate business of the assessee to the tune of Rs.12,60,000/- and further treated Rs.9,00,000 as unexplained cash deposit in the bank.

Aggrieved by such an ac�on of the learned Assessing Officer, assessee preferred appeal before the Ld. CIT(A). The Ld. CIT(A) disposed of the appeal ex parte, sta�ng that the assessee sought adjournment on two occasions, namely, 06/10/2023 and 18/10/2023 but failed to respond to the no�ce issued on 8/12/2023 fixing the date of hearing as 14/12/2023. Ld. CIT(A), therefore, concluded that the assessee is not interested in pursuing the appeal, nor does he have any reasons or proof enough to defend his case. Ld. CIT(A) dismissed the appeal observing that the learned Assessing Officer made the addi�on on merits considering the facts of the case and no infirmity no�ced in the assessment order.

Assessee is, therefore, before me in this appeal contending that the no�ce dated 8/12/2023 was issued by way of email, and such email entered the spam and could not be no�ced by the assessee and that is the reason why the assessee could not respond to the same. Ld. AR submi�ed that having no�ced the expenses incurred towards development cost and also having perused the date wise list of the expenses incurred under various heads, the learned Assessing Officer did not call for any material from the assessee and as a ma�er of fact it is only from the trading account of the assessee the learned Assessing Officer gathered so much of informa�on. The assessee is possessing all the relevant informa�on to sa�sfy the learned Assessing Officer as to the genuineness of the expenses towards development cost, but it is only because the assessee was not aware as to what sort of informa�on that is required by the learned Assessing Officer, the assessee could not furnish such informa�on to the learned Assessing Officer.

Ld. AR further submi�ed that since the assessee was not aware of the no�ce dated 08/12/2023 he could not respond to the same and he submi�ed that the assessee will be careful in future to verify the spam also. Learned AR submi�ed that even otherwise also the learned CIT(A) could have referred to the facts and dispose of the ma�er on merits, so as to render effec�ve assistance to the higher appellate fora. Ld. AR prayed that in the interest of jus�ce an opportunity may be granted to the assessee to produce all the relevant informa�on before the learned Assessing Officer to substan�ate his case jus�fying the development expenses and also the deposits in the bank.

Though Ld. DR vehemently opposed grant of an opportunity to the assessee, the fact remains that there is nothing abnormal in the plea taken by the assessee that the no�ce dated 08/12/2023 sent by email entered the spam box and that is the reason why the assessee had no knowledge of the same. Assessee submi�ed that he has been maintaining the books of accounts and for that ma�er in the assessment order itself the learned Assessing Officer noted that the trading account was available before him.

I have gone through the record in the light of the submissions made on either side. Since I do not find anything abnormality in the plea taken by the assessee that the no�ce dated 8/12/2023 sent by email entered the spam box and that is the reason why the assessee could not respond resul�ng in deciding the case ex parte, I am inclined to believe the same. Even otherwise, requirement of law under sec�on 250 (6) of the Act is that the order of the Commissioner (Appeals) disposing of the appeal shall be in wri�ng and shall state the points for