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Income Tax Appellate Tribunal, HYDERABAD BENCHES “A”, HYDERABAD
Before: SHRI INTURI RAMA RAO, ACOCUNTANT MEMBER & SHRI K. NARASIMHA CHARY
निर्धारितीती द्वारा /Assessee Shri A.V. Raghuram, Advocate. by: राजस्व द्वारा /Revenue by: Shri Shakeer Ahamed, Sr. AR ई की तारीखरीख/Date of hearing: 08.02.2024 सुनवाई की तारीखरीख/Pronouncement on: 08.02.2024 घोषणा O R D E R PER INTURI RAMA RAO, A.M.
This is an appeal filed by the assessee directed against the order of the National Faceless Appeal Centre, Delhi, (NFAC) dated 17.11.2023 for the assessment year 2018-19.
Briefly, the facts of the case are that appellant / assessee is an individual driving income from house property, business and other sources during the year under consideration. The appellant had declared more than one house as self-occupied having Nil ALV in the schedule house property, and hence, his case was selected under CASS. Subsequently, notice u/s.142(1) of the Act was issued to the assessee on 04.12.2019 requesting to furnish details of immovable property owned during the year and reason for reporting more than one immovable property as self occupied. Thereafter, appellant submitted his explanation but the same was not found acceptable by the Assessing Officer.
2.1. Since the appellant failed to demonstrate that the interest expenses on borrowed capital totaling to Rs.25,44,350/- were actually incurred by him during the year, by way furnishing sufficient documentary evidence, the same was disallowed and added back to the total income of the assessee. Thereafter, Assessing Officer initiated separate penalty proceedings u/s 270A of the Act for mis-reporting of income. Thus, Assessing Officer completed the assessment interalia making disallowance of Rs.25,44,350/- and passed assessment order u/s 143(3) r.w.s. 144B of the Income Tax Act, determining the total assessed income at Rs.94,43,200/-.
Being aggrieved by the above assessment order, an appeal was filed before the NFAC, who vide impugned order dismissed the appeal of the assessee for non-prosecution.
Being aggrieved, the appellant is in appeal before this Tribunal in the present appeal.
We have heard the rival submissions and perused the material on record. From perusal of the impugned order, it is clear that the NFAC while passing the ex-parte order had not adjudicated the issue raised in appeal on merits, instead the NFAC dismissed the appeal for want of prosecution of appeal. This approach of the NFAC is totally unreasonable and unjustified. The NFAC fell in serious error by not adjudicating the issues in appeal on merits. The settled position of law mandates the NFAC to dispose of the appeal by adjudicating the issue raised in appeal on merits. In the present case, the NFAC had fell into serious error by not disposing of the appeal on merits. Therefore, we vacate this finding of the NFAC.
In the circumstances, we remand the matter back to the file of the NFAC and direct to dispose of the appeal on merits in accordance with law after affording due opportunity of being heard to the appellant.
In the result, the appeal filed by the assessee stands partly allowed for statistical purposes.
Order pronounced in the Open Court on 8th February, 2024.