RAJENDRA JAVANMAL GANDHI,RAIGAD vs. ITO, WARD 1, PANVEL, PANVEL

Although a number of grounds have been raised by the assessee, however, these all relate to the ex-parte order of the CIT(A) / NFAC in confirming the additions of Rs.2,65,01,095/- and Rs.64,769/-, respectively made by the Assessing Officer in the order passed u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).

Facts of the case, in brief, are that the assessee is an individual engaged in business of builders and developers under the name and style of M/s. Tiruma Properties. He filed his return of income on 13.07.2017 declaring total income of Rs.10,90,930/-. The case of the assessee was selected for scrutiny under CASS category. Accordingly, statutory notices u/s 143(2) and 142(1) of the Act were issued and served on the assessee. During the course of assessment proceedings the Assessing Officer noted that the assessee, in its Profit and Loss Account, has shown flats sold at Rs.99,43,347/-. He observed that the assessee has sold five flats for a total consideration of Rs.3,64,44,412/- and one flat bearing flat No.306 of the building remained unsold. The assessee has not furnished any reason for not accounting the sale proceeds of all the flats which were sold upto 31.03.2016. The Assessing Officer therefore, considered the total sale consideration at Rs.3,64,44,412/- instead of Rs.99,43,347/- declared by the assessee and made addition of Rs.2,65,01,095/- being the difference between the sale of flats shown and the actual sales. The Assessing Officer further noted that flat No.106 has been sold to one Mr. Ravindra Farat for a consideration of Rs.25,48,731/- vide agreement dated 08.01.2016 whereas the market price as per Index-II filed by the assessee was Rs.26,13,500/-. The Assessing Officer, applying the provisions of section 43CA of the Act, made addition of Rs.64,769/- being the difference between the market price and the actual sale consideration. Thus, the Assessing Officer determined the total income of the assessee at Rs.2,76,56,790/- as against the returned income of Rs.10,90,930/-.

Since the assessee did not reply to the notices issued by the CIT(A) / NFAC despite five opportunities granted by him, the CIT(A) / NFAC dismissed the appeal filed by the assessee for want of prosecution.

Aggrieved with such order of the CIT(A) / NFAC, the assessee is in appeal before the Tribunal.

The Ld. Counsel for the assessee at the outset submitted that the notices were sent to the e-mail ID of the erstwhile consultant who did not inform the assessee for which the assessee could not participate in the appeal proceedings. Further, the CIT(A) / NFAC has dismissed the appeal for want of prosecution and has not decided the appeal on merit as per provisions of section 250(6) of the Act. He submitted that in the interest of justice, the assessee should be given an opportunity to substantiate his case by filing the requisite details before the CIT(A)/ NFAC.

The Ld. DR on the other hand strongly relied on the order of the CIT(A) / NFAC and submitted that despite five opportunities granted by him, the assessee did not participate in the appellate proceedings.

We have heard the rival arguments made by both the sides and perused the orders of the Assessing Officer and Ld. CIT(A) / NFAC. It is an admitted fact that despite five opportunities granted by the CIT(A) / NFAC, the assessee did not participate in the appellate proceedings for which he was constrained to dismiss the appeal for want of prosecution. It is the submission of the Ld. Counsel for the assessee that the e-mails were sent to the erstwhile consultant whose e-mail was given in Form No.35 and he did not inform the assessee for which all these unfortunate events happened. It is also his submission that given an opportunity, the assessee is in a position to substantiate his case by filing the requisite details before the CIT(A) / NFAC. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the CIT(A) / NFAC with a direction to grant one more opportunity to the assessee to substantiate his case by filing the requisite details and decide the issue as per fact and law. The assessee is also hereby directed to appear before the CIT(A) / NFAC on the appointed date and file the requisite details without seeking any adjournment under any pretext, failing which the CIT(A) / NFAC is at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.

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