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Income Tax Appellate Tribunal, PUNE BENCHES “A” PUNE
Before: SHRI INTURI RAMA RAO & SHRI S. S. VISWANETHRA RAVI
This is an appeal filed by assessee against the order of the CIT(A) in National Faceless Appeal Centre, Delhi [‘NFAC’] dated 25.05.2023 for the assessment year 2015-16.
At the outset, we find that the ld.CIT(A) while passing the ex-parte order had not adjudicated the issues raised in appeal on merits, instead the ld.CIT(A) dismissed the appeal for want of prosecution of appeal with regard to ground Nos. 1, 3 & 4.
However, with respect to ground No.2 raised before him, the ld. CIT(A) partly allowed the appeal by directing AO to give benefit of cost of acquisition as per the provisions of section u/s.55(2)(b)(ii) of the Act. The ground Nos. 3 & 4 raised by the assessee before the Tribunal are that the lands sold were agricultural lands and therefore, not liable to any capital gain as per exceptions contained in section 2(14)(iii) of the Act. He, therefore, prayed that addition made by the AO requires to be deleted.
When the appeal was called on, none appeared on behalf of the assessee despite due service of notice of hearing. After hearing the ld. DR and perusing the material on record, we proceed to dispose of the appeal ex parte qua the assessee.
We find that the approach of the ld.CIT(A) is totally unreasonable and unjustified. The CIT(A) fell in serious error by not adjudicating the issues in appeal on merits. The settled positions of law mandates the CIT(A) to dispose of the appeal by adjudicating the issue raised in appeal on merits. In the present case, the CIT(A) had fell into serious error by not disposing of the appeal on merits. The findings of the CIT(A) are not based on the material on record, which means that the CIT(A) had not gone into the merits of the issue in appeal. Albeit, with respect to ground No.2 raised before the CIT(A), he allowed the benefit of cost of acquisition but did not dispose of the ground of appeal on merits raised before him challenging the addition made by the AO under the head “capital gains”. Therefore, considering the facts in entirety, we vacate the finding of the CIT(A). In the circumstances, we remand the matter back to the file of the CIT(A) and direct to dispose of the appeals on merits in accordance with law after affording due opportunity of being heard to the appellant.
In the result, the appeal of the assessee stands partly allowed for statistical purposes. Order pronounced on this 31st day of January, 2024.