KRUNAL SUDHIR MEHTA,NA vs. ARIVS.INCOME TAX OFFICER, WARD-3, NAVSARI, NAVSARI

Appellant represented by Shri Nilesh Patel, CA Respondent represented by Shri Vinod Kumar, Sr. DR Date of hearing 30/01/2023 Date of pronouncement 30/01/2023 Order under Section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the assessee is directed against the order of National Faceless Appeal Centre, Delhi (NFAC)/learned Commissioner of Income Tax (Appeals) (in short, the ld. CIT(A) dated 17/10/2022 for the Assessment year (AY) 2020-21. The assessee has raised following solitary ground of appeal

, which reads as under: “1. On the facts and in law the learned Assessing Officer has erred in not allowing exemption u/s 13(A) House Rent Allowance of the Income Tax Ac 1961 Rs. 5,02,550/- and raised demand of Rs. 2,07,250/- for the year under consideration, without giving claim of HRA exemption.”

2. At the outset of hearing, learned Authorized Representative (Ld.AR) for the assessee submits that the ld. CIT(A) dismissed the appeal of assessee without considering the submission of assessee by taking a view that no compliance was made by assessee nor any adjournment Krunal Sudhir Mehta Vs ITO application was filed. The ld. AR submits that he has filed detailed written submissions before the ld. CIT(A) wherein the assessee explained that he is a salaried employee having taxable income of Rs.42,79,113/- and claimed exemption under Section 13(A) of the Act for house rent allowance of Rs. 5,02,550/-. The assessee has paid total tax of Rs. 11,37,449/- by showing by showing taxable income of Rs. 42,70,670/-. The ld. AR submits that the basic salary for the purpose of calculation of HRA was Rs. 11,89,200/- and allowable house rent allowance (HRA) was Rs. 5,31,080/- as per salary detail provided by his employer. As per Rule applicable for HRA, the assessee is eligible for deduction of Rs. 5,31,080/-. The CPC while processing the return, committed mistake and created demand of Rs. 2,07,250/- by not allowing deduction of HRA as per rule. The ld. AR for assessee submits that the assessee has a good case on merit and likely to succeed, if the case of assessee is heard and the appeal is to be decided on merit by ld CIT(A). The ld. AR submits that complete details in the form of statement of fact was filed before the ld. CIT(A), however, the ld. CIT(A) did not think even to refer the basic fact leading to additions. The ld. AR of the assessee prayed that matter may be restored back to the file of Ld. CIT(A) for adjudicating the issue afresh in accordance with law.

3. On the other hand, the ld. Sr. DR for the revenue supported the order of ld. CIT(A) and submitted that the assessing officer as well as ld CIT(A)

Krunal Sudhir Mehta Vs ITO granted sufficient opportunity to the assessee. The assessee failed to availed such opportunity and now taking plea that sufficient opportunity was not given to him. The assessee has no regards to the public authorities.

raised by assessee as per mandate of Section 250(6) of the Act. Section 250(6) mandates that order of ld. CIT(A) must contain facts of the case, points of determination and decision thereon and reasons of such decision. Considering the fact that ld. CIT(A) passed the ex parte order, in my view, the assessee was not offered sufficient and reasonable opportunity of hearing, particularly, when the assessee has filed his submissions and the facts relating to the adjudication of ground of appeal was available on record. Therefore, the order of ld. CIT(A) is set aside and all the grounds of appeal raised by the assessee are restored back to the file of ld. CIT(A) to decide all the grounds of appeal afresh and in accordance with law. Needless to direct Krunal Sudhir Mehta Vs ITO that before passing the order, the ld. CIT(A) shall grant reasonable opportunity of hearing to the assessee. The assessee is also directed to be vigilant and not to cause further delay and seek adjournment without any valid reason. The assessee is further directed to file all the relevant evidence in his power and possession, if so desired without any further delay, before the ld. CIT(A). In the result, the grounds of appeal raised by the assessee are allowed for statistical purposes.

5. In the result, the appeal of assessee is allowed for statistical purposes only. Order pronounced in the open court on 30th January, 2023.