DHANSUKHBHAI RAMANBHAI MALI,SURAT vs. ITO, WARD-2(3)(1), SURAT

Brief facts of the case are that the Assessing Officer(AO) while passing the assessment order under section 143(3) of the Act on 22.12.2016 determined the total income at Rs.64,23,540/- against the income offered at Rs.6,79,760/- . The AO while passing the order, disallowed the deduction and brought the Long Term Capital Gain(LTCG) of Rs.57,43,86/- as undisclosed LTCG and added the same to the income of the assessee. The AO initiated penalty under section 271(c) of the Act. Aggrieved by the additions of undisclosed LTCG, the assessee filed appeal before the ld. CIT(A).During the pendency of appeal in quantum assessment, the AO issued notice under section 274 r.w.s 271(c) of the Act. The AO recorded that no reply was filed by the assessee against the show cause notice. The AO levied penalty @10% of tax sought to evaded on such addition on undisclosed LTCG in his order dated 29.06.2017. Aggrieved by the penalty levied 271(c) of the Act, the assessee filed appeal before the ld.CIT(A). The ld.CIT(A) dismissed the appeal of the assessee in ex-parte order dated 07.07.2019. The ld. CIT(A) while passing the order held that assessee was given five opportunities and that the assessee has not made any compliance. Further aggrieved, the assessee has filed the present appeal before this Tribunal.

We have heard the submission of ld. Authorised Representative (AR) of the Assessee and the ld. Sr. Departmental Representative (ld. Sr.DR) for the Revenue. The ld.AR of the assessee submits that the ld. CIT(A in para 5.1.1 has recorded that assessee was given five opportunities of hearing. The finding of the ld.CIT(A) is not correct. The assessee sought adjournment of three occasions for valid reasons as recorded therein in para 5.1.1. The assessee while seeking adjournment specifically requested that that appeal in quantum assessment is also pending before the same ld. CIT(A). The assessee urged that either both the appeals may be clubbed or the decision of this appeal may be kept in abeyance till the adjudication of appeal in quantum assessment. The ld.AR for the assessee further submits that on 13.06.2019, the ld.AR of the assessee went to attend the proceedings before the ld.CIT(A). The official attached with the office of ld CIT(A) informed to the AR of the assessee that the ld.CIT(A) is not available as he has gone to Delhi for his official work. However, to the surprise of assessee, the ld.CIT(A) recorded that no compliance was made. The ld.AR of the assessee further submits that the appeal of assessee was not adjudicated on merit and as per mandate of section 250(6) of the Income tax Act. The appeal in quantum assessment is still pending at the file of ld.CIT(A). The ld.AR of the assessee prayed that (AY 2014-15) Dhansukhbhai Ramanbhai Malli assessee has good case on merit and is likely to succeed if the appeal is adjudicated on merit.

On the other hand the ld Sr DR for the assessee supported the order of the ld CIT(A). 5. We have considered the rival submissions of the parties and have gone through the orders of the lower authorities. We find that the AO levied penalty on the additions made on account of undisclosed LTCG. The assessee filed appeal before the ld CIT(A) in quantum, assessment. Before us the ld AR for the assessee vehemently submitted that the appeal of the assessee in quantum assessment was also pending before the same ld CIT(A), who instead of first deciding the quantum appeal, dismissed the penalty appeal and that the quantum appeal is still pending. We find merit in the submissions of the ld AR for the assessee for seeking time till the disposal of appeal in quantum assessment. However, we instead of going into controversy, whether the assessee defaulted in attending the proceedings before the ld.CIT(A). We find that the order of the ld.CIT(A) is not in accordance with mandate of section 250(6) of the Income Tax Act. Section 250(6) of the Act mandates that the Ld. CIT(A) while deciding the appeal is required to pass order on points of determination (grounds of appeals), decision therein on and reasons for such decision. Therefore, considering the facts and circumstances of the case, the (AY 2014-15) Dhansukhbhai Ramanbhai Malli appeal of the assessee is restored back to the file of the ld.CIT(A) to decide all the grounds of appeal