JAGDISH CHAND ,MANDI GOBINDGARH V. INCOME TAX OFFICER, WARD-2, MANDI GOBINDGARH , MANDI GOBINDGARH

ITA 884/CHANDI/2024

AI Insights

The case involves an appeal by the assessee, Jagdish Chand, against the order of the CIT(A)/NFAC, Delhi, which pertained to the Assessment Year 2012-13. The primary grievances included the CIT(A)'s ex-parte decision-making without proper hearing, and the upholding of substantial additions to the assessee's income based on unexplained stamp duty and alleged short-term capital gains. The Tribunal found that the CIT(A) had not adequately addressed the issues on their merits and had dismissed the appeal without proper examination or discussion of the non-compliance reasons provided by the assessee.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 315969 (ITAT-CHANDIGARH)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Other Referred Cases: Anil Goel Vs CIT, [2008] 306 ITR 212 (Punjab & Haryana)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK VARDHAN
• Assessee Lawyers: SUDHIR SEHGAL
• Keywords: Set aside; Opportunity of being heard; Capital Gains; Principle of natural justice
• Section: 143(3)

Judgement Text

"आयकर अपीलीय अिधकरण,चǷीगढ़ Ɋायपीठ “ए” , चǷीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “A”, CHANDIGARH HEARING THROUGH: PHYSICAL MODE ŵी लिलत क ुमार, Ɋाियक सद˟ एवं ŵी मनोज क ुमार अŤवाल, लेखा सद˟ BEFORE: SHRI. LALIET KUMAR, JM & SHRI. MANOJ KUMAR AGGARWAL, AM आयकर अपील सं./ ITA No. 884/Chd/ 2024 िनधाŊरण वषŊ / Assessment Year : 2012-13 Jagdish Chand C/o Tejmohan Singh Advocate # 527, Sector 10-D Chandigarh बनाम The ITO Ward-2, Mandi Gobindgarh ˕ायी लेखा सं./PAN NO: अपीलाथŎ/Appellant ŮȑथŎ/Respondent िनधाŊįरती की ओर से/Assessee by : Shri Sudhir Sehgal, Advocate for Shri Tej Mohan Singh, Advocate राजˢ की ओर से/ Revenue by : Shri Vivek Vardhan, Addl. CIT, Sr DR सुनवाई की तारीख/Date of Hearing : 23/04/2025 उदघोषणा की तारीख/Date of Pronouncement : 14/05/2025 आदेश/Order PER LALIET KUMAR, J.M: This is an appeal filed by the Assessee against the order of the Ld. CIT(A)/NFAC, Delhi dt. 29/07/2024 pertaining to Assessment Year 2012-13. 2. In the present appeal Assessee has raised the following grounds: 1. That the Id. Commissioner of Income Tax (Appeals) has erred in passing an ex- parte order without affording a proper opportunity of hearing which is against the Principles of Natural Justice and as such the order passed is arbitrary and unjustified. 2 Without prejudice to the above, the Ld. Commissioner of Income Tax(Appeals) has erred in law in upholding the addition of Rs.15,05,000/-being half share of the stamp duty paid of Rs.30,10,000/-only on the basis of the findings of the assessing officer which is arbitrary and unjustified. 3 That the Ld. Commissioner of Income Tax(Appeals) has further erred in law and facts in upholding the addition of Rs. 1,31,74,428/- made on account of alleged short term capital gains earned on sale of property only on the basis of the findings of the assessing officer which is arbitrary and unjustified. 4 That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off. 5 That the order of Ld. Commissioner of Income Tax(Appeals) Officer is arbitrary, opposed to the facts of the case and thus untenable. 2 3. Briefly, the facts of the case are that the Ld. AO completed the assessment u/s 143(3) r.w.s. 147 of the Act, determining total income at Rs.1,88,33,708/-, making additions of Rs.15,05,000/- on account of unexplained stamp duty and Rs.1,31,74,428/- as short-term capital gain on estimated basis. 4. Aggrieved by the said assessment, the assessee filed an appeal before the CIT(A). However, the Ld. CIT(A) dismissed the appeal ex parte on the ground that despite multiple opportunities, the assessee failed to appear and did not furnish any written submissions or supporting documents. The Ld. CIT(A) proceeded to uphold the additions made by the Assessing Officer based on the material available on record. 5. Against the order of the Ld. CIT(A), the assessee is in appeal before us. 6. During the course of hearing the assessee submitted that the order passed by the CIT(A) is unjust and violates the principles of natural justice, as no proper opportunity of hearing was provided. The addition of Rs.15,05,000 was wrongly upheld based solely on the Assessing Officer’s findings without independent verification. Similarly, the addition of Rs.1,31,74,428 for alleged short-term capital gains is incorrect, as it overlooks key facts like the assessee’s share in the property and the holding period. It is therefore prayed that the order be set aside and the matter remanded for fresh consideration, or the additions be deleted in the interest of justice. He had drawn our attention to the following observation of Ld. CIT(A) :- 7. Ground No. 1 to 4: During the appellate proceedings, the appellant has not complied properly to the notices issued nor filed any written submission. In absence of the written submission and evidence, it remained to be unexplained as to how the AO’s order is erroneous. If the appellant claims that the assessment order was objectionable he should have provided supporting arguments of evidences. The appellate proceedings are first line of remedy to those who think that the injustice has been done by the AO. However, the appellant failed to avail the same by noncomplying. I am of the view that the government cannot waste its own resources in time and 3 money by providing endless opportunities to pursue taxpayers their own appeals, especially when numbers of pending appeals are high. The more opportunities to a particular taxpayer are always at the cost of denying opportunity to other taxpayer of getting his/her appeal heard early. Therefore, it is assumed that the appellant is not interested in pursuing his own appeal. Moreover, the appellant failed to bring on records any facts or documents which can explain how the order of the AO is erroneous. 7.1. In the case of Anil Goel Vs CIT, [2008] 306 ITR 212 (Punjab & Haryana), the Hon'ble High Court held as under: \"4. It is thus obvious on the plain language of section 250 of the Act that date and place of hearing was duly fixed. The assessee was also given notice along with notice to the Assessing Officer. The assessee had ample opportunity to make his submissions by appearing in person or through authorised representative. Despite fixing the case for seventeen hearings, no one had put in appearance nor any justifiable reason for adjournment was given. 5. The Tribunal also found that non-recording of reasons in support of order passed by CIT(A) would not amount to committing any illegality because the CIT(A) has adopted the reasoning advanced by the Assessing Officer and has upheld his order. The judgment of this Court, in the case of Popular Engineering Co. v. ITAT [2001] 248 ITR 5771, has been rightly relied upon wherein it has been observed that elaborate reasons need not be recorded by the CIT(A) as has been done by the Assessing Officer. The reasons are required to be clear and explicit indicating that the authority has considered the issue in controversy. If the appellate/revisional authority has to affirm such an order it is not required to give separate reasons which may be required in case the order is to be reversed by the appellate/revisional authority.\" 7.2 With regard to the merits of the case, the detailed findings of the AO are reproduced above in preceding paragraphs. It was seen that the assessee had purchased land at Gurdevnagar, Ludhiana on which he had paid stamp duty amounting to Rs. 4 15,05,000/-(being the half share). Since the assessee failed to satisfactorily explain the source of the above payment from his bank account, the AO added back the sum of Rs. 15,05,000/-to the income of the assessee. It was further seen that the assessee had purchased land at village Bhadla Neecha, Khanna for a consideration of Rs.33,00,000/- vide deed dated 26.11.2010. Parts of the said land were sold for a total consideration of Rs. 1,47,16,651/-. The AO calculated the short-term capital gain at Rs. 1,31,74,428/-, and added it back to the total income. 7.3 During the appellate proceedings, the appellant has failed to justify/explain with basic documentary evidences as to how the AO’s order is erroneous. Accordingly, I find no infirmity in the action of the AO. In view of the above, the addition of Rs.15,05,000/- on account of failure to explain the source of expenditure and Rs. 1,31,74,428/- as unreported short term capital gain is confirmed. Grounds 1 to 4 are hereby dismissed. 7. Per contra, the Ld. DR relied on the order passed by the lower authorities. 8. We have heard the rival contentions and perused the material available on the record, we find that the Ld. CIT(A) disposed of the appeal in a summary and ex parte manner without examining the issues raised in the grounds of appeal on merits. The reasons cited for non-compliance by the assessee are not discussed nor anyfinding is recorded on whether sufficient cause was shown for such non-compliance. 8.1 In our considered view, the Ld. CIT(A) ought to have decided the appeal on merits by granting one final opportunity and recording reasons in accordance with the law. Since the appeal has been dismissed without addressing the merits of the contentions raised, we find it appropriate to restore the matter to the file of the CIT(A) for de novo adjudication as the Ld. CIT(A) had failed to exercise his powers as enumerated in section 250(6) of the Act. 5 8.2 Accordingly, we set aside the order of the CIT(A) dated 29.07.2024 and remand the matter back to the file of the CIT(A), NFAC, with a direction to decide the appeal afresh after affording a reasonable opportunity of being heard to the assessee. 8.3 The assessee is also directed to appear before the Ld. CIT(A) and cooperate in the proceedings without seeking unnecessary adjournments. 9. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 14/05/2025 Sd/- Sd/- मनोज क ुमार अŤवाल लिलत क ुमार (MANOJ KUMAR AGGARWAL) (LALIET KUMAR) लेखा सद˟/ ACCOUNTANT MEMBER Ɋाियक सद˟ /JUDICIAL MEMBER AG आदेश की Ůितिलिप अŤेिषत/ Copy of the order forwarded to : 1. अपीलाथŎ/ The Appellant 2. ŮȑथŎ/ The Respondent 3. आयकर आयुƅ/ CIT 4. आयकर आयुƅ (अपील)/ The CIT(A) 5. िवभागीय Ůितिनिध, आयकर अपीलीय आिधकरण, चǷीगढ़/ DR, ITAT, CHANDIGARH 6. गाडŊ फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar "