JITENDRA MEHTA,MUMBAI V. ITO-WARD 1(1)(3), SURAT, SURAT

ITA 20/SRT/2025

AI Insights

The case involves Jitendra Mehta, the appellant, who contested the order of the Commissioner of Income-tax (Appeals) regarding the assessment of long-term capital gains on the sale of a property. The primary contention was the difference between the declared sale value and the stamp duty value of the property, which led to an addition of Rs.12,40,500 under section 50C of the Income Tax Act. The CIT(A) dismissed the appeal due to non-compliance and lack of documentary evidence from the appellant, despite multiple opportunities to present his case. The Tribunal found that the CIT(A)'s decision was made without a proper hearing, violating the principles of natural justice, and thus remanded the case back to CIT(A) for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 633147 (ITAT-SURAT)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2018-2019
• Other Referred Cases: M/s Chhabra Land & Housing Ltd., ITA No. 1025 to 1027/Chd/2005, B. N. Bhattacharjee & Ors., 118 ITR 461 (SC)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH JAIN
• Assessee Lawyers: HIMANSHU GANDHI
• Keywords: Set aside; Opportunity of being heard; Sale consideration of property below Jantri Value; Principle of natural justice
• Section: 143(3); 234B; 50C

Judgement Text

" IN THE INCOME-TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER & SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.20/SRT/2025 Assessment Year: (2018-19) (Hybrid hearing) Jitendra Mehta, Office No.M-24, Mezn Floor, 10/21, Flox Chamber, Tata Road No. 1, Opera House, Mumbai – 400004, Maharashtra Vs. ITO, Ward – 1(1)(3), Surat ̾थायीलेखासं./जीआइआरसं./PAN/GIR No: AMBPM9018P (Appellant) (Respondent) Appellant by Shri Himanshu Gandhi, CA Respondent by Shri Mukesh Jain, Sr. DR Date of Hearing 23/04/2025 Date of Pronouncement 09/06/2025 आदेश / O R D E R PER BIJAYANANDA PRUSETH, AM: This appeal by the assessee emanates from the order passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’), dated 13.11.2024, by the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi [in short ‘CIT(A)’] for the Assessment Year (AY) 2018-19. 2. Grounds of appeal raised by the assessee are as under: “1. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in dismissing the appeal without adjudicating the grounds of appeal on merits. 2. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in confirming addition of Rs.12,40,500/- u/s 50C on account of difference between the sale value and stamp duty value of the house property sold. 3. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in confirming addition u/s 50C without considering the fact that the valuation was referred to DVO and report of DVO was pending as on the date of order. 2 ITA No.20/SRT/2025/AY.2018-19 Jitendra Mehta 4. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in levying penalty u/s 270A of Income Tax Act, 1961. 5. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in charging interest u/s 234B & 234C of Income Tax Act, 1961. 5. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.” 3. Brief facts of the case are that the assessee is an individual and filed his return of income on 29.09.2018, declaring total income of Rs.15,74,450/-. The assessee sold an immovable property at Flat No.104, 1st Floor, A Wing, Jai HariChs Ltd., Vasantrao Naik Marg, Mumbai for a consideration of Rs.85,00,000/-, but the stamp valuation authority computed the value of the property at Rs.97,40,500/-. Thus, there is a difference of Rs.12,40,500/-. The AO asked assessee to furnish details and explanation, in response to which the assessee stated that he sold the land at current market value to the buyer and he has not received any additional amount from buyer of the property. The assessee also requested AO to refer the matter to the DVO u/s 55A of the Act to ascertain actual value of property. The DVO started necessary proceedings but since the case was getting time barring, the AO issued a show cause notice on 23.09.2021. But, the assessee failed to do file any reply. In absence of any details/explanation, the AO passed the order u/s 143(3) r.w.s. 144B of the Act and made addition of Rs.12,40,500/-, being the difference between the value declared by the assessee and the long-term capital gain (LTCG) as per stamp valuation authority. 3 ITA No.20/SRT/2025/AY.2018-19 Jitendra Mehta 4. Aggrieved by the order of AO, the assessee filed this appeal before the CIT(A). The CIT(A) issued 6 notices but apart from seeking adjournment once, assessee did not file any reply. Hence, the CIT(A) observed that the appellant was not interested in pursuing his appeal and he had no documentary evidence in support of his claim. The CIT(A) relied on the decisions in cases of M/s Chhabra Land & Housing Ltd., ITA No. 1025 to 1027/Chd/2005 and B. N. Bhattacharjee & Ors., 118 ITR 461 (SC) and held that the appeal does not mean merely filing of the appeal but effectively pursuing the same. The CIT(A) further observed that the appellant was provided adequate opportunity of being heard; however, he had remained non-compliant. No material fact had been brought on record to rebut the findings of the AO. In absence of any documentary evidence, the CIT(A) dismissed the appeal. 5. Aggrieved by the order of CIT(A), the assessee filed appeal before the Tribunal. The learned Authorized Representative (ld. AR) of the assessee submitted that the CIT(A) passed an ex-parte order u/s 250 of the Act on 13.11.2024 without hearing the assessee in violation of the principles of natural justice. Hence, the order being an ex parte, stood vitiated on account of violation of principles of natural justice. The assessee could not appear before the CIT(A) due to circumstances beyond his control. Therefore, Id. AR requested that in the interest of justice, one more opportunity should be given to the assessee to plead his case before the CIT(A). 4 ITA No.20/SRT/2025/AY.2018-19 Jitendra Mehta 6. On the other hand, learned Senior Departmental Representative (ld. Sr. DR) of the revenue submitted that the appellant was negligent and non- cooperative during the appellate proceedings. He submitted that appropriate cost should be imposed on the assessee, if the matter is remitted to the file of CIT(A). 7. We have heard both the parties and perused the material available on record. It is an undisputed fact that the assessee has been non-cooperative during the appellate proceedings. The CIT(A) had issued six notices which at para 4.1 of the appellate order, but apart from seeking adjournment once, the assessee did not comply to the notices issued by the CIT(A). Considering all these facts, we are of the view that the assessee was negligent and non- cooperative before the CIT(A). The Id. AR submitted that the non-compliance was neither deliberate nor intentional, but due to circumstances beyond control of assessee. He submitted that assessee is ready with all details and requested that another opportunity may be granted to the assessee to submit all the required explanations and details and plead his case on merit. We are of the view that the principles of natural justice would call for giving another opportunity of hearing to the assessee. Accordingly, in the interests of justice, the order of CIT(A) is set aside and the matter is restored to file of CIT(A) to re- adjudicate the entire issue afresh subject to payment of cost of Rs.10,000/- (Rupees ten thousand only) by the assessee to the credit of the \"District Legal Services Authority, Surat\" within 2 weeks from receipt of this order. The 5 ITA No.20/SRT/2025/AY.2018-19 Jitendra Mehta assessee should be granted adequate and reasonable opportunity of being heard by the CIT(A). The assessee is also directed to be more vigilant and diligent and to furnish all the details and explanations as needed by the CIT(A) by not seeking adjournment without valid reasons. With this direction, the appeal of the assessee is allowed for statistical purposes. 8. In the result, appeal of the assessee is allowed for statistical purposes. Order is pronounced under provision of Rule 34 of ITAT Rules, 1963 on 09/06/2025. Sd/- Sd/- (SIDDHARTHA NAUTIYAL) (BIJAYANANDA PRUSETH) JUDICIAL MEMBER ACCOUNTANT MEMBER Surat िदनांक/ Date: 09/06/2025 SAMANTA Copy of the Order forwarded to: 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // TRUE COPY // Assistant Registrar/Sr. PS/PS ITAT, Surat "