REHANA BEGAM,KANPUR V. ITO WARD-1(3)(3), KANPUR

ITA 95/LKW/2024

AI Insights

The case involves Rehana Begum, the appellant, contesting an ex-parte order from the Commissioner of Income-tax (Appeals) which dismissed her appeal for non-prosecution. The original assessment by the Income Tax Officer added Rs.1,57,25,000 to her income, claiming it as unexplained under section 56 of the Income Tax Act, 1961, related to the purchase of agricultural land, which the assessee argued was tax-exempt. The Tribunal found that both the lower authorities had not provided adequate opportunity to the assessee, and the appellate order was not a speaking order on the merits of the case. The Tribunal emphasized the need for a fair hearing and proper representation, setting aside the previous orders and remanding the case for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 471450 (ITAT-LUCKNOW)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2016-2017
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJEEV KRISHNA SHARMA
• Assessee Lawyers: ABHINAV MEHROTRA
• Keywords: Set aside; Capital asset; Additional evidence; Corroborative evidences; Principle of natural justice
• Section: 144; 142(1); 143(2); 143(1)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH “A”, LUCKNOW BEFORE SHRI KUL BHARAT, VICE PRESIDENT AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ITA No.95/LKW/2024 Assessment Year: 2016-17 Rehana Begum 94/115 Pench Bagh, Kanpur- 208001. v. Income Tax Officer Ward-1(3)(3) Kanpur-208001. PAN:BJBPB6817R (Appellant) (Respondent) Appellant by: Shri Abhinav Mehrotra, Adv. Respondent by: Shri Sanjeev Krishna Sharma, Addl. CIT(DR) Date of hearing: 20 01 2025 Date of pronouncement: 23 01 2025 O R D E R PER KUL BHARAT, VICE PRESIDENT.: This appeal, by the assessee, is directed against the order of the Learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 22.11.2023 pertaining to the assessment year 2016-17. The assessee has raised the following grounds of appeal: - “1. BECAUSE, on the facts and in the circumstances of the case, the ex- parte order passed by the Ld. Commissioner of Income Tax (Appeals) Dt. 22.11.2023 dismissing the appeal of the assessee is liable to be set-aside and quashed as the impugned order passed by CIT(A) is wholly illegal and bad in law. There is no power vesting with CIT(A) to dismiss an appeal for non-prosecution. 2. BECAUSE, on the facts and in the circumstances of the case, the ex- parte order passed by the Ld. Commissioner of Income Tax (Appeals) is unsustainable in law as no notice of hearing Dt. 03.11.2023 has been received by assessee hence the Ld. CIT(A) was not justified in holding that assessee failed to appear before the authority. There is no finding recorded by Ld. CIT(A) in the impugned order that notice of hearings was served on the assessee. ITA No.95/LKW/2024 Page 2 of 5 3. BECAUSE, the Ld. Commissioner of Income Tax (Appeals) has erred in law and on fact in upholding an ex-parte order of assessment whereby the Assessing Officer has mindlessly made an addition of Rs.1,57,25,000/- to the income of the assessee¢ without considering the facts and circumstances of the case of the assessee whereby she. has purchased agricultural land which is tax exempt as agricultural land do not constitute capital asset. The addition has been made as unexplained under section 56 without taking into account that SOC is not applicable on this transaction. In the impugned ex-parte order is wholly non-speaking and unsustainable in law. 4. BECAUSE, on the facts and in the circumstances of the case, the additional evidence which was issued by the tehsildar of the respective tehsil where the land is situated clearly specifies that the land is agricultural land and not a capital asset. In the impugned ex-parte order is wholly non-speaking and unsustainable in law. 5. BECAUSE, on the facts and in the circumstances of the case, the order of assessment is bad in law as it is not passed by jurisdictional Assessing Officer and without service of jurisdictional notice u/s 143(2) of the Income Tax Act as per law and thus the impugned ex-parte order of CIT(A), upholding such order of assessment deserves to be quashed and set- aside. 6. BECAUSE, on the facts and in the circumstances of the case, the ex- parte order of Ld. Commissioner of Income Tax (Appeals) is further bad in law as the order has been passed in violation of principal of natural justice in as much as the assessee has preferred an appeal before Ld. Commissioner of Income Tax(Appeals), Kanpur and there is no notice/intimation to assessing transferring her appeal before faceless appeal center and thus the assessee: remained under an impression that notice from CIT(A), Kanpur’s office will be received. 7. BECAUSE, on the facts and in the circumstances of the case, the order of assessment passed U/s 144 of the Income Tax Act, made without issuing Show Cause Notice U/s 144 of the Act is wholly illegal and bad in law. The same deserves to be set-aside and quashed and the impugned ex-parte order upholding such order of Assessment deserves to be consequently quashed and set-aside. 8. BECAUSE, on the facts and in the circumstances of the case, the order passed by the Ld. Commissioner of Income Tax (Appeals) is bad in law as no due and proper opportunity of hearing was granted to the assessee to explain its case hence the order of Ld. Commissioner of Income Tax (Appeals) deserves to be set-aside and quashed. That, as per the impugned order, some hearings in the matter were fixed during the COVID- 19 period, thus, it was not possible to assessee to attend those hearing dates. 9. BECAUSE, on the facts and in the circumstances of the case, the order passed by the Ld. Commissioner of Income Tax (Appeals) is plain arbitrary and purely based on conjectures and surmises and hence bad in law and liable to be set-aside and quashed. 10. The humble assessee, craves for leave to add/ amend any other ground with the prior permission of your honours.” ITA No.95/LKW/2024 Page 3 of 5 2. The facts giving rise to the present appeal are that the assessee had filed return of income on 29.03.2017, declaring total income of Rs.3,65,540/- for AY. 2016-17 which was processed u/s 143(1) of the Income Tax Act, 1961 (hereinafter referred as “the Act”). Thereafter, the case was selected for scrutiny and assessment proceeding was initiated. The notices u/s 143(2) and 142(1) of the Act were issued and served upon the assessee. The assessee did not make any compliance of the notices. Thereafter, the Assessing Officer made exparte assessment u/s 144 of the Act. Thereby, assessing the income at Rs.1,60,90,540/- against the returned of income in sum of Rs.3,65,540/-. Aggrieved by this, the assessee preferred an appeal before the Ld. CIT(A), before Ld. CIT(A) also, there was no representation on behalf of the assessee, therefore the appeal was dismissed exparte to the assessee. Now, the assessee is in appeal before this Tribunal. 3. Apropos to the grounds of appeal, the Ld. Counsel for the assessee submitted that both the lower authorities have not given adequate opportunity to the assessee and the assessment order as well as the First Appellate Order was passed orders exparte to the assessee. He submitted that the impugned appellate order is not a speaking order on the merits of the case. The Ld. CIT(A) dismissed the assessee’s appeal in a summary manner, taking adverse view of non-compliance on the part of the assessee of the notices issued by the Ld. CIT(A). The Ld. Counsel for the assessee contended that the Ld. CIT(A) as well as the Assessing Officer failed to appreciate facts of the case in right perspective. The Ld. Counsel for the assessee prayed that the issue in dispute may be ITA No.95/LKW/2024 Page 4 of 5 restored back to the Assessing Officer for giving adequate opportunity to the assessee in the interest of justice and fair play. 4. On the other hand, the Ld. Departmental Representative (“DR”) opposed the submissions and supported the orders of the authorities below. 5. We have heard the rival submissions and perused the material available on record. On perusal of the impugned orders, it is noticed that the Ld. CIT(A) dismissed the assessee’s appeal for want of prosecution, taking adverse view of non-compliance of notices issued by him. It is well settled that Ld. CIT(A) is under statutory obligation for passing a speaking order on all the grounds raised before him. In the present case, the bone of contention between the parties is regarding expenditure incurred on house property. Ld. CIT(A) has taken adverse view on the basis of non-compliance of notices. The effective and meaningful representation is a fundamental requirement of law. In the absence of such representation there is every possibility of error in coming to a just conclusion. The litigant must be afforded reasonable opportunity for presenting his case. 6. In view of the foregoing and as representatives of both sides are in agreement with this, under the peculiar facts and circumstances of the present case; to sub-serve the principles of natural justice and in all fairness last opportunity to the assessee be given to assessee to represent his case effectively. We, therefore, hereby set aside the impugned orders and restore the assessment to the file of the Assessing Officer to make assessment afresh, after giving proper opportunity to the assessee. The assessee would co-operate in the assessment ITA No.95/LKW/2024 Page 5 of 5 proceedings and furnish the requisite supporting evidences as and when called for by the Assessing Authority. The grounds raised by the assessee are allowed for statistical purposes. 7. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 23/01/2025. Sd/- Sd/- [ANADEE NATH MISSHRA] [KUL BHARAT] ACCOUNTANT MEMBER VICE PRESIDENT DATED: 23/01/2025 Vijay Pal Singh, (Sr. PS) Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. DR 5. Guard File By order // True Copy// Assistant Registrar "