VISHALKUMAR HARESHBHAI DARBAR,BOTAD V. THE ITO, WARD-1(8), BHAVNAGAR

ITA 2148/AHD/2024

AI Insights

The case involves Vishalkumar Hareshbhai Darbar, an individual engaged in the retail business of trading in gold and silver, who appealed against the order of the Commissioner of Income Tax (Appeals), which confirmed the addition of Rs.93,45,517 to his income for the Assessment Year 2022-23. The addition was initially made by the Assessing Officer under section 143(3) r.w.s. 144B of the Income-tax Act, 1961, due to non-compliance in providing details of the indexed cost of improvement on a property sale. Both the initial assessment and the subsequent appeal were dismissed ex-parte, leading to the current appeal before the Tribunal. The Tribunal found that the assessee was not properly notified of the hearings, as the notices were sent to an incorrect email address, and thus, the principles of natural justice were not followed.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 472291 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2022-2023
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RIGNESH DAS
• Assessee Lawyers: SAMIR VORA
• Keywords: Set aside; Capital Gains; Principle of natural justice
• Section: 143(3); 250

Judgement Text

" आयकर अपीलीय अिधकरण, अहमदा बा द \u0012ा यपीठ “सी“, अहमदा बा द । IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD सु\u0017ी सुिच\u0019ा का \u001aले, \u0012ा ियक सद एवं \u0017ी मकरंद वसंत महा देवकर, लेखा सद क े सम\"। ] ] BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI MAKARAND V. MAHADEOKAR, ACCOUNTANT MEMBER आयकर अपील सं /ITA No.2148/Ahd/2024 िनधा \u0010रण वष\u0010 /Assessment Year : 2022-23 Vishalkumar Hareshbhai Darbar 3/A, Laxmi Apartment Paliyad Road Botad – 364 710 (Gujarat) बनाम/ v/s. The ITO Ward-1(8) Bhavnagar – 364 290 \u0014थायी लेखा सं./PAN: AHEPD 9555 E अपीलाथ%/ (Appellant) &' यथ%/ (Respondent) Assessee by : Shri Samir Vora, AR Revenue by : Shri Rignesh Das, Sr.DR सुनवाई की तारीख/Date of Hearing : 26 /03/2025 घोषणा की तारीख /Date of Pronouncement: 27 /03/2025 आदेश/O R D E R PER MAKARAND V. MAHADEOKAR, AM: This appeal by the assessee is directed against the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)”] dated 17.09.2024 under section 250 of the Income-tax Act, 1961 [hereinafter referred to as “the Act”] for the Assessment Year (AY) 2022–23, whereby the learned CIT(A) dismissed the appeal ex-parte and confirmed the addition of Rs.93,45,517/- made by the Assessing Officer [hereinafter referred to as “AO”] vide his order dated 22.03.2024 passed under section 143(3) r.w.s. 144B of the Act. ITA No. 2148/Ahd/2024 Vishalkumar Hareshbhai Darbar vs. ITO Asst. Year : 2022-23 2 2. The appeal has been filed with a delay of 23 days. During the course of hearing, the learned Authorized Representative submitted that the delay was on account of the demise of the assessee’s father. The learned Departmental Representative did not object to the condonation of delay, considering the short span of delay and the reason stated. 3. We are satisfied that the cause for delay is reasonable and bona fide. Accordingly, the delay of 23 days in filing the appeal is hereby condoned. Facts of the Case: 4. The assessee is an individual engaged in the retail business of trading in gold and silver, and he maintains regular books of accounts. The assessee filed the return of income for A.Y. 2022–23 on 21.12.2022 declaring total income of Rs.3,40,020/-, which included Long-Term Capital Gain (LTCG) of Rs.3,68,083/- on sale of property. The case was selected for scrutiny under CASS for verification of capital gains/income from sale of property. During the assessment proceedings, various notices were issued by the AO, including show-cause notice dated 05.03.2024 requiring compliance by 12.03.2024. On request, an adjournment was granted and further notice was issued on 13.03.2024, requiring the assessee to comply by 15.03.2024. The assessee, however, failed to respond due to insufficient time and intervening weekends. The AO completed the assessment ex parte under section 143(3) r.w.s. 144B of the Act and disallowed the entire claim of indexed cost of improvement amounting to Rs.93,45,517/-, thereby determining the total income at Rs.96,85,537/-. 5. Aggrieved, the assessee filed an appeal before the learned CIT(A). However, the appeal was also dismissed ex parte. The notices during ITA No. 2148/Ahd/2024 Vishalkumar Hareshbhai Darbar vs. ITO Asst. Year : 2022-23 3 appellate proceedings were issued on 01.05.2024, 01.07.2024, 19.07.2024, and final notice dated 29.08.2024 directed the assessee to comply by 06.09.2024. The assessee, however, failed to file any written submission. 6. The assessee has raised multiple grounds challenging the ex parte dismissal of the appeal which are as follows: 1.1 The order passed u/s. 250 on 17.09.2024 for A.Y.2022-23 by NFAC(CIT(A) Delhi (for short \"CIT(A)\") by dismissing the appeal on the ground of non-compliance to the notices of hearing and thereby confirming the addition of Rs.93,45,517/- is wholly illegal, unlawful and against the principles of natural justice. 1.2 The Ld. CIT(A) has grievously erred in law and or on facts in not allowing sufficient opportunity before upholding impugned disallowance so that there was gross violation of principles of natural justice. The appellant was issued all the notices of hearing at mail id [e-mail], whereas primary registered mobile and email id as per IT Portal are 9824245654, [e-mail] so that the appellant was not aware about the same. 2.1 The Ld. CIT(A) has grievously erred in law and or on facts in dismissing the appeal on the ground of non-compliance to the notices of hearing and thereby confirming the disallowance of entire claim of indexed cost of improvement at Rs.93,45,517/-. 2.2 That in the facts and circumstances of the case as well as in law, the Ld. CIT(A) has grievously erred in dismissing the appeal on the ground of non-compliance to the notices of hearing and thereby confirming the disallowance of entire claim of indexed cost of improvement at Rs.93,45,517/. It is therefore prayed that the impugned disallowance of Rs.93,45,517/- made by the CIT(A) should be deleted. 7. We have considered the grounds of appeal along with statement of facts and perused the material available on record. It is an admitted position that both the orders – the assessment order as well as the appellate order – have been passed ex parte, without the assessee being afforded sufficient opportunity to present his case. ITA No. 2148/Ahd/2024 Vishalkumar Hareshbhai Darbar vs. ITO Asst. Year : 2022-23 4 7.1. The assessee has specifically contended that the notices of hearing were not served at the registered email address and mobile number as appearing on the IT portal. This explanation has not been controverted by the Revenue. The learned Departmental Representative fairly submitted that both the orders have been passed ex-parte and had no objection if the matter is restored for fresh adjudication. 7.2. In these facts and circumstances, we are of the considered view that the matter requires fresh consideration in the interest of justice. The assessee deserves a proper opportunity to submit his explanation and documentary evidence in support of the claim of indexed cost of improvement. 7.3. Accordingly, the impugned order passed by the CIT(A) is set aside. The matter is restored to the file of the AO for deciding the issue afresh after affording due opportunity of hearing to the assessee. The assessee is also directed to fully cooperate and file necessary details during the fresh proceedings. 8. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the Open Court on 27th March, 2025 at Ahmedabad. Sd/- Sd/- (SUCHITRA KAMBLE) JUDICIAL MEMBER (MAKARAND V. MAHADEOKAR) ACCOUNTANT MEMBER अहमदाबाद/Ahmedabad, िदनांक/Dated 27/03/2025 टी.सी.नायर, व.िन.स./T.C. NAIR, Sr. PS ITA No. 2148/Ahd/2024 Vishalkumar Hareshbhai Darbar vs. ITO Asst. Year : 2022-23 5 आदेश की #ितिलिप अ$ेिषत/Copy of the Order forwarded to : 1. अपीलाथ% / The Appellant 2. #&थ% / The Respondent. 3. संबंिधत आयकर आयु' / Concerned CIT 4. आयकर आयु' ) अपील ( / The CIT(A)-(NFAC), Delhi 5. िवभागीय #ितिनिध , अिधकरण आयकर अपीलीय , राजोकट/DR,ITAT, Ahmedabad, 6. गाड\u0010 फाईल / Guard file. आदेशानुसार/ BY ORDER, स&ािपत #ित //True Copy// सहायक पंजीकार (Asstt. Registrar) आयकर अपीलीय अिधकरण, ITAT, Ahmedabad 1. Date of dictation (word processed by Hon’ble AM in his laptop) : 27.3.2025 2. Date on which the typed draft is placed before the Dictating Member. : 27.3.2025 3. Date on which the approved draft comes to the Sr.P.S./P.S : 4. Date on which the fair order is placed before the Dictating Member for pronouncement. : 5. Date on which fair order placed before Other Member : 6. Date on which the fair order comes back to the Sr.P.S./P.S. : 27.3.25 7. Date on which the file goes to the Bench Clerk. : 27.3.25 8. Date on which the file goes to the Head Clerk. : 9. The date on which the file goes to the Assistant Registrar for signature on the order. : 10. Date of Despatch of the Order : "