2020 (12) TMI 149 - AT - Wealth-tax

Wealth tax assessment - exemption claimed under Sec.5(vi) of the Wealth Tax Act in respect of residential flat at Mega Polls denied - assessee had not filed the documentary evidence in support of the exemptions claimed - Addition to the returned wealth on account of cash on hand - HELD THAT - Assessee had claimed exemptions of two properties citing the provisions of Wealth Tax Act. Though the Assessing Officer mentioned that in the absence of evidence in support of the exemptions claimed, denied the exemptions but it is not clear as to what details were required to grant the relief as claimed by the assessee. Addition to the returned wealth on account of cash on hand, the material on the record suggests that the cash was seized in the Financial Year 2009-10, whereas, we are concerned for the Financial Year 2010-11. There is no reference to any material suggesting the availability of cash on hand on 31.03.2011. Thus in the interests of the justice, the matter is remanded back to the file of Assessing Officer for fresh adjudication in accordance with law after affording a reasonable opportunity of being heard to the assessee. - Appeal filed by the assessee is partly allowed for statistical purposes.

Summary

Issues:
1. Ex-parte appellate order passed by CIT(A) under Wealth Tax Act, 1957
2. Violation of principles of natural justice in passing the order
3. Denial of exemptions claimed for self-occupied residential properties
4. Addition made on account of residential properties and cash in hand
5. Failure of the assessee to respond to notices during assessment proceedings

Analysis:
1. The appeal was filed against the order of the Commissioner of Wealth Tax (Appeals) for the Assessment Year 2011-12. The assessee raised various grounds of appeal, including the ex-parte appellate order passed by the CIT(A) confirming the net wealth at a specific amount. The assessee contended that the order was erroneous in law and fact.

2. The assessee also argued that the CIT(A) violated the principles of natural justice in passing the order. Despite opportunities given during the assessment proceedings, the assessee did not respond to notices, leading to an ex-parte order. The lack of evidence in support of exemptions claimed resulted in the confirmation of additions by the CIT(A).

3. The Assessing Officer denied exemptions claimed by the assessee for self-occupied residential properties and under Sec. 5(vi) of the Wealth Tax Act. The denial was based on the absence of documentary evidence supporting the exemptions. The Assessing Officer also made additions to the total wealth on account of cash in hand.

4. The Tribunal noted discrepancies in the assessment order regarding the details required to grant the relief claimed by the assessee. Additionally, the material on record indicated that the cash in hand was seized in a different financial year than the one under consideration. The Tribunal criticized the assessee's non-appearance before the authorities but remanded the matter back to the Assessing Officer for fresh adjudication in accordance with the law and after affording a reasonable opportunity of being heard to the assessee.

5. Despite due service of notice, the assessee did not appear before the Tribunal. The Tribunal proceeded to dispose of the appeal on merits. Ultimately, the appeal filed by the assessee was partly allowed for statistical purposes, with the matter remanded back to the Assessing Officer for fresh adjudication.