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2022 (4) TMI 861 - AT - Income TaxDismissal of appeal by CIT-A for non-persecution - CIT-A proceeded to hold that assessee has not made any submission in respect of the grounds of appeal till date HELD THAT - We find that ld.CIT(A) has taken up the appeal after three years of filing of the appeal and within a very short span of time has dismissed the appeal for non-persecution. The only reason to uphold the order of AO mentioned by the ld.CIT(A) is that no submission was made before him by the assessee. We find that the above is a non speaking, non reasoned and cryptic order, not sustainable in law. As a matter of facts, the income tax Act in section 251 of the I.T.Act dealing with the power of ld.CIT(A) does not provide for any power to the ld.CIT(A) to dismiss the appeal for non-prosecution. In these facts, we are of the considered opinion that the matter needs to be remitted to the file of ld.CIT(A) to give the assessee, an opportunity of being heard and thereafter, decide the appeal as per law by a speaking order. Ld. Counsel of the assessee agreed with the above proposition and undertook to cooperate with ld. CIT(A) when the matter is remanded - Appeal by the assessee stands allowed for statistical purposes.
Issues:
1. Disallowance under section 14A of the Income Tax Act, 1961 2. Disallowance of interest on car loan 3. Ad hoc disallowance of various expenses 4. Taxability of Long Term Capital Gain on the sale of agricultural land Analysis: 1. Disallowance under section 14A of the Income Tax Act, 1961: The appeal challenged the disallowance of ?11,14,309 under section 14A. The Commissioner of Income Tax (Appeals) confirmed this disallowance. However, the Appellate Tribunal found the CIT(A)'s order to be non-speaking, non-reasoned, and unsustainable in law. The Tribunal noted that the CIT(A) dismissed the appeal for non-prosecution without providing any opportunity for the assessee to be heard. The Tribunal held that the matter should be remitted to the CIT(A) for the assessee to have a fair hearing and for a decision to be made in accordance with the law. 2. Disallowance of interest on car loan: The appeal also contested the disallowance of interest on a car loan amounting to ?1,93,267. The CIT(A) had confirmed this disallowance. However, the Tribunal's decision to remit the case back to the CIT(A) for proper adjudication would also encompass this issue, allowing the assessee an opportunity to present their case regarding the disallowance of interest on the car loan. 3. Ad hoc disallowance of various expenses: The CIT(A) had confirmed an ad hoc disallowance of various expenses based on surmises and conjectures. The Tribunal noted specific disallowances related to motor car expenses, depreciation on a BMW car, petrol expenses, and car insurance, totaling ?1,23,535. As the entire appeal was remitted back to the CIT(A) for a proper hearing and decision, this issue would also be reconsidered along with the other grounds raised by the assessee. 4. Taxability of Long Term Capital Gain on the sale of agricultural land: The appeal challenged the taxability of Long Term Capital Gain amounting to ?33,37,227 from the sale of agricultural land. The assessee argued that the land transferred was rural agricultural land and not a capital asset under section 2(14) of the Act, thus contending that no taxable capital gains should arise from its transfer. This issue would also be re-examined by the CIT(A) upon remittance of the case by the Tribunal. In conclusion, the Appellate Tribunal allowed the appeal for statistical purposes, remitting the entire matter back to the CIT(A) for a fair hearing and reasoned decision on all the issues raised by the assessee. The Tribunal emphasized the importance of providing the assessee with an opportunity to be heard and having the appeal decided in accordance with the law.
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