2021 (4) TMI 887 - AT - Income Tax

Ex-parte order - No opportunity was granted to the assessee before the learned CIT Appeal - Reopening of assessment u/s 147 - denying Exemption U/s. 54F of the Income Tax Act, 1961 to the appellant in respect of Construction of Residential House - HELD THAT - As laid down by the honorable Supreme Court in Catena of judgement that the purpose of tax administration is to collect just and fair tax from the citizen and it should not be an endeavor of the revenue authority to take benefit of ignorance of the citizen or absence of appellant in the proceedings. In the present case the individual assessee are before us who had plead that the absence of AR/assessee was on account of sufficient reasons. In our considered opinion the interest of justice, requires that the matters be sent back to the file of the learned AO for a fresh adjudication on merit. We expect the learned AO to decide the matter expeditiously after issuing the sufficient notice to the assessee and he shall grant the assessee sufficient opportunity to produce the evidence/document as may be advised. The assessee is also directed to present on each and every date fixed by the AO and shall not take undue date/adjournment in the matter. It is expected that the appeal shall be decided by the AO preferably within a period of 6 months from the receipt of this order. Appeals of the assessee are allowed for statistical purposes.

Issues:
1. Assessment under sections 144/147 of the Income Tax Act, 1961.
2. Denial of liability imposed on the appellant.
3. Determination of share in the sale of Agricultural land.
4. Denial of Exemption under section 54F of the Income Tax Act, 1961.
5. Request for remand back to the assessing officer for fresh adjudication.

Analysis:
1. The assessment under sections 144/147 was completed by the assessing officer, determining the total assessing the assessee to an amount of ?11,61,310, based on the capital gain earned from the sale of the share in immovable property. The reassessment proceedings were conducted ex parte as the assessee did not comply with the notice under section 148 issued on 30 March 2017, resulting in the taxation of long-term capital gain amounting to ?11,61,310.

2. The appellant, feeling aggrieved by the assessing officer's order, appealed before the Commissioner who partly granted relief to the assessee but sustained the addition of ?5,77,556. The appellant then approached the tribunal challenging the grounds mentioned in the appeal.

3. During the virtual hearing, the appellant's representative argued that the assessing officer wrongly proceeded ex parte and the first appellate authority did not consider the documents filed by the assessee, relying instead on the remand report. The appellant requested a remand back to the assessing officer for a fresh adjudication based on the appreciation of facts and a decision on merit.

4. The respondent, on the other hand, contended that the assessing officer had granted an opportunity to the assessee before the Commissioner Appeal, and the appellant was not entitled to a second opportunity before the assessing officer. The respondent agreed to remand the matter back for fresh adjudication.

5. The tribunal, considering the arguments of both parties, referred to the Supreme Court's stance on tax administration's purpose to collect just and fair tax without taking advantage of the citizen's ignorance or absence. Acknowledging the reasons for the appellant's absence, the tribunal deemed it necessary in the interest of justice to remand the matter back to the assessing officer for a fresh adjudication on merit.

6. The tribunal directed the assessing officer to decide the matter expeditiously after issuing sufficient notice to the assessee and providing ample opportunity to produce evidence or documents. The assessee was instructed to be present on all dates fixed by the assessing officer without seeking unnecessary adjournments, with an expectation for the appeal to be decided within six months from the receipt of the tribunal's order.

7. It was clarified that not all grounds raised were adjudicated, and the matter was remanded back to the assessing officer for a denovo assessment without influence from previous observations, in accordance with the law. The appeals of the assessee were allowed for statistical purposes.

This comprehensive analysis of the judgment highlights the issues involved, the arguments presented by both parties, and the tribunal's decision to remand the matter back to the assessing officer for fresh adjudication, ensuring justice and fair tax collection.

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