2024 (3) TMI 815 - AT - Income Tax

Dismissal of appeal of assessee ex-parte before the Ld.CIT(A) - there was no compliance from the assessee to the notices issued and served on the assessee - AR contended that the assessee was not given sufficient opportunities to substantiate her case and therefore, pleaded for another opportunity of being heard before the CIT(A) - AO applied the section 56(2)(vii) - HELD THAT - As in view of the foregoing facts and circumstances of the case and keeping in view the principles of natural justice, we are inclined to remit the matter back to the file of the Ld.CIT(A) and direct the Ld.CIT(A) to afford the assessee, another opportunity of being heard before the Ld.CIT(A) and to pass order on merits. The assessee is also directed to adhere to the notices issued by the Ld.CIT(A) and furnish relevant material evidences to substantiate her case. Accordingly, the grounds filed by the assessee are allowed for statistical purpose.

Summary

Issues involved:
Condonation of delay in filing appeal u/s 143(3) r.w.s. 147 of the Income Tax Act, 1961 for A.Y. 2014-15 due to medical reasons. Appeal against order disallowing income from other sources u/s 56(2)(vii)(b) and ex-parte dismissal of appeal by CIT(A).

Condonation of Delay:
The appeal was filed with a delay of 51 days due to unforeseen medical circumstances affecting the assessee's ability to sign the appeal papers. The delay was condoned by ITAT Visakhapatnam based on the reasonable cause presented by the assessee, supported by a doctor's certificate, to ensure justice.

Disallowance of Income from Other Sources:
The case involved the assessment of income from a gift of land received by the assessee's husband, valued at Rs. 75,00,000, under section 56(2)(vii)(b) of the Act. The AO disallowed the entire amount as income from other sources since the stamp duty paid exceeded Rs. 50,000. Despite explanations provided, the AO passed an order disallowing the amount, resulting in a total taxable income of Rs. 77,50,480.

Ex-parte Dismissal of Appeal by CIT(A):
After the assessee's husband passed away during appeal proceedings, the appeal was dismissed ex-parte by CIT(A) as the wife and legal heir did not respond to notices. The grounds of appeal challenged the correctness of the orders passed by the AO and CIT(A), violation of natural justice, and the legal sustainability of the impugned addition under section 56(2)(vii) of the Act.

ITAT Decision:
ITAT directed the matter back to the file of CIT(A) to afford the assessee another opportunity to be heard and to pass an order on merits. Emphasizing the principles of natural justice, ITAT allowed the appeal for statistical purposes, granting the assessee the chance to substantiate her case and provide relevant material evidences as required.