Property Seller Faced Rs. 32.48 Lakh Capital Gains Addition Based on Unregistered Sale Agreement; ITAT Sets Aside Ex-Parte CIT(A) Order:

Property Seller Faced Rs. 32.48 Lakh Capital Gains Addition Based on Unregistered Sale Agreement; ITAT Sets Aside Ex-Parte CIT(A) Order The Income Tax Appellate Tribunal (ITAT) Delhi has held that an ex-parte order passed by the CIT(A) without adjudicating the issues on merits and without recording reasons as required under Section 250(6) of the Income Tax Act, 1961, is unsustainable in law. [related id="424504 "] The assessee had not filed his return of income under Section 139 of the Income Tax Act, 1961 for assessment year 2020-21. Based on information received through the Insight Portal, the AO initiated reassessment proceedings under Section 147 and issued notice under Section 148. According to the department, the assessee, along with seven co-owners, had sold a property and had received a part of the consideration in cash. Relying upon an agreement to sell dated 13.02.2018, the AO computed the assessee's share of sale consideration at Rs. 45.65 lakh and made an addition of Rs. 32.48 lakh towards undisclosed long-term capital gains. Aggrieved by the assessment order passed under Sections 147 read with 144B, the assessee preferred an appeal before the CIT(A), who dismissed the appeal ex-parte and confirmed the addition. The assessee approached the ITAT. The Tribunal noted that the CIT(A) had issued three notices and then dismissed the appeal for non-compliance without even examining the issues involved. It observed that the appellate authority had merely upheld the assessment order through a non-reasoned order and had failed to adjudicate even the grounds raised by the assessee. The Tribunal further observed that there was no discussion regarding service of notices upon the assessee. The Tribunal further observed that merely stating that the assessment order deserved to be upheld and that the assessee had failed to furnish details was not sufficient compliance with Section 250(6). While observing that the assessee was also responsible for responding to the notices issued by the appellate authority, the Tribunal held that, in the interest of justice, the matter deserved to be restored to the file of the CIT(A). Accordingly, the ex parte appellate order was set aside and the matter was remanded back to the CIT(A) for fresh adjudication after granting adequate opportunity of hearing to both parties. Thus, the appeal of the assessee was allowed for statistical purposes.