Shree Hari Builders Vs ITO (ITAT Mumbai)
Assessee had not filed its return of income for AY 2013-14. Based on departmental information, it was noticed that an immovable property worth Rs. 2.16 crore was sold during the year. A notice u/s 148 was issued on 23.03.2021, but no compliance was made. AO thereafter completed assessment ex parte on 29.03.2022, treating the entire sale consideration of Rs. 2.16 crore as short-term capital gain in the hands of Assessee.
Assessee carried the matter in appeal before the CIT(A), but again failed to respond to notices, leading to dismissal of the appeal ex parte on 14.05.2025. Before the Tribunal, Assessee explained that due to disputes between the partners, notices were served at the address of one partner who did not share them with the other partner, which resulted in non-compliance. It was pleaded that the matter should be remanded for fresh adjudication on merits. The Department did not object to such a remand.
After considering the peculiar facts, the Tribunal observed that principles of natural justice required that the Assessee be given an effective opportunity. Accordingly, the matter was restored to the file of the Jurisdictional AO for fresh adjudication on merits after giving due opportunity to the Assessee, while also directing the Assessee to ensure proper compliance in the proceedings. The appeal was allowed for statistical purposes.
