CIT(A) Cannot Dismiss Ex-Parte Appeal Without Merits Adjudication: ITAT Nagpur

Mandakini Tirthraj Pannase Vs ITO (ITAT Nagpur )

CIT(A) Cannot Dismiss an Income-Tax Appeal for Non-Prosecution-Section 54F Claim for Two Flats Restored After Nine-Year Delay

Summary: The Nagpur SMC Bench of the Income Tax Appellate Tribunal has held that the CIT(A) cannot dismiss an income-tax appeal in limine merely because the assessee failed to appear or make proper compliance. Even in an ex parte proceeding, the CIT(A) is statutorily required to examine the grounds and dispose of the appeal on merits through a reasoned order. The Tribunal accordingly restored the assessee’s claim for exemption under Section 54F in respect of two flats situated on the same floor to the CIT(A) for fresh adjudication.

Facts of the case

The assessee was an individual who filed her return of income for Assessment Year 2014-15 on 7 August 2014, declaring total income of ₹2,31,630.

The return was selected for scrutiny under CASS. During the assessment proceedings, the Assessing Officer noticed that the assessee had sold a plot of land bearing Plot No. 18 at Mouza Bhamti on 4 February 2014 for ₹60 lakh.

The assessee computed long-term capital gains of ₹57,27,767 from the transaction.

The entire capital gain was invested in the purchase of two residential flats:

• Flat No. T-301 for ₹31,28,910; and
• Flat No. T-302 for ₹30,06,310.

Both flats were located on the same floor and were stated to be situated opposite each other. According to the assessee, the flats were occupied by her and her two sons as a residential arrangement for the family.