Shikhar Chand Jain Vs ITO (ITAT Raipur)
Conclusion: Since CIT(Appeals) dismissed the appeal without addressing key issues raised against the assessment order, therefore, the matter was remanded back to CIT(A) as CIT(A) should have examined this issue by reviewing the assessment records.
Held: Assessee had filed a return of income for A.Y. 2011-12 declaring an income of Rs. 1,57,280/-. AO later received information that a property was sold for Rs. 47.57 lakhs but the capital gain was not reported. Proceedings under Section 147 were initiated, and a notice under Section 148 was issued. In response, assessee filed a return declaring the same income as before. During assessment, AO found that assessee claimed Rs. 9.75 lakhs as a cost of improvement, with Rs. 6.25 lakhs for 1990-91 and Rs. 3.50 lakhs for 1991-92. Due to a lack of documentary evidence, AO disallowed the claim and recalculated the Long term Capital Gain(LTCG) at Rs. 36,90,097/-. As a result, the total income was assessed at Rs. 38,47,380/- under Section 143(3) read with Section 147. Assessee appealed before CIT(A), but appeal was dismissed due to non-compliance despite multiple opportunities. CIT(A) upheld the AO’s addition of Rs. 36,90,097/- towards LTCG. Assessee then filed a rectification application under Section 154 which got rejected as there was no apparent mistake in the order and that assessee had failed to provide evidence during the proceedings. Aggrieved, assessee appealed the CIT(A)’s order before the tribunal. Assessee argued that CIT(A) dismissed the appeal without addressing key issues and wrongly rejected the rectification request. On appeal. It was held that CIT(Appeals) without dealing with the specific issues, based on which, assessment order was assailed before him, had dismissed the appeal. Admittedly, it was a matter of fact borne from record that assessee vide his Grounds of appeal had specifically assailed the validity of the jurisdiction that was assumed by AO for initiating the proceedings without making available a copy of the “reasons to believe” based on which case of assessee was reopened. When assessee had specifically challenged the validity of the jurisdiction that was assumed by the AO for framing the assessment vide his order passed u/s.143(3) r.w.s. 147, CIT(Appeals) ought to have adjudicated the said issue by calling for the assessment records.
