Non-Adherence to Mandate of Section 250(6) of Income Tax Act by CIT(A): ITAT directs for Re-Adjudication [Read Order]

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) directed re-adjudication and held that there was non-adherence to the mandate of Section 250(6) of the Income Tax Act, 1961 by the Commissioner of Income Tax (Appeal) [CIT(A)].

A perusal of the record reveals that in this case an assessment under Section 143(3) read with Section 147 of the Income Tax Act was completed at an income of Rs.50,614/-. Information was received by the Assessing Officer that the assessee had sold an inherited plot of land to M/s. Konark Realtors for a total consideration of Rs.1,25,00,000/- and the amount was distributed equally among five members, including the assessee, i.e. 1/5th share to each.

The subject property was referred for valuation to the Departmental Valuation Officer under Section 55A of the Income Tax Act and in terms of the Valuation Report submitted, the market value of the property was estimated at Rs.3,91,12,000/- and Rs.13,27,030/-.

The Assessing Officer has reassessed the income under the head ‘Capital Gains’ in the impugned order passed under Section 143(3) read with Section 147 of the Income Tax Act at Rs.2,96,76,817/-, and the assessee being the 1/5th owner of the property, an income of Rs.59,35,363/- has been assessed in the hands of the assessee.

The CIT(A) has not addressed any of the aforesaid points raised by the assessee but has instead dismissed the appeal solely for the reason that the assessee had not responded to the notices of hearing sent.

The Representative for the assessee submitted that the appellant would be satisfied if the matter is restored back to the file of CIT(A) so that the required submissions can be made on the merits of the dispute. The Departmental Representative appearing for the Revenue has not seriously opposed the plea of the Representative for the assessee for restoration of appeal for de novo consideration by the CIT(A).

The Two-member bench comprising of C.V. Bhadang (President) and G.S. Pannu (Vice-president) held that the CIT(A) has not determined the appeal of the assessee in the manner mandated by the statute. A perusal of the impugned order by the CIT(A) clearly shows non-adherence to the mandate of Sub-section (6) of Section 250 of the Income Tax Act. He dismissed the appeal solely on the grounds of failure of the assessee to appear before him.

Thus, in the interest of justice and fair play, the bench deemed it fit and proper to set aside the order of CIT(A) and restored the matter back to his file for adjudication in accordance with the law after allowing the assessee a reasonable opportunity of being heard.

To Read the full text of the Order CLICK HERE

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