Adjustment of ₹31.22 Lakh to LTCG: ITAT Remands Case to CIT(A) With One Final Opportunity [Read Order]

The Visakhapatnam Bench of Income Tax Appellate Tribunal (ITAT ) remanded the matter to the Commissioner of IncomeTax (Appeals)[CIT(A)] with one final opportunity after noting an adjustment of ₹31.22 lakh made to long-term capital gains in the intimation under Section 143(1) of Income Tax Act,1961.

Shamrock Apparels, appellant-assessee, was a partnership firm in the apparel business and filed its income tax return on 30.07.2023, declaring ₹13.37 crore for A.Y. 2023-24. The Centralized Processing Centre (CPC) processed the return and, through an intimation under section 143(1) dated 07.11.2024, increased the long-term capital gains to ₹13.43 crore instead of ₹13.12 crore, making an adjustment of ₹31.22 lakh.

The assessee challenged this before the CIT(A), but the order was upheld as no response was given to the notices issued. The matter was then taken to the tribunal in further appeal.

The assessee counsel stated that the CIT(A) had decided the matter without giving adequate opportunities and explained that the assessee was unable to respond to the notices issued. He requested that one last chance be given before the CIT(A) to file the necessary documents.

The departmental representative objected, maintaining that sufficient opportunities had already been provided, as mentioned in the orders, but the assessee had not complied with the notices. She urged the tribunal to deny any further opportunity and to uphold the CIT(A)’s order.

The two member bench comprising Vijay Pal Rao (Vice President) and S.Balakrishnan (Accountant Member) considered the arguments from both sides and examined the records. It observed that the assessee had not complied with several notices and had failed to respond to multiple communications mentioned in the CIT(A)’s order.

To uphold the principles of natural justice, and taking into account the assessee counsel’s request and the significant demand raised, the tribunal decided that the assessee should be given one last chance to present its case before the CIT(A).

It further directed that if the assessee failed to cooperate in the remand proceedings, the CIT(A) could proceed to decide the matter based on the evidence already on record.

Accordingly,the appeal was allowed for statistical purposes.

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