No Notice, No Justice: ITAT Sends Homemaker’s Tax Case Back for Fresh Trial [Read Order]
It was submitted that her spouse had passed away and the property was sold by her brother, due to which she was not monitoring electronic communications
ITAT
ITAT
The Ahmedabad bench of the Income Tax Appellate Tribunal set aside an assessment order against a homemaker and directed the Assessing Officer to conduct a fresh trial after giving her a fair opportunity of hearing. The tribunal observed that the assessee had been denied natural justice as she had not received proper notices and the matter was decided ex parte.
Meenaz Anjum Dayatar, a homemaker from Mumbai, who had not filed an income tax return for the financial year 2017-18 (Assessment Year 2018-19). The Income Tax Department had reopened her case after discovering through its Insight Portal that she had sold an immovable property for Rs. 1.15 crore and had made cash deposits of Rs. 8,89,500 in her bank account.
Since no return was filed, the Assessing Officer reopened the case under section 147 and issued notices under section 142(1). As there was no response, the officer treated the entire sum of Rs. 1,23,89,500 as unexplained income under section 68 and completed the assessment under section 144.
Aggrieved, Dayatar appealed before the Commissioner of Income Tax (Appeals). However, the appellate authority also dismissed her case ex parte, noting that she had not filed any submissions or attended hearings despite repeated notices. The additions made by the Assessing Officer were confirmed in full.
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Before the tribunal, her counsel argued that she was a homemaker with no regular taxable income and was not in the habit of checking emails. It was submitted that her spouse had passed away and the property was sold by her brother, due to which she was not monitoring electronic communications. She claimed that despite updating her postal address, she never received physical notices.
The counsel contended that the assessment was made without allowing the cost of acquisition and indexation against the sale consideration, and the entire sale value was wrongly treated as income under section 68. It was also argued that the addition of cash deposits was unjustified.
The departmental representative supported the orders of the lower authorities.
After hearing both sides, the tribunal noted that the assessment was framed ex parte and the appeal was also dismissed ex parte. It held that the assessee had been deprived of a fair chance to present her case.
The Bench comprising Siddhartha Nautiyal (Judicial Member) and Makarand Vasant Mahadeokar (Accountant Member) observed that her plea of being unaware of the proceedings due to personal circumstances could not be brushed aside. It therefore restored the matter to the file of the Assessing Officer with directions to decide the case afresh after granting adequate opportunity of hearing and to pass a speaking order in accordance with law. The assessee was also directed to cooperate fully in the proceedings.
In conclusion, the appeal was allowed for statistical purposes.
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