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Judgment
Per Kavitha Rajagopal, JM:
This appeal is filed by the assessee challenging the order passed by the Ld. Commissioner of Income Tax (Appeals) [‘the Ld. CIT(A)’, for short] passed under Section 250 of the Income Tax Act, 1961 ('the Act' for short) for Assessment Year (‘AY’, for short) 2013-14.
It is observed that the present appeal is filed with a delay of 369 days beyond the period of limitation for which the assessee has filed an application for condoning the said delay along with an affidavit. Upon perusal of the same and by hearing the rival contentions, we deem it fit to condone the delay in filing the appeal on the ground of there being a ‘sufficient cause’ for the said delay. Delay condoned.
The assessee has raised the following grounds of appeal:-
“1.The learned CIT (Appeals) erred in law and on facts in dismissing the appeal of the appellant by passing the impugned ex-part order in gross violation of principles of natural justice on the alleged ground that the appellant was not interested to prosecute the appeal without adjudicating on the merits of the grounds of appeal raised by the appellant. Thus, the matter should be remanded back to the lower authorities with direction to decide on merits in view of the decision of the Hon'ble ITAT in the case of DSI-Bridgecon India (P) Ltd. [2024] 158 taxmann.com 185 (Delhi-Trib.).
2.The learned CIT (Appeals) erred in law and on facts in confirming the addition in the amount of capital gain by disallowing the deduction of cost of improvement of Rs.24,03,79,099/- on sale of land ignoring that it was a rural agricultural land and therefore was not a capital asset and capital gain arising therefore is an exempt income. Thus, the addition so made should be deleted.
3.The learned CIT (Appeals) erred in law and on facts in confirming the disallowance of Rs. 31,00,000/- being the expenditure incurred in connection with transfer and increasing the amount of capital gains ignoring that that it was a rural agricultural land and therefore was not a capital asset and capital gain arising therefore is an exempt income. Thus, the addition so made should be deleted.
4.The learned CIT (Appeals) erred in law and on facts in confirming the addition of Rs. 11,52,55,502/-being the amount of unsecured loans as unexplained credit ignoring the facts of the case. Thus, the addition so made should be deleted.
5.The learned CIT(Appeals) erred in law and on facts in applying tax as per the provisions of section 115BBE of the Act ignoring that the said provisions can be applied in specific circumstances. Thus, directions should be issued to charge tax at normal rates.
6.Without prejudice to the above, the learned CIT(A) erred in law and on facts in confirming the action of the assessing officer in computing the tax liability on Rs. 37,80,78,854/- in the computation sheet as against the assessed income of Rs. 37,16,05,231/- in the assessment order without mentioning any reason for the same. Thus, directions should be issued to compute the tax liability on the income assessed in the assessment order.
7.Without prejudice to the above, presuming but without admitting if the disallowance of cost of improvement and transfer charges of Rs.24,34,79,099/- is sustained, then it should lead to increase in income from capital gain chargeable to tax at 20 percent not in income from other sources chargeable to tax at 22 percent (as has been assessed by the Assessing officer). Thus, directions should be issued to assess such disallowance under the correct head of income and to charge correct rate of tax. thereon.
8.The appellant craves the leave to add, substitute, modify, DLEETE OR amend all OR any ground of appeal either before OR at the time of hearing.”
Brief facts are that the assessee company filed its return of income dated 22.11.2022 declaring total income at Rs.1,28,70,630/-. The assessee’s case was selected for scrutiny under CASS for verification of the following issues:-
Low long-term capital gain and high improvement cost; and
Inflow of funds in an entity consistently showing loss before depreciation
The Ld. AO issued notice u/s 143(2) and 142(1) seeking for various details from the assessee. It is observed that the assessee has failed to comply with the proceedings before the Ld. AO in spite of several opportunities who, then, passed the assessment order u/s 143(3) r.w.s. 144B dated 18.03.2024 determining the total income at Rs.37,16,05,231/- after making various additions. Aggrieved, the assessee was in appeal before the first appellate authority, who, vide an ex parte order dated 24.12.2025, dismissed the appeal filed by the assessee on the ground of non-prosecution. Aggrieved, the assessee is in appeal before us challenging the impugned order of the Ld.CIT(A).
We have heard the rival submissions and perused the material available on record. The Ld. AR for the assessee prayed that the assessee be given one more opportunity to present its case before the lower authorities as there was genuine hardship caused to the assessee during the proceedings before the lower authorities. The Ld. DR vehemently opposed to the setting aside the issue to the lower authorities for the reason that the assessee was given several opportunities which were not complied by the assessee.
On perusal of the rival contentions, we deem it fit to extend the assessee with one more opportunity to present its case before the Ld. AO by adhering to the principles of natural justice and in the interest of justice dispensation. The assessee is directed to strictly comply with the proceedings before the Ld. AO and the Ld. AO shall pass a de novo assessment order after duly considering the submission of the assessee on the merits and in accordance with the law and to give sufficient opportunity of hearing to the assessee. Hence, the grounds of appeal raised by the assessee are hereby allowed for statistical purpose.
In the result, the appeal filed by the assessee is hereby allowed for statistical purpose.