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Judgment
Per Raj Kumar Chauhan, Judicial Member:
The appeal is directed against the order dated 23.10.2025 of Ld. Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, Delhi [hereinafter referred to as the “CIT(A)/NFAC”] passed u/s 250 of the Income Tax Act, 1961 [hereinafter referred to as “the Act”] w herein the appeal of the assessee was dismissed on account of ex-parte.
The assessee has filed her retur n of inco me for the Assessment Year 2017–18 on 30.07.2017 declaring a total income of Rs.23,65,460/-, w hich was proce ssed u/s 143(1) of the Act. The case was selected for limited scr utiny under CASS for examining the issue of capital gains/loss. During the relevant year, the assessee sold an immovable property situated at 206, Deepali Enclave, Pitampura, Delhi on 27.05.2016 for a consideration of Rs.4,00,00,00 0/-. The said property had originally been acquired on 03 .03.1997 for Rs.6 ,25,000/-. Out of the sale proceeds, the assessee purchased another residential property at NS-3, Mianwali Nagar, Paschim Vihar , Delhi on 21.06.2016 for Rs.1 ,50,52,134/- and claimed exemption u/s 54 of the Act. On the balance amount, the assesse e computed Long Term Capital Gain (LTCG) of Rs.21 ,13,538/- and claimed set-off against a Shor t Term Capital Loss (ST CL) allegedly arising from sale of share s of Reliance Communicatio ns Ltd. It was stated by the assessee that shares were p urchased on 01.01.20 16 amounting to Rs.4,24,56 ,0 00/- and payments were made between 16.06.2016 and 20.06.2016 to certain individuals, name ly Shri Rajesh Prakash and Shri Satish Kumar. The shares were subseque ntly sold between 21.06.2016 and 04.07.2016 for Rs.2 ,23,27,000/-. Accordingly, the claimed loss was tre ated as non-genuine and an addition of Rs.2,02,61,172/- was made to the total income. Further, the assessee had claimed Rs.4 ,00,000/- as expenses on sale of property without furnishing supporting evidence, which was disallowed and added to inco me. The assessment was completed under section 143(3) determining the total inco me at Rs.2,30,3 6,633/-, and penalty proceedings u/s 270 A were initiated.
Aggrieved by the assessment order, assessee filed appeal before the ld . CIT(A) who has dismissed the same ex-parte on the ground that the appellant has failed to respond to the various notices sent as find me ntio ned in parag raph 5 of the impugned order.
Aggrieved by the impugned appellate ex-parte order, the assesse is in ap peal before us and has raised the fo llowing grounds of appeal:
“1 . T hat the impugned or der i s bad in law as well as on merits .
2.That t he impugned order is witho ut jurisdiction.
3.That under the facts and circ umst ances of the case, bot h the lower aut horities erred in not provi ding reasonable opportunity of hearing.
4.That under the facts and circ umst ances of the case, no notice U /s. 143(2) had bee n issued withi n t he stat utory time limits.
5.That under t he fa cts a nd circ umstanc es of the cas e bot h lower a uthoriti es err ed i n law in making and sustai ni ng addition of Rs. 2,02,61,172/- by not allowi ng short ter m capital loss.
6.That under t he fa cts a nd circ umstanc es of the cas e bot h lower a uthoriti es err ed i n law in making and sustai ni ng a dditi on of Rs. 4,00,000/- for expe nses claimed under the head capital gai ns .
7.That under the facts and circ umst ances of the case, no i nt erest U/s . 2 34B shoul d hav e been char ged. In any, case the calc ul ati on ar e e xcessive.”
We have heard the learned AR and the learned DR. Lear ned AR at the very outset submitted that Assessment Order was also passed without effective representation of the assessee. It is fur ther argued that the imp ugned order has been passed without effe ctive opportunity of hearing as the notices allegedly sent were no t received or brought to the knowledge of the assessee. Hence, the principle of natural justice has not been followed by the learned lower author ity. It is, therefore, submitted that assessee be given one more opportunity to p resent its case before the lear ned CIT(A) and the matter may be restored back to the ld. CIT(A) for deciding afresh. Learned DR, on the other hand, has fairly submitted while relying upon the ld. CIT(A) order left it to the discretion of the court to consider the submissions of the assesse/appellant.
We have co nsidered the rival submission and examined the record, Section 250(2)(a) lays down as under:
“250(2 ) The fol lo wing shall have the right to be heard at the heari ng o f the appeal-
(a)the appellant, either i n person or by an authori zed repres entative;”
Thus, the hear ing mandated by Section 250(2)(a) of the Act is no t a mere formality but a mandatory statutory requirement for following the principle of natur al justice by the quasi-judicial authority.
In view of the ab ove facts and circumstances, it is evident that the impugned order has been passed w ithout effective hearing and principle of natural justice has no t b een followed For these reaso ns, the impug ned order is not maintainable and according ly set aside. T he end of justice shall be met in case the matter is restored to the file of the Ld. CIT(A) for deciding the issue afresh by affording an effective o pportunity of hearing and considering the submissions to be made by the appellant/assessee. The assessee/appellant is also directed to make the necessary submissions/ detailed material before the Ld. CIT(A) w ithin the period of 60 days of this order.
In the result, the appeal of the assessee is allowed for statistical purpose.