The assessee preferred an appeal against the order passed by the National Faceless Appeal Centre for Assessment Year 2017–18. The reassessment proceedings were initiated on the basis of information received from the Investigation Wing that the assessee had sold a property for a declared consideration of ₹32,00,000, whereas the stamp duty valuation was ₹1,75,71,000. On this basis, the Assessing Officer formed a belief that income chargeable to tax had escaped assessment and reopened the assessment under section 147 of the Income-tax Act, 1961.

Pursuant to the judgment of the Hon’ble Supreme Court in Union of India v. Ashish Agrawal and the CBDT Instruction No. 01/2022, the notice issued under section 148 was treated as a show cause notice under section 148A(b). After completion of the reassessment proceedings, the Assessing Officer made an addition of ₹45,72,950, being one-third share of the difference between the stamp duty value and the declared sale consideration, by invoking section 50C of the Act.

Aggrieved, the assessee filed an appeal before the Commissioner (Appeals). Although notices were issued, the assessee failed to make effective compliance except seeking adjournment on one occasion. Consequently, the Commissioner (Appeals) dismissed the appeal ex-parte for non-prosecution, without adjudicating the issues on merits.

The Tribunal observed that it is well settled that the Commissioner (Appeals) has no power to dismiss an appeal for non-prosecution. The appellate authority is statutorily obliged to adjudicate the appeal on merits, irrespective of the assessee’s appearance. Relying on the judgment of the Hon’ble Bombay High Court in CIT v. Premkumar Arjundas (HUF), the Tribunal held that the impugned ex-parte order could not be sustained in law.

Accordingly, the Tribunal set aside the order passed by the Commissioner (Appeals) and remanded the matter to his file for fresh adjudication on merits, after affording reasonable opportunity of being heard to the assessee. The assessee was also granted liberty to raise all legal and factual grounds before the appellate authority and was directed to cooperate in the appellate proceedings.

The appeal was thus allowed for statistical purposes.

Source Link- https://itat.gov.in/public/files/upload/1768375304-V6MaWw-1-TO.pdf

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