This article provides an in-depth review of the Income Tax Appellate Tribunal’s (ITAT) decision in ITA No. 2085/DEL/2019, where Maneesh Chopra of Gautam Budh Nagar contested the assessment made by the Income Tax Officer (ITO), Ward-2(2), Noida, for the assessment year 2015-16. The appeal was filed on March 8, 2019, and the final order was pronounced on April 6, 2022.
Maneesh Chopra, the appellant, filed an income tax return for the assessment year 2015-16. During the assessment process, the Assessing Officer (AO) made an addition of Rs. 72,58,325 by invoking the provisions of Section 56(2)(vii)(b) of the Income Tax Act, 1961. The appellant filed an application for rectification under Section 154 of the Act on January 19, 2018, which was rejected by the AO on April 25, 2018. Subsequently, the appellant approached the Commissioner of Income Tax (Appeals) [CIT(A)], but the appeal was dismissed on August 30, 2018. This led to the filing of the present appeal before the ITAT.
The appellant’s primary contention was that the AO erred in applying Section 56(2)(vii)(b) to the case. According to the appellant, the section pertains to situations where a person receives immovable property without consideration or for a lower consideration, which was not applicable in this case. The appellant argued that the property in question was a gift from his mother, which falls under the proviso that excludes transfers from close relatives from the scope of Section 56(2)(vii)(b).
The appellant, represented by Ms. Gunjan Jain, CA, argued that both the AO and the CIT(A) had made an apparent mistake in applying the law to the facts of the case. The appellant emphasized that the immovable property received as a gift from a close relative should not be subject to the provisions of Section 56(2)(vii)(b). The appellant sought rectification of this error under Section 154 of the Act.
The respondent, represented by Shri Gayasuddin Ansari, Sr. DR, contended that the CIT(A)’s order was justified and that the appellant had failed to address the grievance adequately before the CIT(A). The respondent argued that the issue was debatable and not amenable to rectification under Section 154, which is intended for correcting apparent mistakes.
The tribunal, comprising Shri Challa Nagendra Prasad, Judicial Member, and Shri Pradip Kumar Kedia, Accountant Member, considered the submissions from both sides. The tribunal noted that the CIT(A) had proceeded with the matter ex-parte due to the non-attendance of the appellant’s representative on the scheduled hearing date. The tribunal found that the CIT(A) had not provided a reasonable opportunity to the appellant, resulting in a miscarriage of justice.
In its analysis, the tribunal emphasized the importance of providing a fair opportunity to all parties involved. The tribunal concluded that the matter should be remanded back to the CIT(A) for de novo adjudication, ensuring that the appellant has a chance to present his case properly. The tribunal directed the CIT(A) to consider all relevant facts and arguments and to pass a speaking order after granting a reasonable opportunity to the appellant.
The ITAT’s decision to remand the matter for fresh adjudication highlights the importance of adhering to principles of natural justice in tax proceedings. The tribunal’s order ensures that the appellant receives a fair hearing and an opportunity to address the issues raised in the appeal. This case underscores the tribunal’s role in safeguarding the rights of taxpayers and ensuring that justice is served in tax disputes.
1. Income Tax Appellate Tribunal records.
2. Income Tax Act, 1961.
3. Relevant case laws and tribunal orders.
ITA 2085/DEL/2019: Maneesh Chopra vs. ITO Ward-2(2), Noida – Assessment Year 2015-16
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