The court held that an order passed without providing adequate opportunity for representation violates the principles of natural justice and must be set aside and remanded for fresh assessment.

O R D E R

PER KUL BHARAT, VICE PRESIDENT.:

This appeal, filed by the assessee, against the order dated 18.12.2024 of learned Addl/JCIT Commissioner Income Tax (Appeals)-12, Delhi [hereinafter referred as to “Ld. Addl/JCIT CIT(A)”] pertaining to the assessment year 2016-17. The assessee has raised the following grounds of appeals: -

“1. That the Ld. Hon’ble Commissioner of Income tax (Appeals) has erred on the facts and circumstances of the case. Accordingly, the order needs to be quashed.

2. That on the facts and circumstances of the case the Ld. Hon’ble Commissioner of Income tax (Appeals) has failed to appreciate the statement of facts and grounds of appeal filed by the appellant at the time of filling with Hon’ble Commissioner of Income Tax (Appeals).

3. That on the facts and circumstances of the case the Ld. Hon’ble Commissioner of Income tax (Appeals) has failed in appreciating the fact that the assessee company had earned capital gains in the last quarter for the A.Y 2016 and the provisions of section 234C is not applicable where there is short fall in the payment of tax on account of underestimate or failure to estimate the amount of capital gains (second proviso to section 234C).

4. That on the facts and circumstances of the case Ld. Hon’ble Commissioner of Income tax (Appeals) has failed to consider the fact that the appellant company filed Tax as per the MAT provisions and ITR-6 Form in which the Return of Income was filed, only considers the taxable capital gains considered under the normal provisions of Income Tax Act, 1961 after setting off the current year as well as brought forward capital losses. Also, there is no column in Schedule CG for furnishing quarter wise details of Long-Term Capital. Whereas, under the MAT provisions total Capital Gain earned during the year is considered while computing Book Profit u/s 115JB. Therefore, the assessee company is bound to create a chart to calculate interest u/s 234C of the Income Tax Act, 1961, which cannot be disclosed in ITR Form.

5. That on the facts and circumstances of the case the Ld. Hon’ble Commissioner of Income tax (Appeals) erred by wrongly quoting the case laws by stating that Interest u/s 234C is mandatory and consequential to the determination of total income. Although the Interest u/s 234C is mandatory, however, provision of section 234C is not applicable to any short fall in the payment of the tax due on the returned income, where such shortfall is on account of underestimate or failure to estimate the amount of capital gains.

6. That the appellant craves permission to add, amend alter or vary all or any of the ground of appeal on or before the date of hearing of the appeal.”

The facts giving rise to the present appeal are that while processing the Income Tax Return (ITR) of the assessee made adjustment and vide order dated 11.08.2017 pertaining to the A.Y. 2016-17 assessed capital gain at Rs.15,67,224/-. Thus, the AO computed deemed income u/s 115JB of the Act of Rs.81,33,535/- and computed tax of Rs.15,04,704/-. Aggrieved by this, the assessee preferred in appeal before the Ld. CIT(A) who sustained the addition and dismissed the appeal of the assessee. Now the assessee is in appeal before this Tribunal.

Apropos the grounds of appeal, the Ld. Counsel for the assessee contended that the impugned order was passed ex parte to the assessee. Further, the Ld. CIT(A) failed to consider the submissions as made in the written submissions filed before the Ld. CIT(A). For the sake of clarity, the submissions of the assessee are reproduced as under:-

“1. That the appellant, during the Assessment Year 2016-17, sold agricultural land on 18.03.2016 to M/s City Realty for a total sale consideration of ₹80,45,000 (Rupees Eighty Lakh Forty-Five Thousand Only). The said property was purchased during the financial year 2006- 07. Following is the detailed capital gain on the said property:

Sales Consideration: ₹80,45,000

Less:

Indexed Cost of Acquisit