2022 (1) TMI 1143 - AT - Income Tax

ITAT Sets Aside CIT(A) Orders, Directs Restoration for Adjudication on Merits.

Shri Ashok Kumar, Shri Suresh Kumar, Shri J. Dilip Kumar, Shri Dinesh Kumar Versus ITO Ward-2 (1) Bengaluru

Shri Ashok Kumar, Shri Suresh Kumar, Shri J. Dilip Kumar, Shri Dinesh Kumar Versus ITO Ward-2 (1) Bengaluru - TMI Issues:Challenging orders passed by Ld CIT(A) without deciding issues on merits and assessing capital gains in individual status instead of HUF status.Analysis:The appeals were filed against the orders passed by Ld CIT(A) for assessment year 2006-07, where the assessees contended that the capital gains, if any, should be assessed in the hands of the Hindu Undivided Family (HUF) status instead of individual status. The assessing officer had assessed long term capital gains in the individual status of the assessees, leading to the appeals before Ld CIT(A). The assessees argued that the land belonged to the HUF and therefore any capital gains should be assessed in the HUF's hands. However, Ld CIT(A) dismissed the appeals as invalid, stating that the appeals were filed mentioning the PAN of HUF, for which there was no assessment order. The assessees requested to file appeals in individual status as well, but this was not accepted by Ld CIT(A), resulting in the dismissal of the appeals.The assessees, represented by the Ld A.R., argued that the mentioning of the PAN of HUF in the appeals was a mistake and should have been allowed to rectify. They contended that the capital gains, if any, should be assessed in the HUF's hands, prompting the filing of appeals with the HUF's PAN. The Ld A.R. further requested the opportunity to file revised appeals mentioning the PAN of the individual status to allow adjudication on merits. The ITAT, after hearing both parties, noted that the assessments were passed in the individual status, but the appeals mentioned the PAN of HUF due to the contention that capital gains should be assessed in the HUF's hands. In the interest of natural justice, the ITAT held that the assessees should be allowed to file revised appeals mentioning the PAN of the individual status. The ITAT set aside the orders passed by Ld CIT(A) and directed all issues to be restored for adjudication on merits, with the assessees instructed to file revised appeals with the correct PAN information.In conclusion, the ITAT allowed the appeals for statistical purposes, emphasizing the need for proper assessment of capital gains in the appropriate status and the importance of allowing rectification of technical errors in appeal filings to ensure fair adjudication on merits.