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Income Tax Appellate Tribunal, ALLAHABAD BENCH ‘SMC’ ALLAHABAD
Before: SHRI.VIJAY PAL RAO
O R D E R PER SHRI VIJAY PAL RAO, JUDICIAL MEMBER:
This appeal by the assessee is directed against the order dated 19.09.2019 of ld. CIT(A)- Allahabad for the AY 2007-08. The assessee has raised the following grounds: “1 - That in any view of the matter the ex-parte assessment order passed u/s 144/147 of the IT Act by the assessing officer and his action as confirmed by the Commissioner of Income Tax (Appeal) by passing ex-parte order without providing proper opportunity of being heard to the appellant is highly ' unjustified and wrong in the facts and circumstances of the case.
2- That in any view of the matter the appeal was filed before the Commissioner of Income Tax (Appeal) well within time longwith required documents with the intention to contest the matter but no chance was provided to the appellant to explain his case. In such situation the ex-parte decision so passed by the Commissioner of Income Tax (Appeal) is illegal, unjustified and against the principle of natural justice. 3- That in any view of the matter addition of Rs. 10 Lacs made by the assessing officer by alleging unexplained investment and his action as confirmed by the Commissioner of Income Tax (Appeal) ignoring the correct facts is totally unjustified and incorrect because the investment of Rs. 10 Lacs was made from definite source but without considering the evidence and facts addition was so made and confirmed, which is unjustified and illegal, hence the addition is liable to be deleted. 4- That in any view of the matter in the facts and circumstances of the case addition of Rs. 10.00.000/- so made and confirmed by the two lower authorities without appreciating the correct facts is highly unjustified and illegal, hence the same is liable to be deleted. 5- That in any view of the matter the interest charged under different sections of the IT Act is highly unjustified and illegal in the facts and circumstances of the case. 6- That in any view of the matter the appellant reserves his right to take any fresh ground before hearing of the appeal.”
The ld. AR of the assessee has submitted that the Assessing Officer has reopened the assessment by issuing notice u/s. 148 and passed the ex- parte order u/s. 144 r.w.s. 147 whereby the investment at Rs.10.00 lacs in the mutual fund was treated as unexplained investment and added to the income of the assessee. Ld. AR has pointed out that the assessee has duly explained the source of the investment made in the mutual funds which is also recorded by the Assessing Officer in the assessment order. However, since the assessee shifted from Mirzapur to Delhi therefore, he could not appear in the assessment proceedings. Further, the ld. CIT(A) has also confirmed the said 2 addition made by the Assessing Officer without considering the fact that the investment is made from the bank account of the assessee and the source of fund is maturity amount of fixed deposit. He has pointed out that the bank account of the assessee discloses the source as the maturity amount of all FDRs. The FDRs were made out of the share of assessee in the partition of the family business and other properties under the family settlement. This fact was explained before the Assessing Officer in the reply dated 12.5.2014 however, the Assessing Officer has not considered this explanation, which was supported by the copy of the bank account statement of the assessee. Hence, the ld. AR has contended that when the source of the investment was explained by the assessee and bank account statement was also produced before the Assessing Officer then the addition made by the Assessing Officer and confirmed by the ld. CIT(A) is not justified. He has pleaded that since the authorities below have not examined the correct fact and the evidence produced by the assessee therefore, the matter may be set aside to the record of the Assessing Officer for readjudication of the issue after verification of the bank account as well as explanation of the assessee.
On the other hand, the ld. DR has objected to setting aside of the matter to the Assessing Officer and contended that the Assessing Officer as well as CIT(A) have granted sufficient opportunities to the assessee but assessee did not comply with the notices issued by the Assessing Officer and even not produce any evidence before the CIT(A).
Having considered the rival submissions as well as relevant material on record it is noted that the Assessing Officer has recorded in the assessment order that assessee filed his reply dated 12.05.2014 explaining the circumstances under which the assessee received the money it was initially 3 invested into the fixed deposit and thereafter the maturity amount was invested into mutual fund. These facts were recorded by the Assessing Officer in Para 1 of the assessment order. The Assessing Officer has also recorded this fact that the notice issued through post was received back with the postal remark that the addressee has shifted to Delhi and not residing at Mirzapur. Therefore, these facts were in the knowledge of the Assessing Officer that the assessee has shifted to Delhi. Since the assessment order was passed exparte and the ld. CIT(A) has also not verified the relevant record therefore, in the interest of justice, the matter is set aside to the record of the Assessing Officer for proper verification of the evidences, bank statement of the assessee as well as the other evidences to be filed by the assessee along with the explanation of the source of investment in the mutual fund. Needless to say, fresh order should be passed after giving appropriate opportunity of hearing to the assessee.
In the result, appeal filed by the assessee is allowed for statistical purposes.