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Income Tax Appellate Tribunal, DELHI BENCH “SMC”: NEW DELHI
Before: SHRI KUL BHARAT
O R D E R PER KUL BHARAT, JM:
This appeal, by the assessee, is directed against the order of the learned Commissioner of Income-tax (Appeals)-15, New Delhi, dated 25.06.2019, pertaining to the assessment year 2011-12. The assessee has raised following grounds of appeal:
“A. Before the Ld. AO in assessment proceedings:
That the Appellant has been denied the basic right to be heard at the Assessing Officer level as well as CIT (Appeal) level.
That the Ld.AO has not carried out any verification of payments made
Ram Narayan Yadav Vs. ITO to the seller against agreement to sell from the seller owing to his death , nor from the witness to the agreement.
3. That the Ld.AO erred in verifying the agreement to sell from the Witness to the Agreement when original party has left earth. He even did not give the assessee an opportunity to the assessee to present before him the person witnessing the agreement to sell to confirm the correctness of payment made against the agreement to sell. He did not even called for receipts of each payment to verify the claim that these payments were made in different financial years.
4. That the Ld.AO has said in the order that a since the seller has passed away in 2010 , he cannot call for information from him under section 133(6). But he failed to call any witness to the agreement to verify its authenticity as he was in a hurry to finish his assessment.
That the LD.AO failed to admit the fact that the assessee a year person has invested his lifetime’s savings for purchasing the property in question. He non-challantly denied the ground that payment of Rs.15 Lakhs was made from his past savings in different financial years.
6. That the Ld.AO ignored the fact that tax applicability comes on the seller of property and not on Assessee who has paid advance for purchase of the said property. Thus charging double tax on it. 7. That the learned AO ignored the Balance Sheets and Profit and Loss account submitted from the year 2006-07, 2007-08, 2008-09, 2009-10 and 2010-11 wherein it has been clearly mentioned how the appellant has accumulated funds to pay for the property. The AO has not given any comments on these , this clearly shows that he has failed to discharge his duties. 8. That the Ld AO has erred to verify the payments to the seller from the income that particular year only whereas it is a well known fact and common practice to invest lifetime earning in purchasing properties. He failed to appreciate the fact that the assessee is an old age person and has been continuously doing the business for last 30 years , he has creditors and in business cash flow can be generated just by changing the terms with creditors or debtors. The AO ignored the fact that the assesee is living in a joint family where his other family members are also earning and he is not Ram Narayan Yadav Vs. ITO the sole bread earner for the family. His drawings are only for his personal expenses which are also minimal seeing his living habits. He is a simple villager and has no extravagent ways owns no vehicle and has an agriculture income as well. His wife , children and brother are also earning to support family expenditure.
The Ld.AO has also erred in mentioning in his order that the assessee has disclosed agriculture income before him in his financials books produced before him. He has deliberately not commented on this in his order to frame this erroneous order.
The Ld.AO has not made proper decision as he was under pressure from complainant to act against my client. He did not even verified the payments made to the assessee from the sellers income tax returns. A. Before the Ld. CIT (A) XV in Appellate Proceeding: 1. That the Hon’ble CIT (A) XV has not provided proper opportunity of being heard to the assessee, and has accepted the AO’s version without making any further enquiry.
2. The Hon’ble CIT (A) XV failed to verify the contents of the sale agreement from the witness to the agreement.
3. The Hon’ble CIT (A) XV did not allowed the appellant to submit receipts issued by the seller in support of our claim as the same were not submitted before the AO.
4. Hon’ble CIT (A) XV was in a hurry to finish the case as only one hearing was provided to the assessee and the matter was decided. He has not given any reason for not making any further enquiry.
5. The Hon’ble CIT (A) XV has followed the order of the AO ignoring that an application to him is made because of the injustice made at the AO level.
6. That while passing the order The Hon’ble CIT (A) XV has not followed the principles of natural justice and no reasonable opportunity of hearing was given to the appellant and the witness .
Ram Narayan Yadav Vs. ITO 7. That the prima facie case and balance of convenience lies in favor of the appellant and huge financial loss would be caused to the appellant if in case the order dated 25.06.2019 passed by Ld. Commissioner of Income Tax (Appeals) -XV and assessment order dated 19.12.2018 are not quashed and set aside.
That grave injustice and undue hardship will be caused to the appellant if the present appeal is not allowed and the order dated 25.06.2019 passed by Ld. Commissioner of Income Tax (Appeals) -XV and assessment order dated 19.12.2018 by this Hon’ble Tribunal.”
2. Facts giving rise to the present appeal are that case of the assessee was reopened for assessment and the assessment u/s 147 read with section 143(3) of the Income-tax Act, 1961, hereinafter referred to as the “Act” was framed vide order dated 19.12.2018. While framing the assessment the Assessing Officer made addition of Rs. 10,00,000/- on account of unexplained investment. Aggrieved against this assessee preferred appeal before the learned CIT(Appeals), who also dismissed the appeal. Now the assessee is in appeal before this Tribunal.
No one appeared on behalf of the assessee. It is seen from the record that on earlier occasion also the assessee has not attended the proceedings. Notices sent to the assessee are returned back by the postal authorities. Therefore, the appeal is taken up for hearing in the absence of the assessee.
Learned DR supported the orders of the authorities below and submitted that there is no infirmity into the order of the authorities below, therefore, same may be affirmed.
Ram Narayan Yadav Vs. ITO 5. I have heard learned DR and perused the material available on record. It is seen that the learned CIT(Appeals) has noted the fact that the assessee had filed written submissions and thereafter he decided the issue in para 4 as under:
“4. DECISION: The contention of the Appellant has been considered and the order of AO has also been perused. It is seen from the order of the AO that there was an information available with AO about the sale purchase of the immovable property. During the course of assessment proceedings, as per para 6.1 of the order of the AO, the assessee could not furnish any documentary evidences the source of Rs. 15,00,000/- payment made in cash for the payments made for the property. In para 6.3 of the order, the AO has duly granted benefit of Rs. 5,00,000/- and had made the addition of Rs. 10,00,000/- on account of unexplained investment u/s 69.
During the course of appellate proceedings, the AR of the appellant has submitted the same arguments which were submitted before the AO. These arguments have already been considered by the AO on page 5 & 6 of his order. I do not find any reason to interfere with the findings of the AO in this regard and therefore the addition of Rs. 10,00,000/- made by the AO u/s 69 is hereby confirmed.”
From the above finding of the learned CIT(Appeals) it is evident that the written submissions filed by the assessee were not adverted. From the record it is seen that the assessee had specifically stated that the payments were made in different financial years and he had also filed certain explanation regarding source of investment. However, the explanation of the assessee is not considered by the authorities below. Therefore, looking to the facts of the present case and to sub serve the interests of principles of natural justice the impugned order is set aside and the matter is restored to the file of the Assessing Officer for de novo
Ram Narayan Yadav Vs. ITO assessment. The Assessing Officer is therefore directed to make assessment afresh after verifying veracity of the claim of the assessee that the investments were made in different financial years. Grounds raised in this appeal are allowed for statistical purposes.
In the result, appeal is allowed for statistical purposes.
Order pronounced in open court on 20th April, 2022.