RAVINDER KUMAR,HARYANA vs. ITO WARD 3(5), GURUGRAM, HARYANA
What did the Tribunal hold?
The Tribunal found that the assessee did not get an opportunity to explain the increase in capital. Therefore, the issue was restored to the Commissioner (Appeals) for fresh adjudication after providing a reasonable opportunity of being heard.
What were the facts?
The assessee filed a return declaring an income of Rs. 12,06,590. The Assessing Officer, completing the assessment under section 144, added Rs. 2,75,52,390 as unexplained increase in capital. The Commissioner (Appeals) confirmed this addition ex-parte.
What were the issues?
Whether the Commissioner (Appeals) erred in disposing of the appeal ex-parte without providing the assessee an opportunity to explain the increase in capital.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH: ‘G’ NEW DELHI
Before: SHRI SAKTIJIT DEY & DR. B.R.R. KUMAR
Date of hearing 23.02.2022 Date of pronouncement 23.02.2022 ORDER PER SAKTIJIT DEY, JM:
This is an appeal by the assessee against order dated 24.09.2018 of learned Commissioner of Income Tax (Appeals)-1, Gurgaon, for the assessment year 2015-16.
We have heard the parties and perused the materials on record. The basic grievance of the assessee is against ex-parte disposal of assessee’s appeal by learned Commissioner (Appeals).
As could be seen from the facts on record, assessee is a resident individual. For the assessment year under dispute, the assessee had filed its return of income on 25.01.2016 declaring total income of Rs.12,06,590/-. While completing the assessment under section 144 of the Income-tax Act, 1961 (in short ‘the Act’), the Assessing Officer added an amount of Rs.2,75,52,390/- resulting in determination of total income at Rs.2,87,58,980/-.
Against the assessment order so passed, assessee preferred an appeal before learned Commissioner (Appeals). However, by the impugned order learned Commissioner (Appeals) disposed of assessee’s appeal ex-parte confirming the addition made.
Having considered rival submissions, we find that the disputed addition was made by the Assessing Officer simply for the reasons that against the income reported of Rs.12,06,590/- there is an increase in capital of Rs.2,75,52,390/-. Since, the assessment was completed under section 144 of the Act to the best of judgment, the Assessing Officer treated the increase in capital as unexplained and added back to the income of the assessee. Learned Commissioner (Appeals) while disposing of the appeal has merely confirmed the addition.
5. Considering the nature of the disputed addition and the fact that, for whatever may be the reason, the assessee could not avail the opportunity to explain the increase in capital balance, we are inclined to restore the issue back to learned Commissioner (Appeals) for de-novo adjudication after providing a due and reasonable opportunity of being heard to the assessee. We also direct the assessee to cooperate in finalization of the proceeding before learned Commissioner (Appeals) with timely appearance and proper representation.
In the result, the appeal is allowed for statistical purposes.
Order pronounced in the open court on 23rd February, 2022
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