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Facts
The assessee's case was reopened under Section 147 of the Income Tax Act, 1961, based on transactions captured by ITS. A sum of Rs. 39,02,000/- was deposited in cash, and the assessee had not filed a return for Assessment Year 2012-13. The Assessing Officer (AO) made an ex-parte addition of Rs. 10,52,224/- on account of negative cash balance and interest income.
Held
The Tribunal held that the First Appellate Authority had confirmed the addition made by the AO without admitting or rejecting the additional evidence submitted by the assessee and without giving the AO an opportunity to examine the same. To prevent miscarriage of justice, the appeal was remitted to the AO for de-novo assessment.
Key Issues
Whether the First Appellate Authority correctly decided the appeal without properly considering additional evidence and affording the AO an opportunity to examine it.
Sections Cited
147, 144, 151, 148, 46A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “SMC”: NEW DELHI
The instant appeal, filed by the assessee, is directed against the order dated 09.07.2024 (DIN & Order No. ITBA/NFAC/S/250/2024-25/1066520511(1) passed by the National Faceless Appeal Centre (NFAC), Delhi, arising out of the order dated 24.10.2019 passed by the ITO, Ward-44(2), New Delhi, under Section assessment year 2012-13.
2 Briefly stated, the case was reopened u/s 147 of the Act, on the basis of transactions captured by ITS, during the course of Board’s Pilot Project pertaining to Non-Filers of Income Tax returns as NMS project. The ld. AO on perusal of transaction captured by ITS, that appellant has deposited a sum of Rs. 39,02,000/- in cash into Bank account maintained with Delhi Nagrik Sahkari Bank Ltd., Near Subji Madi, New Delhi and had not filed return of income for assessment year 2012-13and thus, after recording reasons and obtaining approval u/s 151 of the Act, the Ld. AO has issued notice on 30.3.2019 u/s 148 of the Act. Appellant fails to comply the notices issued during the course of assessment proceedings, thus ld. AO called the bank statement from Bank of appellant and prepared a cash flow statement which is reproduced in the order of assessment. It is evident from aforesaid cash flow statement that there was maximum negative cash balance of Rs. 10,17,150/- on 27.10.2011. Ld. AO further noted from Form 26AS of the appellant that there is interest of Rs. 22,160/- on FDs and Rs. 12,914/- in saving account. Thus, the learned Assessing Officer in ex-parte order of assessment has made addition of Rs. 10,52,224/- on account of maximum negative cash balance and interest income (supra). condonation of delay, application for admission of additional evidence in the shape of bank statement for preceding assessment year i.e. assessment year 2011-12 under Rule 46A of Income Tax Rules’ 1962 (hereinafter referred to as “Rules”) and written submissions in support of grounds raised challenging the jurisdictional issue and addition of Rs. 10,17,150/- made therein. The First Appellate Authority has condoned the delay in filing of appeal before him, however, neither the Assessing Officer has been allowed any opportunity to examine the evidences nor he himself rejected or admitted the additional evidences under Rule 46A of the Rules, rather the First Appellate Authority proceeded to decide the appeal filed by appellant and has confirmed the addition made by ld. AO.
4 I have heard the rival submissions made by the respective parties and perused the materials on record. In this case, order of assessment has been passed ex-parte u/s 147/144 of the Act. Though the appellant has made representation before the First Appellate Authority and has submitted written submissions supported by additional evidences in the shape of bank statement of appellant for preceding assessment year to establish the availability of opening cash balance, the However First Appellate Authority neither admitted nor rejected the aforesaid additional evidence and has even not allowed opportunity to the ld. AO to examine the additional evidence as required under rule 46A of the Rules. Thus, in order to prevent the miscarriage of justice, I dispose of this appeal by remitting the issue to the Ld. AO, for de-novo assessment, upon granting an opportunity of being heard to the assessee. The assessee is also granted liberty to challenge the assumption of jurisdiction of initiation of proceedings as the ground raised before the Bench before the First Appellate Authority, if so advised. for statistical purposes Order pronounced in open court on 04.06.2025.