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Facts
The assessee, an individual, did not file an income tax return for AY 2010-11. The AO reopened the assessment and made additions based on contract receipts, commodity transactions, and credit card payments, totaling Rs. 4,13,29,317/-. The CIT(A) confirmed these additions, stating the assessee did not provide sufficient evidence.
Held
The Tribunal noted that the CIT(A) confirmed the additions without examining the merits, solely on the ground that the assessee failed to submit evidence. To ensure natural justice and fair play, the Tribunal decided to give the assessee another opportunity.
Key Issues
Whether the reopening of assessment was valid and whether the additions made by the AO were justified without proper examination of evidence by the CIT(A).
Sections Cited
147, 148, 250, 144, 234B, 234C, 271(1)(c)
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Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY, VP &
O R D E R
Per Padmavathy S, AM:
This appeal by the assessee is against the order of the Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre (NFAC), Delhi [In short 'CIT(A)'] passed under section 250 of the Income Tax Act, 1961 (the Act) dated 11.04.2025 for Assessment Years (AY) 2010-11. The assessee raised the following grounds:
“1) On the facts and circumstances of the case and in law, the Authorities below have erred in re-opening of the assessment u/s 147 of the I T Act as there was no reason to believe with the AO that any income had escaped assessment as provided Mahendra Jethalal Mamtora under the provisions of section 147 of the IT Act except merely relying on the report and hence the re-opening of the assessment was bad in law and against the provisions of Income Tax Act, 1961 and rules made thereunder.
2) On the facts and circumstances of the case and in law the authorities below have erred in making an addition of Rs. 39,78,000/- arbitrarily without any basis on commodity transactions and debit and credit summations in the bank account of about Rs. 3,62,29,500/- and the reasons assigned for doing so were wholly wrong, irrelevant and contrary to the facts of the case, and therefore this is not in accordance with the provisions of Income Tax Act, 1961, and rules made thereunder.
3) On the facts and circumstances of the case and in law the authorities below have erred in making an addition of Rs. 2,58,816/- being the credit card expenses done for the business purposes and the reasons assigned for doing so were wholly wrong, irrelevant and contrary to the facts of the case, and therefore this is not in accordance with the provisions of Income Tax Act, 1961, and rules made thereunder.
4) On the facts and circumstances of the case and in law the authorities below have erred in making an addition of Rs. 14,52,300/- of the contract receipts arbitrarily estimating without any basis and the reasons assigned for doing so were wholly wrong, irrelevant and contrary to the facts of the case, and therefore this is not in accordance with the provisions of Income Tax Act, 1961, and rules made thereunder.
5) On the facts and circumstances of the case and in law, the Authorities below have erred in levying the interest u/s 234B and 234C of the I T which was wholly wrong, and against the provisions of Income Tax At, 1961 and rules made thereunder.
6) On the facts and circumstances of the case and in law, the Authorities below have erred in initiating the penalty proceedings u/s 271(1)(c) of the Income Tax Act, 1961 which were wholly wrong, irrelevant, and not in accordance with the facts and circumstances of the case as no income is concealed nor any inaccurate particulars were furnished.”
The assessee is an individual and did not file the return of income for AY 2010-11. The Assessing Officer (AO) noticed from the details available with the department that during the Financial Year (FY) relevant to AY 2010-11 the assessee has received contract receipts, invested more than Rs. 10,00,000/- in commodities and made payment against Credit Card Bills. Since the assessee did Mahendra Jethalal Mamtora not file the return of income, the AO issued a notice u/s 148 reopening the assessment. The assessee did not file any response to the notice u/s. 148 and also subsequent notices issued calling the assessee to furnish details. Therefore, the AO completed the assessment u/s. 147 r.w.s. 144 making additions towards Credit Card payments, commodity exchange transaction and amount received on which TDS deducted totalling to Rs. 4,13,29,317/-. Aggrieved the assessee filed further appeal before the CIT(A). Before the CIT(A) the assessee filed written submissions contending the additions made by the AO. The CIT(A) considered the submissions made by the assessee to hold that the assessee has only file the written submissions without attaching any evidences in support of the contentions made against the additions. The CIT(A) accordingly confirmed the additions made by the AO. The assessee is in appeal before the Tribunal against the order of the CIT(A).
None appeared for the assessee and we heard the ld. DR. The ld. DR argued that the assessee has not been cooperating with the assessment proceedings as well as the proceedings before the CIT(A). The ld. DR further argued that the financial transactions entered into by the assessee remain unexplained due to the fact that the assessee neither filed the return of income nor responded to the notices issued by the lower authorities. Accordingly, the ld. DR argued that the order of the CIT(A) be upheld. From the perusal of the order of the CIT(A) we notice that the assessee has made a written submission before the CIT(A) as has been extracted in the appellate order. We further notice that the CIT(A) has observed that the assessee has uploaded various submissions and the evidences at the appellate stage but has proceeded to hold that the assessee has not attached any evidences with the written submissions. Considering the fact the CIT(A) has sustained the impugned additions without examining the merits on the ground that the assessee failed to Mahendra Jethalal Mamtora submit any evidence we are inclined to give one more opportunity to the assessee in the interest of natural justice and fair play. Accordingly, we remit the appeal back to the CIT(A) for a denovo consideration by calling for the required details in order to adjudicate the appeal on merits in accordance with law. The assessee is directed to submit the necessary details as may be called for by the CIT(A) and co- operate with the appellate proceedings without seeking unnecessary adjournments. It is ordered accordingly.
In result, the appeal of the assessee is allowed for statistical purposes.