BHAWANA VYAS,GURGAON vs. ITO, WARD 1, AMBALA, AMBALA

The Ld. CIT(A) has erred in law as well as on fact by upholding an addition amounting to Rs. 43,64,000/- made by Ld. AO treating it as unexplained investment u/s. 69A of the act being on-money payment by appellant which was factually incorrect.

The Ld. CIT(A) had erred in law as well as on fact by upholding action of Ld. AO by not providing opportunity of being heard and making addition on the basis of material seized from premises of third party and statement recorded during the course of search without providing full copies of said material and statement recorded during the course of search and their cross examination though specifically requested, violating principle of natural justice.

The Ld. CIT(A) had erred in law as well as on fact by setting aside the case to file of Ld. AO without adjudicating same on merits though assessment order framed by Ld. AO was not ex-parte assessment.

At the time of hearing, none appeared on behalf of the assessee despite notice of hearing having been duly issued. Accordingly, the appeal was heard ex-parte qua the assessee without the able assistance of the Ld. AR and on the basis of the material/documents available on record as well as after hearing the learned Departmental Representative.

Brief facts of the case are that the assessment in the present case was completed by the Assessing Officer ex-parte under section 144 r.w.s. 147 of the Act on the basis of information received from the Investigation Wing regarding alleged on-money/cash payment made by the assessee in connection with purchase of immovable property. On the basis of such information and material available on record, the Assessing Officer treated the alleged cash payment as unexplained money and made addition under section 69A of the Act.

Against the order of the AO the assessee went in appeal before the Ld. CIT(A). The Ld. CIT(A), after considering the facts of the case, observed that the assessment had been framed ex-parte under section 144 of the Act due to non-compliance on the part of the assessee during the course of assessment proceedings. The Ld. CIT(A) further observed that though the assessee had raised various legal and factual grounds before the appellate authority including challenge to reopening proceedings, reliance upon third party material, denial of cross-examination and violation of principles of natural justice, the matter required proper factual verification at the level of the Assessing Officer. The Ld. CIT(A), therefore, by adopting the amended provisions of section 251(1)(a) of the Act, restored the matter back to the file of the Assessing Officer for framing fresh assessment after granting reasonable opportunity of hearing to the assessee.

The Ld. DR relied upon the orders of the lower authorities.

We have heard the Ld. DR and perused the material available on record. We find that admittedly the assessment in the present case was framed ex-parte under section 144 r.w.s. 147 of the Act. We further notice that the Ld. CIT(A), while restoring the matter back to the file of the Assessing Officer, has categorically observed that several factual as well as legal issues raised by the assessee required proper verification and adjudication. The Ld. CIT(A) has also observed that adequate opportunity deserves to be granted to the assessee to substantiate its claim before the Assessing Officer. Considering the entirety of the facts and circumstances of the case, we are 3 of the considered opinion that the Ld. CIT(A) was justified in restoring the matter to the file of the Assessing Officer for fresh adjudication. We, therefore, uphold the action of the Ld. CIT(A) in remanding the matter back to the file of the Assessing Officer. Accordingly, the Assessing Officer is directed to adjudicate the matter afresh in accordance with law after providing adequate and effective opportunity of hearing to the assessee.

1 Needless to say, the Assessing Officer shall examine all the legal as well as factual issues raised by the assessee including the validity of reopening proceedings, assumption of juri iction, reliance upon third party material, applicability of section 69A, issue relating to cross-examination and principles of natural justice, uninfluenced by any observation made earlier and strictly in accordance with law.

2 The assessee is also directed to extend full cooperation and furnish necessary details/documents as may be called for by the Assessing Officer during the course of fresh assessment proceedings.

In the result, the appeal stands disposed of in terms indicated hereinabove. Order pronounced on 13/05/2026 मनोज कुमार अ"वाल लिलत कुमार (MANOJ KUMAR AGGARWAL) (LALIET KUMAR) लेखा सद"/ ACCOUNTANT MEMBER "ाियक सद" /JUDICIAL MEMBER AG आदेश की "ितिलिप अ"ेिषत/ Copy of the order forwarded to : 1. अपीलाथ"/ The Appellant

""थ"/ The Respondent 3. आयकर आयु"/ CIT 4. आयकर आयु" (अपील)/ The CIT(A) 5. िवभागीय "ितिनिध, आयकर अपीलीय आिधकरण, च"ीगढ़/ DR, ITAT, CHANDIGARH 6. गाड" फाईल/ Guard File