ARUN SAHU,VARANASI vs. INCOME TAX OFFICER, WARD - 3(1), VARANASI

PER SUDHANSHU SRIVASTAVA, J.M.: This appeal has been preferred by the Assessee against the order dated 29.09.2023, passed by the National Faceless Appeal Centre, Delhi (NFAC) for Assessment Year 2017-18.

2.0 The brief facts of the case are that the assessee filed his return of income for the year under consideration on 30.09.2017, declaring a total income of Rs.3,37,490/-. In this case, reassessment proceedings were initiated under section 147 of the Income Tax Act, 1961 (hereinafter called 'the Act’) after issuing notice under section 148 of the Act to the assessee, for the reason that an investment of Rs.83,98,000/- made by the assessee in purchase of two immovable properties had allegedly escaped assessment. However, there was no response from the

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side of the assessee in response to notice issued under section 148 of the Act. Subsequently, the Assessing Officer (AO) issued notices under section 142(1) of the Act, requiring the assessee to furnish the details/documentary evidences with respect to the purchase of immovable properties worth Rs.83,98,000/-. However, still there was no response from the side of the assessee. During the course of assessment proceedings, the assessee raised an objection to the reopening of assessment under section 147 of the Act by the AO, which was rejected by the AO by passing a detailed order. Since the assessee had failed to respond to the statutory notices issued by the AO and had also failed to furnish the requisite details relating to purchase of immovable properties worth Rs.83,98,000/-, the AO proceeded to frame ‘Best Judgment Assessment’ under section 144 of the Act. The AO held that the investment of Rs.83,98,000/- made by the assessee in properties during the year under consideration was assessee’s unexplained investment and, accordingly, the same was added to the total income of the assessee under section 69 of the Act. The AO completed the assessment under section 144 read with section 147 of the Act, assessing the total income of the assessee at Rs.87,35,490/-.

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2.1 The AO also invoked the provisions of section 115BBE of the Act and initiated penalty proceedings under section 27AAC(1) of the Act, separately.

2.2 Aggrieved, the Assessee preferred an appeal before the Ld. First Appellate Authority. Subsequently, the appeal was migrated to the NFAC, which dismissed the appeal of the assessee ex-parte qua the assessee and confirmed the order of the AO.

2.3 Now the assessee has approached this Tribunal challenging the order of the NFAC, by raising the following grounds of appeal:

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The Ld. National Faceless Appeal Centre(NFAC), Delhi has also erred and acted illegally in confirming the same. 2. Because the Ld. Assessing Officer has erred and acted illegally in adding back Rs.83,98,000 u/s 69A of the Income Tax Act, 1961 without taking into consideration of the facts and circumstances of the case as well as the affidavit on record. The Ld. National Faceless Appeal Centre (NFAC), Delhi has also erred and acted illegally in confirming the same. 3. Because it is fully explained that the assessee could not submit explanation on the date of hearing of appeal as the appellant was diagnosed with heart diseases and was busy in his treatment. The Ld. National Faceless Appeal Centre (NFAC) Delhi erred and acted illegally in passing the order. 4. Because the assessment is bad both on facts and in law and not maintainable. 4.0 The Ld. Authorized Representative for the assessee (Ld. A.R.) submitted that there is a delay of 195 days in filing the appeal before the Tribunal. He further submitted that the assessee had filed an application dated Nil, for condonation of delay, duly supported by Medical Certificate and prescriptions issued by Medanta Hospital, Gurgaon, stating therein that the due date for filing the appeal against the impugned order of the Ld. First Appellate Authority was 28.11.2023, however, since the assessee was suffering from various kinds of diseases, he was

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either hospitalized or was on bed rest and finally he underwent heart surgery and, therefore, the assessee could not contact his Counsel for filing the appeal before the Tribunal. The prayer of the Ld. A.R. was that the delay caused in filing the appeal was not deliberate, which may please be condoned and the appeal be heard on merits.

5.0 The Ld. Sr. D.R. objected to the delay being condoned.

5.0 In view of the prayer made by the Ld. A.R., we condone the delay in filing of the appeal and admit the appeal for hearing.

3.0 During the course of hearing before us, the Ld. A.R. moved an application dated 10.02.2026 for admission of the following additional ground:

5.0 In the Additional Ground of appeal, the assessee has raised the issue relating to the addition under section 50C of the Act. However, we notice that in the instant case, no addition under section 50C of the Act has been made by the AO, whereas, the only addition made by the AO was under section 69 of the Act

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and, therefore, the additional ground raised by the assessee is not admissible and, accordingly, the same is rejected.

6.0 The Ld. A.R. submitted before us that the NFAC has passed an order ex-parte qua the assessee, arbitrarily upholding the order passed by the AO. The Ld. A.R. further submitted that the AO had not allowed adequate opportunity of being heard to the assessee and had passed the impugned assessment order under section 147 read with section 144 of the Act, without bringing on record any material in support of the addition which was made on the basis of presumption and surmises only. The Ld. A.R., therefore, prayed that, in the interest of justice, the matter may be restored to the file of the AO for deciding the same afresh after providing reasonable opportunity of being heard to the assessee. He submitted that the assessee undertakes to produce all the relevant documents in support of the purchase of immovable property, before the AO.

7.0 The Ld. Sr. D.R. objected to the restoration of appeal to the file of the Assessing Officer and submitted that the appeal of the assessee be dismissed.

8.0 We have heard both the parties and have also perused the material on record. Looking into the facts of this case and the undertaking given by the Ld. A.R. in open Court to produce all the relevant documents before the AO, we are of the

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considered view that the assessee deserves one last opportunity to present his case and, therefore, in the interest of substantial justice, we restore this file to the Office of the AO with the direction to provide one last opportunity to the assessee to present his case along with necessary evidences in support of his averments regarding the impugned issue. We also caution the assessee to fully comply with the directions of the AO in the set- aside proceedings when called upon to do so, failing which, the AO would be at complete liberty to pass the order in accordance with law, based on the material available on record even if it is ex-parte qua the assessee.

9.0 In the result, the appeal of the assessee stands allowed for statistical purposes.

Order pronounced in the open Court on 12/05/2026.

Sd/- Sd/- [NIKHIL CHOUDHARY] [SUDHANSHU SRIVASTAVA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:12/05/2026 JJ: Copy forwarded to: 1. Appellant 2. Respondent 3. CIT(A) 4. CIT 5. DR By order Assistant Registrar/DDO