LAVANGA SREENIVAS,NARSAPUR vs. ACIT., CENTRAL CIRCLE-2(4), HYDERABAD

Facts

The assessee, Shri Lavanga Sreenivas, filed an appeal before the Commissioner of Income Tax (Appeals)-12, Hyderabad, against an order passed by the Assessing Officer (AO) under Section 153C of the Income Tax Act, 1961, for Assessment Year 2019-20. The appeal was dismissed by the CIT(A) for non-prosecution, upholding the AO's order. The assessee, aggrieved by this dismissal, filed an appeal before the Income Tax Appellate Tribunal (ITAT). The ITAT noted that the assessee could not respond to notices from the CIT(A) due to unavoidable circumstances and had no mala fide intention to delay proceedings. The amount in dispute, ₹33,59,600, was an addition made by the AO as unexplained investment under Section 69.

Held

The Tribunal considered the rival submissions and the fact that the CIT(A) dismissed the appeal for non-prosecution. The assessee's counsel submitted that unavoidable circumstances prevented compliance with the CIT(A)'s notices and there was no mala fide intention. The Tribunal, considering the principle of natural justice, was of the opinion that the assessee deserved one more opportunity to present their case. Therefore, the matter was restored to the file of the Assessing Officer for de novo adjudication. The assessee was directed to cooperate and not seek unnecessary adjournments. The AO was to pass a fresh assessment order after considering the evidence and submissions. The appeal was allowed for statistical purposes.

Key Issues

1. Whether the addition of ₹33,59,600 as unexplained investment under Section 69 of the Income-tax Act, 1961, was based on conjectures and surmises without corroborative evidence (Assessee's contention). 2. Whether the addition was based solely on a loose sheet of paper found during a third-party search without independent evidence (Assessee's contention). 3. Whether the assessee was deprived of an effective opportunity to rebut the addition as the alleged material was not provided, violating principles of natural justice (Assessee's contention). 4. Whether the CIT(A) failed to exercise powers under Section 250(4) to make further inquiries or direct verification, violating principles of natural justice (Assessee's contention). 5. Whether the CIT(A)'s order was non-speaking and defective, failing to set out points for determination, decisions, and reasons, thus breaching Section 250(6) (Assessee's contention). Revenue's contention was that sufficient opportunities were provided and not availed. Alternatively, if remanded, it should be to the AO for fresh adjudication.