LATE GURUPADAPPA MALLAPPA HAVINAL, BY LEGAL HEIR HEMAGIRISH G HAVINAL,GADAG vs. INCOME TAX OFFICER, WARD- 1, GADAG

The brief facts of the case are that the assessee is an individual and earned pension, interest on savings bank accounts and commission. The assessee filed his return of income on 30/12/2013 and the said return was processed u/s. 143(1) of the Act. Based on the survey conducted in the business premises of his son, loose sheet bundle was impounded and on that basis, the AO had found that the assessee had given advance for the purchase of an immovable property. The AO alleged that the said transaction was not reflected in the return of income and therefore, a notice u/s. 148 was issued for reopening the assessment. Thereafter, notice u/s. 142(1) was issued for which the assessee appeared and also filed the copy of the revised return dated 15/02/2016 along with the reply to the notices issued. The assessee also furnished bank statement details and form 26AS. The AO after analyzing the documents found in the loose sheets, had alleged that the assessee had paid advance of Rs. 25 Lakhs on 24/05/2012. The AO asked for the source for the said investment. The assessee submitted that he has withdrawn the agricultural incomes on various dates from the SBI, Mundargi and out of the said withdrawals, the assessee has paid the advance to the said seller. The AO alleged that a sum of Rs. 18 Lakhs was withdrawn during the F.Y. 2011-12 and a sum of Rs. 10,00,000/- by cash was redeposited on 29/03/2012 and therefore, the AO accepted the source for the payment to the extent of Rs. 8 Lakhs. The assessee submitted that balance payment of Rs. 17 Lakhs was paid out of the cash accrued as on the date of payment. The AO had not accepted the said contention and confirmed the Rs. 17 Lakhs as unexplained investment u/s. 69 of the Act.

As against the said order, the assessee filed an appeal before the Ld.CIT(A). The Ld.CIT(A) had not accepted the explanation offered and confirmed the addition made u/s. 69 of the Act.

As against the said order, the assessee filed this appeal before this Tribunal with a delay of 210 days and also filed an application to condone the said delay. The application was filed by the legal heir of the appellant since the assessee died on 08/05/2025. In the said application, the legal heir explained the difficulties faced by him and also about his health issues and his son’s treatment and submitted that the delay is neither willful nor wanton and prayed to condone the said delay.

We have considered the said application and also the reasons stated in the application and we are satisfied that the present appeal has been filed by the L/R of the deceased assessee and therefore, in the interest of justice, we are inclined to condone the delay and proceeded to decide the appeal on merits.

At the time of hearing, the Ld.AR submitted that the assessee has withdrawn a sum of Rs. 20 Lakhs from the Syndicate Bank account on 19/04/2012 which could not be produced before the Ld.CIT(A) since the records could not be easily searched by the L/R of the assessee. The Ld.AR further submitted that if the said amount has been considered, the source for the said investment was very much explained. The L/R of the assessee also filed an application to admit the additional ground in which the L/R has disputed the appeal order passed in the name of the deceased assessee. The L/R of the assessee also filed an application to admit the additional evidence to admit the bank statement of the Syndicate Bank in support of his contention that the cash of Rs. 20 Lakhs was withdrawn on 19/04/2012.

The Ld.DR submitted that the assessee has not furnished the source for the advance payment and therefore, the AO had rightly added the investment as unexplained investment u/s. 69 of the Act. The Ld.DR also submitted that the additional ground raised is not correct since the appeal before the Ld.CIT(A) was filed by the assessee himself and the L/R of the assessee also not informed about the death of the assessee before the Ld.CIT(A) and therefore, the Ld.CIT(A) would not have any knowledge about the death of the assessee and also submitted that there is no evidence produced by the L/R of the assessee to show that the death of the assessee was intimated to the Ld.CIT(A). Insofar as the additional evidence filed by the L/R of the assessee, the Ld.DR submitted that this is a new document which was not produced before the lower authorities and therefore prayed to dismiss the appeal.

We have heard the arguments of both sides and perused the materials available on record.

Insofar as the additional ground raised by the assessee that the Ld.CIT(A) is not correct in passing order in the name of the deceased assessee, we are of the view that the appeal itself was filed by the assessee and the Ld.CIT(A) has no occasion to know about the death of the assessee. Further, the L/R of the assessee has not produced any evidence to show that the fact was informed to the Ld.CIT(A). In such circumstances, we do not find any merit on the said additional ground raised by the L/R of the assessee and therefore, dismissed the additional ground raised by the assessee.

Now we will take up the appeal and decide the issue on merits. Admittedly, the assessee had paid an advance of Rs. 25 Lakhs for purchasing an immovable property. The AO had considered the withdrawals made from SBI, Mundargi on various dates and accepted the withdrawal made on 24/05/2012 whereas not accepted the other three withdrawals. Therefore, the balance Rs. 17 Lakhs was treated as unexplained and added u/s. 69 of the Act.

During the pendency of the appeal, the assessee also filed an application under Rule 29 of the Rules seeking the Tribunal to accept the additional evidence filed by him. Along with the said application, the L/R of the assessee enclosed the copy of the Syndicate Bank account statement to show that the assessee had withdrawn a sum of Rs. 20 Lakhs on 19/04/2012. It is the case of the L/R of assessee that the said statement was not produced before the lower authorities and submitted that if the said statement has been considered, the AO might have satisfied that the assessee was having source for balance Rs. 17 Lakhs. Considering the said document as a vital document, we are admitting the said document as an evidence in support of the said contention. The said document was not produced before the AO as well as before the Ld.CIT(A) and therefore, they did not have an opportunity to examine the same. We, therefore, set aside the assessment order dated 31/03/2016 and remit this issue to the file of the AO for considering the issue afresh in the light of the additional evidence filed by the L/R of the assessee and thereafter decide the issue in accordance with law. The AO is also directed to provide an opportunity of being heard to the assessee’s L/R during the remand proceedings.

In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 05th October, 2026.