PRAKASH GUNAJI VEER,MUMBAI vs. INCOME TAX OFFICER 41(3)(3), MUMBAI, MUMBAI

The Ld. CIT (A) erred in not granting final opportunity of being heard. The Ld. CIT (A) erred in not accepting the reply duly submitted to the only notice issued by the Ld. CIT (A), in which the appellant had asked for some time to reply to the only notice issued by the Ld. CIT (A). The Ld. CIT (A) erred in issuing standard notices, and passing the order ex-parte without giving the appellant a chance to file a written submission. Further the Ld. CIT (A) erred in accepting the Learned Assessing Officer's stand when prima facie, it was fairly evident, that the Order passed by the Learned Assessing Officer was mechanical without considering the 'mens rea' of the appellant.

On the facts and in the circumstances of the case, and also in law, the Ld. CIT (A) erred in confirming the addition of Rs.51,63,690 under Section 69 of the Income Tax Act, 1961, treating it as unexplained investment, despite the appellant furnishing documentary evidence explaining the full source of investment towards the purchase of residential property amounting to Rs. 67,00,000 during the assessment proceedings to the Learned Assessing Officer.

On the facts and in the circumstances of the case, and also in law, the Ld. CIT (A) erred failed to consider the copies of the sale deed of the old flat, loan sanction letter from SBI, loan account statement, and evidence of personal savings, all of which collectively establish the source of Rs.67,00,000 invested in the new residential property.

The addition made and upheld by the Ld. CIT (A) is based on assumptions that Rs.51,63,690/- was unexplained, despite the appellant having filed a revised return and submitted data and documents during the assessment proceedings to corroborate the source of funds for the purchase of the flat for Rs.67,00,000. 5. Your appellant craves leave to alter, modify, amend or delete any of the above grounds of appeal, or to add one or more new ground(s), as may be necessary.”

Heard the parties. Case records carefully perused.

Briefly stated the facts of the case are that return of income for the year was filed on 14/11/2018, the return was selected for scrutiny assessment and accordingly statutory notices were issued and served upon the assessee. As per the inside data, the AO came to know that the assessee has purchased a property for a consideration of Rs.67,00,000/-. In spite of notice, the assessee did not furnish the necessary details and the AO was left with no choice but to frame the assessment ex-parte and made the addition of Rs.67,00,000/-.

Though the assessee preferred the appeal before the ld. CIT(A) but could not furnish the necessary details and the ld. CIT(A) partly confirmed the addition to the extent of Rs.51,63,690/-

Before us, the Ld. Counsel for the assessee filed an affidavit of the assessee in which the assessee states that he did not receive the statutory notices issued by the Department as the mobile number and e-mail id registered in his income-tax records belonged to his tax consultant who did not inform about the notice or the proceedings initiated in his case. The assessee further contends that due to Covid-19 Pandemic, the assessee could not collect the evidence and furnish the same and all those evidence are furnished now.

Considering the contents of the applications and the additional evidence furnished before us, we are of the considered view that such evidence has to be examined by principal officer i.e., the AO. Therefore, in the interest of justice, we deem it fit to restore the issue to the file of the AO. The assessee is directed to attend the assessment proceedings and furnish all the necessary evidence explaining the source of investment in the said property and the AO is directed to examine the same and decide the issue afresh after affording a reasonable and adequate opportunity of being heard to the assessee.

In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the Court on 21st August, 2025 at Mumbai. (NARENDRA KUMAR BILLAIYA) ACCOUNTANT MEMBER Mumbai, Dated 21/08/2025 आदेश की प्रतिलिपि अग्रेषित/