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Facts
The assessee, engaged in the transport business, declared an income of Rs. 4,84,840. The AO estimated income at 8% of excess credits due to lack of documentary evidence. The CIT(A) later reduced the estimate to 4% of unexplained receipts.
Held
The Tribunal held that the CIT(A) failed to consider the revised remand report submitted by the AO, which accepted the assessee's explanation. Therefore, the matter was remitted back to the CIT(A) for a fresh decision.
Key Issues
Whether the CIT(A) erred by not considering the revised remand report from the AO while deciding the appeal. Whether the assessee was provided sufficient opportunity to explain the credits.
Sections Cited
143(3)
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Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: SHRI MANU KUMAR GIRI & SHRI JAGADISH
आदेश / O R D E R
PER JAGADISH, A.M : Aforesaid appeal filed by the assessee for Assessment Year (AY) 2016-17 arises out of the order of Learned Commissioner of Income Tax (NFAC), Delhi [hereinafter “CIT(A)”] dated 20.03.2025.
The assessee is an individual engaged in the transport business.
The assessee has filed his return of income declaring total income of Rs. 4,84,840/-. The A.O, in the assessment order passed u/s. 143(3) of the Act, estimated income at 8% of excess credits amounting to Rs.3,96,74,754/- credited in the bank account, as the assessee failed to furnish any documentary evidence. Aggrieved, the assessee preferred an appeal before the Ld. CIT(A). On appeal, the Ld. CIT(A) called for a remand report from the A.O. In the remand proceedings, the A.O stated that the assessee had not made any submissions despite being given several opportunities, and therefore, reiterated the addition made in the assessment order. Consequently, the Ld. CIT(A) estimated the income at 4% of the total credits determined by the A.O.
The Ld. Authorized Representative (A.R) has contended that the Ld. CIT(A) decided the case based on the initial remand report submitted on 30.09.2024, in which the A.O stated that the assessee had failed to submit any explanation despite sufficient opportunity and recommended rejection of the assessee’s claim. However, the A.O subsequently on the basis of details submitted by the assessee had sent revised remand report dated 03.03.2025 accepting assessee’s explanation and uploaded to the ITBA portal, recommending acceptance of the assessee’s explanation, but the Ld. CIT(A) passed the order without considering the revised remand report.
The Ld. Departmental Representative relied on the orders of the authorities below.
We have heard the rival submissions and perused the materials available on record. The A.O made an addition of Rs. 31,73,980/- by applying 8% on the excess bank credits of Rs. 3,96,74,754/-, citing lack of documentary evidence. The Ld. CIT(A) reduced the estimate to 4% of unexplained receipts of Rs. 2,51,36,436/- as the assessee did not make submissions during the initial remand proceedings. However, the A.O subsequently submitted a revised remand report, which the Ld. CIT(A) did not consider. In our considered opinion, and in the interest of natural justice, the matter is remitted back to the file of the Ld CIT(A) with a direction to decide the appeal after duly considering the revised remand report. We also direct the assessee to appear before the Ld. CIT(A) on the date of hearing without fail and to furnish all necessary details. In view of the above, the appeal filed by the assessee is allowed for statistical purposes only.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced on 24th day of July, 2025 at Chennai.