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Facts
The assessee filed an ITR for AY 2018-19, declaring an income of ₹4,34,460. The Assessing Officer (AO) noted the purchase of an immovable property for ₹33,00,000 and, after issuing notices, completed the assessment under Section 147 r.w.s. 144B, treating the property purchase as unexplained investment under Section 69, as the assessee failed to respond to statutory notices. The CIT(A) dismissed the appeal, rejecting additional evidence (affidavits) submitted by the assessee on the grounds that they were not furnished before the AO.
Held
The Income Tax Appellate Tribunal held that the CIT(A) was not justified in rejecting the additional evidence solely because it was not produced before the AO. The Tribunal set aside the CIT(A)'s order and remanded the matter back to the AO to examine the documentary evidence and decide the issue on merits, directing the assessee to furnish all evidence.
Key Issues
Whether the CIT(A) was justified in confirming the addition under Section 69 by rejecting additional evidence, and if the assessee should be granted an opportunity to substantiate the source of investment before the Assessing Officer.
Sections Cited
69, 148A, 148, 143(2), 142(1), 144, 147, 144B, Rule 48A
AI-generated summary — verify with the full judgment below
Before: Shri S.S. Viswanethra Ravi & Shri Jagadish
Year: 2018-19 Varatharaj Venugopal, Vs. The Income Tax Officer, 13, Thiruvalluvar Nagar 4th St., Ward 1(1), Nesavalar Colony, East P.N. Road, Tiruppur. Tirupur 641 602. [PAN:AYLPV5231F] (अपीलाथ�/Appellant) (��थ�/Respondent) अपीलाथ� की ओर से / Appellant by : Shri Raghavan, Advocate (virtual) for Shri R.C. Sachin, C.A. ��थ� की ओर से/Respondent by : Ms. R. Anita, Addl. CIT सुनवाई की तारीख/ Date of hearing : 02.07.2025 घोषणा की तारीख /Date of Pronouncement : 10.07.2025 आदेश /O R D E R
PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:
This appeal filed by the assessee is directed against the order dated 17.02.2025 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi for the assessment year 2018-19.
The assessee raised 2 grounds of appeal amongst which, the only issue emanates for our consideration as to whether the ld. CIT(A) is justified in confirming the addition made by the Assessing Officer under section 69 of the Income Tax Act, 1961 [“Act” in short] by rejecting the additional evidences filed by the assessee in the facts and circumstances of the case.
3. We note that the assessee filed return of income for the AY 2018-19 on 28.07.2018 admitting total income of ₹.4,34,460/-. As per information available with the Department, the Assessing Officer noted that the assessee has purchased an immovable property for ₹.33,00,000/- during the relevant assessment year 2018-19. After following due procedure as provided under section 148A of the Act, the Assessing Officer issued notice under section 148 of the Act on 25.04.2022 to the assessee and in response to the said notice, the assessee filed revised return of income on 17.05.2022 admitting total income of ₹.4,34,460/-. Thereafter, the Assessing Officer issued various statutory notices under sections 143(2) and 142(1) of the Act as well as show cause notice under section 144 of the Act dated 16.01.2024 and another show cause notice dated 13.02.2024. However, there was no response to various notices/show-cause notices issued by the Assessing Officer. Thus, the Assessing Officer completed the assessment under section 147 r.w.s. 144B of the Act by treating the investment made in purchase of immovable property at ₹.33,00,000/- as unexplained investment under section 69 of the Act and added to the total income of the assessee. On appeal, the ld. CIT(A) dismissed the appeal of the assessee by rejecting the affidavits filed for admission of additional evidences by the assessee on the ground that the same were not furnished before the Assessing Officer. Aggrieved by the order of the ld. CIT(A), the assessee is in appeal before the Tribunal.
The ld. AR Shri Raghavan, Advocate submits that non-response to the notices issued by the Assessing Officer is neither deliberate nor wanton, but, due to circumstances beyond his control. He vehemently argued that the first appellate authority has erred in dismissing the appeal of the assessee by rejecting the request for filing of additional evidences under Rule 48A of the IT Rules, despite having jurisdiction and without considering the veracity of the evidences filed to prove the source for the purchase of property. By placing on record copy of the affidavits as was filed before the ld. CIT(A), the ld. AR prayed that the assessee may be granted one more opportunity to substantiate assessee’s case before the Assessing Officer.
The ld. DR Ms. R. Anita, Addl. CIT did not oppose the submissions of the ld. AR.
Heard both the parties and perused the material available on record. The Assessing Officer completed the assessment under section 147 r.w.s. 144B of the Act by treating the purchase of immovable property at ₹.33,00,000/- as unexplained investment under section 69 of the Act in the absence of any documentary evidence brought on record. However, before the first appellate authority, the assessee furnished material evidence to substantiate his claim under Rule 48A of IT Rules in the form of additional evidences as reflected at para 4.1.2 of the impugned order. Having coterminous status, without examining the additional evidences filed by the assessee during the course of appellate proceedings by obtaining remand report from the Assessing Officer and deciding the issue on merits, we note that the first appellate authority was not justified in rejecting the additional evidences just because the assessee could not furnish the same before the Assessing Officer. Under the above facts and circumstances, we set aside the order of the ld. CIT(A) and remand the matter to the file of the Assessing Officer to examine the documentary evidences as may be filed by the assessee and decide the issue in accordance with law. The assessee is also directed to furnish the documentary evidences before the Assessing Officer without fail. Thus, the grounds raised by the assessee are allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 10th July, 2025 at Chennai.