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Facts
The assessee filed an appeal against an order that upheld the Assessing Officer's decision. The appeal was filed with a significant delay, which was condoned. The Assessing Officer had treated a payment of ₹.50,50,000/- as unexplained, adding it to the assessee's income.
Held
The Tribunal condoned the delay in filing the appeal. While the Assessing Officer's objection was the unexplained source of ₹.50,50,000/-, the assessment order lacked details of the transaction. Therefore, the matter was remitted back to the Assessing Officer for fresh consideration.
Key Issues
Whether the CIT(A) was justified in upholding the ex-parte order of the Assessing Officer, and whether the matter should be remanded for fresh adjudication due to lack of details regarding a specific transaction.
Sections Cited
147, 148, 143(2), 142(1), 144B, 271(C)
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Before: Shri S.S. Viswanethra Ravi & Shri S.R. Raghunatha
O R D E R
PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:
This appeal filed by the assessee is directed against the order dated 13.02.2024 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi for the assessment year 2016-17.
We find that this appeal is filed with a delay of 279 days. The assessee filed an affidavit for condonation of delay stating the reasons. Upon hearing both the parties and on examination of the said affidavit, we find the reasons stated by the assessee are bonafide, which really prevented in filing the appeal in time. Thus, the delay is condoned and admitted the appeal for adjudication.
The assessee raised 12 grounds of appeal, amongst which, the only issue emanates for our consideration as to whether the ld. CIT(A) is justified in upholding the order of the Assessing Officer by exparte of the assessee.
At the outset, we note that the assessee is an individual and filed his return of income on 07.11.2016 admitting total income at ₹.1,58,680/-. As per information available with the Department, the Assessing Officer noted that the assessee has purchased property at Ambattur and the amount paid of ₹.50,50,000/- needs to be verified. Accordingly, the Assessing Officer issued notice under section 148 of the income Tax Act, 1961 [“Act” in short] on 30.03.2021. Thereafter, a notice under section 143(2) r.w.s. 147 of the Act was issued to the assessee on 03.09.2021. Thereafter a notice under section 142(1) of the Act was issued on 18.11.2021 along with the questionnaire.
Before the Assessing Officer, the assessee has submitted that he himself with three other persons namely Dr. Arun Prakash, Dr. Nirupa Arun and Shri Shrinivasan have purchased the property jointly for the 3 purpose of partnership firm M/s. Murugan Hospital and the same property declared in the firm’s balance sheet. The source of purchase of the property is out of loan from Indian Bank for ₹.8.5 crores and also loan from other family associates in which the assessee is also an existing partner into aforesaid business. Before the Assessing Officer, the assessee also filed copy of loan sanction letter. Further, before the Assessing Officer, the assessee also submitted copy of purchase agreement, in which, the purchase price of the property is ₹.8,00,00,000/- and the details of payment also given. However, the Assessing Officer noted that nowhere in the reply, the assessee has explained the payment of ₹.50,50,000/- made by the assessee and no details for the source of this amount has been clarified. Thus, as per the information available with the Department, the Assessing Officer treated the same as unexplained amount and added to the income of the assessee. On appeal, the ld. CIT(A) upheld the order of the ld. CIT(A) since there was no compliance to the hearing notices issued by the ld. CIT(A).
The ld. AR Shri A. Mohamed Shakeer, Advocate submits that the best judgement assessment passed by the Assessing Officer under section 147 r.w.s. 144B of the Act is incorrect when the assessee has fully cooperated by furnishing complete details against the notices issued by the Assessing Officer and not disputed the details filed by the assessee. The Assessing Officer should have furnished a copy of the so called details available with the department and sought for explanation from the assessee, which was not done so. The ld. AR vehemently argued that due to link failure, the assessee could not represent before the Assessing Officer and the ld. CIT(A). He also submits that the assessee became aware of the order of the ld. CIT(A) only on receipt of show cause notice under section 271(C) of the Act physically served to the assessee. Thus, the ld. AR prayed that the matter may be remanded to the file of the Assessing Officer for fresh adjudication.
The ld. DR Ms. Deeptha, Addl. CIT supported the orders of authorities below.
We have heard both the parties and perused the materials available on record. On perusal of the assessment order, we note that the assessee along with other three persons namely, Dr. Arun Prakash, Dr. Nirupa Arun and Shri Shrinivasan purchased property jointly for the purpose of partnership firm M/s. Murugan Hospital by availing loan from Indian Bank for ₹.8.5 crores and also loan from other family associates in which the assessee is also an existing partner into aforesaid business. We note that the assessee furnished bank loan sanction order as well as 5 purchase agreement before the Assessing Officer and not disputed the details furnished by the assessee. The only objection of the Assessing Officer is that the assessee could not explain the source for the payment of ₹.50,50,000/- as per the details available with the Department. However, from the assessment order, no details of mode of transaction of ₹.50,50,000/- has been recorded by the Assessing Officer for which explanation from the assessee is required. Accordingly, we remit the matter to the file of the Assessing Officer for his fresh consideration with reference to the transaction of ₹.50,50,000/-. The assessee shall explain the same and the Assessing Officer shall decide the issue in accordance with law. Thus, the ground raised by the assessee is allowed for statistical purposes.