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Facts
The assessee filed a return in response to a Section 148 notice, and the case was selected under Section 147 due to an unexplained investment of ₹81,80,000 in immovable property for AY 2013-14. The AO assessed the total income under Sections 147/144, and the CIT(A) dismissed the assessee's appeal, confirming the addition due to lack of evidence from the assessee.
Held
The Tribunal noted that the assessee was not afforded adequate opportunity to present evidence or be heard at the AO and CIT(A) levels. Considering the grounds raised by the assessee regarding indexation and DVO report, the Tribunal remitted the appeal back to the CIT(A) for a fresh decision after providing proper opportunity of hearing to the assessee and allowing the AO to represent the case as per Rule 46A.
Key Issues
Whether the addition of ₹81,80,000 for unexplained investment in immovable property under Section 69 was justified when the assessee claimed lack of proper opportunity to present evidence and disputed the issuance of Section 143(2) notice.
Sections Cited
69, 143(2), 144, 144B, 147, 148, 250, Rule 46A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, KOLKATA ‘B’ BENCH, KOLKATA
Before: SONJOY SARMA & SRI RAKESH MISHRA
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of the Ld. Commissioner of Income Tax (Appeals)- NFAC, Delhi [hereinafter referred to as ‘the Ld. CIT(A)’] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2013-14 dated I.T.A. No.: 1105/KOL/2025 Assessment Year: 2013-14 Krishnendu Bikash Jana. 24.03.2025, which has been passed against the assessment order u/s 147/144/144B of the Act, dated 23.03.2022. 2. The assessee is in appeal before the Tribunal raising the following grounds of appeal:
“1. For that on the facts and in circumstances of the case, the impugned Assessment Order u/s. 147/ 144 of the Income Tax Act, 1961 passed by the Ld. Assessing Authority for the AY. 2013-14 is illegal and bad in law as the Ld. A.O. made the addition without mentioning the section invoked for.
For that on the facts and in circumstances of the case, the impugned Appeal Order dated 24/03/2025 as passed by the Ld. Appellate Authority u/s. 250 of the Income Tax Act, 1961 without proper findings is wrong and arbitrary.
For that on the facts and in circumstances of the case the Assessment Order us. 147/144 of the IT Act, 1961 is void and bad in law as the said Order is passed against the Notice u/s 148 dated 30/03/2021 against which no notice us. 143.2 of the It Act, 1961 was issued after filing of the return us. 148 for the AY. 13-14 though the issuance of the notice us. 143.2 of the Act is mandatory.
For that on the facts and in circumstances of the case, the addition of Rs. 81,80,000/- has made on account unexplained investment in immovable property without asking for the Report of the DVO which is arbitrary & unjust for.
For that your petitioner craves leave to file any other additional ground or grounds before the disposal of this appeal petition.”
Brief facts of the case as submitted before the Ld. CIT(A) are that the assessee is an individual and engaged in the business of petrol pump and kerosene oil shop and had filed the return of income showing total income of ₹7,65,710/- in response to the notice u/s 148 of the Act. The reason for selection of the case u/s 147 of the Act is that the assessee had made an investment of ₹81,80,000/- towards purchase of I.T.A. No.: 1105/KOL/2025 Assessment Year: 2013-14 Krishnendu Bikash Jana. immovable property. The Assessing Officer (hereinafter referred to as Ld. 'AO') assessed the total income of the assessee at ₹89,45,710/- u/s 147/144 of the Act. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A) who held that the assessee had been merely making self-serving statement and raising flimsy grounds and did not file even an iota of evidence such as sale deed of the property, copy of bank account indicating the source for investment in respect of the impugned transaction made by the assessee and completely failed to offer any explanation before the Ld. AO as well as before the Ld. CIT(A). The Ld. CIT(A) did not find any infirmity in the order of the Ld. AO and accordingly dismissed the appeal of the assessee.
Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before this Tribunal.
Rival submissions were heard and the record and the submissions made have been examined. In ground no. 2 before the Ld. CIT(A), the assessee contested that the Ld. AO did not allow the indexation cost of acquisition of the immovable property for the calculation of the income of the assessee. However, as the addition was made u/s 69 of the Act on account of unexplained investment in the property and did not emanate from the assessment order of the Ld. AO, therefore, this ground of appeal was dismissed by the Ld. CIT(A).
As regards the unexplained investment u/s 69 of the Act, the Ld. CIT(A) held that the onus was on the assessee to prove the bona fide or genuineness of the money credited in the bank account and relying upon several judicial pronouncements and observing in para 7.5.9 I.T.A. No.: 1105/KOL/2025 Assessment Year: 2013-14 Krishnendu Bikash Jana. dismissed this ground of appeal of the assessee and also dismissed the appeal of the assessee. The relevant para is as under: “7.5.9 Now, coming to the facts of the case, the appellant is merely making self-serving statement and raising flimsy grounds. Also, the appellant is not filing even an iota of evidence such as sale deed of the property, copy of bank account indicating the sources for investment etc., in respect of the impugned transaction done by him. Having considered entire facts of the case, and the case laws cited above, it is apparent that the appellant has completely failed to offer any explanation either before the AO during assessment proceedings or before me during appellate proceedings despite affording sufficient number of opportunities and hence, I find no infirmity in the order of AO. Accordingly, the addition made of Rs. 81,80,000/- is confirmed. Accordingly, ground no. 3 of the appeal is dismissed.”
Before us, the assessee has submitted that adequate opportunity of being heard was not allowed to the assessee and requested that the matter may be remanded to the Ld. CIT(A) to which the Ld. DR vehemently objected. Further, the assessee had also disputed the service of notice under section 143(2) of the Act, which also has been addressed by the Ld. CIT(A) only on the basis of the content of the assessment order. Considering the fact that before the Ld. AO also the assessee did not furnish any reply and the appeal was also not properly filed nor represented properly, as the issue related to investment in property while the ground relating to indexation for calculating the capital gains was raised and argument which related to the DVO’s report was also made, therefore, in the interest of justice and fair play, we set aside the order of the Ld. CIT(A) and remit the appeal to him to be decided afresh, who shall allow an opportunity of being heard to the assessee and also grant an opportunity of representing the case and be heard to the Ld. AO as per rule 46A of the Income Tax Rules, 1962, if I.T.A. No.: 1105/KOL/2025 Assessment Year: 2013-14 Krishnendu Bikash Jana. required, and thereby pass an order in accordance with law. For statistical purposes, the appeal of the assessee is allowed.
In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 6th August, 2025. [Sonjoy Sarma] [Rakesh Mishra] Judicial Member Accountant Member Dated: 06.08.2025 Bidhan (Sr. P.S.) I.T.A. No.: 1105/KOL/2025 Assessment Year: 2013-14 Krishnendu Bikash Jana. Copy of the order forwarded to:
Krishnendu Bikash Jana, Kumarpur, Contai, Purba Medinipur, West Bengal, 721401. 2. ITO, Ward-27(1)/(Assessment Unit/NFAC).
CIT(A)-NFAC, Delhi.
CIT-
CIT(DR), Kolkata Benches, Kolkata.
Guard File. //// By order