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Facts
During a search and seizure operation under Section 132 for AY 2020-21, jewellery worth Rs.1,46,56,010/- was seized from the assessee. The Assessing Officer subsequently made an addition for unexplained jewellery under Section 69A, taxed under Section 115BBE, assessing the total income at Rs.1,80,02,140/-. The CIT(A) sustained this addition due to the assessee's failure to furnish evidence, which the assessee attributed to counsel's negligence and personal distress.
Held
The Tribunal acknowledged the assessee's claim of counsel's negligence and personal distress as a sufficient cause for not appearing before the CIT(A) and failing to submit supporting evidence. Thus, the Tribunal set aside the CIT(A)'s order and remanded the matter back to the CIT(A) to provide the assessee another opportunity of hearing to explain their case.
Key Issues
Whether the CIT(A) was justified in confirming the addition for unexplained jewellery without providing the assessee a proper opportunity to present evidence, given the circumstances of counsel's negligence and the assessee's personal distress, and if the matter should be remanded for re-adjudication.
Sections Cited
139(1), 132, 153A, 143(2), 142(1), 143(3), 69A, 115BBE
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Income Tax Appellate Tribunal, HYDERABAD “A” BENCH: HYDERABAD
Before: SHRI MANJUNATHA G & SHRI RAVISH SOOD
ORDER PER MANJUNATHA G. : This appeal has been filed by the assessee against the order dated 24.01.2025 of the learned CIT(A)-12, Hyderabad, relating to the assessment year 2020-2021.
Brief facts of the case are that, the assessee is an individual and derives income from salary and income from other sources. The assessee had filed his original return of income u/sec.139(1) of the Income Tax Act, 1961 [in short "the Act"] on 05.01.2021, declaring total income of 2 ITA.No.470/Hyd./2025 Rs.33,46,130/-. A search and seizure operation was conducted in the case of assessee u/sec.132 of the Act as part of the searches conducted on M/s. C5 Infra Pvt. Ltd., & Others on 07.01.2021 by the DDIT (Inv.), Unit-II(4), Hyderabad. During the course of search operation, jewellery worth Rs.1,46,56,010/- was seized. Notice u/sec.153A dated 20.10.2021 was issued to the assessee. In response to the said notice, the assessee filed his return of income on 19.11.2021 declaring total income of Rs.33,46,130/- which comprises of income from salary and income from other sources. During the course of assessment proceedings, the Assessing Officer issued notices u/sec.143(2) and 142(1) of the Act and duly served upon the assessee. In response to the said notices, the assessee submitted the information as called for. However, the Assessing Officer being not satisfied with the explanation submitted by the assessee, made addition on account of unexplained jewellery worth Rs.1,46,56,010/- out of Rs.2,57,91,310/- representing undisclosed income u/sec.69A and taxed in accordance with the provisions of sec.115BBE. Thus, the Assessing
3 ITA.No.470/Hyd./2025 Officer assessed the income of assessee at Rs.1,80,02,140/- as against the returned income of the assessee at Rs.33,46,130/- vide order dated 28.03.2022 passed u/sec.143(3) r.w.s.153A of the Income Tax Act, 1961 [in short "the Act"].
On being aggrieved, the assessee preferred an appeal before the learned CIT(A). Before the learned CIT(A), it was noted that, sufficient time and opportunities were provided to the assessee, but, the assessee has failed to furnish any explanation or written submissions along with evidences to substantiate his case. In absence of any evidences/explanation, the learned CIT(A) sustained the addition made by the Assessing Officer.
Aggrieved by the order of the learned CIT(A), the assessee is now, in appeal before the Tribunal.
CA, C. Maheshwar Reddy, Learned Counsel for the Assessee submitted that, due to negligent on the part of the Counsel who appeared before the learned CIT(A), there was no response from the assessee and further, the 4 ITA.No.470/Hyd./2025 assessee is under great distress due to financial issues and went into depression. Therefore, could not attend the matter before the learned CIT(A). He, therefore, pleaded that one more opportunity may be given to the assessee to explain it’s case in the interest of substantial justice by remitting the matter back to the file of learned CIT(A).
Shri Gurpreet Singh, Sr. AR for the Revenue, on the other hand, supporting the order of the learned CIT(A) submitted that, despite several opportunities provided to the assessee, the assessee did not chose to file any submissions along with relevant documentary evidences to substantiate it’s case. In absence of any submissions with relevant documentary evidences, the learned CIT(A) has rightly sustained the addition made by the Assessing Officer. He, therefore, submitted that, the order of the learned CIT(A) should be upheld. However, did not strongly object for remitting the issue back to the file of learned CIT(A) to give one more opportunity of hearing to the assessee.
We have heard both the parties, perused the material on record and the orders of the authorities below.
5 ITA.No.470/Hyd./2025 Admittedly, we find force in the submissions of the assessee for the reason that, since the Counsel who represent the case before the learned CIT(A) is negligent on his part and, therefore, the assessee was prevented by sufficient cause to substantiate his case with supporting documentary evidence. Since, the assessee could not file any evidence to justify his case and further, there is a reasonable cause for not appearing, in our considered view, the matter needs to be set-aside to the learned CIT(A). Thus, we set-aside the order of the learned CIT(A) and restore the issue back to the file of learned CIT(A) with a direction to re-consider the issue, after providing one more opportunity of hearing to the assessee to explain it’s case to meet the ends of justice.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 25.07.2025.