NANDKUMAR BABAN SASTE,PUNE vs. ITO, WARD 8(3), PUNE, PUNE

This appeal at the instance of the assessee is directed against the order of National Faceless Appeal Centre (NFAC)/ Commissioner of Income Tax (Appeals), Delhi [“CIT(A)”], dated 21/02/2024 passed under section 250 of the Income Tax Act, 1961 (“Act”), which is arising out of assessment order u/s.147 r.w.s. 144 of the Act, dated 30/03/2022 by the ITO, Ward-8(3), Pune, for the Assessment Year (AY) 2017-18.

When the case called for, none appeared on behalf of the assessee. In the past also, the assessee failed to appear on the dates fixed for hearing on 17/04/2025, 07/05/2025 & 17/07/2025. We, therefore, proceed to adjudicate the appeal exparte qua assessee with the assistance of Ld. Departmental Representative (DR) and the documents available on record.

The assessee has raised the following grounds of appeal:-

Brief facts of the case are that assessee is an individual and did not file return of income for A.Y. 2017-18. Notice u/s. 148 of the Act was issued, in response to which assessee, filed return of income on 17/03/2022 declaring income of ₹ 138/-. Subsequently, notice u/s. 143(2) and 142(1) of the Act were issued. The reason for reopening is that the assessee made declaration under Income Declaration Scheme, 2016 (IDS) disclosing income of ₹ 88,22,870/- for A.Y. 2014-15, but failed to pay due taxes. During the course of assessment proceedings, assessee submitted that declaration was made on account of transaction carried out during A.Y. 2014-15 when the assessee entered into joint development agreement executed on 29/01/2014 for the ancestral agricultural land 4 ITA.No.99/PUN./2025 (Nandkumar Baban Saste) located at gat No. 269, Mauhje Handewadi, Hadapsar, Pune for a consideration of ₹ 1,47,91,500/-. In the same development agreement, assessee along with 22 others have received consideration in kind valued at ₹ 88,22,870/- on completion of the proposed project. Ld.AO concluded the proceedings mainly taking note of the declaration made by the assessee under IDS, 2016 during the A.Y. 2014-15 and treated the declaration amount in such application under IDS, 2016 at ₹ 88,22,870/- as unexplained money and made the addition thereof and assessed the income at ₹ 88,23,010/-.

Aggrieved, assessee filed appeal before the Ld.CIT(A) and again reiterated the submissions, however, Ld.CIT(A) has passed a cryptic order not dealing with the facts properly and has upheld the addition made by the Ld.AO. Aggrieved with the order of Ld.CIT(A), assessee is now in appeal before this Tribunal.

Ld. DR vehemently argued supporting the order of Ld.CIT(A).

We have heard Ld. DR and perused the records placed before us. The assessee is aggrieved with the addition of ₹ 88,22,870/-. In the written submissions filed, assessee claimed that he is a farmer and has no other income other than agricultural income. He submitted that assessee made declaration under IDS, 2016 in ignorance of law and misrepresentation made by his advisor. It is stated that 5 ITA.No.99/PUN./2025 (Nandkumar Baban Saste) assessee declaration made under IDS, 2016 was purely regarding the joint development agreement entered into in A.Y. 2014-15, on which any tax liability does not arise. We note that Ld.AO has made the impugned addition based on the IDS, 2016 declaration by the assessee. Further Ld.CIT(A), in the impugned order, has only referred the declaration made under IDS, 2016 by the assessee and thereafter concluded the findings observing as under:- “6. Upon perusal of the Declaration that the appellant duly submitted the Declaration under IDS-2016 before PCIT, Pune on 28.09.2016 by declaring the undisclosed income of Rs.88,22,870/- and also calculated tax, surcharge and penalty payable. After this Declaration before the AO and during the course of appeal proceedings, the appellant filed a submission stating that he entered into a JDA with M/s Aradhaya Properties and M/s. Ramsons Associates for development of property situated at Borhadewadi Gat No.269, Haveli Taluk, Pune admeasuring 5050 sq.ft. According to the agreement, the Developers have to develop the land into a residential and commercial construction. The development activities were not started in the property. 7 However, the undisclosed income disclosed in IDS-2016 did not have any such particulars. It is for this reason, the AO treated Rs.88,22,870/- declared in the Form as undisclosed income by virtue of Sec.197(b) of the Scheme.

On perusal of the above findings of the Ld.CIT(A), it is evident that Ld.CIT(A) has not dealt with merits in a proper manner and the impugned order cannot be termed as a speaking order which is required to be passed by the Ld.CIT(A) in terms of provisions of section 250(6) of the Act. Ld.CIT(A) has also not dealt with merits of the case regarding 6 ITA.No.99/PUN./2025 (Nandkumar Baban Saste) transaction reported in IDS, 2016 and summarily rejected the assessee’s application.

Under these given facts and circumstances, we are of the considered view that the issues raised in the instant appeal deserve to be restored to the file of Ld.CIT(A) for necessary adjudication by way of speaking order as contemplated u/s. 250(6) of the Act. Needless to mention that Ld.CIT(A) shall grant fair opportunity of hearing to the assessee. Assessee is also directed to remain vigilant and not to take adjournments unless otherwise required for reasonable cause. Effective grounds of appeal