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Facts
The assessee, an individual, did not file a return of income for Assessment Year 2015-16. The Assessing Officer (AO) reopened the case under Section 147 based on AIR information, making additions of Rs. 1,06,80,000/- as unexplained investment and Rs. 29,65,500/- as unexplained money. The Commissioner of Income Tax (Appeals) dismissed the assessee's appeal as unadmitted, citing non-filing of return and non-payment of advance tax.
Held
The Tribunal held that the CIT(A) erred in dismissing the appeal as unadmitted. Recognizing that the assessee has presented additional evidence, the Tribunal restored the matter to the AO for a fresh denovo reassessment on merits after proper inquiry and scrutiny.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal as unadmitted, and whether the matter should be remanded for fresh assessment considering additional evidence.
Sections Cited
147, 144, 148, 142(1), 249(4)(b), 69
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘H’: NEW DELHI
Before: SHRI RAMIT KOCHAR & SHRI SUDHIR KUMAR
ORDER
PER RAMIT KOCHAR, AM:
for Assessment Year: 2015-16 has arisen form the learned CIT(A)’s appellate order u/s 250 dated 04.01.2024 in DIN & Order No: ITBA/NFAC/S/250/2023-24/1059370588(1) , which in turn has arisen from the re- assessment order dated 28.03.2023 passed by the AO u/s 147 r.w.s 144 of the Act (DIN & Order No. ITBA/AST/S/147/2022-23/1051527223(1)).
The grounds of appeal raised by the assessee in Memo of appeal filed with the Income-Tax Appellate Tribunal, Delhi Benches, New Delhi, reads as under:
“1.That NFAC has erred in law and on facts by dismissing the appeal of the appellant u/s 249(4)(b) who was not having income beyond thrash hold limit for the year under appeal and also was not liable neither to file ITR nor the payment of advance tax. Further, her written explanation was also arbitrarily rejected. 2.That the Assessing Officer, ITO, Ward 5(2)(5), Gautam Budh Nagar, has passed assessment order under Section 147/144 of the Income Tax Act, 1961 on the basis of AIR information from insight portal without service of notice under Section 148 of the Income Tax Act, 1961 to the appellant which is sin quo non for re- assessment proceedings. Therefore, the assessment order is without jurisdiction, void ab initio and deserves to be quashed. 3.That NFAC has erred in law and on facts by confirming the addition of Rs. 13645500/- without considering the merits of the case.
That the appellant craves leave to add, delete or alter any ground of appeal.”
Brief facts of the case are that the assessee is an individual , and has not filed return of income for the impugned Assessment Year 2015-16. The information was received by the AO on Insight portal which was identified and flagged as potential case by the Directorate of Income Tax (System), CBDT in accordance with the risk management strategy formulated by the Board. As per information, the assessee has made the following financial transactions during F.Y. 2014-15 corresponding to A.Y. 2015-16: Sr. Information Description Amount No. 1 Purchased an immovable property Rs.1,06,80,000/- 2 Time deposit of Rs.1,00,000/- or Rs.12,00,000/- more 3 Cash Transaction of Rs.1,00,000/- Rs.8,65,500/- or more with Kotak Mahindra bank
4 Cash deposits with Yes bank, Rs.4,00,000/- Sector-27, Noida 5 Cash deposits with Yes bank, Rs.5,00,000/- Sector-63, Noida Total Rs.1,36,45,500/- 3.2 The case was reopened by the AO for framing reassessment by invoking provisions of Section 147 of the Act after recording reasons and taking necessary administrative approval from the learned Pr. CIT, UP (West) &Uttarkhand. Notice u/s 148 of the I.T. Act was issued by the AO on 28.03.2022 to the assessee requiring the assessee to e-file return of income. However, no compliance was made by the assessee. Notices were issued by the AO to the assessee as reproduced at page 3 of the assessment order u/s 148 and 142(1) of the Act, but there was no compliance made by the assessee . The AO issued show cause notice dated 16.02.2023 u/s 144 to the assessee, but there was again no compliance made by the assessee. This culminated into an ex-parte re- assessment order passed by the AO being a best judgment order u/s 144 rws 147 of the Act, wherein two additions were made by the AO in the hands of the assessee, firstly on account of investment of Rs.1,06,80,000/- made by the assessee by treating the same as an unexplained investment u/s 69 of the Act, and secondly addition of Rs.29,65,500/- was made by the AO in the hands of the assessee on account of unexplained money u/s 69 being unexplained time deposits of Rs. 12,00,000/- , cash deposits of Rs. 9,00,000 in the bank account number 001490100016732 with Yes Bank and cash deposit of Rs.8,65,500/- in Account No.4811419983/- with Kotak Mahindra Bank during the concerned financial year.
4. The assessee being aggrieved by the re-assessment order dated 28.03.2023 passed by the AO u/s 144 r.w.s. 147 of the Act filed first appeal before the Ld. CIT(A) who dismissed the appeal of the assessee by treating the same as un-admitted by invoking provisions of section 249(4)(b) of the Act, as in view of ld. CIT(A) the assessee having not filed the return of income has also not deposited amount of advance tax payable by Vandana Singh v. ITO him, despite the submissions made by the assessee before Ld. CIT(A) that the assessee is teacher of younger children home tutor , her income is below taxable limit for filing income tax return and hence the assessee is not liable to pay advance tax .
Still aggrieved, the assessee filed second appeal with ITAT. The Ld. Counsel for the assessee, at the outset submitted that the assessee is aggrieved by the reassessment order dated 28.03.2023 passed by the AO u/s 144 r.w.s. 147 , wherein additions to the income in the hands of the assessee in aggregate to the tune of Rs. 1,36,45,500/- were made by the AO vide ex-parte reassessment order without providing proper opportunities of being heard to the assessee. It was submitted that the assessee did not received any notice of hearing as there was change in address of the assessee from C-6.86, Janta Flat, Sector-31, NOIDA, U.P.-201301 to Flat No. 302, Abhinav Apartments, Vasundhra Enclave, Delhi- 110096, while notices were sent by the AO to NOIDA address, where the assessee was not living at the relevant time. It was submitted that no notices were received by the assessee. It was further submitted that the Ld. CIT(A) erred in dismissing the first appeal of the assessee u/s 250 of the Act by treating the same as un-admitted under provisions of section 249(4)(b) of the Act because in view of ld. CIT(A) the advance tax was not paid by the assessee. It was submitted that the assessee did not file return of income for the year under consideration.It was submitted by the Ld. Counsel for the assessee that the assessee does not have any taxable income during the year under consideration and no tax was payable by the assessee. It was submitted that the assessee is teacher and had income below taxable limits. It was submitted that there was no advance tax liability on the assessee. It was submitted that the additions made by the AO were disputed and challenged by the assessee before ld. CIT(A) , and hence there is no question of paying any advance tax on disputed additions made by the AO. It was submitted that ld. CIT(A) erred in dismissing the appeal of the assessee as being un-admitted. The ld. Counsel for the assessee relied upon the appellate order dated 28.08.2025 passed by ITAT in Laxmanji Khodaji Solanki(Thakor) v. ITO in ITA no. 1626/Ahd/2024. It was submitted by the Ld. Counsel for the assessee that the assessee has purchased one residential
Vandana Singh v. ITO property during the year under consideration. The said property were owned jointly by brother-in-law’s of the assessee, Mr. Vivek Singh and Mr. Vishal Singh. The said property was purchased by father-in-law of the assessee ( Flat No.302, Abhinav Apartment, Plot No.12, Vasundhra Enclave, Delhi-110096) in the name of his aforesaid sons. Later on the said property was mortgaged to bank for a business loan taken by Mr. Vishal Singh. He could not re-pay the loan to the bank and defaulted, and the matter reached ld. DRT at the behest of bank for effecting recovery of outstanding loan and interest. The auction proceedings were initiated by ld. DRT. Later the assessee in order to protect the family property from auction, arranged funds from the relatives for making payments to the bank , and the said residential flat was transferred in the name of the assessee. It was submitted that it establishes bonafide nature of the transaction , and the assessee purchased flat to liquidate the loan of M/s Yashoda Travels while the matter was with ld. DRT. The assessee has now filed additional evidences before the Bench in the form of Paper Book(Page 3-77) to support he contentions. A copy was given to the Department. It was submitted that since the reassessment order is an ex-parte reassessment order, it will be in fitness of the things to restore the matter back to the file of the AO for denovo re-assessment, as the additional evidences now filed for the first time before the Bench can be scrutinized /verified by the AO. 5.2 The Ld. CIT-DR submitted that the assessee was given adequate opportunities of being heard by the AO but the assessee did not avail the opportunities provided by the AO. The ld. CIT-DR fairly submitted that the matter may be restored back to the file of AO to consider the additional evidences and to pass an denovo re-assessment order on merits after verification/ scrutiny of the additional evidences.
We have considered rival contentions and persued the material on record . We observed that the assessee is an individual and has not filed the return of income for the Assessment Year 2015-16. The case of the assessee was reopened for framing reassessment by invoking provisions of section 147. The AO issued notices to the assessee from time to time during reassessment proceedings u/s 148 as well 142(1) and Vandana Singh v. ITO SCN u/s 144 of the Act, but the same were not complied with by the assessee before the AO during reassessment proceedings, which led to an ex-parte reassessment order wherein additions to the time of Rs. 1,36,45,500/- were made by the AO.We have detailed additions in preceding para’s of this order and the same are not repeated. The assessee filed first appeal with ld. CIT(A). The assessee has claimed that notices issued by the AO were not received by the assessee as there was change in address. The Ld. CIT(A) dismissed the first appeal of the assessee as being un-admitted keeping in Section 249(4)(b) on the ground that assessee has not deposited advance tax. The assessee had not filed return of income with the department. The assessee has claimed that the assessee is teacher , and was not having taxable income and hence there is no advance tax liability. The assessee has disputed the additions made by the AO before ld. CIT(A). The same are also been challenged before us , keeping in view that ld. CIT(A) dismissed the appeal of the assessee as unadmitted by invoking Section 249(4)(b). Thus, keeping in view aforesaid facts and keeping in view ratio of appellate order of ITAT in Laxmanji Khodaji Solanki(supra), we hold that ld. CIT(A) erred in dismissing appeal of the assessee as being unadmitted. We have observed that the assessee has challenged before ITAT, the additions made by the AO in an ex-parte reassessment order. We have observed that the assessee has now come forward with additional evidences to support her contentions (PB/Page 3-77). We have observed that these additional evidences go the root of the matter but need verification , scrutiny and enquiry by the authorities below. Thus keeping in view principle of fairness and in view of interest of justice, we set aside the orders of the AO as well ld. CIT(A), and restore the matter back to the file of Ld. AO for fresh denovo re-assessment on merits in accordance with law after making necessary enquiry , scrutiny and verification as may deem fit by the AO. The assessee is directed to co- operate in the denovo re-assessment proceedings , otherwise the AO will be at liberty to pass such reassessment order as may deem fit on merits in accordance with law. All the contentions and issues are kept open. We clarify that we have not commented on the Vandana Singh v. ITO merits of the issue in this appeal. The appeal of the assessee is allowed for statistical purposes. We order accordingly.