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Facts
The assessee, a partnership firm, purchased 11 immovable properties in FY 2014-15 but did not file a return of income for AY 2015-16. The Assessing Officer reopened the assessment and made an addition of Rs. 30,91,80,736/- on account of unexplained investment.
Held
The Tribunal condoned the delay in filing the appeal. Considering the assessee's lack of response during assessment and appeal proceedings, a cost of Rs. 5,000/- was imposed. The issue was restored to the Assessing Officer for one final opportunity to the assessee to substantiate its case.
Key Issues
Whether the assessee should be granted a final opportunity to substantiate its case before the Assessing Officer, despite not filing returns or submissions earlier.
Sections Cited
147, 148, 142(1), 144, 69
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Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE
Before: SHRI R. K. PANDA & MS. ASTHA CHANDRA
This appeal filed by the assessee is directed against the order dated 25.07.2024 of the Ld. CIT(A) / NFAC, Delhi relating to assessment year 2015-16.
There is a delay of 23 days in filing of this appeal before the Tribunal, for which the assessee has filed a condonation application along with an affidavit explaining the reasons for such delay. After considering the contents of the condonation application filed along with the affidavit and after hearing the Ld. DR, the delay in filing of the appeal is condoned and the appeal is admitted for adjudication.
Although a number of grounds have been raised by the assessee, however, these all relate to the ex-parte order of the Ld. CIT(A) / NFAC in confirming the addition of Rs.30,91,80,736/- made by the Assessing Officer as unexplained investment in the property u/s 69 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).
Facts of the case, in brief, are that the assessee is a partnership firm and has purchased 11 immovable properties for a consideration of Rs.28,62,78,460/- during the financial year 2014-15, but no return of income was filed for the assessment year 2015-16. The Assessing Officer therefore, after recording reasons as per the provisions of section 147 of the Act and after taking the necessary approval from the Addl./Joint CIT reopened the assessment and issued notice u/s 148 of the Act on 19.03.2021. However, the assessee did not file any return in response to notice u/s 148 of the Act. A notice u/s 142(1) of the Act along with the questionnaire was also issued and served on the assessee. However, there was also no compliance from the side of the assessee. The Assessing Officer therefore, proceeded to complete the assessment u/s 144 of the Act. In absence of any compliance from the side of the assessee to the statutory notices, the Assessing Officer made addition of Rs.30,91,80,736/- u/s 69 of the Act by considering the cost of purchase at Rs.28,62,78,460/- and stamp duty charges of Rs.2,29,02,276/-.
Since the assessee did not appear before the Ld. CIT(A) / NFAC despite number of opportunities granted, the Ld. CIT(A) / NFAC in the ex-parte order passed by him dismissed the appeal filed by the assessee. While doing so, he relied on the following decisions: i) CIT vs. BN Bhattachargee (1979) 118 ITR 461 (SC) ii) CIT vs. Multiplan India Pvt. Ltd. 38 ITD 320 (Delhi) iii) Estate of Late TukojiraoHolkar vs. CWT 223 ITR 480 (MP) iv) New Diwan Oil Mills vs. CIT (2008) 296 ITR 495 (P&H) v) M/s. Kanchan Singh Bhuli Devi Shikshavs vs. CIT vide & 707/LKW/2010 vi) M/s. Shamsher Jang Bahadurvs vs. ACIT vide ITA No.488/Asr/2010
Aggrieved with such order of the Ld. CIT(A) / NFAC, the assessee is in appeal before the Tribunal.
The Ld. Counsel for the assessee at the time of hearing submitted that both the orders passed by the lower authorities are ex-parte orders. He submitted that in the interest of justice the assessee should be given an opportunity to substantiate its case by filing the requisite details either before the Assessing Officer or Ld. CIT(A) / NFAC. He further submitted that the entire investment was out of the funds obtained from the sister concern through proper banking channel. He accordingly submitted that given an opportunity, the assessee is in a position to explain the source of the entire investment by submitting the requisite documentary evidence.
The Ld. DR on the other hand heavily relied on the orders of the Assessing Officer and the Ld. CIT(A) / NFAC. He submitted that despite number of opportunities granted by both the authorities, the assessee neither bothered to file return of income nor file any submission. Therefore, the addition sustained by the Ld. CIT(A) / NFAC should be upheld.
We have heard the rival arguments made by both the sides and perused the orders of the Assessing Officer and Ld. CIT(A) / NFAC. It is an admitted fact that despite issue of notice u/s 148 of the Act, the assessee did not file any return of income in response to the same. Further, despite number of opportunities granted by the Assessing Officer during the course of assessment proceedings, the assessee did not bother to file any submission. It is also an admitted fact that despite four opportunities granted by the Ld. CIT(A) / NFAC, the assessee firm neither bothered to file any submission nor filed any adjournment application. It is the submission of the Ld. Counsel for the assessee that in the interest of justice, the assessee should be given an opportunity to substantiate its case. Since the assessee during the course of assessment proceedings as well as appeal proceedings has not bothered to respond to any of the statutory notices issued, therefore, considering the attitude of the assessee, we impose a cost of Rs.5,000/-. However, considering the request of the Ld. Counsel for the assessee that given an opportunity, the assessee is in a position to substantiate its case by filing the requisite details, we in the interest of justice deem it proper to restore the issue to the file of the Assessing Officer with a direction to grant one final opportunity to the assessee to substantiate its case by filing the requisite details and decide the issue as per fact and law. The assessee is also hereby directed to make its submissions, if any, before the Assessing Officer on the appointed date without seeking any adjournment under any pretext, failing which the Assessing Officer is at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 4th February, 2025.