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Facts
The assessee, a retired Vice Chancellor, filed an ITR for AY 2016-17. Based on information regarding cash deposits and property purchase, the AO made additions under Section 56(2)(vii)(b) for the difference between the market value and purchase price of a property, under Section 69C for unexplained expenditure, and for suppressed interest income.
Held
The Ld. CIT(A) had dismissed the assessee's appeal in limine for non-prosecution. The Tribunal, finding reasonable cause for non-appearance due to the Covid-19 pandemic and with no objection from the DR, set aside the CIT(A)'s order and remanded the matter for de novo adjudication on merits, ensuring a reasonable opportunity of hearing.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal in limine; validity of additions made by AO concerning property valuation, unexplained expenditure, and suppressed interest income.
Sections Cited
250, 143(3), 56(2)(vii)(b), 69C
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “A”, PUNE
Before: DR.MANISH BORAD & MS. ASTHA CHANDRA
PER DR. MANISH BORAD, ACCOUNTANT MEMBER :
This appeal filed by the assessee pertaining to the Assessment Year 2016-17 is directed against the order dated 09.06.2023 passed by National Faceless Appeal Centre, Delhi u/s.250 of the Income-tax Act, 1961 (in short ‘the Act’) which in turn is arising out of the Assessment order dated 20.11.2018 passed u/s.143(3) of the Act.
Facts in brief are that the assessee is an individual retired as Vice Chancellor of Solapur University and deriving his Pension. Return of return for the A.Y. 2016-17 was filed on 23.06.2016 declaring total income of Rs.7,41,380/-. Based on the information that the assessee deposited huge cash in savings bank account and has also purchased property, the case selected for scrutiny under CASS followed by issuance of statutory notices. Based on the information filed, the Assessing officer noted that the assessee along with his wife has purchased property for consideration of Rs.10.00 lakh and the market value of the said property as per Stamp Duty Act is at Rs.3,22,68,600/-. Since the market value of the property is more than the purchase consideration, ld. AO asked the assessee to explain as to why the difference amount should not be taxed as income invoking the provisions of section 56(2)(vii)(b) of the Act. In response, the assessee filed 7/12 extracts establishing the ownership of many persons and the land is under litigation. Not convinced with the explanation, the ld. AO made addition of difference amount of Rs.3,12,68,600/- u/s. 56(2)(vii)(b) of the Act. As also made addition of Rs.19,66,200/- as unexplained expenditure u/s.69C of the Act and Rs.48,149/- on account of suppressed interest income.
Aggrieved assessee challenged the assessment before the ld.CIT(A). The ld.CIT(A) vide the impugned order dismissed the appeal in limine for non-prosecution. Now the assessee is in appeal before the Tribunal
At the outset, ld. Counsel for the assessee submitted that the assessee’s case could not be represented before the ld.CIT(A) for the reasons beyond control of the assessee. Most the hearing notices pertain to the covid-19 pandemic outbreak. Given an opportunity, the assessee is now in a position to substantiate its claim with documentary evidences. Therefore, it is prayed for remanding the matter to the file of ld.CIT(A) for afresh adjudication. Ld. Departmental Representative has no objection for the same. Considering the fact that the ld.CIT(A) has dismissed the appeal in limine without going into merits of the issues and the submissions of ld. Counsel for the assessee, we deem it appropriate to remit the issues on merit to the file of ld.CIT(A) for denovo adjudication. The ld.CIT(A) may call for the remand report from the Jurisdictional Assessing Officer and after obtaining the counter comments from the assessee he shall decide the appeal in accordance with law after giving reasonable opportunity of hearing to the assessee. Assessee is also directed to remain vigilant and not to take adjournment unless otherwise required for reasonable cause, failing which the ld.CIT(A) shall be free to proceed in accordance with law. Findings of the ld.CIT(A) is set aside and effective grounds of appeal raised by the assessee are allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced on this 21st day of January, 2025.