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Facts
The assessee, a salaried individual, filed an ITR for AY 2017-18. His case was selected for scrutiny due to credit card payments, leading to an ex-parte assessment under Section 144 where an addition of Rs. 10,68,489/- was made under Section 69A read with Section 115BBE for unexplained credit card payments. The CIT(A) partly allowed the appeal, reducing the addition to Rs. 9,18,946/- while accepting part of the ICICI credit card transactions.
Held
The Tribunal noted the ex-parte assessment lacked a clear breakdown of the addition and that the assessee was not given adequate opportunity to explain the sources of credit card payments. Therefore, it decided to remand the matter back to the Assessing Officer for fresh adjudication, directing the AO to provide the assessee a reasonable opportunity to be heard and to furnish necessary documents.
Key Issues
Whether the addition for unexplained credit card payments under Section 69A was validly made in an ex-parte assessment without providing proper opportunity and specific computation to the assessee.
Sections Cited
143(2), 142(1), 144, 69A, 115BBE, 234A, 234B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
Before: DR. B.R.R. KUMAR, VICE-Ms SUCHITRA KAMBLE
[PAN :AQWPM0171 A] (Appellant) .. (Respondent) Appellant by : Shri P F Jain, AR Respondent by: Shri Kamal Deep Singh, Sr DR Date of Hearing 07.07.2025 Date of Pronouncement 18.07.2025 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:-
This appeal is filed by the Assessee against the appellate order dated 06.11.2024 passed by the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, Delhi, relating to the Assessment Year 2017-18.
The assessee has raised the following grounds of appeal:
1. Learned CIT(A) has erred in law and facts in upholding addition of Rs.9,18,946/- in respect of credit cards bills of ICIC Bank and Axis Bank without appreciating and properly considering the submission, documents and explanation of the assessee placed before him.
2. He has erred in law and facts in not appreciating the facts that assessee is having sufficient source of income by way of salary etc. and hence the credit card payment ought to have been accepted. 3. On the facts of the assessee no addition u/s.69A ought to have been made.
4. He has erred in law and facts in upholding computation of tax by applying provision of section 115BBE.
5. On the facts of the assessee the ROI of Rs.3,73,190/- ought to have been accepted.
6. On the facts no interest u/s.234A and 234B ought to have been levied.
7. The appellant craves, leave to add, to alter and or to modify any grounds of appeal.
3. In this case, the assessee filed return of income for the year under consideration on 17.02.2018 declaring income of Rs.3,73,190/- under the head ‘Income from Salary’. The case was selected for limited scrutiny through CASS to examine credit card payments. Accordingly, a notice under section 143(2) of the Act was issued on 21.08.2018, followed by a notice under section 142(1) dated 10.10.2019 and a show cause notice on 19.11.2019. As there was no compliance from the assessee, the Assessing Officer completed the assessment ex-parte under section 144 of the Act, vide order dated 30.11.2019, making an addition of Rs. 10,68,489/- under section 69A read with section 115BBE of the Act towards alleged unexplained cash payments towards credit card bills of ICICI Bank and Axis Bank.
4. Aggrieved by the order of the Assessing Officer, the assessee filed appeal before the Ld. CIT(A) who partly allowed the appeal by restricting the addition to Rs. 9,18,946/-. The Ld. CIT(A) accepted the assessee's contention to the extent of Rs. 1,49,543/-, being the transaction amount on the ICICI credit card, and sustained the balance addition in absence of evidences.
5. Aggrieved by the order of the Ld. CIT(A), the assessee is now in appeal before the Tribunal.
Before us, the Ld. AR submitted that the assessee is a salaried person and has been filing regular income tax returns. He argued that the Assessing Officer has not specified how the amount of Rs. 10,68,489/- has been computed, especially when the ICICI credit card statement reflects transactions of only Rs. 1,49,543/-. It was also submitted that no opportunity was granted to explain or reconcile the alleged payments, particularly with respect to the Axis Bank credit card account, for which the assessee claims to have no present access.
6.1 The Ld. AR submitted that due to non-cooperation from the tax consultant handling the case, the assessee could not appear during the assessment or appellate proceedings before the Ld. CIT(A). The Ld. AR, therefore, pleaded that the assessee be given one more opportunity to substantiate the claim with relevant documents, as the Assessing Officer has not provided the basis or working for the amount added under section 69A of the Act.
The Ld. DR relied on the orders of the lower authorities, however, fairly conceded that if adequate opportunity was not granted, the matter may be remanded for verification.
We have heard the rival contentions and perused the material on record. It is not in dispute that the assessment was made ex-parte under section 144 and the addition of Rs. 10,68,489/- was made without specifying the exact credit card-wise breakup or how the alleged cash payments were made. It is also a fact on record that the usage of credit card of Rs.1,49,543/- was reflected in his ICIC credit card statement and the same was even considered and accepted by the CIT(A). We find that the remaining addition of Rs. 9,18,946/- has not been clearly reconciled or supported by documentary evidence by the Assessing Officer in the assessment order. Given the above circumstances and in the interest of justice, we find it appropriate to restore the matter back to the file of the Assessing Officer for a fresh adjudication after affording the assessee a reasonable opportunity of being heard. The assessee is directed to fully cooperate with the Assessing Officer during the proceedings and provide the necessary details including credit card statements, source of funds, and any other supporting documents.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
The order is pronounced in the open Court on 18.07.2025.