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Facts
The assessee purchased an immovable property for Rs. 84,00,000/- without filing a return of income. The Assessing Officer (AO) completed the assessment ex parte, treating the investment as unexplained under Section 69 and making additions. The CIT(A) set aside the AO's order and remanded the case for de novo assessment.
Held
The Tribunal held that the CIT(A) rightly set aside the assessment order and directed the AO to make a fresh assessment after providing a proper opportunity of hearing. The Tribunal found no reason to interfere with the CIT(A)'s order.
Key Issues
Whether the CIT(A) erred in remanding the case for fresh assessment without addressing the merits of the addition and if the principles of natural justice were violated due to lack of opportunity.
Sections Cited
250, 148, 147, 144, 69, 142(1), 144B, 271F, 271(1)(b), 271(1)(c), 234A, 234B, 234C, 251(1)(a)
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सुनवाई की तारीख/Date of Hearing : 06/10/2025 उदघोषणा की तारीख/Date of Pronouncement : 16/10/2025 आदेश/Order PER KRINWANT SAHAY, A.M: This is an appeal filed by the Assessee against the order of the Ld. CIT(A)/NFAC, Delhi dt. 27/12/2024 pertaining to Assessment Year 2013-14. 2. In the present appeal Assessee has raised the following grounds:
1. That on the facts, circumstances and legal position of the case, the Worthy CIT(A), NFAC in Appeal No. NFAC/2012-13/10135340 has erred in passing order dtd. 27.12.2024 in contravention of provisions of S. 250 of the Income Tax Act, 1961 (hereinafter referred to as "Act").
2. That on facts, circumstances and legal position of the case, Worthy CIT(A)has erred in confirming the actions of Ld. AO in initiating, continuing and then concluding the impugned assessment u/s 148r.w.s. 147/144 and the impugned assessment order deserves to be quashed.
3. That on facts, circumstances and legal position of the case, Worthy CIT(A) has erred in not allowing the ground of the appellant on addition of Rs. 84,00,000/-wrongly made by Ld. AO u/s 69 and has wrongly remanded the case back to Ld. AO for fresh proceedings/adjudication more-so when the addition was wrongly made, the back material and opportunity of cross examination was not provided.
4. That on facts, circumstances and legal position of the case, the orders passed by Ld. AO and then by Worthy CIT(A) deserves to be quashed since the same have been passed without affording reasonable opportunity of being heard to the appellant.
That the appellant craves leave for any addition, deletion or amendment in the grounds of appeal on or before the disposal of the same.
3. Briefly, the facts of the case are that the assessee, an individual, had purchased an immovable property for Rs.84,00,000/– during the relevant year. Based on information available with the department, the Assessing Officer noted that no return of income had been filed by the assessee. Consequently, a notice under section 148 was issued on 30.03.2021. 3.1 Despite the issuance of notice under section 148 and subsequent notice under section 142(1) along with a questionnaire, the assessee failed to make compliance or furnish the required details. In the absence of a response, the Assessing Officer proceeded to complete the assessment ex parte under section 144 read with sections 147 and 144B of the Act on 30.03.2022. 3.2 The Assessing Officer treated the investment of Rs.84,00,000/– made towards the purchase of the property as unexplained investment under section 69 of the Act and assessed the total income at Rs.84,00,000/–. The AO also initiated penalty proceedings under sections 271F, 271(1)(b), and 271(1)(c) and charged interest under sections 234A, 234B, and 234C.
4. Against the order of the AO the assessee went in appeal before the Ld. CIT(A).
5. Before the Ld. CIT(A), the assessee contended that the assessment was framed without providing a reasonable opportunity of being heard and that the investment was made out of explained sources. The assessee also requested for a personal hearing through video conferencing under the Faceless Appeal Scheme, 2020. 5.1. After considering the submissions, the Ld. CIT(A) observed that the matter required further verification and examination of the facts and documents furnished by the assessee. The CIT(A) invoked the newly inserted proviso to section 251(1)(a) of the Act (effective from 01.10.2024), empowering the appellate authority to set aside an assessment made under section 144 and remand the case to the Assessing Officer for fresh adjudication.
5.2 Accordingly, the Ld. CIT(A) set aside the assessment order dated 30.03.2022 and directed the AO to frame the assessment de novo after giving proper opportunity of hearing to the assessee and after carrying out necessary enquiries and verification. The appeal was thus dismissed for statistical purposes.
Against the order of the Ld. CIT(A) the assessee preferred an appeal before the Tribunal.
During the course of hearing the Ld. AR submitted that the order of the Ld. CIT(A) is bad in law as it does not address the merits of the addition made by the AO. It was argued that the addition of Rs.84,00,000/– under section 69 was unjustified, being based merely on assumption without any supporting material, and that the assessee was never afforded the opportunity to explain the source of the investment or cross-examine the concerned parties.
7.1 The Ld. AR further contended that both the AO and the Ld. CIT(A) failed to provide reasonable opportunity of hearing, which constitutes a violation of principles of natural justice. It was prayed that the assessment as well as the appellate order be quashed, or alternatively, that the matter be remanded with directions for proper examination and opportunity to the assessee.
Per contra the Ld. DR relied on the orders of the lower authorities.
We have carefully considered the rival submissions and examined the record. The assessment in this case was completed ex parte under section 144 read with section 147 of the Act on the basis of information regarding the assessee’s purchase of immovable property amounting to Rs. 84,00,000/–. The assessee has contended that the investment was made from explained sources and that no reasonable opportunity was provided to furnish supporting evidence. The Ld. CIT(A), by invoking the newly inserted proviso to section 251(1)(a), has rightly set aside the assessment and directed the Assessing Officer to make a fresh assessment. In the interest of justice, we find that there is nothing wrong with the order of the Ld. CIT(A). So, we find no reason to interfere in the order passed by the Ld. CIT(A). Thus, appeal of the assessee is dismissed.
In the result, appeal of the Assessee is dismissed.