SURENDRA SINGH,LUCKNOW vs. DCIT / ACIT-1, LUCKNOW

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ITA 416/LKW/2025Status: DisposedITAT Lucknow15 October 2025AY 2017-184 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal noted that none was present on behalf of the assessee at the time of hearing. The Tribunal observed that the assessment order was passed ex-parte qua the assessee and the order passed by the CIT(A) was a non-speaking order. In response to a query from the Bench, the learned Departmental Representative for the Revenue suggested restoring the issue back to the CIT(A) for a fresh order. Consequently, the Tribunal set aside the order of the CIT(A) and restored the issues in dispute back to the file of the CIT(A). The CIT(A) is directed to pass a de novo speaking order on the merits of the case, in accordance with law, after providing a reasonable opportunity of being heard to the assessee. The Tribunal did not decide the substantive grounds of appeal on their merits.

What were the facts?

The assessee, Surendra Singh, filed his return of income for assessment year 2017-18 declaring a total income of Rs. 28,58,280. The Assessing Officer (AO) passed an assessment order under section 143(3) on 22/12/2019, assessing the total income at Rs. 2,78,02,555. This assessment included an addition of Rs. 2,49,44,275 under section 69 of the Income Tax Act, 1961, for unexplained investment. The assessee appealed to the Commissioner of Income Tax (Appeals) [CIT(A)]. The CIT(A) dismissed the assessee's appeal for non-prosecution via an order dated 05/12/2023. The assessee then filed the present appeal before the Income Tax Appellate Tribunal (ITAT).

What were the issues?

1. Whether the addition made by the Assessing Officer under section 69 of the Income Tax Act, 1961, for assessment year 2017-18 is permissible when the entire investment in assets and liabilities, amounting to Rs. 2,99,44,275, was made or incurred in a prior assessment year? (Question of law) 2. Whether the addition made by the Assessing Officer under section 69 of the Income Tax Act, 1961, is illegal and against the principles of natural justice, given that the AO arbitrarily accepted only Rs. 50 lacs of the total opening capital of Rs. 2,99,44,275 and failed to provide a basis for assuming Rs. 2,49,44,275 as invested in the year under appeal? (Question of mixed law and fact) Assessee's contentions: - The addition under section 69 for AY 2017-18 is impermissible as the investments were made in a prior year. - The AO's arbitrary acceptance of only a portion of the opening capital and the basis for the addition are illegal and against natural justice. Revenue's contentions: - The Revenue, through the learned Departmental Representative, submitted that the issue in dispute may be restored back to the file of the learned CIT(A) with a direction to pass a de novo order.

Which sections of the Income-tax Act were involved?

Section 69,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, LUCKNOW BENCH “B”, LUCKNOW

Before: SHRI ANADEE NATH MISSHRA & SHRI SUBHASH MALGURIA

2017-18 against impugned appellate order dated 05/12/2023 (DIN & Order No. ITBA/NFAC/S/250/2023- 24/1058474155(1) of Commissioner of Income Tax (Appeals) [“CIT(A)” for short]. Grounds of appeal are as under:

“1. That since entire investment in assets and liabilities, as shown in opening capital amounting to Rs.2,99,44,275/- was made OR incurred in the year prior to a.y.2017-18, hence no addition under section 69 of the Act is permissible in a.y. 2017-18, accordingly, addition made by Learned. AO as unexplained investment under section 69 of the Act is illegal, against the provisions of the Act and without jurisdiction.

2.

That Ld. AO arbitrarily accepted opening capital to the extent of Rs.50 lacs out of total opening capital of Rs.2,99,44,275/-. He failed to come out the reason and basis of assuming the opening capital amounting to Rs.2,49,44,275/- invested in the year under appeal, accordingly, addition made by Ld. AO as unexplained investment under section 69 of the Act is against the law of natural justice, illegal and without jurisdiction.”

(C) The facts of the case, in brief, are that the assessee is an individual and filed his return of income for the year under consideration on 28/03/2018 declaring total income of Rs.28,58,280/-. Assessment order dated 22/12/2019 was passed by the Assessing Officer u/s 143(3) of the I.T. Act whereby the assessee’s total income was assessed at Rs.2,78,02,555/- (rounded off to Rs.2,78,02,550/-). In the aforesaid assessment order, addition of Rs.2,49,44,275/- was made under section 69 of the I.T. Act. Aggrieved, the assessee carried the matter in appeal before the learned CIT(A). Vide impugned appellate order dated 05/12/2023, the assessee’s appeal was dismissed by the learned CIT(A) for non prosecution. Aggrieved further, the assessee is in appeal before the Income Tax Appellate Tribunal.

(C) At the time of hearing before the Tribunal, none was present on behalf of the assessee. In absence any representation from assessee’s side, learned Departmental Representative was heard and materials available on record were perused. On perusal of records, it is seen that the assessment order was passed ex-parte qua the appellant assessee and the order passed by learned CIT(A) is non speaking order. In response to a query from Bench, the learned Departmental Representative for Revenue submitted that the issue in dispute may be restored back to the file of the learned CIT(A) with the direction to pass de novo order in accordance with law after providing reasonable opportunity of being heard to the assessee. In view of the foregoing, the order of learned CIT(A) is set aside and issues in dispute are restored back to the file of learned CIT(A) with the direction to pass de novo speaking order on merits of the case in accordance with law after providing reasonable opportunity of being heard to the assessee.

(D) In the result, the appeal is allowed for statistical purposes.

(Order pronounced in the open court on 15/10/2025)

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