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Facts
The assessee filed his return of income, which was processed. Subsequently, his case was reopened for assessment year 2016-17 based on information regarding the purchase of immovable property. The Assessing Officer (AO) treated the investment as unexplained and added it to the assessee's income, also adding the difference between purchase value and stamp duty value. The AO completed the assessment ex-parte as the assessee neither filed a return in response to a notice under Section 148 nor responded to other notices.
Held
The Tribunal found that there was non-compliance by the assessee before the lower authorities. However, considering the facts and the prayer of the assessee's representative, the Tribunal decided to restore the case to the Assessing Officer for a fresh assessment after providing a reasonable opportunity of hearing.
Key Issues
Whether the lower authorities erred in passing ex-parte orders without giving proper opportunity to the assessee, and if the non-compliance was due to the previous counsel's failure, whether the case should be restored for a fresh assessment.
Sections Cited
143(1), 147, 144, 69, 56(2)(vii)(b), 148, 271(1)(c)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, LUCKNOW BENCH “A”, LUCKNOW
Before: SHRI. SUDHANSHU SRIVASTAVA & SHRI ANADEE NATH MISSHRA
PER SUDHANSHU SRIVASTAVA, J.M.: This appeal has been preferred by the assessee against order dated 05.09.2024, passed by the National Faceless Appeal Centre, Delhi (NFAC) for Assessment Year 2016-17.
The brief facts of the case are that the assessee was working as a District Homeopathic Medical Officer. The assessee filed his return of income for the year under consideration on 26.07.2016, declaring a total income of Rs.4,46,110/- after claiming deduction of Rs.1,51,028/- under Chapter VI-A of the Act. The return filed by the assessee was processed under section 143(1) of the Income Tax Act, 1961 (hereinafter called “the Act’). Thereafter, the case of the assessee was reopened under section 147 of the Act on the basis of information received from ITO-1(5), Lucknow that the assessee had purchased an immovable property bearing identification number as MIG H - No.3 & 4, Anjani Puram, Awasiya Yojna, Reed Ganj, Faizabad from Smt. Nirja Mishra during the year under consideration for Rs.29,39,170/- against the Circle Value of Rs.52,31,000/- of the said property. The assessee neither filed any return of income in response to notice issued under section 148 of the Act nor responded in response to other statutory notices issued by the Assessing Officer (AO). The AO, therefore, proceeded to complete the assessment invoking the provisions of section 144 of the Act. The AO treated the investment of Rs.29,39,170/- made by the assessee in the immovable property, MIG H No.3 & 4, Anjani Puram, Awasiya Yojna, Reed Ganj, Faizabad as unexplained investment and added the same to the income of the assessee under section 69 of the Act. The AO also treated the difference between the purchase value and stamp duty value of the said property, amounting to Rs.22,91,830/- as income of the assessee and added the same under section 56(2)(vii)(b) of the Act. The AO completed the assessment under section 144 read with section 147 of the Act, assessing the total income of the assessee at Rs.56,77,110/-.
The AO also initiated penalty proceedings under section 271(1)(c) of the Act, separately.
4. Aggrieved, the Assessee preferred an appeal before the NFAC, which dismissed the appeal of the assessee for the reason of non-compliance by the Assessee.
Now, the Assessee has approached this Tribunal challenging the orders of the AO as well as NFAC by raising the following grounds of appeal:
1. 1. Because the Ld. CIT (Appeal) has erroneously passed the Ex-parte order without giving proper opportunity to the Appellant.
2. Because the Respondent has not even considered to serve the Notice through any other mode apart from E-mail keeping the principle of Natural Justice "Audi Alteram Partem” in mind .
3. Because the Respondent has erred on law that the appellant has failed to prove his income whereas the appellant believed on the previous counsel who had not replied to the Notices or dates.
Because the Ld. CIT(Appeals) has fell in error by holding that the property purchased has been purchased with unaccounted source and the income has been added in the Income of the Assessee.
5. Because the Respondent has erred in the impugned order that the assessee has confirmed the Email which is wrong.
During the course of hearing before us, the Ld. Authorized Representative for the assessee (Ld. A.R.) submitted that both the authorities below have passed orders ex-parte qua the assessee. The Ld. A.R. further submitted that the main reason for non-compliance before the lower authorities was that the previous Counsel, to whom the case was assigned, did not intimate the assessee about the hearing of the case nor did seek other relevant details. The Ld. A.R. submitted that there was reasonable cause for non-representation on behalf of the assessee before the authorities below. The Ld. A.R. prayed that in view of these facts, the matter may be restored to the file of the AO for deciding the matter afresh after providing reasonable opportunity of hearing to the assessee.
The Ld. CIT (D.R.) had no objection to the restoration of appeal to the file of the Assessing Officer as requested by the Ld. A.R.
We have heard both the parties and have also perused the material on record. We find that there was non-compliance on behalf of the assessee before the NFAC as well as before the AO. However, looking into the facts of this case and the prayer of the Ld. A.R., we are of the considered view that the assessee deserves one more opportunity to present his case and, therefore, we restore this file to the Office of the Assessing Officer with the direction to provide an opportunity to the assessee to present his case and direct the assessee to produce the necessary evidences in support of the impugned transactions entered into by him during the year under consideration. We also caution the assessee to fully comply with the directions of the Assessing Officer in the set-aside proceedings when called upon to do so, failing which, the Assessing Officer would be at complete liberty to pass the order in accordance with law, based on the material available on record even if it is ex-parte qua the assessee.
In the result, the appeal of the assessee stands allowed for statistical purposes.
Order pronounced in the open Court on 12/08/2025.