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Facts
The Department filed appeals against two orders of the CIT(A) concerning assessment year 2015-16. The appeals challenged the deletion of additions made under Section 147 and Section 271(1)(c) of the Income Tax Act. The assessee remained ex-parte throughout the proceedings.
Held
The Tribunal noted that the assessee did not appear for the proceedings. However, considering that the quantum additions were deleted by the CIT(A) and the penalty was based on these additions, the Tribunal restored the quantum appeal to the AO for fresh adjudication, setting aside the penalty appeal as infructuous.
Key Issues
Whether the CIT(A) erred in deleting additions made by the AO under Section 69 and penalty under Section 271(1)(c) without providing adequate opportunity to the AO to examine evidence, especially when the assessee remained ex-parte.
Sections Cited
147, 144, 271(1)(c), 69, 46A, 148, 142(1), 115BBE, 10(4)
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Income Tax Appellate Tribunal, JAIPUR BENCHES,’’B” JAIPUR
704/JPR2025 (U/S 147/144C(3) & 271(1)© of the Income Tax Act, 1961 fu/kZkj.ko"kZ@AssessmentYear : 2015-16 cuke The DCIT (Intl.Tax) Shi Devidass Aswani Jaipur Vs. 3CHH 3, Chopasani Housing Board Jodhpur 342 003(Raj) LFkk;hys[kk la-@thvkbZvkjla-@PAN/GIR No.: ATNPA 0054A vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assesseeby :None jktLo dh vksjls@Revenue by: Mrs. Alka Gautam, CIT-DR lquokbZ dh rkjh[k@Date of Hearing : 7/10/2025 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: : 11 /11/2025 vkns'k@ORDER PER BENCH:
Both these appeals have been filed by the Department against two different orders of the ld. CIT(A),Delhi-42 dated 03-02-2025 and 04-02- 2025 for the assessment year 2015-16 in the matter of Section 147 r.w.s. 144 and Section 271(1)(c) of the Act respectively. The Grounds of appeal raised by the Department in the respective appeals are as under:-
(Quantum Appeal) ‘’I. On the facts and in the circumstances of the case and in law, whether the Ld. Commissioner of Income Tax (Appeals) has erred in deleting the addition of Rs 4,08,55,152/- made u/s 69 of the I.T. Act 1961 by allowing the appeal of the assessee without appreciating the findings of the AO that the assessee did not furnish evidences relating to the source of time deposit of Rs.4,08,55,152/ in his bank account no.007401077044 maintained with ICICI-bank?
II. On the facts and in the circumstances of the case and in law, whether the Ld. Commissioner of Income Tax (Appeals) has erred in deleting the addition of Rs 2,99,339/- made u/s 69 of the I.T. Act 1961 by allowing the appeal of the assessee without appreciating the findings of the AO that the assessee did not furnish evidences relating to the source of credit entry of Rs. 2,99,339/- in his bank account no.007401077044 maintained with ICICI bank?
III. On the facts and in the circumstances of the case and in law, whether the Ld. Commissioner of Income Tax (Appeals) has erred in admitting the additional evidences filed by the assessee in contravention to rule 46A of the Income Tax Rules which mandates that no additional evidence shall be admitted by the CIT (Appeals) without providing opportunity to the AO to examine the evidence or document or to cross-examine the witness produced by the appellant?
IV. Whether on the facts and in the circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals) is justified in assuming the powers vested to the Assessing officer to examine the evidence or & 704/JPR/2025 DCIT (INTL. TAX), JAIPUR VS SHRI DEVIDASS ASWANI, JODHPUR document or to cross-examine the witness produced by the appellant by admitting additional evidences without providing opportunity to the AO?’’ [Penalty Appeal u/s 271(1( c) ‘’I. On the facts and in the circumstances of the case and in law, whether the Ld. Commissioner of Income Tax (Appeals) has erred in deleting the penalty of Rs 1,39,88,411/- levied u/s 271(1)(c) of the I.T. Act 1961 by allowing the appeal of the assessee without appreciating the findings of the AO that the assessee has not submitted any reply during the penalty proceedings? II. On the facts and in the circumstances of the case and in law, whether the Ld. Commissioner of Income Tax (Appeals) has erred in admitting the additional evidences filed by the assessee in contravention to rule 46A of the Income Tax Rules which mandates that no additional evidence shall be admitted by the CIT (Appeals) without providing opportunity to the AO to examine the evidence or document or to cross-examine the witness produced by the appellant? III. On the facts and in the circumstances of the case and in law, whether the Ld. Commissioner of Income Tax (Appeals) has erred in allowing this penalty appeal on the basis of findings given in quantum appeal of the assessee for the same assessment year by admitting the additional evidences filed by the assessee in contravention to rule 46A of the Income Tax Rules which mandates that no additional evidence shall be admitted by the CIT (Appeals) without providing opportunity to the AO to examine the evidence or document or to cross-examine the witness produced by the appellant, especially where the department has also challenged the order dated 03.02.2025 passed by Ld. CIT(A) deciding the quantum appeal of the assessee for the A.Y. 2015-16?
IV. Whether on the facts and in the circumstances of the case and in law, whether the Ld. Commissioner of Income Tax (Appeals) is justified in assuming the powers vested to the Assessing officer to examine the evidence or document or to cross-examine the witness produced by the appellant by admitting additional evidences without providing opportunity to the AO?
2.1 Apropos grounds of appeal of the Department in 2015
16. (i.e. quantum appeal) wherein the ld. CIT(A) has allowed the grounds (i.e. 1, 2 & 3) of the assessee by observing as under:- ‘’8.3 On perusal from the copy of bank statement of ICICI Bank NRE Account no. 007401077044 and NRO Account no. 007401077045 for the financial year 2014-15 submitted by the appellant, it is seen that on 17.03 2015 an amount of Rs. 3,75,30,000/-has been credited/deposited through remittance in the account no. 007401077044 and subsequently the time deposit/ fixed deposited was created with the same amount of Rs. 3,75,30,000/- with narration (TRFR TO FD No. 007413003623) on 20.03.2015. Further, it has been noticed that no other amount was credited/deposited in ICICI Bank of the NRE Account no. 007401077044 and NRO Account no. 007401077045 during the financial year except small amount of interest income which is also exempt. It is also viewed from the bank statement of ICICI Bank of the appellant that huge amount of fixed deposits were made by the assessee in earlier year too. The appellant has stated that the AO has mistakenly considered the amount of Rs. 4,08,55,152/- in place of & 704/JPR/2025 DCIT (INTL. TAX), JAIPUR VS SHRI DEVIDASS ASWANI, JODHPUR Rs.3,75,30,000/- as a time deposits made from ICICI Bank 8.4. In support of his contention the appellant has also submitted copy of bank statement of First Abu Dhabi Bank. On perusal from the First Abu Dhabi Bank it can be seen that the amount has been transferred on 17.03.2015 to ICICI Bank. The appellant has also submitted the advice letter received from First Abhu Dhabi Bank from which states that 6,00,000 USD has been transferred to investment in t year leveraged NRE deposit of ICICI Bank and USD 10,500 is upfront fees@1.75% of amount transferred. The conversion rate during that period was 62.55 which works out to Rs. 3,75,30,000/- (USD 6,00,000* 62.55) 8.5 With regard to the addition made by AO of Rs. 2.99.339/ on account of unexplained deposits u/s 69 of the income Tax Act 1961, the appellant has stated that he has earned NRE interest on FD which is exempt u/s 10(4) of the Act. The amount of Rs. 2,99,339/- is the interest earned from NRE fixed deposits and therefore not taxable. The appellant has also stated that on such interest TDS has already been deducted during the financial year 2014-15, 8.6 After considering the facts of the case and the detailed reply alongwith documentary evidence submitted by the assessee, it is clear that the source of the investments in the said FDRs is from foreign earning of the appellant, therefore, the addition made by the AO has no force. Based on the above facts, the addition of Rs.4,11,54,491/- made by the Assessing Officer u/s 69 of the IT Act as unexplained investment is hereby deleted. Hence, ground no. 1, 2 & 3 are allowed.’’ & 704/JPR/2025 DCIT (INTL. TAX), JAIPUR VS SHRI DEVIDASS ASWANI, JODHPUR 2.2 Apropos grounds of appeal of the Department in for the assessment year 2015-16 [i.e. Penalty appeal u/s 271(1)(c ) of the Act] wherein the ld. CIT(A) has deleted the penalty of Rs.1,39,88,411/- imposed by the AO u/s 271(1)(c)of the Act by observing at para 10 to 12 of his order as under:- ‘’10. During the course of appellate proceedings, it was stated by the appellant that he is Non-Resident Indian for several years and has his source of income in Doha Qatar where he is employed since last many years and his only source of fund is from Doha Qatar i.e. overseas. The appellant has further stated that he was employed as a General Manager with Nasser Bin Khaled & Sons Trading Co., a company managing the distribution and sale of international brands in the Qatatri market. During the course of assessment proceeding AO made an addition of Rs. 4,11,54.491/- which included time deposits of Rs. 4,08,55,152- and amount credited of Rs. 2,99,339/- in his ICICI bank NRE account treating it as unexplained investment u/s 69 of the Income Tax Act, 1961 during the year under consideration. As per information available with the department that the assessee had made time deposits amounting to Rs. 4,08,55,152/- and amount credited of Rs. 2,99,339/- in ICICI Bank during the financial year 2014-15, and that the assessee did not file Income tax return. It was stated by the AO that the source of funds was not explained by the assessee during the course of assessment proceedings. Hence this amount was treated as unexplained deposits and added back to the income of the assessee u/s 69 of the income Tax Act, 1961.
11. It is to be noted here that against the assessment order passed by the AO where an addition of Rs. 4,11,54,491/- was made, the appellant preferred an & 704/JPR/2025 DCIT (INTL. TAX), JAIPUR VS SHRI DEVIDASS ASWANI, JODHPUR appeal before the CIT(A). The CIT(A) passed an order u/s 250 of the Income Tax Act, vide ITBA/APL/S/250/2024- 25/1072863251(1) on 03.02.2025 in which, he has deleted the entire addition made by the Assessing Officer on the basis of submissions and documents furnished by the appellant. In his order, the CIT(A) has discussed each and every issue in detail.
It is to be noted here that the Assessing Officer in the penalty order u/s 271(1)(c) of the Income Tax Act, 1961 has stated that in the absence of any details/evidences of source of investment the entire financial transactions of Rs.4,11,54,491/- has been treated unexplained investment for which, the assessee has failed to furnish any explanation. It is clear that the assessee has failed to declare his true and correct picture of receipts & had concealed his income as per provisions of section 271(1)(c) of the Income tax Act, 1961 Further, as has been stated above the quantum addition amounting to Rs. 4,11,54,491/-has been deleted by the Ld. CIT(A) vide order u/s 250 of the Income Tax Act, vide ITBA/APL/S/250/2024-25/1072863251(1) on 03.02.2025. On perusal of the appellate order, it is seen that the appellant has submitted relevant documents and supporting evidences to prove the transaction under taken by him during the year under consideration and the Ld. CIT(A) has passed a well-reasoned order. Based on the detailed discussion held above, as the quantum additions have been deleted in the appellate order, therefore, the penalty imposed by the AO u/s 271(1)(c) of the Income Tax Act, 1961, does not have any force accordingly the penalty u/s 271(1)(c) of the IT Act, 1961 imposed by the AO amounting to Rs. 1,39,88,411/- is hereby deleted.’’ 2.3 None appeared on behalf of the assessee in spite of the notice sent by the ITAT to last known address of the assessee. Hence, the Bench & 704/JPR/2025 DCIT (INTL. TAX), JAIPUR VS SHRI DEVIDASS ASWANI, JODHPUR decides to dispose off the appeals of the Department ex-parte by taking into consideration the materials available on record. 2.4 We have heard the ld.DR and perused both the orders of the ld. CIT(A) [supra]. It is noted that the solitary grievance of the Department in both the appeals are that the AO was not provided opportunity to examine the evidence or document or to cross examine the witnesses produced by the assessee by admitting the additional evidences produced by the assessee in respective appeals. It is pertinent to note that during the course of hearing, none appeared on behalf of the assessee nor any written submission countering the grounds of appeal raised by the Department in both the appeals (supra) were filed. The Bench also noted that the in the quantum appeal, the assessee had failed to furnish return of income in response to notice u/s 148 of the Act and also failed to furnish relevant information/ documents in response to notices issued from time to time u/s 142(1) of the Act. Hence the AO had no other option except to complete the assessment ex-parte u/s 144 of the Act. Thus the AO made addition of Rs.4,11,54,491/- in the hands of the assessee vide his order dated 18-03-2023 by observing as under:- ‘’In view of the provisions of Section 144(1) of the Act, the Assessing Officer has left with no alternative and compelled in view It is a matter of fact that the assessee has huge time deposit of Rs. 4,08,55,152/- and amount credited of Rs. 2,99,339/- in his ICICI bank account during the FY 2014-15 relevant to A.Y 2015-16. The onus is on the assessee to prove the sources of time deposits, which he has failed to explain completely. Therefore total time deposits of Rs. 4,08,55,152/- and amount credited of Rs. 2,99,339/- is treated as unexplained deposit and the same is added u/s 69 of the Act on which tax is charged u/s 115BBE of the I.T. Act, 1961.
(Addition of Rs. 4,11,54,491/-)’’ The Bench further noted that in the penalty appeal u/s 271(1)(c) of the Act, the assessee was non-cooperative during the assessment proceedings as well as during penalty proceedings. Ample opportunities were provided but the assessee did not turn up. Accordingly, the AO had no other option but to finalise the penalty proceedings ex-parte. Hence, the AO imposed penalty u/s 271(1)©of the Act by observing as under:- ‘’On examination of assessment record, it is seen that the assessee has made investment of Rs.4,08,55,152/-in FDR and enjoyed accrued interest of Rs.2,99,339/-. The assessee even there being taxable income did not file return and accordingly concealed the particulars of his total income. Therefore, the assessee is liable for a penalty which shall not be less than the tax evaded and shall not exceeded the three times of the tax.
Thus considering all facts and circumstances of the case, the penalty of Rs.1,39,88,411/- being equal to 100% of the amount of taxis hereby Imposed a penalty of Rs.1,39,88,411/-. Issued demand notice and challan.’’ It is an admitted fact that the assessee is ex-parte before the AO in quantum as well as penalty orders. Therefore, he could not put forth his defence. It was the bounded duty of the assessee to appear before the statutory authority as and when called for. It is noticed that various opportunities were provided to the assessee for settling the issue but the assessee remained lethargic and unserious in pursuing his case. However, the Bench feels that the quantum appeal of the Department needs to be restored to the file of the AO for afresh adjudication by the AO and to decide them by providing one more opportunity of hearing, however, the assessee will not seek any adjournment on frivolous ground and remain cooperative during the course of proceedings. Thus the appeal of the Department in quantum proceeding is allowed for statistical purposes. 2.5 As regards the appeal of the Revenue in penalty proceedings, since we have set aside the issue of quantum proceedings to the file of the AO, therefore, the issue of present penalty proceedings becomes infructuous and the same shall be based on the set aside proceedings.
& 704/JPR/2025 DCIT (INTL. TAX), JAIPUR VS SHRI DEVIDASS ASWANI, JODHPUR 3.0 In the result, the appeals of the Department are allowed for statistical purposes Order pronounced in the open court on 11 /11/2025. Sd/- Sd/- ¼jkBksM deys'kt;UrHkkbZ ½ ¼MkWa-,l-lhrky{eh½ (RATHOD KAMLESH JAYANTBHAI) (Dr. S. Seethalakshmi) ys[kk lnL; @Accountant Member U;kf;dlnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 11/11/2025 *Mishra आदेश की प्रतिलिपिअग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. The Appellant- The DCIT (Intl. Tax), Jaipur 2. izR;FkhZ@ The Respondent-Shri Devidass Aswani, Jaipur, 3. vk;djvk;qDr@Theld CIT 4. विभागीय प्रतिनिधि] आयकरअपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. xkMZQkbZy@ Guard File (ITA No.703 & 704/JP/2025) vkns'kkuqlkj@ By order,
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