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Facts
The assessee, an NRI, purchased an immovable property for Rs. 6.95 crore, jointly with other co-purchasers, funded through an NRE bank account. The assessee did not file a return for AY 2016-17. The AO made an addition for unexplained investment, which was confirmed by the CIT(A). The assessee's appeal was dismissed by the CIT(A) due to non-prosecution.
Held
The Tribunal condoned the delay in filing the appeal, acknowledging that the assessee was an NRI and the purchase involved co-owners and NRE funds. The Tribunal decided to provide one more opportunity to the assessee to plead their case before the CIT(A), allowing the grounds for statistical purposes.
Key Issues
Whether the addition for unexplained investment is justified when the purchase was made by an NRI jointly with others, funded from NRE accounts, and whether the principles of natural justice were violated due to non-service of notices.
Sections Cited
147, 144, 148, 69
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Income Tax Appellate Tribunal, JAIPUR BENCHES,”A” JAIPUR
Before: SHRI MANISH BORAD, AM & SHRI NARINDER KUMAR, JM vk;dj vihy la-@ITA. No. 420/JPR/2025
fu/kZkj.k o"kZ@Assessment Year : 2016-17 cuke Husain Ahamed ITO, Near Forest Department Arnod Vs. Ward Road, Pratapgarh Pratapgarh LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AQNPA5391H vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Rakesh Kumar Kabra, CA & MS. Prachla Kabra, CA jktLo dh vksj ls@ Revenue by : Shri Rajesh Kumar Ojha, CIT-DR lquokbZ dh rkjh[k@ Date of Hearing : 02/07/2025 mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 04/07/2025 vkns'k@ ORDER PER: MANISH BORAD, AM This appeal at the instance of the assessee is directed against the order of ld. CIT(A), Delhi-42 dated 15.02.2024 arising out of the order for A.Y 2016-17 framed u/s 147 r.w.s 144 of the Act dated 29.03.2022 by ITO, Ward- Pratapgarh.
There is a delay of 322 days in filing of this appeal application for condonation of delay along with affidavit is filed. We have heard both sides. On going through the contents of the application for condonation of delay, we find that reasonable cause prevented the assessee for filing the appeal in time. In the interest of justice and taking liberal we approach hereby condone the delay and admit the appeal for adjudication.
3. The assessee has raised the following grounds of appeal:-
1. That the order passed by Id. AO as well as by CIT(A) are bad in law and against the principles of natural justice as it was passed ex-parte without giving the appellant a fair opportunity of being heard. The appellant is an NRI, he never received any notice, order, or communication at his registered address or email, thereby violating the statutory provisions requiring proper service of notices and orders. Also the CIT(A) failed to appreciate that the appellant had updated his contact details and address in the income tax portal also mentioned in form 35 and despite that, the appeal order and notices were not served at the correct address and nor emailed at correct mail ID.
2. On the facts and circumstances of the case & in law, the final assessment order passed by the Learned Assessing Officer (Ld. AO) under Section 144 read with Section 147 of the In come-tax Act, 1961 is invalid, bad in law and liable to be quashed as the notice issued u/s 148 dated 31.03.2021 was barred by limitation.
On the facts and circumstances of the case & in law, the final assessment order passed by the Learned Assessing Officer (Ld. AO) under Section 144 read with Section 147 of the In come-tax Act, 1961 is invalid, bad in law and liable to be quashed as the assessment notice issued u/s 148 dated 31.03.2021 suffers from multiple legal defects, including but not limited to jurisdictional errors, absence of proper approval, absence of reasons for reopening, vagueness regarding the escaped income, non-compliance with the faceless assessment scheme.
4. That the order passed by ld. AO as well as by CIT(A) are bad in law
and in facts as the, Assessee has invested his foreign income for purchase of land which he has purchased jointly with other person, hence, the addition of Rs. 6.95 crore under Section 69 of the Act as unexplained investment is unjustified, arbitrary, and without any basis. 5. That the appellant reserves the right to add, modify, or alter any grounds of appeal before or during the hearing of this appeal.
4. Brief facts of the case as stated in statement of facts are that the assessee is an individual NRI staying in Dubai since 1989. It is also stated that the assessee rarely visits India and his house in Pratapgarh is mostly locked. The assessee is claiming to have no business income or any other textile income from India and therefore, he did not file return of income for A.Y 2016-17. As per information available with the department, the assessee has purchased immovable property amounting to Rs. 6.95 CR. Notice issued u/s 148 dated 31.03.2021 but no return was filed in compliance thereto. The ld. AO framed best judgment assessment making addition of Rs. 6.95 CR. Aggrieved assessee filed an appeal before ld. CIT(A) with the delay of 143 days. Ld. CIT(A) dismissed the assessee’s appeal.
3. Now, the assessee is in appeal before this Tribunal.
A detailed paper book running into pages 433 has been filed by ld. counsel for the assessee which includes Golden Cards of assessee issued by United Arab Emirales (UAE) , Passport, Bank Statement through which payment was made for purchase of immovable property along with two other co-purchasers namely Zehra and Abbas. It is also stated by that re-assessment proceedings are invalid.
On the other hand, ld. Departmental representative submitted that the assessee failed to appear before both the lower authorities and therefore, issued needs to be restored back.
We have heard the rival contentions and perused the record placed before us. We observe that the addition made by the Assessing Officer for unexplained in immovable property at Rs. 6.95 CR has been confirmed by ld. CIT(A) observing as follows: “6. I have considered the facts of the case, grounds of appeal and assessment order u/s 147 r.w.s 144 of the IT Act, 1961.
7. As has been stated by the appellant in statement of facts, the appellant has purchased two Shop No. 3 & 4 for Rs. 2,68,02,050/- and Rs 4,26,97,950/- respectively paid total consideration of Rs. 6,95,00,000/- jointly with family members from the builders. Further, in the statement of facts, the appellant has stated that he has paid the amount from his own or his family member's bank account out of funds transferred from NRE bank account. In order to substantiate his claim, appellant was required to file submission along with supporting documents/evidences/details with respect to the transaction undertaken but he has failed to furnish any single submission till date. Accordingly, the source of funds used in purchase of the shop remained unexplained. Hence, an addition of Rs 6,95,00,000/- was made by AO on account of unexplained investment u/s 69 of the Income Tax Act, 1961. Further, during the appellant proceedings also, the appellant was required to file submission along with supporting documents/evidences/details with respect to the transaction undertaken but he has failed to furnish any single submission till date.
8. Hon'ble High Court of Madhya Pradesh has in Estate of Late Tukojirao Holkar vs CWT and in Jamunadas v. CST [1993] 38 MPLJ 462 (MP) has held that where after making reference to High Court no one had taken necessary steps, reference was to be dismissed in default and for not taking necessary steps.
9. The Hon'ble ITAT Delhi has in Shree Balaji Woollen Mills vs ACIT, [2012] 28 taxmann.com 198 (Delhi) where none appeared on behalf of the assessee when appeals were called for hearing nor any request for adjournment was filed, following the CIT v. Multiplan (India) (P.) Ltd. [1971] 38 ITD 320 (Delhi) and Estate of Late Tukojirao Holkar v. CWT [supra], dismissed the appeal filed by the assessee in limine.
10. The Hon'ble ITAT, Jabalpur Bench, Jabalpur in M/s Bindra Warehousing Corporation, Itarsi vs ITO, and in Jabalpur Sahkari Dugdh Sangh vs ITO, to 203/Jab/2015 has found assessee as not interested in pursuing appeal on the basis of just one non-attendance before the Hon'ble Tribunal. The Tribunal has dismissed appeals for non-prosecution. The Tribunal has held as follows:
"At the time of hearing, none appeared on behalf of the assessee. The notice hearing was sent to the assessee through RPAD, but there was no compliance on behalf of the assessee. Even no application seeking adjournment was filed. The laws aid those who are vigilant, not those who sleep upon their rights. This principle is embodied in well-known dictum "VIGILANTIBUS ET NON DORMIENTIBUS JURA SUBVENIUN". Under these circumstances, in our considered opinion assessee is not interest in prosecuting the appeal. As such we hold that this appeal is liable to be dismissed for non-prosecution."
Similar view has been taken in New Diwan Oil Mills vs. CIT (2008) 296 ITR 495 (P&H) and CIT vs. B. N. Bhatachargee and another 118 ITR 461 (SC).
Decision:
As has been stated above, repeated opportunities were afforded to the appellant during the appellate proceeding. However, the appellant failed to submit any reply during appellate proceeding. By repeated non-attendance and not filing any written submission during the course of appellate proceedings, the appellant has shown that he is not interested in pursuing the appeal. The appellant has been so reckless that all notices were ignored and not even any adjournment was sought. Besides, the statement of facts and the grounds of appeal
, the appellant has not filed any documentary evidence/information in support of his contention, although, sufficient and adequate opportunities were afforded to the appellant for the same. The overall circumstances show that the appellant has nothing to say in the matter and the evidences against him are incontrovertible. In view of these facts, I have no alternative but to dismiss the appeal of the appellant as he has never submitted the response to various hearing notices and in such circumstances, appeal cannot be kept pending adjudication for indefinite period,
13. In the result, the appeal is dismissed.”
7. From going through above findings of ld. CIT(A) and also considering the judicial precedent, we are of the considered view that the assessee deserves one more opportunity to go before ld.
CIT(A) so as to plead on the grounds raising legal issue as well as quantum addition. Ld. CIT(A) shall afford sufficient opportunity to the assessee and should duly consider that the assessee is claiming to be a non-resident Indian and the purchase of the alleged immovable property is with other two co-purchasers. In other words, the assessee is having 1/3rd share in the immovable property and further, the payments for purchase of immovable property has been made through, Non-Resident ordinary account of the assessee held with Union Bank of the India, Agsipara, Jurisdictional Assessing Officer. The assessee is also directed to update latest e-mail id and contact details on income tax portal.
Effective Grounds of appeal raised by the assessee are allowed for statistical purposes.
In the result, appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 04/07/2025.