RITIKA JAIN,THANE vs. ITO(IT TP), BHOPAL, AAYKAR BHAVAN

Per Paresh M Joshi, J.M.:

This is an appeal filed by the assessee Under Section 253 of

the Income Tax Act, 1961 (hereinafter referred to as the “Act” for

sake of brevity) before this Tribunal as and by way of Second

appeal under the Act. The assessee is aggrieved by the order

bearing Number ITBA/NFAC/S/250/2024-25/1066243407(1)

dated 29.06.2024 passed by Ld. CIT(A) u/s 250 of the Act which

is hereinafter referred to as the “Impugned order”. The relevant

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Assessment Year is 2015-16 and the corresponding previous year

period is from 01.04.2014 to 31.03.2015.

2.1 That the Department of Income Tax had received credible

information from reliable sources that the assessee had

purchased an immovable property of Rs.76,80,000/- during the

year under consideration.

2.2 That since the assessee entered into huge financial

transaction during the year under consideration and she did not

file her ITR for the Assessment Year 2015-16.

2.3 Accordingly, after providing opportunity of being heard to

the assessee an order u/s 148A(d) was passed on 29.03.2022

with the prior approval from the competent authority.

2.4 That accordingly, a notice u/s 148 of the Act was issued on

29.03.2022 through ITBA portal.

2.5 That assessee despite notice u/s 148 did not file her ITR for

Assessment Year 2015-16.

2.6 That however assessee submitted that she was a NRI during

the year under consideration. In support of the said claim she

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submitted all the supporting documents which was placed on

record after examination.

2.7 Upon transfer of case on 20.02.2023 further various

notice(s) u/s 142(1) of the Act was issued to the assessee for

submitting reply regarding purchase of immovable property and

source of investment therein. In compliance assessee furnished

her reply. The same was placed on record after examination.

2.8 That further the proposed addition was sent to the assessee

vide draft order u/s 144C of the Act dated 26.03.2023. In

response to the draft order, the assessee submitted her reply but

she did not mentioned that whether she preferred appeal before

Hon’ble DRP or accepted variations proposed in the draft order.

2.9 That on basis of the perusal of the submission made by the

assessee it was noticed that assessee had purchased an

immovable property jointly with her husband Shri Ankur Priti

Jain Total consideration of the property was Rs. 80,94,000/-

(including stamp duty of Rs. 3,84,000/- and registration charge

of Rs. 30,000). Out of total consideration of the property, Rs.

35,00,000/- had been paid through a loan from Oriental Bank of

Commerce. Further, it is also observed that Rs. 29,80,000/- was

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paid through the ICICI bank account of the husband of assessee,

Shri Ankur Preeti Jain and the balance amount was paid through

the PNB account of the assesse. On being asked for the source of

the payment made by her and her husband, the assessee

submitted that source of the her husband's income was his

salary income and savings. Further, she submitted that she had

taken loan of Rs. 10,85,000/- from her relatives.

2.10 That in the context of above discussion, further, a notice

u/s 142(1) of the IT Act dated 01.03.2023 has been issued to

assessee for submitting evidence regarding the income earned by

her husband and loan received from relatives. In compliance to

the same the assessee has submitted the earning evidence of her

husband but regarding loan received from relatives, the assessee

has provided only confirmation of the relatives.

2.11 That in view of the fact that assessee did not submitted the

all details/evidence with respect to the loan received from

relatives, a show cause notice dated 19.03.2023 2015-18 has

been issued for submitting copy of ITR and copy of bank

statements of the relatives, whereby creditworthiness and

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genuineness of the transaction can be established. The response

of assessee was required on or before 23.03.2023 at 01:52PM.

2.12 On the date given in show cause notice no response was

received from the assessee. Since, the assessee has not complied

the notice dated 19.03.2023, it may be presumed that assessee

has nothing in her possession to substantiate her claim regarding

loan received from her relatives. Thus, amount so claimed to be

have received from relatives is remained unexplained.

2.13 Basis above Ld. A.O recorded that it is an undisputed fact

that the assessee in spite of providing several opportunities of

being heard, she did not furnish satisfactory explanation and

thus, has failed to discharge the onus of proof cast upon her.

Therefore, the amount Rs. 10,85,000/- claimed to be have loan

from her relatives is remained unexplained.

2.14 Accordingly Ld. A.O recorded that assessee has failed to

establish the genuineness and creditworthiness of the loan

received from relatives of Rs. 10,85,000/-. Therefore, the loan

received from relatives of Rs 10,85,000/- is being disallowed and

treated as unexplained investment made in aforesaid immovable

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property and being added to the total income of the assessee as

unexplained investment u/s 69 of the IT Act for A.Y. 2015-16.

2.15 The d. A.O thus made addition of Rs. 10,85,000/- (supra).

2.16 That since the assessee despite opportunities of being heard

u/s 142(1) vide notice dated 01.03.2023 had not provided any

evidence of source of payment of stamp duty and other charges to

the tune of Rs.4,14,000/- same was treated as unexplained and

added.

2.17 That Ld. A.O computed the total assessed income as under:-

Particular Amount

Income as per ITR (not filed in response Nil

to notice u/s 148)

Added income as per para 4.4 Rs.10,85,000/-

Added income as per Para 6.1 Rs. 4,14,000/-

Total assessed income Rs.14,99,000/-

2.18 That the aforesaid assessment order of Ld. A.O bears

No.ITBA/AST/S/147/2023-24/1052774554(1) dated 12.05.2023

and that the same is hereinafter referred to as the “Impugned

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Assessment Order” which was passed u/s 147 r.w.s. 144 of the

Act. Additions were made u/s 69 of the Act.

2.19 That the assessee being aggrieved by the “impugned

assessment order” prefers first appeal u/s 246A of the Act

before Ld. CIT(A) who by the “impugned order” has held as

under:-

“I have gone through above reply of appellant. The appellant in his reply has admitted that he did not file return of income for his income was below taxable limit. This explanation is not acceptable as it is not as per computation of income, made by the appellant, but after determination of income unless any changes are made in the assessed income by virtue of rectification or giving appeal effect, which decides the quantum of income. In this case, assessed income is above taxable limit and the appellant was supposed to file return of income. At present appellant has to just tell whether he paid an amount equal to the amount of advance tax which was payable by him and if he had not made such payment whether he wants exemption from operation of provisions of section 249(4)(b) of the Act. The appellant has failed to do so. It is, therefore, clear that the appellant has not made payment of amount equal to the advance tax which was due on its income.

2.20 That the assessee being aggrieved by the “Impugned order” dismissing 1st appeal has filed present appeal before us

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and has raised following grounds of appeal in Form No.36 against

the “Impugned order” which are as under:-

“1) Ld. CIT(A) erred in not considering the merits of the case but dismissed it merely on technical grounds without consideration of the substantive issues which is unjust and contrary to established legal principles.

2) Ld. AO has erred in passing the assessment order u/s i.e. 147 r.w.s. 144 of I.T.Act, 1961 dated 12-05-2023 without considering the reply filed against the draft order u/s 144C(1) I.T.Act, 1961 dated 26.03.2023 merely on technical grounds without considering its merit which is against the principle of natural justice and in law.

3) The appellant was deprived of a fair hearing at both levels due to procedural oversight, which violated the principles of natural justice.

4) The Ld. AO has erred in passing the assessment order under section 147 r.w.s 144 of the Act instead to be passed under section 144C after compliance of notice under section 142(1), thus the order by the Ld.AO is without applying his mind and against the principle of law.

5) The appellant humbly submits that the order passed is bad in law and the additions made should be deleted.

(a) Ld.AO erred in making addition amounting to Rs. 10,85,000 u/s 69 of the Act however had issued show cause u/s 68 of the Act.

(b) Ld.AO erred in making addition to the tune of Rs.4,14,000 u/s 69 of the Act without issuing show cause notice. 6) Ld. AO has erred in passing order u/s 148A(d) & issuing notice u/s 148 of L.T.Act, 1961 without appreciating that appellant was not having the jurisdiction for the same in view of Section 151A and the notification issued thereunder notifying e-Assessment of Income Escaping Assessment Scheme, 2022 and, thereby, rendering the said order and the notice as well as the entire assessment proceeding as null and void.

7) Ld. Officer has erred in not furnishing the copy of approval u/s 151 of 1.T.Act, 1961 and notice u/s 143(2) of 1.T.Act, 1961 during the course of proceedings.

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8) The Ld. AO erred in not considering all the submissions made as there was ample time on hand and whereas the order was passed on 12.05.2023 against the last submission made on 14.4.2023. 9) That other grounds may be urged at the time of hearing, the appellant prays that the appeal may please be allowed or entire addition may kindly be deleted or deemed fit as the case may be. 10) The appellant reserves the right to add, alter, or amend any ground or grounds of appeal on or before the hearing.”

3.1 The hearing in the matter took place before this Tribunal on

21.04.2025 when Ld. AR for and on behalf of the assessee

appeared before us interalia stated that the “Impugned Order”

is totally illegal, bad in law. The Ld. CIT(A) has not considered

the merits of the case and has dismissed the appeal on technical

ground without considering substantive issues. Reply filed before

A.O were not considered including objections against additions

proposed. Assessee is deprived of fair hearing. Other legal

objections and grounds as per grounds of appeal were agitated

too before us.

3.2 Per contra Ld. DR stated that this Tribunal be pleased to

pass such order as it thinks fit and proper according to law.

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4.1 We now have to decide the legality, validity and the

proprietary of the “Impugned Order” basis records of the case

and rival contentions canvassed before us.

4.2 We have carefully perused the records of the case.

4.3 We basis records of the case and after hearing and upon

examining the rival contentions are of the considered opinion that 1st appeal dismissed on limited ground that assessee has not

filed return of income as well as not paid an amount equal to the

amount of advance tax which was payable, present appeal is

infructuous and is therefore dismissed. We hold that said finding

is not legally tenable as at the material time the assessee was

under a reasonable belief that she is not liable to file return of

income as no known sources of income were with her or any

income was accrued to her. The stand of the assessee throughout

has been that there are no identifiable income which had accrued

to her. The Ld. AO even in the impugned assessment order has

not been able to establish any known source of income of the

assessee requiring her to file return of income. Therefore

assessee did not file any return of income either u/s 139 or u/s

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A.O has taken returned income at Nil. Only additions have been

made. Hence Ld. CIT(A) is wrong in holding that assessee had

not filed any return of income and further erred in holding that

assessee has not paid advance tax. It cannot be said in law that

there was non compliance of Section 249(4) of the Act though in

the impugned order it is not stated very expressly. We gainfully

refer to decision of this Tribunal in case of Shri Pushpendra

Singh Chouhan V/s ITO ITA No.122/Ind/2024 order dated

24.06.2024 wherein following is held:-

“7. We have considered the rival submissions as well as relevant material on record. The Assessing Officer initiated proceedings u/s 147 on the basis of the AR information regarding the cash deposit of Rs.36,03,600/- in the savings bank account of the assessee. Since there was no response on behalf of the assessee to the notices issued by the Assessing Officer, therefore, the assessment was framed ex- parte as best judgment assessment thereby the Assessing Officer has assessed total income of the assessee at Rs.36,03,600/-. The assessee has explained the reasons for non appearance before the Assessing Officer as the assessee belongs to a rural area and having no computer or internet facility in the village and therefore, the assessee was not having access to the notice issued by the Assessing Officer and consequently could not furnish any reply or submissions as well as evidence during the assessment proceedings. Further the CIT(A) has dismissed the appeal of the assessee in limine for want of payment of tax as per the provisions of Section 249(4)(b) of the Act. This is a case of reassessment framed by Assessing Officer u/s 147 r.w.s. 144 of the ACT and therefore, there is no obligation of payment of advance tax as per Clause(b) of Section 249(4) as held by the

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Mumbai Benches of the Tribunal in case of M/s. Nine Globe Industries Pvt. Ltd Vs. ACIT (supra) in para 4 to 6 as under:

"4. In that view of the matter, the appeal came to be dismissed on the ground that the appellant has not filed RoI as well as not paid an amount equal to the amount of advance tax, which was payable by it. It can thus be seen that the CIT(A) had no occasion to examine the merits of the impugned additions.

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In the case in hand the assessee has filed return of income and thereafter, the Assessing Officer has initiated reassessment proceedings and passed reassessment order. Therefore, for filing the appeal before CIT(A) the question of payment of advance tax by the assessee as per clause(b) of Sub Section 4 of Section 249 does not arise. Similarly the Raipur Bench of the Tribunal in case of Vishnusharan Chandravanshi Vs. ITO in ITA No.73/RPR/2024 order dated 10.04.2024 has also considered the identical issue in para No.10 to 15 as under:

"(4) No appeal under this Chapter shall be admitted unless at the time of filing of the appeal,-

(a) where a return has been filed by the assessee, the assessee has paid the tax due on the income returned by him; or

(b) where no return has been filed by the assessee, the assessee has paid an amount equal to the amount of advance tax which was payable by him:

Provided that, in a case falling under clause (b) and on an application made by the appellant in this behalf, the Commissioner (Appeals) may, for any good and sufficient

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reason to be recorded in writing, exempt him from the operation of the provisions of that clause."

The CIT(Appeals) observed that as the assessee who had not filed his return of income had neither paid an amount equal to the amount of advance tax which was payable by him; nor filed any application seeking exemption from operation of the aforesaid statutory provision for any good and sufficient reason, therefore, he had failed to comply with the statutory requirements contemplated u/s 249(4)(b) of the Act. Accordingly, the CIT(Appeals) dismissed the appeal on the said count itself.

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and sufficient reason to be recorded in writing exempt him from the operation of the aforesaid statutory provision.

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view in absence of any obligation cast upon the ass to compute/pay "advance tax" u/s. 208 and 209 of the Act for the subject year first appellate authority could not have held that he had failed to comply with statutory conditions contemplated in Sec. 249(4)(b) of the Act. My aforesaid we fortified by the orders of the ITAT, Bengaluru in the case of Shamama Reddy Vs. ITO, ITA No.1120/Bang/2023 dated 20.02.2024 and that of ITAT, Deih in the of Vikram Singh Vs. ITO, ITA No.6559/Del/2019, dated 21.02.2023

4.4 Thus, applying the view taken by ITAT, Indore cited above

the impugned order of CIT(A) is hereby set aside.

4.5 The Ld. A.O in the impugned assessment order ought to

have give further opportunity to the assessee to justify her stand.

We observe that assessee too has partly responded. Be that as it

may we are of the view that assessee now can place all material

in her possession to give a suitable justification about additions

made, if one more opportunity is provided by Ld. CIT(A). By

taking into consideration overall facts and circumstances of the

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present case it would be just fair and prudent that “impugned

order” be set aside. Accordingly we set aside the impugned order

as not being on merits and remand the case back to CIT(A) to

pass a fresh order on merits of the case so that there is

meritorious disposal as per Section 250(6) of the Act.

5.1 In result appeal of assessee is allowed as and by way of

remand back to file of CIT(A) to pass a fresh order on merits on

denovo basis.

5.2 Appeal of the assessee is allowed for statistical purpose.

Order pronounced in open court on 29.04.2025.

Sd/- Sd/-

(SMT. ANNAPURNA GUPTA) (PARESH M JOSHI) ACCOUNTANT MEMBER JUDICIAL MEMBER

Indore िदनांक/ Dated : 29/04/2025 Dev/Sr. PS

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Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File

By order COPY Senior Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore

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