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Facts
The assessee, engaged in money lending and kuri business, faced a survey under Section 133A which led to significant additions for unaccounted investments, including Rs. 1,01,07,714/- for unexplained kuri/chitty investments. The assessment was completed under Section 144, and the assessee contended that they were denied natural justice by not being given an opportunity to present their case before the AO or during remand proceedings before the CIT(A).
Held
The Tribunal acknowledged that the assessment was completed under Section 144 and the assessee was not given a fair opportunity. In the interest of justice and fair play, the entire issue was remitted back to the Ld. CIT(A) for fresh consideration. The CIT(A) is directed to provide a reasonable opportunity of being heard to the assessee and decide the matter in accordance with law.
Key Issues
Whether the additions for unaccounted investments were justified given the assessment was completed under Section 144 and the assessee alleged denial of natural justice.
Sections Cited
250, 133A, 69, 144
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, COCHIN BENCH: COCHIN
Before: SHRI INTURI RAMA RAO & SHRI KESHAV DUBEY
Assessment Year: 2015-16 Panakkal Kumaran Jayaprakasan Panakkal House Valappad Beach Valapad CIT(A) Vs. Thrissur 680 567 Thrissur Kerala PAN NO : AFRPJ2700A APPELLANT RESPONDENT Appellant by : N o n e Respondent by : Shri Sanjit Kumar Das, CIT-DR. Date of Hearing : 19.02.2025 Date of Pronouncement : 24.04.2025 O R D E R
PER KESHAV DUBEY, JUDICIAL MEMBER:
This appeal at the instance of the assessee is directed against the order of the CIT(A), Thrissur dated 12.08.2020 for the AY 2015- 16 passed u/s 250 of the Income Tax Act, 1961 (in short “The Act”).
The assessee has raised the following grounds of appeal:
Brief facts of the case are that the assessee is the proprietor of M/S. Krishna Finance, Triprayar and doing money lending business and kuries. He is also a partner in the firm M/s. Indrapuri Jewellery, Triprayar. A survey operation was carried out at the business premises of the assessee u/s. 133A of the Act. During the course of survey proceedings, it was found that the assessee has invested his unaccounted money in various immovable properties and other investments.
3.1 Further, during the course of assessment proceedings, the AO observed that total investment in landed property/advance given by assessee in his name and in the name of his wife during the relevant year is summarized at Rs. 2,70,84,000/- and in the absence of the proper explanation, the same is treated as deemed income of the assessee and added to the total income returned as per section 69 of the Act. Further, during the year, the assessee sold a jointly held land property of 6 acres 85 sq. meters and 3 acres 6 sq. meters for a total consideration of Rs.32,56,000/- along with Sri Thomas vide sale deed No. 1878/2014. The assessee has 3/4th share. The short term capital gain was worked out at Rs. 4,67,625/-. During the relevant financial year, credits in the bank accounts maintained by the assessee were found at Rs.4,19,86,530/- and treated the same as unaccounted income of the assessee. The assessee has also made investment in Kuri subscriptions for the period 1.4.2014 to 31.3.2015 amounting to Rs. 89,36,399/- and investment in M/s. Hi Wealth Kuries Limited a sum of Rs. 11,70,775/- during the relevant financial year totaling to Rs. 1,01,07,174/-.
Mr. P.K. Jayaprakasan, Thrissur Page 4 of 5 4. Before us both the parties, fairly conceded that assessment order was passed u/s 144 of the Act and the assessee could not represent his case before the AO. Further, during the proceedings before the ld. CIT(A), the assessee could not represent his case before AO in response to remand report called for by the ld. CIT(A). Further, ld. A.R. of the assessee vehemently submitted that the AO in the course of remand proceedings was unwilling to even verify the documents with the impounded materials and the AO relied on the stand that assessment are done by the previous AO and the present AO does not intend to verify the materials this occasion and accordingly AO denied legal and natural justice to the assessee.
4.1 This being so, in the interest of justice & fair play and considering the prayer of ld. A.R. of the assessee, we remit the entire issue in dispute to the file of ld. CIT(A) for fresh consideration and to decide the same in accordance with law after giving reasonable opportunity of being heard to the assessee. The assessee is directed to cooperate with the proceedings before the authorities below and file the relevant documents/evidences/ submissions/information which would be essential and required by the revenue authorities for proper adjudication of the case. We clarify that in case of further default, the assessee shall not be entitled for any leniency. It is ordered accordingly.