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Facts
The assessee, an individual, did not file an income tax return for A.Y. 2019-20. Based on high-value transactions, the AO initiated reassessment proceedings under Section 148, adding Rs.13,75,000/- as unexplained income under Section 69A r.w.s. 115BBE due to the assessee's failure to respond to notices. The CIT(A) upheld this addition.
Held
The Tribunal observed the assessee's non-compliance with notices at both assessment and first appellate stages. However, in the interest of natural justice and considering the substantial demand, it granted one final opportunity to the assessee to substantiate their case before the CIT(A). The appeal was allowed for statistical purposes, remanding the matter back to the CIT(A) for a fresh decision.
Key Issues
The key issues are the validity of the addition of Rs.13,75,000/- as unexplained income under Section 69A, the applicability of tax under Section 115BBE, and whether the assessee was afforded sufficient opportunity by the CIT(A).
Sections Cited
147, 144, 148, 142(1), 69A, 115BBE
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Income Tax Appellate Tribunal, VISAKHAPATNAM “DIVISION” BENCH, VISAKHAPATNAM
Before: SHRI DUVVURU RL REDDY, HON’BLE & SHRI S BALAKRISHNAN, HON’BLE
आदेश /O R D E R PER SHRI S BALAKRISHNAN, ACCOUNTANT MEMBER:
This appeal is filed by the assessee against order of Learned Commissioner of Income Tax (Appeals), National Faceless Appeal centre, Delhi [hereinafter in short “Ld.CIT(A)”] vide DIN & Order No. ITBA/NFAC/S/250/2025- 26/1075632913(1) dated 15.04.2025 for the A.Y.2019-20 arising out of the order
Brief facts of the case are that assessee is an individual and had not filed Return of Income for A.Y. 2019-2020. As per the information available with the department regarding the high value transactions made by the assessee during the year, Ld. Assessing Officer [hereinafter in short “Ld. AO"] had reasons to believe that the assessee had unexplained income of Rs.13,75,000/- and initiated proceedings under section 148 of the Act. Subsequently, notices under section 142(1) were issued to the assessee calling for information regarding into the sources of the said investment. In response to the notices, assessee failed to give a satisfactory reply and provide any required details. Therefore, Ld. AO completed the assessment under section 144 of the Act by treating the entire amount of Rs.13,75,000/- as unexplained income and added back to the total income of the assessee under section 69A r.w.s. 115BBE of the Act.
3. On being aggrieved by the addition made by the Ld. AO, assessee filed an appeal before Ld. CIT(A). Ld. CIT(A) upheld the order of the Ld. AO since assessee has not responded to any of the notice / opportunities provided to the assessee.
4. On being aggrieved by the order of the Ld. CIT(A), assessee is in appeal before us by raising following grounds of appeal: -
Page No. 2 (A.Y. 2019-20) Sanapala Bhulakshmi “1. The order of the learned Commissioner of Income Tax (Appeals) is contrary to the facts and also the law applicable to the facts of the case.
2. The learned Commissioner of Income Tax (Appeals) is not justified in sustaining the addition of Rs.13,75,000 made by the assessing officer u/s 69A of the Act towards unexplained money.
The learned Commissioner of Income Tax (Appeals) is not justified in sustaining the tax levied by assessing officer u/s 115BBE of the Act.
Any other ground that may be urged at the time of appeal hearing.”
At the outset, Ld. Authorised Representative [hereinafter “Ld.AR”] submitted that the Ld. CIT(A) has passed the order without providing sufficient opportunities to the assessee. He further pleaded that the assessee could not respond to the notices issued by the Ld. CIT(A). He therefore prayed for one final opportunity before Ld. CIT(A) to submit the relevant documents.
Per contra, Ld. Departmental Representative [hereinafter in short “Ld.DR”] strongly objected to the plea of the Ld.AR and vehemently argued that revenue has provided ample opportunities to the assessee as detailed in their respective orders. However, assessee has failed to comply with the notices issued by the Revenue Authorities. She therefore pleaded that the no further opportunity should be granted and prayed for upholding the order of the Ld.CIT(A).
We have heard rival contentions and perused the material available on record. It is an undisputed fact that the assessee has not fully complied with the notices and has also not responded to the various notices issued to the assessee as detailed in the order of the Ld. CIT(A). In the interest of natural justice,
Page No. 3 (A.Y. 2019-20) Sanapala Bhulakshmi considering the plea of the Ld.AR and considering the huge demand, we are of the considered view that assessee may be provided one final opportunity to substantiate the case before Ld. CIT(A). Needless to say, that the assessee should cooperate with the remand proceedings failing which the Ld. CIT(A) is at liberty to decide the case based on the material available on record. Accordingly, the grounds raised by the assessee are statistically allowed.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 20th August, 2025.