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Facts
The assessee filed a return of income of Rs. 90,780. The Assessing Officer reopened the assessment under Section 148 due to information about property purchase, making additions of Rs. 26,00,000 under Section 69 and Rs. 9,01,000 under Section 56(2)(vii)(b), and assessing total income at Rs. 35,91,780 under Section 147 r.w. Section 144. The CIT(A) dismissed the assessee's subsequent appeal in limine due to delay in filing and non-compliance.
Held
The Tribunal condoned the delay in filing the appeal before itself. It directed that the assessee be given another opportunity before the CIT(A) to explain the delay and have the appeal adjudicated on merits, subject to payment of Rs. 2,000 as cost to the Income Tax Department within one month and cooperation in submitting information. The grounds of appeal are allowed for statistical purposes.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal in limine without considering the merits, and the validity of the re-opening under Section 148 and additions under Sections 69 and 56(2)(vii)(b).
Sections Cited
147, 144, 250, 148, 69, 115BBE, 56(2)(vii)(b), 133(6), 142(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, NAGPUR
Before: SHRI PAVAN KUMAR GADALE
The assessee has filed appeal against the order dated 31/05/2024, passed by the learned CIT(A)/National Faceless Appeal Centre (NFAC), Delhi, u/sec147 r.w.s 144 and u/sec250 of the Income Tax Act, 1961 (for short "the Act") dismissing the assesse’s appeal as not maintainable. The assessee has raised following grounds of appeal:–
“1. Whether in facts and circumstances of the case the Ld. CIT(A) is justified in upholding re-opening under Sec 148 of the Income Tax Act, 1961.
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2. Whether in facts and circumstances of the case the Ld. CIT(A)/d. AO is justified in addition of Rs. 26,00,000/-u/s 69 of the Act and taxed as per the provisions of section 115BBE of the Act.
3. Whether in facts and circumstances of the case the Ld. CIT(A)/Ld. AO is justified in addition of Rs. 9,01,000/- being difference between value determined by the Stamp Valuation Authority and the amount paid by the assessee is hereby added to the total income of the assessee as per the provisions of section 56(2)(vii)(b) of the Act.
4. Whether in facts and circumstances of the case the Ld. CIT(A)/Ld. AO is justified in passing an order where no independent enquiry was made or record under Sec 133(6) was called for. 5. Whether in facts and circumstances of the case the Ld. CIT(A)/Ld. AO is justified in passing an order in breach of principle of Natural justice. 6. Whether in facts and circumstances of the case the Ld. CIT(A)/Ld. AO is justified in initiating penalty proceedings against the assessee. 7. The appellant craves leave to add, alter, modify and withdraw any grounds before or during the course of appellate proceedings.”
At the time of hearing, the Ld.AR of the assessee submitted that there is a delay in filing the appeal before the Hon’ble Tribunal and the assessee has filed an application and affidavit for condonation of delay explaining the sufficient cause. Whereas the facts mentioned in the Affidavit are reasonable and the learned D.R. has no specific objections. Accordingly, the delay is condoned and the appeal is admitted.
The Brief facts of the case are that the assessee has filed the return of income for the assessment year 2016–17 on 27/03/2018, disclosing a total income of Rs.90,780. Subsequently, the Assessing Officer has received information that the assessee has purchased immovable property during the year and the provisions of sec 56(2)(vii)(b) of the Act are applicable. The Assessing Officer has reason to believe that the 3 Madhur Laxman Gadikar ITA no.406/Nag./2025 income has escaped assessment and issued notice under section 148 of the Act and there was no compliance. Further the Assessing Officer has issued notices on various dates u/sec 142(1) of the Act referred at Para2 of the assessment order. In spite of issuing notices, there was no compliance by the assessee in the assessment proceedings. Therefore, the Assessing Officer considering the information on record invoked the provisions of sec144 of the Act and made the best judgment assessment with the addition of Rs.26,00,000/- as unexplained investment in immovable property u/sec 69 of the Act and Similarly due to difference in value determined by the Stamp Valuation Authority and the amount paid by the assessee, the assessing officer invoked the provisions of sec56(2)((vii)(b) of the Act and made addition of differential amount of Rs.9,01,000/- and finally assessed the total income of Rs.35,91,780/- and passed the order u/sec147 r.w.s 144 of the Act dated 27/03/2022. Aggrieved by the order, the assesse has filed the appeal before the CIT(A).
In appellate proceedings, notices were issued to the assessee, but there was no proper compliance. Further, the learned CIT(A) found that there is a delay in filing the appeal before the appellate authorities and the assessee, in spite of providing adequate opportunities has not explained the delay with sufficient cause other than mentioning in the Form.no.35 and the CIT(A) has dismissed the appeal in limina as not 4 Madhur Laxman Gadikar ITA no.406/Nag./2025 maintainable. Aggrieved by the order of the learned CIT(A), the assessee has filed appeal before the Tribunal.
At the time of hearing, the learned A.R. submitted that the learned CIT(A) has erred in not considering the fact that the assessee is not aware of the provisions of the Income Tax and the delay was not a deliberate act and also the assessee has purchased the immovable property and sources for acquisition are available. Further the assessee has a good case on merits and prayed for granting of opportunity to substantiate the case with evidences and information before the lower authorities. Per–contra, the learned Departmental Representative relied on the order of the CIT(A).
Heard the rival submissions and perused the material available on record. The Ld.AR contentions that the CIT(A) has dismissed the appeal as not maintainable by overlooking the fact that the assessee is a salaried employee and is not aware of the provisions of the Income Tax and the assessee has a good case on merits. On a perusal of the CIT(A) order, the appellate authority has provided opportunity to explain the sufficient case for the delay in filing the appeal and whereas there was no proper compliance by the assessee. Hence considering the facts and circumstances of the case, there can be various reasons for non– compliance by the assessee before the appellate authorities, which can be ruled out. Therefore, the assessee should be provided with one more
5 Madhur Laxman Gadikar ITA no.406/Nag./2025 opportunity of hearing before the learned CIT(A) to explain the sufficient cause with the condonation application for the delay and subsequently the CIT(A) adjudicate a fresh on merits subject to the assessee making payment of cost of Rs.2,000 (Rupees Two Thousand Only) to be deposited with the Income Tax Department within one month from the date of receipt of this order. And the assessee shall co–operate in submitting the information for early disposal of the appeal. And the grounds of appeal of the assessee are allowed for statistical purposes.
In the result, assessee’s appeal is allowed for statistical purposes. Order pronounced in the open Court on 08-10-2025.