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Facts
The assessee's assessment for AY 2016-17 was initiated under section 148 due to cash payment for immovable property, resulting in additions to income. The assessee's appeal to the NFAC was dismissed, and the present appeal is against the NFAC's order.
Held
The Tribunal, considering the assessee's claim of not being provided a proper opportunity of being heard and non-service of notice under section 148, restored the issues to the Assessing Officer. The AO was directed to grant a final opportunity to the assessee to substantiate its claims.
Key Issues
Non-compliance with principles of natural justice due to lack of opportunity and proper service of notice under section 148.
Sections Cited
147, 148, 144
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Income Tax Appellate Tribunal, DELHI BENCH “B”, DELHI
Before: AND
Date of hearing: 03/02/2026 Date of Pronouncement: 06/02/2026 ORDER
PER SUDHIR KUMAR, JUDICIAL MEMBER:
This appeal by the assessee is directed against the order of the National Faceless Appeal Centre (NFAC) Delhi [hereinafter referred to as “Ld. NFAC)”] vide order dated 21.2.2025 pertaining to A.Y. 2016- 17 arising out the assessment order passed u/s.147 r.w.s.144 of the Income-tax Act, 1961, (in short ‘the Act’).
The brief facts of the case are that assessee is an individual and fetching income from house property, profession and other sources. The proceeding for assessment year 2016-17 initiated under section 148 on the issue of cash payment to purchase of immovable property pointed out by the Investigation Wing and assessed the income of Rs. 1,31,66,780/- under section 144 read with section 147 by making the addition of Rs. 1,14,99,120/-.
Aggrieved the order of the AO, the assessee preferred the appeal before the Ld. NFAC who vide his order dated 21.2.2025 dismissed the appeal. Being aggrieved the order of the Ld. NFAC the assessee is in appeal before the Tribunal.
None is present for assessee. Learned authorized representative for Department of Revenue submitted that departmental authorities have passed reasoned orders. He also submitted that the assessee has not taken part in the proceedings before the Ld. NFAC. The appeal was rightly rejected by the Ld. NFAC.
We have heard the Ld. DR and perused the material available on record. It was the contention of the assessee in the grounds of appeal that Ld. CIT(A) has erred in confirming the action of the AO by not providing proper opportunity of being heard as show cause notice was issued on 29.3.2022 and order passed on 30.3.2022. It was further contended that CIT(A) erred in confirming the action of the AO by issuing notice under section 148 of the Act were never being served on the assessee. The assessee has not received any notice prior to show cause notice thus, opportunity of being heard is not provided. Therefore, considering the totality of the facts and circumstances of the case and in the interest of justice, we deem it proper to restore the issues to the file of the Assessing Officer with a direction to grant one final opportunity to the assessee to substantiate its claim and decide the issues as per fact and law. The assessee is also directed to appear before the Assessing officer and co- operate in the proceedings. The grounds raised
by the assessee are accordingly allowed for statistical purposes.
6. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court 06.02.2026.