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Facts
The assessee, an individual, did not file a return for AY 2011-12, but conducted transactions on the Bombay Stock Exchange. The assessment was reopened, and additions were made for unexplained sale of shares and bank credits. The CIT(A) deleted additions related to share sales but confirmed an addition for unexplained share purchases.
Held
The Tribunal found that the CIT(A) confirmed an addition of Rs. 6,18,319/- for unexplained share purchases without issuing a show-cause notice and without giving the assessee a proper opportunity to be heard. The Revenue did not object to setting aside the matter.
Key Issues
Whether the CIT(A) erred in enhancing the addition without issuing a show-cause notice and providing proper opportunity of hearing to the assessee?
Sections Cited
147, 144, 68, 251(2)
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Income Tax Appellate Tribunal, SURAT BENCH, SURAT
Before: SHRI T.R.SENTHIL KUMAR & SHRI BIJAYANANDA PRUSETH
Assessment Year : 2011-12 Shweta Pareshkumar Jain The Income Tax Officer v/s. C-904 Jolly Residency Ward-2(3)(4) Nayapura Karva Road Surat – 395 001 Vesu, Surat – 395 007 PAN: ASKPP 6811 E (Appellant) (Respondent) Assessee by : Shri Mehul Shah, CA Revenue by : Shri Ajay Uke, Sr.DR Date of Hearing : 03/07/2025 Date of Pronouncement: 16/07/2025 O R D E R
PER T.R.SENTHIL KUMAR JUDICIAL MEMBER:
This appeal is filed by the assessee as against the ex-parte appellate order dated 31/01/2025 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)”] arising out of the re-assessment order passed u/s.147 r.w.s.144 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) relating to the Assessment Year (AY) 2011- 12.
The brief facts of the case are that the assessee is an individual has not filed the return of income relating to the AY 2011-12. The assessee had carried out transactions in Bombay Stock Exchange to 2 the tune of Rs.2,34,273/-. Therefore, the assessment was reopened by issuing a notice u/s.148 on 29/03/2018. However, the assessee has not participated in the hearing which has resulted in making an addition of Rs.5,95,387/- being unexplained income of sale of shares and Rs.18,72,477/- being unexplained credits in his bank accounts of HDFC Bank and State Bank of India and demanded tax thereon.
3. Against the ex-parte re-assessment order, the assessee filed appeal before the Ld.CIT(A) and filed additional documents relating to sale of shares and bank transactions. Ld.CIT(A) called for a Remand Report from the AO and deleted the additions on account of sale of shares. However, the CIT(A) held that the purchase of Larsen and Toubro shares for Rs.6,18,319/- was not properly explained by the assessee, therefore confirmed the addition.
Against the order of ld.CIT(A), assessee is in appeal before us raising following Grounds of Appeal:
“1. On the facts and in circumstances of the case as well as law on the subject, the learned CIT(A) has erred in making an enhanced addition of Rs. 6,18,319/- after deleting the total original addition of Rs. 24,67,864/- (Rs. 5,95 387/- on account of sale of shares u/s 68 (+) Rs. 18,72,477 on account of unexplained credits in the bank accounts u/s 68] without issuing any show-cause notice u/s. 251(2).
2. Even otherwise, the learned CIT(A) has erred in making addition of Rs. 6,18,319/- on account of unexplained purchases.
It is therefore prayed that the enhancement made by the learned CIT(A) may kindly be deleted.
4. The appellant craves leave to add or alter or delete any of the ground or grounds of appeal at the time of the hearing before Your Honour.”
3 5. The Ld.Counsel for the assessee submitted that the Ld.CIT(A) without issuing a show-cause notice, confirmed the addition of Rs.6,18,319/- being the purchase value of the shares, whereas the assessee has produced copy of the broker statement, therefore requested to set aside the matter back to the file of Ld.CIT(A) to decide the case by giving regular opportunity of hearing to the assessee.
The Ld.Sr.DR appearing for the Revenue has no serious objection in setting aside the matter back to the file of Ld.CIT(A) to decide the same on merits.
We have heard both the parties and perused the material available on record. Looking to the facts and circumstances of the case and in the interests of justice, the impugned order of the Ld.CIT(A) is hereby set aside with a limited purpose for deciding the issue relating to addition of Rs.6,18,319/- made on account of unexplained purchases, by giving proper opportunity of hearing to the assessee.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the Open Court on 16/07/2025.