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Facts
The assessee, an individual and a non-filer, is in appeal against the order of the CIT(A) which upheld the assessment order. The case was reopened based on information that the assessee sold immovable property and made significant cash deposits in a bank account. The assessment order included additions for unexplained cash deposits, capital, agricultural income, and short-term capital gains.
Held
The Tribunal observed that the assessee was not provided with adequate opportunity to present their case before the Assessing Officer (AO) and the CIT(A). The CIT(A) also failed to discuss the merits of the case. Therefore, the orders of both the AO and CIT(A) were set aside.
Key Issues
Whether the assessee was afforded adequate opportunity of being heard during assessment and appellate proceedings, and whether the CIT(A) properly adjudicated the grounds of appeal.
Sections Cited
250, 147, 144B, 148, 149, 69A, 115BBE, 68, 271(1)(c), 271F, 250(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PATNA BENCH AT KOLKATA
Before: SHRI SONJOY SARMA & SHRI RAKESH MISHRA
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2015-16 dated 30.05.2025, which has been passed against the assessment order u/s 147 r.w.s. 144B of the Act, dated 30.01.2024. 2. The assessee is in appeal before the Tribunal raising the following grounds of appeal:
“1. For that the grounds of appeal hereto are without prejudice to each other. I.T.A. No.: 321/PAT/2025 Assessment Year: 2015-16 Zaimur Rahman.
For that the appellate order dated 30/05/2025 bearing DIN & Order No: ITBA/NFAC/S/250/2025-26/1076580474(1) passed under Section 250 of the Income Tax Act, 1961 (hereinafter called the Act) for the Assessment Year 2015-16 by the ld. First Appellate Authority, viz. the Commissioner of Income Tax (Appeal) at National Faceless Appeal Centre (NFAC), Delhi, is bad both in law and on facts.
For that the order of assessment dated 30/01/2024 Bearing DIN and Order number TBA/AST/S/147/2023-24/1060257194(1) passed under Section 147 read with Section 144B of the Act for the Assessment Year 2015-16, by the ld. assessing officer at Assessment Unit, Income Tax Department, is bad both in law and on facts.
For that the appellant was not given any opportunity, much less sufficient opportunity, to put forth his contentions and place evidences henceforth at the time of assessment proceeding.
For that the order of the ld. Commissioner of Income Tax (Appeal) as well as the order of the ld. assessing officer is based on presumption, surmises and conjectures.
For that the order of the ld. Commissioner of Income Tax (Appeal) as well as the order of the ld. assessing officer is wholly perverse in as much as the same are contrary to and at variance with the materials available on record.
For that the order of the ld. Commissioner of Income Tax (Appeal) as well as the ld. assessing officer is far from best judgment assessment as envisaged in the Act.
For that the ld. Juri ictional assessing officer has erred in issuing notice dated 08/04/2022 under Section 148 of the Act, which is barred by limitation as per the provisions of Section 149 of the Act.
For that the ld. Commissioner of Income Tax (Appeal) as well as the ld. assessing officer, without giving any opportunity, much less sufficient opportunity, has erred in holding that the cash deposits aggregating to Rs.62,25,000 in State Bank of India during the Financial Year 2014-15 corresponding to Assessment Year 2015-16 is unexplained money under section 69A read with section 115BBE of the Act and assessed the same under the Act.
For that the ld. Commissioner of Income Tax (Appeal) as well as the ld. assessing officer, without giving any opportunity, much less sufficient opportunity, has erred in holding that the opening balance of Proprietor's Capital (being the closing balance as on 31/03/2015) to the tune of Rs.3,45,16,118 is unexplained cash credit under section 68 read with section 115BBE of the Act and assessed the same under the Act. I.T.A. No.: 321/PAT/2025 Assessment Year: 2015-16 Zaimur Rahman.
For that the ld. Commissioner of Income Tax (Appeal) as well as the ld. assessing officer, without giving any opportunity, much less sufficient opportunity, has erred in holding that Rs.11,43,600 shown as sales of agricultural produce and Rs.9,65,000 shown as sale proceeds from the sale of tree and plantation during the Financial Year 2014-15 corresponding to Assessment Year 2015-16 are taxable income and accordingly an amount of Rs.21,08,600 (Rs.11,43,600 plus Rs.9,65,000) was disallowed and added to the total income of the appellant as income from other sources.
For that the ld. Commissioner of Income Tax (Appeal) as well as the ld. assessing officer, without giving any opportunity, much less sufficient opportunity, has erred in holding that the appellant had sold immovable property for Rs.33,20,000 and taxed the same under the head Short Term Capital Gain.
For that the appellate order of the ld. Commissioner of Income Tax (Appeal) as well as the assessment order of the ld. assessing officer is far away from best judgment assessment as envisaged in the Act, for the reason that the ld. Commissioner of Income Tax (Appeal) as well as the ld. assessing officer, should have made independent enquiry about the contentions raised by the appellant during the assessment proceeding.
For that the ld. assessing officer has erred in initiating penalty proceeding under Section 271(1)(c) of the Act for concealment of income.
For that the ld. assessing officer has erred in initiating penalty proceeding under Section 271F of the Act for non filing of ITR.
For that the ld. assessing officer has erred in not providing the appellant the reason recorded for initiation of reassessment proceeding under Section 147 of the Act and has grossly acted in violation of the directions of the Hon'ble Supreme Court in the case of GKN Driveshafts (India) Ltd vs ITO reported in [2002] 125 Taxman 963 (SC) and [2003] 259 ITR 19 (SC).
For that the appellant shall place any other point/points at the time of hearing of the appeal.”
Brief facts of the case are that the assessee is an individual and is a non-filer. The return of income for the year under consideration was also not filed by the assessee. The case was reopened u/s 147 of the Act on the basis of information that the assessee had sold immovable property (value assessed for stamp duty at ₹33,20,000/-) and had made deposit in cash in a saving bank account amounting to ₹62,25,000/- I.T.A. No.: 321/PAT/2025 Assessment Year: 2015-16 Zaimur Rahman. during the relevant assessment year. The assessment was completed by making an addition of ₹62,25,000/- u/s 69A of the Act for unexplained cash deposits in bank, ₹3,45,16,118/- u/s 68 of the Act for unexplained capital, ₹21,08,600/- for unsubstantiated agricultural income treated as income from other sources, ₹33,20,000/- for Short Term Capital Gain on sale of immovable property and the total income was computed at ₹4,62,56,388 /-. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A) who issued several notices and though it is mentioned in the appeal order at page 4 that the assessee was issued a final show cause notice by AO but it is mentioned in the statement of facts filed along with Form No. 35 that the said notice was never served upon the assessee. The Ld. CIT(A) issued six notices for hearing but the assessee did not comply with the same and since the assessee failed to make any submission or rebut the findings of the Assessing Officer (hereinafter referred to as Ld. 'AO') therefore, it was inferred that the assessee had no further evidence or explanation to offer in respect of the issues and grounds raised in the appeal and there was no cause to interfere with the additions and the assessment made by the Ld. AO and all the grounds of appeal were dismissed.
Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before the Tribunal.
Rival contentions were heard and the submissions made have been examined. The Ld. AR at the outset, requested that since the order of the Ld. CIT(A) is ex parte and the order of the Ld. AO has been passed on a different issue then on the issue on which the assessment was reopened therefore, the matter may be remanded to the Ld. AO as the assessee was not provided adequate opportunity of being heard. I.T.A. No.: 321/PAT/2025 Assessment Year: 2015-16 Zaimur Rahman.
We have considered the submissions made. It is observed that in the assessment order besides the issue on which the case was reopened i.e. sale of immovable property and deposit of cash in the bank account, there were two other additions which have been made. Although the Ld. AO has not mentioned section 144 of the Act on the first page of the order however, in para 6 of the order on page 38, the assessment is stated to be made u/s 144 r.w.s. 144B of the Act. Although the assessment is in accordance with the legal provisions that once the case is reopened, the Ld. AO can make an assessment not only in respect of the income for which the reopening was done but also in respect of any other income which is noticed to have escaped assessment in the course of the reassessment proceeding conducted, therefore, there is no infirmity in the order of the Ld. AO. However, since both before the Ld. AO as well as before the Ld. CIT(A), proper representation was not made and the Ld. CIT(A) has not discussed the merits of the case as is required u/s 250(6) of the Act and as is held in the cases of Ajji Basha Vs. CIT (2019) 111 taxmann.com 348 (Madras) and Commissioner of Income-tax (Central) Nagpur v. Premkumar Arjundas Luthra (HUF) [2016] 69 taxmann.com 407 (Bombay), therefore, the order of the Ld. CIT(A) is not justified. However, as requested by the Ld. AR to remand the matter to AO for fresh assessment to which the Ld. DR raised no serious objection, in order to grant one more opportunity, both the orders of the Ld. CIT(A) as well as Ld. AO are hereby set aside and the matter is remanded to the Ld. AO to frame the assessment de novo. Needless to say, the assessee shall be given a reasonable opportunity of being heard to make any further submission it wants to make in support of its grounds of appeal and shall not seek unnecessary I.T.A. No.: 321/PAT/2025 Assessment Year: 2015-16 Zaimur Rahman. adjournments. Accordingly, the grounds taken by the assessee in his appeal are partly allowed for statistical purposes.
In the result, the appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 7th October, 2025. [Sonjoy Sarma] [Rakesh Mishra] Judicial Member Accountant Member Dated: 07.10.2025 Bidhan (Sr. P.S.) I.T.A. No.: 321/PAT/2025 Assessment Year: 2015-16 Zaimur Rahman. Copy of the order forwarded to:
Zaimur Rahman, S/o Anisur Rahman, Kundwa Chainpur, S.O. Chandan Bara, East Champaran, Motihari, Bihar, 845304. 2. Income Tax Department, NFAC, Delhi.
CIT(A)-NFAC, Delhi.
CIT-
CIT(DR), Patna Bench, Patna.
Guard File. //// By order