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Facts
The assessee filed a return declaring Nil income and claimed agricultural income. The AO accepted a small portion of agricultural income and disallowed the rest, treated a difference in property purchase value as income under section 56(2)(vii)(b), added unexplained cash deposits, and disallowed exempt income. The CIT(A) upheld these additions.
Held
The Tribunal found that the CIT(A) order was violative of the principles of natural justice as the assessee was not given a sufficient opportunity to be heard. Therefore, the matter was restored to the CIT(A) for fresh adjudication.
Key Issues
Whether the CIT(A) erred in confirming additions made by the AO and whether the principles of natural justice were followed.
Sections Cited
250, 56(2)(vii)(b), 143(2), 142(1), 10(10D)
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Before: SHRI SANJAY GARG & SHRI BIJAYANANDA PRUSETH
आदेश / O R D E R
PER BIJAYANANDA PRUSETH, AM:
This appeal by the assessee emanates from the order passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’), dated 30.04.2024 by the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi [in short ‘CIT(A)’] for the Assessment Year (AY) 2015-16.
Grounds of appeal
raised by the assessee are as under:
1. On the facts and circumstances of the case as well as in law on the subject, the learned CIT A has erred in confirming the disallowance of agricultural income amounting to Rs. 23,65,220/-.”
2. On the facts and circumstances of the case as well as in law on the subject, the learned CIT A has erred in confirming addition of Rs. 11,64,680/- u/s. 56(2)(vii)(b) of the I.T. Act.”
/AY.2015-16 Kundanben Maheshchandra Gor “3. On the facts and circumstances of the case as well as in law on the subject, the learned CIT A has erred in confirming Rs. 31,35,000/- as unexplained cash deposit.” “4. On the facts and circumstances of the case as well as in law on the subject, the learned CIT A has erred in confirming the disallowance of claim of exempt income amounting to Rs. 14,00,900/- as in come from unexplained sources.”
The facts of the case in brief are that the assessee filed return of income on 12.02.2017, declaring total income of Rs. Nil. The case was selected for scrutiny under CASS and notices were issued u/s 143(2) and 142(1) of the Act. The assessee had not shown any agricultural income in the preceding assessment year 2014-15, but has shown net agricultural income of Rs.24,12,200/- in the subject AY. The case was converted to complete scrutiny with approval of the PCIT, Valsad. After obtaining information from Department of Agricultural Economics, Junagadh University, Junagadh and after hearing the assessee, the AO accepted agricultural income of Rs.46,980/- and disallowed Rs.23,65,220/-. The AO also found that there was difference between the value as per stamp duty authority and purchase consideration of property bought by the assessee along with 7 co-purchasers. The AO, therefore, added 1/8th of the difference of Rs.93,17,447/-, i.e., Rs.11,64,680/- u/s 56(2)(vii)(b) of the Act. The AO also added Rs.31,35,000/- towards unexplained cash deposit in the bank account of assessee, maintained with Axis bank and ICICI bank. He also disallowed exempt income of Rs.14,00,900/- claimed u/s 10(10D) of the Act. In the result, total income was determined of Rs.80,65,800/- as against the returned income of Rs. Nil.
/AY.2015-16 Kundanben Maheshchandra Gor 4. Aggrieved by the order of AO, the assessee filed appeal before the CIT(A). the CIT(A) issued a notice on 22.12.2018. The assessee did not respond to the said notice. Thereafter, the CIT(A) decided the appeal on the basis of materials available on record and upheld all the four additions made by the AO. The appeal was accordingly dismissed.
Aggrieved by the order of CIT(A), the assessee filed appeal before the Tribunal. The learned Authorized Representative (ld. AR) of the assessee submitted that the CIT(A) has issued only one notice on 22.12.2018. Thereafter, he had not given any opportunity to the assessee and passed the order by dismissing appeal of the appellant. He submitted that adequate and reasonable opportunity was not granted by the CIT(A) and the order is clearly violative of the principles of natural justice. He requested that one more opportunity may be given to the assessee to plead his case on merit.
On the other hand, learned Senior Departmental Representative (ld. Sr. DR) for the revenue submitted that the Bench may decide the applications, as it thinks fit.
We have heard both parties and perused the materials available on record. We find that the CIT(A) has issued only one notice on 22.12.2018 and proceeded to decide the appeal on the basis of the details available on record. The ld. AR submitted that all details are available with the appellant and one more opportunity may be granted to the appellant to plead its case on merit.