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Facts
The assessee filed an appeal against an ex parte order by the NFAC for AY 2014-15. The AO reopened the assessment under section 147 due to substantial financial transactions and made additions amounting to Rs. 12,82,13,854/-. The assessee's appeal before the first appellate authority was also disposed of ex parte due to non-compliance.
Held
The tribunal acknowledged that the assessee, an elderly lady, may not have been familiar with online procedures, leading to non-compliance. Given the substantial additions and the assessee's plea for an opportunity to present evidence, the tribunal decided to grant a chance to explain the source of investments and deposits.
Key Issues
Whether the ex parte disposal of the appeal by the appellate authority without providing a reasonable opportunity of being heard to the assessee is justified, and whether the assessee should be granted an opportunity to present her case with supporting evidence.
Sections Cited
139(1), 147, 148, 142(1), 144
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
(Assessment Year: 2014-15) Saroj Bhonsle Naik ITO, Ward-22(3)(6) 1303, Purna Building 1, Piramal Chamber, Worli Sagar 50, Pochkhanwala Road, Vs. Mumbai – 400 012 Worli, Mumbai-400 030 PAN/GIR No. ABIPB 9956 B (Appellant) : (Respondent) Appellant by : Shri Yash Bhadola Respondent by : Shri Sawpnil Choudhari – Sr. DR Date of Hearing : 20.01.2026 Date of Pronouncement : 23.01.2026 O R D E R
Per Saktijit Dey, Vice President:
This is an appeal by the assessee against order dated 21.03.2025, passed by National Faceless Appeal Centre (‘NFAC’ for short), Delhi for the assessment year (A.Y. for short) 2014-15. The basic grievance of the assessee is against ex parte disposal of her appeal by the first appellate authority without providing reasonable opportunity of being heard.
We have considered rival submissions and perused the materials available on record. The assessee is a resident individual. As per the allegation of the Assessing Officer (A.O. for short), for the assessment year under dispute, the assessee did not file any return of income u/s. 139(1) of the Act. However, information available in the system of the department revealed that in the financial year relevant to the assessment year under dispute, the assessee had undertaken substantial financial transactions. Based on such information,
Saroj Bhonsle Naik vs. ITO the A.O. reopened the assessment u/s. 147 of the Act. As alleged by the A.O., the assessee did not comply with the statutory notices issued u/s. 148 and 142(1) of the Act. Since, the assessee remained non-responsive, the A.O. proceeded to complete the assessment ex parte to the best of his judgement, invoking the provision of section 144 of the Act. While doing so, he made the following additions: a) Unexplained investment in immovable property of Rs.1,25,16,500/- b) Investment made out of undisclosed sources of Rs.4,83,41,565/- c) Investments made in time deposits out of undisclosed income of Rs.5,65,00,000/- d) Undisclosed rental income of Rs.10,44,610/- e) Undisclosed income from sale of motor vehicles Rs.18,90,919/- f) Cash deposits in bank account of Rs.79,15,000/-
The aforesaid additions resulted in determination of total income at Rs.12,82,13,854/-.
The additions made by the A.O. were contested by the assessee by filing an appeal before the first appellate authority. However, due to non-compliance before the first appellate authority, the appeal was disposed of ex parte sustaining the additions.
Before us, ld. Counsel appearing for the assessee has pleaded that the assessee is an old lady and not familiar with the online procedure. Thus, he submitted, due to lack of proper support, the assessee could not make necessary compliance before the A.O. and first appellate authority. He submitted, given an opportunity, the assessee will explain the facts and source of the investment/deposits before the A.O. with supporting evidence. Thus, he prayed, for restoration of the issues to the A.O.
Having examined the factual matrix, we find that the assessee went unrepresented both before the A.O. and first appellate authority. Thus, the additions made by the A.O. and sustained by the first appellate authority were purely due to lack of supporting evidences. As can be seen from the facts on record, substantial additions have been made on account of investments made in immovable properties and bank deposits. Thus, the assessee is required to explain the source of such investments through documentary evidences. Due to non-appearance before the departmental authorities, the source could not be explained. Considering the fact that the additions made are quite substantial and reason for such additions being lack of evidence and keeping in view the hardship that the assessee might be undergoing due to such huge addition and the consequential demand, we are inclined to grant an opportunity to the assessee to explain the source of investment in immovable properties/bank investments. The assessee also deserves an opportunity to explain the factual position relating to the other additions made by the A.O., including the cash deposits in the bank account. For enabling the assessee to do so, we set aside the impugned order of learned first appellate authority and restore all the issues to the A.O. for de novo adjudication, after providing due and reasonable opportunity of being heard to the assessee. The assessee is directed to respond to the queries made by A.O. and co-operate in finalizing the proceedings.